Pros & Cons of Outsourcing Healthcare IT Services to the Philippines

Posted on:
May 28, 2024
min read
Table of Contents
What are the benefits of outsourcing to developing countries?
What are the challenges of outsourcing to developing countries?
Top 5 Most In-demand Developing Countries for Outsourcing
What are some successful examples of companies that have outsourced to developing countries?
What are the best practices for outsourcing to developing countries?
Pros & Cons of Outsourcing Healthcare IT Services
KDCI Outsourcing
May 27, 2024

In the age of digitization, even traditionally manual industries like healthcare are turning to outsourcing, particularly of healthcare IT services, as a way to meet the growing tech and IT demands to remain competitive and relevant.

In 2019, 90% of hospital leaders were looking to outsource some part of their operations. Today, that number is reflected in the boom of the healthcare business process outsourcing industry as it grows at a rapid rate of 11.75% from 2024 to 2031.

The popularity of outsourcing in healthcare can be attributed to benefits such as cost savings, scalability, and access to specialized expertise. However, in such a highly regulated industry as healthcare, it’s even more crucial to consider the tradeoffs of healthcare outsourcing services to manage risks and ensure efficient and uninterrupted healthcare operations.

Healthcare IT Services: Definition & Examples

Healthcare IT services pertains to the technological and systematic support provided to professionals and organizations in the healthcare industry, with the goal of improving efficiency, effectiveness, and quality of service delivery. 

Given the digitalization in healthcare, such a service is crucial in helping organizations modernize their processes and adapt technologies particularly in the areas of data management, advanced diagnostics, and telemedicine.

Some examples of Healthcare IT Services are as follows:

  • Electronic Health Records (EHRs) - digital storage that consolidates patient records for easier access and sharing of patient information among healthcare providers
  • Pharmacy Information Systems (PIS) - systems that manage the ordering, dispensing, and use of medications to reduce error and improve effectiveness of treatment
  • Laboratory Information Systems (LIS) - systems that manage medical laboratory processes and automatically integrate test results into EHRs
  • Radiology Information Systems (RIS) - systems that manage the scheduling and tracking of radiological exams and procedures, including patient registration and billing
  • Picture Archiving and Communication Systems (PACs) -  systems that manage the storage, retrieval, and distribution of medical images like X-rays, MRIs, and CT scans
  • Clinical Decision Support Systems (CDSS) - a set of tools used by healthcare professionals that help with decision making, providing evidence-based recommendations and alerts to potential issues based on patient data
  • Health Information Exchange (HIE) - a process of sharing healthcare information among different healthcare institutions, making data available whenever and wherever needed
  • Telemedicine - a type of service that allows patients to consult healthcare professionals remotely via video, call, or live chat
  • Mobile Health Technologies (mHealth) - the use of mobile devices such as smartphones and tablets to deliver healthcare services, collect patient data, and provide information to healthcare professionals and patients
  • Billing and Revenue Cycle Management - types of services that streamline the billing and insurance processes in healthcare institutions
  • Cybersecurity - measures to safeguard confidential digital information such as patient information and bank details against data breaches and cyber threats

Pros of Outsourcing Healthcare IT Services

The advantages brought about by outsourcing for U.S. healthcare companies are enormous. In fact, 80% of US hospitals are satisfied with outsourcing some healthcare functions. Below is a list of benefits that healthcare companies may get from healthcare IT outsourcing.

Cost Reduction

Outsourcing to a third party with robust infrastructure to support the extensive IT requirements of healthcare institutions. This eliminates the need to invest in in-house resources, allowing U.S. healthcare companies to save up to $140 million through outsourcing.

Improved Efficiency

Reduction of expenses allows healthcare institutions to allocate resources more efficiently. At the same time, outsourcing lets them leverage the IT expertise of third-party providers, so they may enjoy up to 70% productivity increase and 25-50% improvement in accuracy through tech integrations.

Access to Expertise

Outsourcing allows healthcare institutions to tap into a wide pool of IT professionals with experience in healthcare. Not only will they have the skills, but they would also be up-to-date with the latest technologies and regulatory requirements, ensuring the highest level of IT support.

Enhanced Focus

With IT services managed by a service provider, healthcare institutions can concentrate on patient care, which can improve healthcare service and patient experience.  


As healthcare institutions experience growth and changes in service demand, outsourced IT services can scale to meet their changing needs without having to hire or lay off staff.

Improved IT Security

Outsourcing agencies that specialize in IT have stronger cybersecurity capabilities that allow them to better protect sensitive information such as patient data or banking details against data breaches or cyber threats.

Compliance and Risk Management

Outsourcing firms that specialize in healthcare IT are aware of compliance requirements such as HIPAA in the U.S., allowing healthcare institutions to meet legal standards to avoid violations and penalties that can damage their reputation.

Innovation and Access to New Technologies

Technology is changing rapidly, making it challenging for healthcare institutions to keep up while managing patient care. Through outsourcing, they can easily be up-to-date with the advancements in tech, helping them stay competitive.

Cons of Outsourcing Healthcare IT Services

Before outsourcing, healthcare institutions should carefully consider the drawbacks of outsourcing to minimize risks and ensure quality and efficiency of healthcare services. Below are some outsourcing pitfalls that can be expected and should be mitigated to ensure smooth healthcare IT outsourcing.

