Top Healthcare Outsourcing Destinations: Eastern Europe vs South America
18 min read
This article compares healthcare IT outsourcing in Eastern Europe and South America, outlining the pros and cons of each. We focus on key considerations such as provider expertise, cost analysis, and communication. Gain practical insights to make informed decisions about outsouricing healthcare solution.
In today’s globalized world, companies are continuously looking for ways to cut costs, access specialized skills, and tap into a worldwide labor pool. Outsourcing is a popular strategy whereby companies transfer certain tasks to external service providers. This allows companies to focus on their core competencies while gaining access to cost-effective solutions and specialized expertise.
Eastern Europe and South America have emerged as major destinations for outsourcing software development. Both locations have distinct advantages and a large pool of skilled workers. In this article, we will compare these two locations and examine the key aspects that make them attractive as healthcare software outsourcing destinations.
Eastern Europe offers a highly skilled workforce, competitive prices, and a favorable business environment. Countries such as Poland, Ukraine, Romania, Bulgaria, and the Czech Republic have established themselves as prominent IT outsourcing destinations, attracting companies from around the world. Eastern Europe countries also offer a larger pool of healthcare IT outsourcing companies.
South America, on the other hand, offers a highly skilled workforce, cultural compatibility, competitive pricing, and political stability. Countries such as Argentina, Brazil, Colombia, and Uruguay have experienced rapid growth in their technology sectors and are emerging as top destinations for healthcare software outsourcing.
Ultimately, the choice of outsourcing destination depends on the specific needs and requirements of each business.
Healthcare outsourcing enables municipal and commercial healthcare institutions to grow. The global healthcare IT outsourcing market was estimated to be USD 66180.02 million in 2021 and is expected to grow at a CAGR of 6.3% from USD 70403.55 million in 2022 to USD 114778.53 million by 2030. By outsourcing tasks to healthcare software development companies, medical organizations can reduce costs, speed up development time, and tap the required technical expertise.
In this article, we’ll answer the following questions:
- What are the pros and cons of outsourcing to Eastern Europe?
- What are the pros and cons of outsourcing to South America?
- What are the best destinations for outsourcing in Eastern Europe and South America?
- How do you choose a destination to outsource a healthcare solution?
Outsourcing Healthcare to Eastern Europe
Eastern Europe has long been recognized as a major healthcare outsourcing location, with a significant pool of highly experienced IT staff available at competitive rates. Poland, Ukraine, Romania, Bulgaria, and the Czech Republic have established themselves as leading destinations for healthcare software outsourcing.
The Advantages of Eastern Europe
The vast pool of tech specialists
Eastern Europe has a large number of skilled software engineers, with over 2 million developers in 2022. These professionals have deep tech and domain expertise.
In addition, Eastern European technical universities, many of which are globally recognized and featured in the Top 100 Best Universities List, play a significant role in nurturing new talent in the region.
Cultural compatibility and communication
For businesses in Western Europe, the region is a great cultural fit, making it easier for companies to communicate and work together. Cultural similarities promote efficient collaboration and reduce the likelihood of misunderstandings. For the US market, countries in Eastern Europe have a Western work ethic, and the country with the closest cultural compatibility would be Ukraine. The English language skills of Eastern European technical experts is excellent, enabling them to successfully interact with an international clientele.
Eastern Europe is known as a cost-effective outsourcing option. Although hourly development rates are not the lowest, the Total Cost of Ownership (TCO), which includes management and other costs, makes Eastern Europe a cost-effective option.
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Hourly rates in Eastern European countries typically range from $35 to $100, depending on skills, experience, and the outsourcing model. These rates remain competitive with local providors in the US, Western, or Scandinavian countries. In addition, many Eastern European healthcare IT outsourcing companies handle more tasks, minimizing in-house costs for clients.
Advantageous time zone
Eastern European countries have an advantageous time zone difference from the United States, allowing for more efficient real-time communication and cooperation during business hours.
Exposure to new markets
Eastern Europe’s geographical location and time zones make it accessible in terms of travel and communications for companies in Central Europe or North America, such as Germany and the United States. The region’s proximity to key business centers means that clients can visit suppliers throughout Eastern Europe within a matter of hours.
In addition, the actual time difference between Eastern Europe and these regions is between five and eight hours, allowing for instant interaction without scheduling issues. This simplicity can help organizations streamline their solution and task management, enabling greater interaction and collaboration with their Eastern European software development outsourcing partners.
