`Outsourcing offers rationalisation of cost and flexibility’

Thirty-one-year old Kumar Katra, is the General Manager - Marketing, Business Development and Healthcare, Radha Krishna Hospitality Services Ltd (RKHS), a joint venture with Compass Group PLC, UK. He is the dynamic man behind RKHS spreading its tentacles to 265 sites across 18 states in India, employing over 5500 team members. In an interview with Express Healthcare Management, he discusses the outsourcing market in healthcare. Excerpts:

How big is the outsourcing market in Mumbai? What is the rate of growth of the market?
Outsourcing in large sense of the word is intended at improving efficiencies, building core competence & ensuring the customer gets the best for his money. In case of hospitals our customer focus is patient. Outsourcing of non-core areas is being seriously considered by service & manufacturing industry for its known benefits. In hospital operations one can outsource much more than just catering, housekeeping, laundry, security and gardening.

In healthcare industry potential market is large, however the industry is still at early stages of outsourcing. The concept has clicked with new hospitals; the old ones remain constrained by their existing infrastructure.

Outsourcing of non-core areas has been prevalent for over a decade in its own small way which is now getting organized with complete responsibility shifting towards the operator. The operator is accountable for the job rather than his people.

Single window clearance has its merits which weigh over the multiple agencies, which means comprehensive outsourcing reduces the burden of monitoring the agencies. The hospital management can focus on their core area - medical treatment and outsource non-core areas. Comprehensive service provider relieves burden on administration, procurement, accounting, logistics & all other responsibilities off the management resulting in savings of indirect cost related to these functions.

The client gets a monthly invoice that gets scrutinized & paid. RKHS is responsible for providing the defined service, the back office support, i.e. vendors, supplies, recruitment, pay roll, quality control etc. is completely RKHS responsibility.

On what criteria should the hospital administration choose the agent for oursourcing?
It is important to choose right partner for outsourcing. Some of the parameters one should consider are reliability of the partner, experience, systems & processes, continuous efforts in upgrading, technical support & understanding of international standards. Documentary evidence of deliverables and other client recommendations should be high on checklist for outsourcing.

Do you think outsourcing helps in easy control as the authority is dealing with the agency and workmen?
It is easier to identify the function that can be outsourced. The most difficult part is to define the scope of responsibility for both the parties. One may find practical issues while implementing the contract if it is not explicit & comprehensive.

Does outsourcing ensure better commitment towards the job by staff, as reputation of the outsourced agency depends on the given quality as well as output?
The objective of outsourcing is to off load areas of non-core competence. Whether outsourced or managed in-house, cost of the function is inevitable. But one has to recognize that quality has a price tag. Outsourcing has hidden benefits which one needs to consider, in the long run offers rationalization of cost and flexibility.

It is believed that hospital authorities pay less to outsourced employees than their permanent staff. In that case, do your employees complain about being paid less?
The hospital and hospitality industry is governed by statutory norms for payment of wages. The principal employer is liable for non-compliance of statutory requirements.