Outsourcing goes from cost cut to core strategy 

Key highlights: 

Outsourcing becomes strategic: Providers increasingly view outsourcing as essential for sustainability amid staffing shortages, payer audits and rising operational complexity.  

Labor and expertise challenges: High turnover, costly onboarding and specialized billing requirements push providers toward partners with deep industry knowledge and process expertise.  

Tech-plus-people approach: Successful outsourcing blends automation with skilled human oversight, improving efficiency, reducing burnout and maintaining compliance. 

YARMOUTH, Maine – As margins tighten and administrative burdens multiply, home medical equipment (HME) providers are confronting a quiet reckoning that the internal workforce that once carried the load can no longer keep up, industry experts say. 

“The conversation around outsourcing in health care is changing,” said Sid Simmons, executive vice president of sales for ACU-Serve. “In today’s environment, third-party partnerships have become essential for sustainability.” 

About half of providers now outsource patient collections and nearly one-third outsource billing services, according to the most recent HME News/VGM & Associates Financial Benchmarking Survey. 

Behind those numbers are multiple pressures pushing providers toward outsourcing in larger numbers. 

“The HME and health care industries face significant staffing headwinds from higher salary expectations, rising living costs, expensive employee benefits and substantial onboarding and training expenses,” said Todd Usher, founder of Tactical Back Office. “The lack of retention, high cost of turnover and lack of trained candidates in specialized health care roles creates operational challenges.” 

Labor fatigue 

Stakeholders say COVID marked a turning point in the labor market. Since then, it’s become harder to hold on to qualified staff, particularly in billing and collections. Even with layoffs rippling through tech and corporate sectors, few providers have the capacity to recruit and train new hires, experts say. 

“Building that infrastructure takes significant time, money and leadership bandwidth,” said Bruce Gehring, senior vice president of business development at Allegiance Group. “Even if the labor pool is large, the cost of developing and maintaining a high-performing team – especially to meet the operational and customer service standards our industry demands – can be prohibitive." 

For many providers, the challenge isn’t just finding people – it’s keeping up with a system that never stops changing. The complexity of HME billing and evolving payer requirements demand deep expertise and constant adaptation, areas where outsourcing partners often excel, says Gehring. 

Steve Cela, CEO of Strategic Office Support (SOS), agrees, adding that deep expertise can’t be faked. 

“Don’t settle for a generic staffing vendor that claims they can ‘learn as they go,’” he said. “That learning curve comes at your cost in time, money and frustrated patients. A true DME-specialized partner brings process expertise – they understand CMNs, PARs, resupply, denials, timely filing – all the moving parts that directly impact your cash flow.” 

Partnership over transaction 

For providers turning to outside help, success depends on who’s at the other end of the contract. Gehring warns that a purely transactional relationship – where an account is handed off with little oversight – rarely delivers lasting value. 

“A major red flag is when a vendor disappears after the contract is signed,” he said. “When there’s no training, no proactive support, and no process for issue resolution, the relationship becomes reactive instead of collaborative.” 

At ACU-Serve, that relationship looks different. 

“We view outsourcing as a strategic extension of a provider’s team, not a handoff,” said Simmons. “At ACU-Serve, we start with a consultative assessment to identify root-cause issues, not just surface-level fixes. Together, we define KPIs, outline responsibilities and build reporting that gives clients full transparency.” 

Usher takes a similar stance. His company invests up to 16 weeks in staff training to maintain turnover below 1%. 

“Moving into outsourcing staffing can be a bit overwhelming, so TBO offers their clients the opportunity to use three TBO staff for the price of one local hire the first month,” he said. “This provides them with the ability to explore the personalities and work styles that match their business.” 

Tech plus people 

While technology continues to reshape health care operations, Cela cautions against viewing automation as a silver bullet. 

“There’s a lot of hype around AI right now and it’s justified,” he said. “But even the most advanced platforms still require context, oversight and human judgment. The winning formula today is not just tech, but tech plus people. A technology-enabled partner that combines automation with skilled operators is going to outperform standalone software or traditional staffing every time.” 

That balance of technology and talent, says Usher, is ultimately what keeps providers and their people sustainable. When outsourcing is used strategically, it doesn’t replace teams; it protects them. 

“Ultimately, this improves overhead and retention, reduces burnout of internal staff members and increases the service level for patients and referral sources while maintaining compliance standards and operational excellence,” he said.