The Health Industry Ups Its Outsourcing Prospects

With the amount of companies over the past year weve seen making the most out the

outsourcing service, its no surprise that an increasing amount of businesses are following in each others footsteps. Most recently the health industry have looked to outsourcing, including several different pharmaceutical firms and the National Health Service (NHS), in particular.

Bosses at an NHS trust in South Yorkshire recently confirmed they are to outsource the laundry service at several hospitals across the county, with The Yorkshire Post reporting that hospitals in Doncaster, Worksop and Mexborough will be affected by the move. This move has been speculated to see 28 members of staff transferred elsewhere. The Doncaster and Bassetlaw NHS Foundation Hospitals Trust hopes the decision will save them around 472,000 each year, insisting there will be no redundancies made as a result of it.

Deciding to outsource any service is difficult, let alone one that many members of staff feel passionately about, said chief executive Ron Calvert. But the Doncaster Royal Infirmary site needs investment of 2.2m to bring it up to 21st century standards. We can only spend the money once we either invest in the laundry or in direct patient care.

A spokesman confirmed that staff affected by the move would be redeployed in other departments, with much of the existing work completed by temporary employees. Trust board members voted on the matter at a meeting held earlier this week.

Following in the footsteps of the NHS, an advisory firm on global research and services has tipped pharmaceutical firms to increase their spending on outsourcing next, which we are expected to see over the coming few months.

According to a new report from Everest Group, new third-party deals in the global pharmaceutical industry surged to a ten-year high in 2010, which was up by 81% on the previous year. Outsourcing currently accounts for between 3 and 6% of the sectors total annual spend of $490-670bn, but Everest believes this could climb to between 10% and 15%.

Cost pressures, a changing pharma ecosystem, emerging markets, and other market forces are continuing to drive the market, said Amneet Singh, Everests vice-president of global sourcing. Moving forward, we expect to see an increase in the sourcing of drug development and research, supply chain, data management and analytics functions.

Mr Singh noted that pharma companies had been relatively slow to adopt outsourcing when compared to other industries, but suggested that firms would continue to contract out certain functions due to evolving business drivers. The study came after technology outsourcing and consultancy group Accenture predicted consistent growth in 2012, and reported better-than-expected results for the most recent quarter.

by: Tim Bisley

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