Posted on 06/26/2010 8:21:55 PM PDT by 2ndDivisionVet
The $940 billion U.S. healthcare bill, the Patient Protection and Affordable Care Act, passed by Congress in March extends health insurance coverage to 32 million Americans over the next decade. According to the Centers for Medicare and Medicaid Services, the U.S. spent $2.5 trillion, or $8,160 per resident, on healthcare in 2009. The healthcare bill expands the market by $261 billion. The new law is a potential goldmine for Indian outsourcers and medical service providers.
Great Indian Expectations
The emphasis in the bill on cost-cutting by American insurance and medical care providers is a plum business opportunity for Indian companies. Not only are Indian information technology and business process outsourcers sectors likely to reap the benefits, the Indian medical and pharmaceutical industry stand to gain too.
The substantial cuts in administrative costs in health care services creates back-office support opportunities for Indian outsourcing companies. Healthcare claimants in the U.S. will likely discover themselves being serviced by Indian call centers. Besides offering customer support services, Indian companies may be hired for other administrative processes, such as enrolling the newly insured, processing claims and transcribing health records, etc.
Riding high on expectations, Ananda Mukerji, CEO of Firstsource Solutions, an early outsourcing mover in the U.S. market, says, “The influx of newly insured 32 million Americans represents a considerable rise in the consumption of health services in the U.S. The legislation is especially significant with its new limits on how much can be spent on administrative costs.”
Indian IT firms have already begun jostling for the new business. Keshav Murugesh, CEO of WNS Global Services says: “The passage of the healthcare bills means that the delivery of healthcare in the U. S. will never be the same again. If there is one focus of the bill, it is getting the entire administration behind reducing healthcare costs against what they are today. In order to do this, every form of cost reduction theme must be leveraged by healthcare companies, including outsourcing and offshoring. This will mean positive momentum for players in this space in the medium to long term. For BPO players it will be an interesting opportunity to play both onsite as well as with offshore models as well as use technology, tools and components to drive efficiencies up and costs down. Amongst others, services such as Finance and Accounting (F&A), Research and Analytics (R&A) will be high in demand as they also help reduce cost and increase efficiency.”
The new law imposes limits on outsourcing by American insurance companies and medical service providers. In addition, several categories of data are prohibited from flowing offshore. As a result, many Indian outsourcing firms have begun setting up shop in the United States. America’s outsourcers are now outsourcing back to America.
Patni, the sixth largest Indian IT major, has acquired CHCS Services, a subsidiary of the American healthcare firm Universal American Corp. Sanjiv Kapur, global head of Patni BPO, says that the company plans to use it new offices in El Paso as a major hub for delivering secured health care services required to keep sensitive data processing operations onshore. Firstsource Solutions’ Mukerji likewise asserted that its 2007 acquisition of MedAssist would be ready for harvest by 2014, yielding even larger dividends thanks to the healthcare bill.
Another IT giant Wipro, with nearly 100,000 employees worldwide, is also expanding its U.S. business. It is set to double its workforce at its Atlanta office by 2013 and open campuses in other U.S. cities. Suraj Prakash, a vice president at the company, says, “There will be enough work to be done in the U.S. Hence, we need to recruit workforce accordingly.”
The healthcare bill allocates $37 billion for the implementation of electronic health records (EHR). The paper to electronic conversion of health records of every American is not as simple as it sounds. The conversion involves several phases, such as system setup, installation, beta-testing, conversion of archives into compatible formats, development of an all-new file management process, in which clinical staff must be trained, and around-the-clock support backup. That makes for a big shopping list for Indian companies.
Suresh Vaswani, joint CEO of Wipro’s IT business, recent said: “Healthcare business in the U.S., with electronic healthcare records work, entails great business opportunities. We have carved it out as a separate business unit and are already doing a lot of back office processing work like medicare and mediclaim for the State of Missouri.”
McKinsey estimates that the EHR requirements will cost $175 billion over the coming decade, of which nearly $50 billion will be devoted to IT services and training.
Image Reading
Business sprouting from the U.S. healthcare bill is expected to benefit Indian companies in other ways as well. One example is advanced medical imaging interpretation. With the expansion in medical services, the demand for image interpretation will widen the gap between demand and supply of diagnostic radiologists in the country. Hospitals are bound to seek outsourcing help. By studying images of American patients overnight, Indian radiologists could provide preliminary readings. The next day, a U.S. doctor can interpret the study and undertake the final reading.
“One could see opportunities in telemedicine as well. More complex solutions, such as medical management and wellness outreach, could also be automated. Outsourcing for the growing clinical research market is an added thrust area,” says Dr Arati Verma, Chief-Medical Excellence Programs, at Max Healthcare. Citing McKinsey estimates, she adds, “the overall market for ‘real world data’ analytics could be worth over $10 billion.”
Treatment Treat
The Indian medical tourism industry is also eyeing a share of the U.S. health bill. As more Americans come under the umbrella of insurance and an already long-waiting list of patients awaiting treatment grows, some analysts expect a five-fold growth in the number of Americans flying overseas for relief. That translates into 5 million American patients heading for foreign hospitals.
By offering world-class medical facilities at one-tenth of the U.S. costs, India may well turn out to be the world’s leading medical destination. Indian doctors are already well entrenched in the United States and India boasts a 98.7 percent success rate of medical procedures against 97.5 percent in the U.S. The country anticipates nearly one million medical tourists by 2012. An Evalueserve study by the Federation of Indian Chambers of Commerce & Industry (FICCI’s) says that India’s share in global medical tourism market is touching 2.4 percent and projects $1 billion in medical tourism over the next two years.