Considerations for outsourcing to Eastern Europe
Eastern European countries are stable because they are members of the EU and NATO. Ukraine is not part of the EU or NATO, but it has shown resilience during the full-scale Russian invasion. The technology industry in Ukraine is one of the few industries that continues to operate without interruption. Data from the Ukrainian IT Association for 2022 shows that only two percent of these companies have ceased operations as a result of the war, while software exports actually grew by 23% during the first six months of the year, underlining the robustness of the sector.
Legal and regulatory challenges
Outsourcing healthcare to Eastern Europe can present legal and regulatory challenges, including navigating different tax laws, regulations, intellectual property rights, and data privacy laws. It is crucial to work with experienced healthcare software development outsourcing providers who can navigate these complexities.
Reduced transparency for the solution
Whether a healthcare organisation outsources a specific solution or an entire department, it should not expect the same level of control as in-house staff. However, a reliable provider will undoubtedly provide the necessary level of oversight for your solution.
Outsourcing healthcare to South America
South America is quickly becoming a major destination for healthcare outsourcing due to its highly skilled workforce, cultural similarities, reasonable prices, and political stability. Argentina, Brazil, Colombia, and Uruguay are attracting companies with their high-tech workforce and attractive business conditions.
Benefits of outsourcing to South America
Deep and skilled talent pool
South America has a highly skilled workforce that is technologically and innovatively oriented. Argentina, Brazil, Colombia, and Uruguay are known for their expertise in software development, web development, and healthcare software development services.
Outsourcing to LATAM is attractive because of its substantial developer workforce, which exceeds 1 million professionals. Brazil leads with 500,000 tech professionals, followed by Mexico with 220,000 software engineers. Argentina and Colombia also make significant contributions with 115,000 and 62,000 programmers respectively. In addition, Latin American STEM universities offer tuition-free IT degrees, complemented by government programs that support the development of local talent.
Favourable time zone
South American countries such as Brazil, Argentina, Chile, and Uruguay, which share the Eastern Standard Time (EST) zone with the Eastern United States, offer a significant advantage for real-time collaboration with North American businesses. This synchronization allows for quick responses, especially in industries such as customer services and technical support.
In addition, the minimal time difference allows for extended working hours without night shifts, which benefits global customer support centers. This time zone alignment simplifies project management, making it easier to schedule meetings and collaborate. Overall, this time zone advantage promotes seamless, real-time collaboration between South American countries in the EST zone and North American businesses.
South America’s healthcare outsourcing costs are relatively competitive compared to other locations while maintaining high-quality standards. Companies can save money without compromising on the quality of the services they provide.
Healthcare software development outsourcing to Latin America offers substantial cost savings for businesses. The growing LATAM market offers US companies access to highly skilled developers at reasonable rates. Comparing salary data on Glassdoor, a Full-Stack Developer in the US earns nearly $109,000 annually, while a Chilean programmer earns approximately $41,000. This significant difference in salaries allows companies to hire skilled software engineers at a fraction of the cost, significantly reducing overall expenses.
Considerations for outsourcing to South America
Infrastructure and connectivity
It is critical to assess the chosen infrastructure and connectivity of the chosen outsourcing destination. Reliable internet access and modern infrastructure are essential for seamless collaboration.
Legal and regulatory compliance
Outsourcing healthcare to South America may require negotiation of various legal and regulatory frameworks, including tax rules, intellectual property rights, and data privacy standards. It is critical to work with compliance-savvy software development outsourcing companies.
Time zone differences
While South America offers a favorable time zone for clients in the United States, time zone differences can still cause problems for companies in other regions of the world. Clear communication procedures and work schedules need to be established to ensure effective teamwork.
Top Destinations to Outsource Healthcare Software Development in Eastern Europe
Poland has established itself as a prominent outsourcing destination for healthcare software development, boasting a highly skilled workforce. The country’s emphasis on technology and innovation, coupled with its favorable business climate, makes it an attractive option for companies. Polish IT companies are renowned for delivering high-quality healthcare software development services at competitive prices.
Poland’s software companies have an exceptional developer skills pool of over 88,636 workers, with more than 15,000 university graduates entering the field each year. Polish developers have a very high HackerRank ranking of 98 out of 100 in terms of technical skills.
At the moment, Poland’s pool of IT specialists is growing due to the large number of Ukrainian professionals who have chosen to relocate to this country because of the war. As a result, the vast majority of Ukrainian companies have established headquarters in Poland and other European countries. However, these professionals are planning to return to Ukraine as soon as the conflict is resolved.
When outsourcing software development to Poland, you can find a large pool of developers specializing in both popular and uncommon technologies, with the most prevalent specializations being Java, C#, C/C++, JS, .NET, and Python.
Poland has five main IT hubs: Krakow, Warsaw, Wroclaw, Lodz, and Poznan, with developers charging between $750 and $5,500.
