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Clinical Services in Healthcare: When to Outsource & When Not To

By : | Published On : June 20, 2018

Key Takeaways

Choosing which clinical services to subcontract is not a straightforward task; nonetheless, it can be a time and money saver. Most hospitals have their radiology interpretations, laboratory testing, remote patient monitoring, and tele-ICU collaborations done by outside experts. This not only frees up more time for doctors to attend to patients but also facilitates faster results. However, outsourcing can also be risky, such as having a disparity in quality or losing a certain degree of control. Intelligent hospitals monitor costs, turnaround times, and patient outcomes, using software like Valify to help with decisions and ensure that outsourcing is indeed a value-adding activity.

One of the hardest decisions that a healthcare leader has to make is when to outsource clinical services. Hospitals that have to pay for clinical services at the same time that they are expected to provide high-quality patient care need a strong guideline to know which services to outsource and which to retain in-house. Healthcare outsourcing, mainly for clinical functions, is transforming the care delivery process and the way organizations manage their expenses. The healthcare outsourcing market, which is mainly driven by international demand, is expanding very quickly as providers are trying to attain better operational efficiency.

Why This Decision Matters in 2026

Today’s healthcare environment is more complex and competitive than ever:

These trends mean hospitals must understand not just if they should outsource, but when and how outsourcing fits into their strategy.

What Are Clinical Services in Healthcare?

“Clinical services” include all activities directly related to patient care, diagnosis, treatment, and therapeutic support. Common Clinical Services That May Be Outsourced

  • Imaging interpretation (radiology reads)
  • Pathology or specialized lab work
  • Dialysis support services
  • Tele‑ICU or remote monitoring
  • Pharmacy compounding or clinical support
  • Specialty clinician consult services

These differ from administrative outsourcing, like billing or scheduling; they affect clinical outcomes, quality, and patient experience.

The Growing Role of Outsourcing in Healthcare

Outsourcing clinical functions is no longer a niche strategy. Healthcare providers are increasingly working with third‑party specialists because:

  • Staffing shortages make it hard to recruit and retain specialized clinical professionals.
  • Hospitals face rising operational costs and need predictable budgets.
  • New technologies enable remote diagnostics and monitoring.
  • Regulatory complexity makes in‑house management more burdensome.

Today, hospitals can partner with outside specialists to deliver certain clinical services without compromising quality or continuity of care.

Benefits of Outsourcing Clinical Services

Let’s examine the fundamental reasons why hospitals choose to contract clinical services and how these reasons correspond with the overall business and clinical objectives.

  • Access to Specialized Talent

By outsourcing, hospitals get a chance to use the facilities of the most skilled professionals without incurring the burden of full in-house staffing costs. For instance, rural or community hospitals may send their radiology readings to imaging groups having the specialized expertise for better accuracy.

  • Better Control Over Costs

Most hospitals find that outsourcing leads to the reduction of costs in the whole process, particularly for the services that are highly specialized or require expensive equipment. Outsourcing changes the capital costs (CapEx) into predictable operating costs (OpEx), thus allowing the leaders to budget more confidently.

  • Faster Results for Critical Services

The dedicated outsourced partners generally provide faster results, especially in the areas of imaging reads or remote patient monitoring. This can also result in freeing up clinicians so that they can concentrate more on patient care, which will not only improve outcomes but also staff satisfaction.

  • Flexibility to Scale Up or Down

If there is an increase in the number of patients, outsourcing clinical teams can also increase according to the demand. This would eliminate the long-term hiring and training efforts, which are often costly. Hospitals that adopt outsourcing strategically can even increase or decrease their services without causing a major disruption to their workforce.

Risks & When NOT to Outsource Clinical Services

Outsourcing clinical functions isn’t risk‑free. It may be the wrong choice when:

  • Quality Control Is Essential

Some hospitals deliver consistently higher quality care because their internal teams understand organizational standards and culture. If outsourcing partners cannot meet quality benchmarks, patient outcomes may suffer.

  • Loss of Operational Control

Outsourcing means relying on an external team to manage workflows, data, and clinical protocols. This can be challenging if the partner’s processes are not tightly integrated. If there are no clear Service Level Agreements (SLAs) in the contracts, there can be gaps in care and accountability left unattended. 

  • Cultural or Strategic Misalignment

Certain clinical services need to be well integrated with the internal teams and the entire workflow of the institution. It is a must for outsourced partners to be on the same page with the institution in terms of values and goals; otherwise, the whole service delivery might seem alienating. 

  • Data Security and Compliance Concerns

One of the key elements of clinical outsourcing is the strictest following of privacy regulations (like HIPAA). If the vendors are lacking in the area of compliance, the probability of a data breach happening is greater.  Key takeaway: Outsourcing should not result in violation of patient privacy or compliance with regulations. 