Indian hospital chains like Fortis, Apollo and Max are already inking deals with prominent American agencies and hospitals to send patients seeking low-cost quality-services to them. “From 4,500 foreign patients, we witnessed a 35 per cent increase in 2009. This number is likely to further increase in the coming years,” says Vishal Bali, CEO of Fortis Hospital group. “There’s now an apparent shift from medical tourism to medical value travel,” he adds.
Many U.S. insurance companies are visiting Indian hospitals to survey and assess them, says Apollo Hospitals Managing Director, Preetha Reddy. “I see competition coming only from the U.S. neighboring countries like Mexico and Barbados,” says Reddy.
Indian hospitals are ramping up emphasis on quality care. “There is an urgent need to set some uniform standards for super-speciality medical care,” says Dr Shubnum Singh , Chief of Medical Affairs (External) at Max Care.
“With increasing globalization, cross border healthcare solutions are here to stay. Patients and payers will be able to exercise the most cost-effective choices in selecting their healthcare providers from anywhere in the world. This is why, Indian hospitals need to match world-class medicare services,” adds Max Healthcare’s Verma. “To ensure smooth cross-border business, India and America should collaborate and work towards making medical tourism seamless by easing travel restrictions, visa formalities, etc.”
DK Chopra, CEO of Empathy Solutions, says the Indian government should introduce regulatory measures for medical services and treatment costs. “The government should recognize some hospitals and set uniform costs for different treatments of foreign nationals,” he says.
Empathy Solutions is already promoting medical tour packages that combine Indian culture and traditional Indian treatments. Chopra says: “We have wellness packages for medical tourists that include treatments through yoga, ayurveda, naturopathy, panchkarma and other holistic health programmes. The idea is to not just cure the body, but also the mind and soul.”
In recent years, people across the world have begun showing interest in Indian wellness vidhis. Yoga guru Swami Ramdev claims, “Every year, we have more than 5,000 patients coming from the United States, United Kingdom and Canada for treatment in Patanjali Yogpeeth, our ayurveda research institute based in Haridwar.”
Sweet Pills
The healthcare bill also relies upon substantially reducing drug costs. During the healthcare debate, India was identified as one of 14 countries from which low-cost drugs can be sourced to reduce costs. Indian drug firms, such as Ranbaxy, Sun Pharma and Dr Reddy’s Lab already are well entrenched in the U.S. market. These Indian generic manufacturers are therefore poised to make a killing in the U.S. market, especially as the patent exclusivity of many drugs, valued at over $100 billion, is set to expire in the coming five to six years. Little surprise therefore that the Bombay Stock Exchange (BSE) Healthcare index has climbed 12 percent since January this year, most significantly since the passage of the healthcare bill.
It’s a two-way street. GIve another century and India will literally be another America!
Sooner or later, *American* Indians are going to figure out that they should get into the “medical tourism” business. Their reservations are a heck of lot closer than India, and nobody seems to have any trouble getting to them when they’re looking for a casino.
But hey.....we’ll be “equal” with everyone else!
Every other industry is outsourcing in the name of capitalism, why should medicine be any different. Yea globalism.
Will President Palin (hopefully;) be able to ELIMINATE this stinking Obamacare monster by executive order on Jan.20, 2013? One way or another, it must be STOPPED!
When Obongo Bozocare is repealed in 2013, all these companies will go bankrupt.
The Schadenfreude (satisfaction or pleasure felt at someone else’s misfortune) will be soooooooooooooo sweet!
If it is going to get repealed, we need a new party. I have no faith the repubs will do it.
Send more of our good paying jobs overseas. Already happened in tech, now it is in medicine. God help us !
I dealt with a few of these Indians (East Asia) and a lot of times, it is you get what you pay for. Crappy service and many of them don’t know they are doing. I do tech support for a well known West Coast company and they are clueless on our software.
Of course, lawyers won't let it happen to them.
Claims adjustment with “Chuck” in India.
Just shoot me and be merciful.
Had a friend who went to an Eastern Indian doctor and told him he needed to go to a neurologist. My friend thought he said a urologist and spent 2 hours at the urologist only to be told he needed a translator or a hearing aid.
Thank you verrrrrrddddy much!
Those that do not spend significant time in America are not worth a damn.
By 2012, the Republican Party may just be a NEW Party.
If it is to be, it is up to me (us)!
All we have to do is ensure that Real Conservatives (con summos cojones) replace Rinos in 2010 and 2012.
This is the key part of the article. I wish you had highlighted just this line so that it didn't get buried in the post. Indians have sensed a business opportunity here in the form of medical tourism created by waiting lists. Canadians and the British already fly to India when their waiting time is long.
This is the key part of the article. I wish you had highlighted just this line so that it didn't get buried in the post. Indians have sensed a business opportunity here in the form of medical tourism created by waiting lists. Canadians and the British already fly to India when their waiting time is long.
This will quickly be a multi-multi billion dollar industry if ObamaCare isn't repealed by 2014.
Actually, if you check certain blogs i.e. "Law is for Losers", you'll see that a lot of legal research is being outsourced to India.
In fact one law school even suggests taking a job there at $8500 per year.
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