Poland is ranked 40th in the world for ease of doing business, and according to the The World Bank, Poland’s diverse economy has proven to be one of the strongest economies in the EU. Poland also has the lowest corruption rate in Central and Eastern Europe.
According to Clutch, Poland has nearly 400 companies providing healthcare outsourcing services.
Ukraine has emerged as a major player in the healthcare outsourcing market. The country offers a favourable time zone difference from the United States, making communication and collaboration seamless. Ukraine is known for its affordable prices, adaptable engagement strategies, and expertise in software development and engineering.
A Ukrainian developer earns an average of $4000 per month, according to Glassdoor. In the United States, a senior software engineer earns $10,000.
In terms of IT competitiveness, Ukraine ranks 12th out of 30 European countries. Ukrainian programmers have excelled in HackerRank coding challenges, with an average score of 88.7%.
Ukraine is gaining ground in terms of IT industry credibility. The country is ranked 42nd in the Kearney Global Services Location Ranking. Ukraine also ranked fourth in its category in the WIPO 2022 Global Innovation Index.
The majority of Ukrainian enterprises provide services in more than one sector. Healthcare is one of the most prominent business sectors among Ukrainian software development companies (32.5%). According to Clutch, there are 369 companies in Ukraine that provide software development services for healthcare.
According to the latest Statista research, despite the invasion of Ukraine in February 2022, the Ukrainian IT industry has remained solid and resilient. It shows that in the first nine months of 2022, the country achieved the same level of computer services exports as in 2020, with the potential to exceed 2021.
Bulgaria, a member of the EU since 2007, is one of the most stable and fast-growing economies in the Union. The government has allocated significant financial resources to growing Bulgaria’s IT sector and has put in place the necessary regulations to make the country a true healthcare outsourcing haven for foreign companies.
Bulgaria has a highly educated and professional IT workforce of over 66,000, with a focus on software development, engineering, and cybersecurity. The country offers a competitive cost of living and a favorable business environment, making it an attractive destination for outsourcing IT services.
Bulgarian IT companies are known for providing high-quality services at reasonable prices. A Bulgarian developer earns an average of $4500 per month according to Glassdoor.
Bulgaria is a gold mine for highly skilled software engineers. Their technological prowess is confirmed by official assessments such as the SkillValue report, where Bulgarians are ranked 11th.
According to Clutch, Bulgaria has 58 companies offering healthcare outsourcing services.
Romania’s IT sector is rapidly expanding. The country offers a favorable business climate, low labor costs, and expertise in software development, automation, and testing. Romania is an attractive option for companies looking for high-quality IT services at reasonable prices.
According to Glassdoor, a Romanian developer earns an average of $3500 per month. This also positions the country at a cheaper price point for software development outsourcing in Eastern Europe. In the SkillValue report, Romanian developers are ranked 21st.
Romania prioritizes STEM courses and has developed a number of initiatives to link IT compaies with educational institutions. However, there may be a shortage of suitable individuals. Romania has a smaller talent pool than the other countries mentioned above.
The Czech Republic
The Czech Republic boasts a large IT workforce of approximately 100,000 professionals, with a strong focus on software development and engineering. The country offers a favorable business climate, competitive prices, and a highly skilled workforce. The Czech Republic is known for its IT consulting, software development, and cloud computing capabilities.
In the Czech Republic, the percentage of individuals with higher education is 35%. Each year, the country’s technical universities produce around 16,700 IT professionals.
According to Glassdoor, a developer in the Czech Republic earns an average of $6400 per month. This puts the Czech Republic at the top of Eastern Europe.
Top Destinations to Outsource Healthcare Software Development in South America
While Eastern Europe has traditionally been a popular destination for healthcare outsourcing, South America, particularly Latin America, is emerging as a top choice for IT outsourcing. The region offers a highly skilled workforce, cultural compatibility, competitive pricing, and political stability.
Argentina has a strong education system with a focus on STEM, producing a high number of computer science and engineering graduates. The country has a large pool of experienced developers and engineers and ranks highly in English proficiency.
Argentina is an attractive destination for companies looking for skilled IT professionals. According to Clutch, there are 91 companies in Argentina that provide healthcare outsourcing services. Glassdoor reports that a developer in Argentina earns an average of $1,800 per month.
By 2026, Argentina’s software exports are expected to reach $2.5 billion, a 2.2% growth from the $2.1 billion recorded in 2021. Over the past twenty years, the market has experienced a consistent annual growth rate of 5.3%, suggesting an upward trend in software development outsourcing to Argentina.