How to Decide: Key Indicators for Outsourcing

To make a smart decision and avoid common pitfalls, hospitals should track both financial and quality indicators.

Financial KPIs to Consider

Metric What It Tells You
Cost per clinical service Whether internal costs exceed national or peer benchmarks
Spend variance over time Gaps between budgeted and actual clinical spend
Capital vs. operating costs Potential savings from outsourcing
Return on investment (ROI) Whether outsourcing yields measurable savings

Using a tool like Valify’s spend analytics, hospitals can uncover hidden opportunities and risks in clinical service spend.

Operational & Quality Metrics

  • Turnaround time for lab or imaging services
  • Patient outcome measures (e.g., readmission rates)
  • Clinical compliance scores and error rates
  • Patient satisfaction scores

A rising trend in delays or quality dips may signal that internal resources are stretched too thin.

Capacity & Strategic Considerations

Ask questions like:

  • Does our facility have the staffing to support this service internally?
  • Is demand for this clinical service growing faster than we can scale?
  • Would outsourcing improve patient experience or clinical outcomes?

If the answer is “yes” to multiple questions, an outsourced evaluation is likely warranted.

Best Practices for Outsourcing Clinical Services

Once the decision is made to outsource, execute with a strategy that protects quality and maximizes value.

  • Choose Partners With Proven Outcomes

Look for vendors with benchmarked performance data, ideally tied to quality and turnaround metrics.

  • Align Outsourcing With Internal Goals

Make sure the outsourcing partnership supports your broader clinical and operational strategy, not just cost reduction.

This means aligning performance metrics, communication frequency, and reporting structures.

  • Build a Strong Governance Framework

Set up review cadences, oversight committees, and performance dashboards with clear thresholds for quality and compliance.

Valify’s WorkPlan dashboard and benchmarking tools help ensure that outsourced clinical services remain on track.

  • Use Data to Monitor Performance

Track outcomes over time using objective data:

  • Monthly performance dashboards
  • Quality benchmarks vs. industry standards
  • Cost savings compared to forecasted internal costs

Real‑time visibility enables continuous improvement, not just quarterly or annual reviews.

Real‑World Examples of Clinical Outsourcing

Example 1: Radiology Reporting

A mid‑sized hospital outsourced radiology interpretations during peak hours. Turnaround time improved by 25%, while internal staff could focus on urgent inpatient needs.

Example 2: Specialized Laboratory Testing

A hospital without high‑complexity lab equipment partners with a specialized vendor for advanced tests. Internal costs drop while diagnostic accuracy improves.

Example 3: Remote Patient Monitoring

An integrated health system deployed outsourced remote monitoring services for chronic care patients. Patient follow‑ups improved, and hospital readmissions fell.

Decide, Outsource, Excel with Valify

Outsourcing clinical services can be a great advantage for hospitals, but only if the decision is backed up by data and is in line with the goals of patient care. It is not merely a matter of saving money; rather, it involves making intelligent choices that ensure quality and efficiency.

We provide hospitals with a comprehensive view of our Purchased Services expense, which covers clinical categories as well. Our analytics, benchmarking tools, and contract management solutions give you the insights essential for making decisions regarding the outsourcing of certain services or keeping them in-house.

Are you curious about how outsourcing can lead to the efficiency of the operations and better healthcare?

Schedule a demo with Valify today and get rid of the uncertainties in your decision-making process.

Frequently Asked Questions:

Which clinical services in hospitals should be recommended for outsourcing at the very beginning?

The top candidates include services that require specialized skills and involve high equipment costs: the likes of radiology reads, lab tests, tele-ICU support, and pharmacy compounding. Also, consider the areas where the internal staff are overworked or where the technology costs are the highest to start with.

What are the implications of outsourcing on patient wait times and care quality?

Outsourced specialists would probably be able to provide quicker results, which would consequently reduce the possibilities of delays for imaging or lab work. This, in turn, will allow the in-house clinicians to concentrate more on the bedside care which is very likely to improve the whole patient’s experience.

What should I be cautious of when selecting a clinical services vendor?

You should pay attention to the quality benchmarks, the reliability of the turnaround time, and the strict compliance standards. A difference in culture or lack of communication can lead to gaps in care, so always do a thorough check.

How is outsourcing actually saving my hospital money?

Monitor costs by service, ROI, and operating vs. capital expenses. Actual spending compared to industry benchmarks not only shows the true savings but also helps identify areas for further improvement.

Can benchmarking and data really point out the specific services that should be outsourced?

Definitely. Data analytics illuminate the ‘hidden’ costs, areas of discrepancies in performance, and places where efficiency can be increased. Expanding tools such as Valify’s spend insights allow empowered and informed, evidence-based decision-making from the leaders.