How to Leverage Outsourcing to Respond to Health Tech Industry Shifts
Article

How to Leverage Outsourcing to Respond to Health Tech Industry Shifts

by Peter Burns
April 20, 2021

The health tech landscape experienced immediate and dramatic shifts when the COVID-19 crisis hit the U.S. in March 2020, including higher demand for telemedicine services, acceleration of digital strategy initiatives and increased focus on cloud services and digital transformation. This has many health tech companies sprinting to market faster than ever, putting a huge strain on their infrastructure.

Business leaders are under pressure to deliver their product or service successfully in a radically different business climate. At the same time, most lack the in-house resources and expertise to manage all the regulatory, operational and technological challenges they encounter. To solve their immediate needs and set themselves up for sustainable success, a growing number of health tech firms are turning to outsourcing.

Where Outsourcing Can Help

Accounting and HR management are what most health tech leaders look at first when thinking about outsourcing support. Building and maintaining these teams in-house can be difficult and cost-prohibitive for any fast-growing company. And in the health tech industry, many financial functions are particularly complex and highly regulated, with noncompliance leading to potential investigations from regulatory bodies or fines.

From an accounting perspective, all stages of health tech companies, from foundation to viable product or service , encounter difficult expense and revenue tracking. If you’re in the process of software development, for example, there are internal costs and/or fees paid to third-party service providers, needing categorization in the event of an audit. If you have a telemedicine service currently in the market, complicated pricing arrangements, which are usually based on a per-visit or monthly fee structure, create challenges about when to recognize that revenue.

Both situations require extensive knowledge of regulatory standards. A capable outsourced accounting partner will be able to navigate the requirements to ensure you stay compliant. They can also help you find any cost reduction strategies or tax credit opportunities.

Administering compensation and benefits packages and retaining talent is also tricky and may fall outside your in-house expertise. A good HR partner will manage day-to-day HR tasks and ensure compliance with local, state and federal rules. They will also understand how to craft employment agreements that align with your goals to keep your employees satisfied with their remuneration while ensuring you don’t pay more than expected when it comes to distributing commissions.

How to Find the Right Partner

There is a wide range of outsourcing vendors in the market. These are some key points to think about when selecting an outsourcing service provider:

  • Do they understand your business? The right provider should know the nuances of your current challenges. When you interview them, they should have a solid grasp of the complexity of your regulatory environment and also the speed with which the health tech industry is changing in the short and long term.
  • Can they scale with you? A provider may have the right solution now, but is their offering going to be able to pivot as your needs change? They should be able to anticipate the roadblocks you’ll encounter down the road when you reach the next stage in your organization’s growth and have the depth and breadth of expertise to meet those needs.
  • Are they technology savvy? Ask them about their technology footprint and expertise. Make sure they’re up to date on the latest tools and platforms. They should be able to walk you through the reasons a technology is a good fit for you and how you can leverage it. Can they identify appropriate business technology solutions and explain how integrating them with your existing tools can give you greater insights into business performance?
A good outsourcing partner will provide stability and reliability to your organization through a deep bench of resources and expertise. This will enable you to focus more on your core business, deliver your product or service faster and more effectively and meet ever-changing market demands.

To learn more about how to leverage outsourcing for your health tech organization, contact our experts.

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