Brazil’s tech ecosystem is growing rapidly, with a focus on innovation. The country offers a large pool of skilled developers, engineers, and data scientists. Brazil has a vibrant startup scene and a supportive government that invests heavily in tech infrastructure and education.
According to Clutch, Argentina has 55 companies offering healthcare outsourcing services. Glassdoor reports that a developer in Brazil earns an average of $3500 per month.
According to the Gartner Market Databook for the second quarter of 2022, the software development market in the country was valued at $9.3 million, making it the largest in Latin America. It is also expected to grow to $13.3 million by 2025.
Colombia has a fast-growing tech ecosystem, with many startups and accelerators. The country offers a large pool of skilled developers, engineers, and designers, with a strong focus on mobile app development and UX/UI design.
The Colombian government offers tax incentives and other benefits to tech companies, making it an attractive destination for outsourcing IT services.
Over the past decade, Colombia has seen the number of technology graduates’ double. In particular, the IT sector has grown by 38% in the last five years. Data from the Colombian Ministry of Education shows that more than 13,000 students graduate with engineering and IT qualifications each year.
In addition, around 24.7% of university graduates in Colombia concentrate on disciplines such as engineering, mathematics, science, and technology. Among these, computer engineering is proving to be a particularly popular choice among Colombian students. In March 2023, there were more than 350 outsourcing companies in Colombia, indicating that the market is still in its infancy. However, the number of companies is growing steadily.
Uruguay may be a small country, but it has a fast-growing tech ecosystem. The country offers a large pool of skilled developers, engineers, and data scientists. Uruguay has a supportive government that offers tax incentives and other benefits to tech companies. The country also has a stable political environment and strong infrastructure.
According to Glassdoor, a developer in Uruguay earns an average of $4000 a month. This puts Uruguay at the top of South America’s rates.
Uruguay’s tech sector is growing, with a focus on software development, gaming, and e-commerce. Montevideo is the main hub, with the emergence of fintech, ed-tech, and health-tech startups. Uruguay ranks second in Latin America in terms of digital readiness. The ICT market is active, with more than 1,000 software development companies exporting nearly $1 billion worth of goods.
Consider These Factors When Outsourcing Your Healthcare Solution
Before outsourcing a healthcare solution, there are several things you should consider.
Objectives and strategy for the solution
Determine the goals you want to achieve by outsourcing software development, such as cost savings, increased productivity, access to specialized talent, or improved patient care. Analyze potential outsourcing options and select suppliers that fit your overall strategy.
Provider’s expertise in healthcare
Before entering into an outsourcing agreement, make sure your chosen provider meets the appropriate criteria. This is especially true for HIPAA, so make sure they have all the appropriate physical, network, and procedural safeguards in place to protect private patient information.
To determine the monetary impact of outsourcing, conduct a thorough cost study. Assess both the indirect and direct costs of outsourcing, including supplier fees, relocation costs, and training costs. Evaluate these costs against the benefits and potential savings that outsourcing could bring.
Identify the interaction and collaboration technologies required for your organisation and the outsourcing partner to work together seamlessly. Analyze language skills, cultural compatibility, and time zone differences to ensure easy interaction and collaboration.
Choosing the Right Healthcare Outsourcing Destination
When selecting a healthcare outsourcing destination, companies need to consider several factors, including the specific requirements of their solutions, the skills required, cost considerations, legal and regulatory frameworks, cultural compatibility, and language skills.
Ultimately, the choice of outsourcing destination depends on the specific needs and requirements of each organisation. Companies should carefully evaluate the pros and cons of each region and select a partner that can meet their unique needs.
In summary, both Eastern Europe and South America offer attractive opportunities for IT outsourcing. Companies can benefit from the highly skilled workforce, competitive pricing, and a favorable business environment in these regions. Whether choosing Eastern Europe or South America, companies can find reliable partners to help them achieve their IT outsourcing goals.
What is the global market size of healthcare IT outsourcing?
The global healthcare IT outsourcing market was estimated to be worth USD 66,180.02 million in 2021 and is expected to grow at a CAGR of 6.3% from USD 70,403.55 million in 2022 to USD 114,778.53 million by 2030.
What is the best destination to outsource healthcare?
Both Eastern Europe and South America offer attractive opportunities for IT outsourcing. Businesses in these regions can benefit from a highly skilled workforce, competitive pricing, and a favorable business environment. Whether choosing Eastern Europe or South America, companies can find reliable partners to help them achieve their IT outsourcing goals.
How to choose the outsourcing destination for a healthcare solution?
Consider these factors when choosing an outsourcing healthcare solution
- Objectives and strategy for the solution
- Provider’s expertise in healthcare
- Cost analysis
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