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Farming out services

December 1, 2008
by Gary A. Enos, Editor
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Treatment centers look to mission in deciding whether to enlist outside contractors

The move to hire outside contractors rather than using in-house staff for an organizational function represents an important business consideration for any company, but for addiction treatment centers the discussion around this topic also maintains a highly clinical focus. Treatment organizations report that they generally weigh any decision to contract out services according to the proposal's potential impact on the clinical experience.

“At AdCare, if we determine that contracting out a service would have a favorable impact on the patient care experience, we would be excited to investigate the possibility,” says Jeffrey Hillis, JD, MBA, vice president of administration at AdCare Hospital in Worcester, Massachusetts. “To the contrary, if we determine that contracting out a service would have a negative impact on patient care, we would obviously not be excited to evaluate such an arrangement.”

Hillis continues, in reference to the latter scenario, “The only time we would consider such an arrangement would be where the negative impact on patient care was negligible and the favorable fiscal impact would be significant enough to generate resources that could then be utilized in other areas to enhance the program's overall patient care experience.”

Hillis developed for his treatment organization a decision matrix that helps govern the analysis of potential opportunities for contracting out various functions. He says that besides the primary factors of patient care and financial considerations that play into the ultimate decision, other prominent criteria in AdCare's evaluation process include potential disruption to departments, the reputation of the outside service provider being considered, the availability of qualified workers in the area marketplace, and considerations around corporate compliance.

One provider's contracts

Administrators at Father Martin's Ashley in Havre de Grace, Maryland have an exacting standard to live up to in their determination of when it makes sense to hire an outside contractor to perform a service. The ideals of co-founders Mae Abraham and Father Joseph Martin about treatment that respects the addict and offers a healthy, reinforcing environment are never far from the minds of the organization's key decision makers.

“What we offer here on this campus is a culture, and the contracts that are successful are the ones that become a seamless part of the culture,” says Lisa Bucklin Williams, Father Martin's Ashley's director of marketing.

Dan Berardi, the organization's vice president of support services, explains that the center has decided over the past 18 months to bring in outside contractors for three major categories of services. Each has had its own set of considerations for the decision and for the evaluation of its success.

This past summer, Ashley decided to hire a national firm with local ties to perform construction management services for its expanding treatment campus. Separate from everyday maintenance functions that are performed with in-house employees, the contracted work involves larger project-based efforts designed to meet Ashley's expansion and renovation needs. Managers concluded that it would be cost-effective to bring on a private firm that could use its expertise and contacts to enlist various construction trades on an as-needed basis, Berardi says.

“Our big issue here is, ‘What are our existing resources and what is the skill set we have in place?’” Berardi says. “Then we look at what benefit we would gain by continuing to have that skill set in the organization.”

Timeliness of project completion and the ability to stay within budget will be among the factors that will determine how successful this particular contracting arrangement proves to be, according to Ashley staff.

The organization also has contracted with an outside company to handle laundry services for clients. These services traditionally have been offered to residents free of charge—not to coddle them, Williams emphasizes, but to be in keeping with Father Martin's philosophy that residents in recovery need to spend as much time as possible free from the mundane distractions that might take time away from their recovery-focused activities.

Ashley formerly operated its own off-site laundry facility with hired staff, but having these individuals located off-campus and dealing with costs of replaceable assets in the operation convinced it to explore a private contract. Berardi says the organization has incurred about a 20% savings with the contract arrangement. Patient satisfaction will play a major part in whether the organization decides to continue the arrangement long term.

Finally, Ashley moved from in-house staffing of its patient service associates, who escort patients to lecture sessions and take them to other appointments, to a contract security operation for the campus. Berardi likens these workers' tasks to “shepherding the flock” and says the recent acquisition of an additional 100 acres for the campus has added complexities to the overall effort to keep residents and staff safe.

Through its typical request-for-proposals process, Ashley was able to find a company with an operations manual that illustrated its appreciation for the particular security needs of clinical settings. “They understand the industry, from the care and custody of patients to the need for confidentiality to the assessment of risk,” Williams says.

Berardi explains that the organization typically will seek a one-year agreement with an outside contractor, giving it frequent opportunities for formal review of how well the process is working. Ashley foresees a 6- to 8-month project window for the construction management function, with a possibility that it could be extended.