Health Care Services: Potential Opportunity for Outsourcing Growth

May. 6.09 | About: Wipro Limited (WIT)

America’s problem is not just its unstoppable rising unemployment rates but as well as its disastrous health care system. With a strong growing demand for well priced high quality health care service and rising unemployment rate, the outsourcing industry can benefit from playing an active part in the health care system restructuring.

ABC News reported last November 2008 that “health policy experts say it may not be long before all Americans feel the impact of what is shaping up to be a national health care disaster”. 55 year old diabetic David Rushing lost his job. He used to pay $200 per month for his Blue Cross and Blue Shield health care plan through his employer. But after getting laid off, he had to pay $400 per month to keep the coverage through COBRA program which unfortunately expires in 18months.

Wells Fargo senior economist Scott Anderson said that the worst is yet to come and estimated that 3 million Americans will lose their jobs this year. In US, when employees lose their jobs, with it goes their health insurance coverage.

This then calls for a real and comprehensive health care system restructuring where in individuals can still have access to quality medical care and services especially in times of financial crisis. The outsourcing industry has been known as the cost saving strategy. But it has also proven through time and experience that it also offers quality and not simply cost savings. It would be interesting what role outsourcing can play in the health sector given its more delicate premise, requirements and goals as compared to manufacturing, IT and financial sectors.

Health Care Service Outsourcing in Philippines and India

Currently in the Philippines, the business process outsourcing firms are only handling medical bill processing and medical transcription. Although in India, some outsourcing firms are already offering teleradiology and medical graphics services.

Wipro Technologies (NYSE:WIT), an Indian outsourcing giant providing business, technology and process started a pilot project in 2004 offering teleradiology and medical graphics services to anonymous U.S. hospitals according to MSNBC.

Altoona Hospital and other American hospitals believe that offshore outsourcing works even in medicine. Health services offshoring advocates said that there are no reasons to think that that this kind of partnership will turn the health service industry into a seedy sweatshop stealing US jobs and replacing them with cheap unqualified doctors. They emphasized that they only hire doctors who are U.S.-licensed and credentialed radiologist. Altoona Hospital for example outsource its teleradiology services to Teleradiology Solutions which is run by Dr. Arjun Kalyanpur, a U.S.-licensed and credentialed radiologist with post graduate training at Yale University.

Outsourcing Opportunity

The home country hospital then sends the brain scan to the foreign partner hospital for interpretation. Due to shortage of radiologists in the US, Altoona Hospital sends the brain scan during emergencies at night and the doctors from Teleradiology Solutions in India interpret the scan.

This is something the Philippine major hospitals like Makati Medical Center can also explore. Given the fast digitalization of Philippine hospitals and good supply of highly educated English speaking doctors and other medical practitioners, some even with international license, medical diagnosis outsourcing appears to be a good potential market for the Philippines to tap into. Medical tourism which is also a growing phenomenon is worth investing on.

Disclosure: No positions