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A Pro Forma Guide to C-Suite Approval for ROI Outsourcing

By Deborah Gustavsen, PhD

The benefits of outsourcing release of information (ROI)—eg, reduced costs, fewer phone calls, a reduction in risk and liabilities, tracking software, and improved patient satisfaction—are well known. These benefits are a major selling point for ROI vendors, yet it often is portrayed as a “life-or-death” scenario, with a failure to outsource ROI equivalent to putting your professional life in danger. The truth is, the business of ROI is dynamic and requires continuous evaluation to determine whether your current approach—in house or outsourced—is founded on empirical grounds.

A few helpful tips can help you evaluate your current approach, assess alternative options, and build the business case required to effect change with senior leaders in your organization.

Any proposed change will likely require input from senior leaders in your organization. Heath care organizations looking to make a change must construct a business case presenting options—eg, the complete outsourcing of ROI, a combination of insourcing and outsourcing, an ROI support program, a change in ROI vendors, or a move to consolidate the contracts and operations from many vendors—that lays out the hard and soft benefits of the proposed change. Benefits might include cost savings, improved processes, increased patient satisfaction, and a reduction in complaint phone calls. Don’t limit yourself to what can be captured in a spreadsheet when considering the rationale for action.

Critical Components of a Compelling Case
Consider a trip to the C-suite like an appearance in court and the comprehensive pro forma as your argument. The successful prosecution of your case depends entirely on presenting a compelling case with the evidence to back it up.

While not all pro formas look the same, there are some common traits that make for the most successful arguments, including the following.

• The what and why. Identify the business objectives and address them clearly and succinctly. If cost reduction is the goal for the ROI function, say so. Responding to patient and requestor complaints? Document them. Switching vendors to avoid a projected cost increase from your current vendor? Bring invoices and proposed renewal data.

• Current state. It’s difficult to demonstrate the benefits of the change without a thorough and meticulous documentation of the current state; this is the bedrock of any pro forma. Often the basic tenets are likely in the departmental budget: supervision and staff, the square footage of onsite office space, equipment and supplies, postage and/or mailroom costs, equipment, scanners, IT support, recruitment/hiring expenses, and software costs. This is the moment to be transparent, including those costs you incur as a result of your current state, eg, the true costs of overtime during spikes in requests, the need for customer service personnel for telephone calls, and the draw on legal counsel for regulation clarification. The incurred cost of transporting records back from offsite storage for ROI is often underrecognized.

• Scenarios/options. Document the proposed scenario for change. In a sentence or two, describe what options are being considered; if there is a strong preference for one option over another, clearly indicate your desired state and the evidence to support it. Looking at a number of scenarios helps you accurately capture the current state, and targeting the solution that will best meet your organization’s needs ultimately increases leadership’s confidence in your recommendation.

• Future state(s). As meticulously as you documented the current state, do so with the various scenarios you may be considering as well. While “apples-to-apples” comparisons are often not entirely possible, there will be instances where the benefits of a future state scenario will reveal additional current state costs and vice versa.

• The delta. When compared with the current state, each future scenario will have a demonstrated difference, whether in the form of reduced costs or a need for an increased budget. Don’t limit your examination of the delta to cost. A financially neutral proposition with softer benefits can often bring changes, eg, in process, personnel, and access, that should be detailed; make sure those are captured, too.

Whatever your chosen format for your pro forma, an analytical approach that clearly and coherently illustrates a current and future state with assumptions and financials is key for gaining approval from senior leadership. The right context, clear objectives, honest (and defensible) analysis, anticipated questions surrounding risk, cost, and proposed timing for the transition ensure that the desired impact of your pro forma—and a successful delivery of your argument—will be achieved.

— Deborah Gustavsen, PhD, is a member of the Association of Health Information Outsourcing Services and director of health care solutions at Iron Mountain Incorporated.