Navigating the Landscape of Outsourcing Administrative Tasks in the Medical Sector
It’s so hard to hire staff here in Australia; should you outsource your medical administration to an international jurisdiction?
The unprecedented impact of the COVID-19 pandemic has exacerbated the hiring challenges faced by businesses in Australia. Businesses in the medical sector, in particular, have struggled to find and retain qualified staff, including skilled professionals for administrative roles. In light of these challenges, medical practices are exploring alternative strategies, such as outsourcing administrative tasks to international jurisdictions. By considering the factors set out in this article, medical practices can make informed decisions regarding outsourcing administrative tasks.
The Staffing Challenge in Australia
Australia's healthcare system is recognised for its high standards and quality care. However, the country is experiencing a shortage of medical administrative professionals, making it increasingly difficult for healthcare providers to fill crucial positions.
The reasons for this staffing challenge are multifaceted and include:
1. Skills gap: The demand for qualified medical administrators surpasses the available talent pool, creating a mismatch between supply and demand.
2. Geographic constraints: The shortage of skilled professionals is often more pronounced in rural and remote areas where access to healthcare services is already limited.
3. Rising costs: Hiring and retaining skilled staff in Australia can be expensive due to the country's high living costs and wage expectations.
As a result of this challenge, some practices and clinics are looking for options on how to engage team members from different parts of the world to assist with their business needs. Many have identified that there are opportunities to consider retaining people in locations other than Australia to have their Australian teams focus on more high-value tasks.
What is Outsourcing Administrative Tasks?
Outsourcing involves delegating specific functions to external service providers or individuals who are based in international jurisdictions.
Outsourcing can offer several potential benefits, including potential cost savings. Outsourcing to countries with lower labour costs can significantly reduce expenses related to salaries, benefits, and infrastructure.
It can also provide access to a larger talent pool. Australia is a smaller country population, and expanding the search for skilled people globally can provide access to a more extensive pool of qualified professionals, increasing the chances of finding suitable candidates.
Medical practices can consider outsourcing non-core administrative functions, which then allows healthcare providers to redirect their resources and attention to delivering quality healthcare services.
We are sure you are wondering, as a medical practice, that you can legally outsource these administrative tasks without getting the clinic into trouble. Let’s take a look at the Australian legal landscape of international outsourcing.
Australia’s Legal Landscape of International Outsourcing for Medical Practices
When considering outsourcing administrative tasks internationally, it is essential to navigate the legal landscape to ensure compliance with relevant laws and regulations. This includes understanding the legal framework in both Australia and the chosen outsourcing jurisdiction. As we are Australian lawyers, we will focus on the aspects to consider from the Australian perspective.
We therefore recommend that you take proactive measures to mitigate any legal risks and protect your business interests by considering the following matters:
1. Clear and Well-Defined Contractual Obligations
Establishing comprehensive and well-drafted contracts with outsourcing partners is crucial. The contracts should clearly define the scope of work, responsibilities, deliverables, timelines, payment terms, and dispute resolution mechanisms. Clear contractual obligations provide a foundation for a successful outsourcing relationship.
Contracts and Service Level Agreements (SLAs) with service providers should be based on best practices and adhere to legislative obligations relating to privacy, occupational health, and safety. If you are a General Practice, for your practice to be formally accredited, your contracts and SLAs must satisfy the RACGP Standards for general practice.
2. Confidentiality and Non-Disclosure Agreements
To safeguard sensitive information, including patient data and proprietary business information, practices should implement robust confidentiality and non-disclosure agreements (NDAs) with outsourcing partners. NDAs help ensure that confidential information and practice intellectual property remain protected and cannot be disclosed or used for unauthorised purposes.
3. Data Transfer Agreements
If personal data is being transferred to the outsourcing jurisdiction, practices must establish data transfer agreements that comply with applicable data protection laws. These agreements outline the responsibilities of both parties regarding data security, privacy, and compliance with relevant regulations.
4. Compliance with Australian Privacy Laws
The Privacy Act in Australia provides a framework for cross-border disclosure of personal information. As medical practices are APP entities, this is a relevant consideration. APP 8.1 and s 16C, APP entities are required to ensure that overseas recipients handle personal information in accordance with the APPs. They are accountable for any mishandling by overseas recipients. Exceptions exist, and the disclosure must comply with APP 6, which governs the use and disclosure of personal information for the primary purpose unless an exception applies.
