Examining the Efficiency of Outsourcing in India's Healthcare Sector Using Data Envelopment Analysis

Outsourcing is a global phenomenon not only to remain competitive but also to survive in the fast changing environment across different sectors of industry, and healthcare sector is no exception. Financial pressures like reduced reimbursements by the payers, rise in input cost and lower payment by the patients are forcing many healthcare organizations to opt for outsourcing. It is difficult to generalize the theories and practices underlying the practice of outsourcing in healthcare. On the other hand, it is very difficult to closely measure the benefit of outsourcing, particularly in healthcare, as it is not easy to quantify the benefit. This paper presents a study on the current practice of outsourcing in healthcare sector in India, and measures the performance of outsourcing activity through benchmarking, using conventional Data Envelopment Analysis (DEA)