Loss of Control

Having external service providers manage IT services means healthcare institutions relinquish control over their IT operations and strategies, which may lead to misalignment in terms of organization needs and goals.

Privacy and Security Risks

Outsourcing involves sharing sensitive healthcare information, which increases the risk of costly data breaches and security lapses if the outsourcing partner does not have strict cybersecurity protocols in place or they don’t have a clear understanding of privacy regulations such as HIPAA.

Communication Issues

Outsourcing to offshore agencies entails timezone, geographical, language, and cultural differences which pose a threat to effective communication. Such a challenge can negatively impact the quality of service and speed of issue resolution.


Relying on a third party to manage critical healthcare IT services can create a dependency, which may pose challenges should the outsourcing partner change or stop their services.

Inconsistency in Quality

The quality of service provided by an outsourcing partner can vary depending on their resources, expertise, and management. Inconsistencies in these aspects may disrupt services and also, healthcare operations.

Hidden Charges

While the costs of healthcare outsourcing services are declared early on, there’s a possibility of having hidden costs associated with contract negotiations, process transitions, and changes in the outsourcing relationship, which may negate the expected cost savings.

Impact On Inhouse Staff

Outsourcing means not hiring inhouse, and this can create morale issues with employees as they perceive a threat to their job security.

Regulatory Compliance

When outsourcing to an offshore company, there is the risk of missing relevant healthcare regulations and standards due to varying requirements in different regions.

Healthcare Outsourcing: Philippines

In 2023, KDCI Outsourcing found that 8% of companies that were interested in outsourcing to the Philippines were from the healthcare industry. Compared to 2.85% in 2022, this number shows a growing openness of companies in the healthcare sector to outsourcing some of their operations to the Philippines.

The primary driver for this increase is attributed to the financial constraints of healthcare in the U.S., which urges traditionally more manual based industries like healthcare to outsource processes such as IT and data management to developing countries like the Philippines, which is known to provide significant cost savings.

Other reasons for outsourcing healthcare services to the Philippines include the country’s growing IT-BPO outsourcing industry, its high English proficiency, and government support that make the Philippines a great outsourcing destination.

Given the growing digitalization of healthcare services worldwide, it is expected that more companies from healthcare sectors will offshore some of their non-core operations to better cope with the growing demands of tech and IT. 

This means a significant increase in healthcare IT services jobs for the Philippine outsourcing industry, opening up more opportunities for healthcare workers who opt not to join the Philippine healthcare workforce.

Healthcare IT Services Roles You Can Outsource

When working with healthcare outsourcing companies, it helps to have a clear understanding of the roles and responsibilities you can outsource, so you can set expectations and requirements prior to establishing a partnership. Below are the most commonly outsourcing healthcare IT roles.

Medical Transcriptionist

They convert voice-recorded reports dictated by healthcare professionals into text for easier storage and retrieval of data.

Medical Coder and Biller

They code healthcare diagnoses, treatments, and procedures for billing purposes using specialized software specific to healthcare IT.

Pharmacy Technician

They use IT systems to manage patient data, track prescriptions, and process insurance claims, all of which ensure the accuracy and efficiency in dispensing medications.

Medical Secretary

They use healthcare IT systems to manage patient appointments, records, and communications between patients and medical staff.

Nurse Case Manager

They rely on IT systems to manage patient appointments, records, and communications between parties and medical staff.

Healthcare Support Agent

They use healthcare IT systems to provide customer and tech support, ensuring smooth patient care coordination and systems are working as they should.

Medical Records Technician

They use EHRs to manage patient health information and records.

Healthcare Data Analyst

They use sophisticated IT systems to analyze large amounts of data to generate trends and insights for improvement of patient outcomes and operational efficiency.

Software Developer

They can design, develop, and maintain software that manage patient records, billing, and other health-care related processes.

Mobile App Developer

They create and maintain mobile applications used in mHealth to ensure smooth delivery of healthcare services, collection of patient data, and maintenance of information.

QA Tester

They ensure that healthcare software, applications, and systems function correctly without bugs, as well as meet strict quality standards.

Front-end Developer

They work on the user interface of healthcare websites and apps to ensure systems are user-friendly for patients and healthcare providers.

Back-end Developer

They handle the server side of healthcare websites and apps, dealing with database management and integration with other systems to ensure healthcare IT services are robust.

Systems Administrator

They manage and maintain the IT infrastructure that supports healthcare services for reliable, secure, and efficient healthcare services.

IT Project Manager

They oversee all healthcare IT services projects, ensuring that new systems are deployed smoothly, while existing systems are updated or maintained well.

Security Analyst

They ensure the protection of sensitive medical data to comply with healthcare privacy regulations like HIPAA and protect against data breaches and cyber threats.

Outsource Healthcare IT Services to the Philippines

As healthcare institutions come to recognize the growing need to digitize, it’s become crucial to partner with an outsourcing company that has not only a robust IT infrastructure, but also extensive knowledge and experience in U.S. healthcare.

KDCI Outsourcing, with over a decade of experience catering to U.S. companies, can build you an offshore healthcare team in the Philippines that will assist you with your IT and tech needs. As we tailor our outsourcing solutions to your organization’s requirements, you can rest assured that you are enjoying the highest quality of service for the best results.

Learn more about outsourcing for healthcare, contact us today!

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