Taking proactive measures to ensure you are legally compliant in Australia is an important step in your outsourcing plan. Remember, laws and regulations can evolve and change over time, so seeking legal advice from professionals who have worked with medical and health outsourcing can provide additional guidance and ensure all legal considerations are addressed appropriately.
Compliance with Applicable Laws and Regulations
Practices should conduct thorough due diligence to ensure that the outsourcing partner complies with all applicable laws and regulations in the country they are working in. This includes verifying their legal standing, licenses, certifications, and adherence to labour laws, intellectual property laws, data protection regulations, and any other relevant legislation. Connecting with a local lawyer in the jurisdiction is a sensible step in working through these issues.
Practices should also be aware that laws and regulations can evolve and change over time, not just in Australia but in the jurisdiction you are outsourcing to. It is essential for practices to stay updated on legal developments in both their home jurisdiction and the outsourcing jurisdiction. This enables practices to adapt their outsourcing arrangements to remain compliant with any new or modified legal requirements. Stay up-to-date with the latest legal updates relevant to your practice by signing up for You Legal’s newsletter here.
Insurance Considerations in International Outsourcing
We are not insurance brokers, but we suggest engaging one when working through the business case for international outsourcing in your medical practice. Carefully consider the insurance coverage required to mitigate potential risks and inform the relevant insurers of your business plans.
The following insurances could be considered when undertaking this outsourcing:
1. Professional Liability Insurance
The practice's Professional liability insurance (as a service provider to the doctors) should be updated to ensure that the insurance company is aware of the arrangement. They may ask to see the outsourcing agreement to confirm that the agreement specifies the outsourcing partner's responsibility for maintaining their own professional liability insurance to cover any potential liabilities arising from their actions or errors.
2. Cyber Liability Insurance
Cyber liability insurance is crucial with the increasing reliance on digital systems and the risk of data breaches. This coverage protects against financial losses and liabilities resulting from data breaches, unauthorised access, or cyberattacks. Verify that the outsourcing partner has appropriate cybersecurity measures in place and consider including requirements for cyber liability insurance in the outsourcing agreement.
3. Business Interruption Insurance
Business interruption insurance provides coverage for financial losses and additional expenses incurred due to a disruption in operations. This can include disruptions caused by natural disasters, political instability, or unforeseen circumstances such as the COVID-19 pandemic. Consider the potential impact of disruptions on the outsourced tasks and ensure that both parties have appropriate business interruption coverage to address potential losses.
Regularly review and update your insurance coverage to align with changing outsourcing arrangements and evolving risks with a broker as needed.
Ethical Considerations
Balancing business needs with ethical considerations is a crucial aspect of outsourcing. While outsourcing offers potential benefits such as cost savings and access to specialised skills, it is essential to prioritise fair labour practices throughout the outsourcing process, regardless of where the talent is located.
While medical centres do not meet the threshold for reporting and compliance, in accordance with the Modern Slavery Act (2018), there is a moral and ethical obligation to ensure that your business does not engage in modern slavery.
By balancing business needs with ethical considerations and ensuring fair labour practices in the outsourcing process, medical practices can establish a responsible and sustainable outsourcing relationship. This approach not only contributes to the well-being and rights of outsourced employees but also enhances the reputation and ethical standing of the medical practice itself.
Leverage an Expert
Whether you already utilise outsourcing in your medical practice or are just thinking of starting, weighing the legal, insurance and ethical aspects is crucial. Compliance with employment laws, data protection, and patient privacy is essential. Adequate insurance coverage and fair labour practices should be prioritised. Outsourcing can offer benefits like specialised expertise and cost savings, but a comprehensive cost-benefit analysis is necessary.
Medical practices should evaluate their needs and resources to determine the best approach, which may include a combination of outsourcing, remote work, and automation. Overall, outsourcing can be a viable option if legal, insurance, and ethical aspects are addressed. It can enhance efficiency and achieve strategic objectives, but careful consideration and alignment with practice values are necessary.
We suggest seeking professional advice on these issues. If you have any questions about outsourcing and how it might apply to your particular circumstances or anything else, feel free to contact us here.
To help you navigate the complexities of outsourcing, we've prepared a detailed checklist that covers everything you need to consider. Take advantage of optimising your administrative tasks effectively!