The Hindu Business Line : Up and running

The Indian medical transcription industry is on its feet again and appears to have learnt from past mistakes. A look at the opportunities - and the threats.

At a plush upmarket hospital in New York City, a doctor dictates medical diagnosis for a patient onto a digital recorder. Thousands of miles away, in Siliguri — a rapidly developing metropolis in the state of West Bengal — a young Medical Transcriptionist receives the dictation in a voice file, and then readies herself for the task in hand.

Over the next few hours, the spoken words are efficiently transcribed, formatted, proof-read and perfected into a digitised medical record, which will eventually become a part of patients' permanent files, ready to be retrieved by the hospital for insurance and research purpose.

Make no mistake. The Medical Transcription (MT) outsourcing industry, which had come under a cloud after its initial runaway success in the 1990s, is all set to make a grand comeback.

According to the latest Market Intelligence Service report of Nasscom, with at least 120-150 companies engaged in medical transcription in India, the sector is clocking an annual revenue aggregate of about $220-240 million. And this figure, analysts say, will witness a meteoric rise in the coming years, given factors such as increasing healthcare costs in the US, its ageing population, and increasing regulatory emphasis on digitisation of medical records and documentation.

MT activity — which by definition refers to conversion of doctor or physician interactions with their patients, including patient history, medical diagnosis from oral or written exchanges into a digitised format — hit the Indian shores way back in the 1990s, when large US-based service providers made a beeline for the country to leverage the cost advantage achievable through the offshore outsourcing model.

Outsourcing Medical Transcription allowed physicians to not only devote more time to attending patients but also paved the way for standards in the documentation and management of medical records.

Moreover, offshoring to remote locations such as India meant access to a large skill-pool in remote locations, and substantially reduced costs. It was a situation that appeared too good to be true. And it was.

Quality - the casualty

With few players in the Indian offshore outsourcing industry having onsite prowess to interface with customers, many companies had to rely on middlemen to build business. This dependence led not only to severe price undercutting (cost per line transactions declined from 12 cents to as low as 2 cents), but also, in the rush to serve customers and to grab substantial market share, the quality of work delivered got reduced substantially.

Several companies also failed to meet all the provisions of their contracted agreements, thereby affecting performance, says the Nasscom report. "Although a multitude of factors could have contributed to the setback in India, most likely there was a lack of quality MT work being returned to the US, small transcription outfits underestimated the complexity of the industry, and very few companies acquired the critical mass for surviving long-term," Peter Preziosi, Executive Director of the American Association for Medical Transcription (AAMT), recalls.

Bouncing back

However, the sector seems to have come a long way since then. It has bounced back and has also seen a substantial degree of consolidation, with 10-12 companies accounting for almost a third of the industry employee base.

According to the AAMT, the global medical transcription pie is estimated to be anywhere between $12 billion and $20 billion, with the US being the largest market. Only 50-60 per cent of the US transcription market gets outsourced from hospitals and clinics, and of that amount approximately 10 per cent is offshored to countries such as India and the Philippines.

"Today, India's share is roughly over $200 million. This means, as an industry, we are capturing less than 2 per cent of the overall size of the US market, but it also shows there is a tremendous opportunity waiting to be tapped," says Suresh Nair, CEO of Spheris India, and President of the Indian Medical Transcription Industry Association.

Demand build-up

K.B. Anand, Chief Operating Officer of medical transcription firm Acusis India, sees a huge demand building up for MT work in US hospitals. "For hospitals and clinics in the US, the bottom-line is always a concern. One area to cut expenses is outsourcing good quality work from offshore locations, at less than half the price. Also, there is an immense backlog when it comes to transforming dictations into medical records and dearth of professionals (the average age of an American medical transcriptionist is 49 years) to ease that backlog. Together these factors are creating a burgeoning demand-supply gap in the US market," he reasons.

India, with its talent pool, English language skills, and the advantage of a favourable time zone, is in a unique position to tap this opportunity, say industry observers. In India, it is estimated that service providers charge anywhere around 12-18 cents per line of 65 characters, while the same work, when sub-contracted further to smaller outfits, can go as cheap as 4-5 cents per line.

"In contrast, the work done within US shores could be billed at 15-25 cents per line," says Anand.

Privacy concerns

Given this backdrop, while there is obviously a great potential for the growth of the medical transcription industry in India, companies need to be acutely aware of the sensitivity of the data being handled and also realise the sensitivity of the US public towards privacy concerns, Nasscom says, adding that MT service providers need to have stringent data protection laws in place to acquire more business.

"There is also increasing pressure on companies to be HIPAA (Health Insurance Portability and Accountability Act) compliant. The purpose of HIPAA is to protect confidential healthcare information through improved security standards and it defines certain requirements for storing patient information. Under HIPAA, transcription service providers must implement technology and business processes to ensure the security and confidentiality of patient information and establish an audit trail of all those who have accessed this information," says the report by Nasscom.

"There is no specific data protection legislation in India equivalent to the US. However, if you see all the Indian laws, including the Information Technology Act, there is enough teeth to prosecute those violating the stipulated norms. However, we will be happier if we have a specific Act on data protection," says Nair.

So, for offshored MT providers, overcoming perceptions of enforcing privacy and security standards could continue to plague efforts in expanding market share, cautions Preziosi.

Manpower crunch

Another major challenge is the impending manpower crunch facing the industry, which currently employs about 20,000 professionals. Even with the resurgence of this industry, there exists an acute shortage of qualified MTs, both in India and in the US. This holds true for the established large Medical Transcription service organizations in India who have more work than professional medical transcriptionists to do the job.

Consider this. Spheris India alone intends to add 1,000 employees every year from now. The company has 2,300 now and hopes to reach 3,000 professionals by the end of this year, according to Nair.

With thousands of new job positions peering out of the MT horizon, many players feel it is about time the Government adopted initiatives to embed medical transcription programmes in the college curriculum.

"Huge Government support is required to make MT a viable vocational subject in institutions. If this does not happen, we may see a manpower shortfall in the next 1-2 years. The industry's manpower requirements is in thousands while we are getting people in hundreds," Acusis' Anand says, while pointing to issues of attrition and cross-poaching.

The sector also rues the inclusion of domestic medical transcription services under the service net in the Union Budget 2006-07. While the move does not directly impact the export segment, the industry fears it may lead to an increase in costs for those companies that sub-contract part of their activities to domestic players.

Threat factors

Also, although well ahead of other alternate destinations and potential competition, Indian firms need to be wary of developments in locations such as Pakistan, the Philippines, Sri Lanka, Singapore, China, Mexico and Brazil.

Amongst them, the Philippines is the most visible threat. Being one of the largest English-speaking nations in the world with a literacy rate of over 90 per cent, the Philippines had about 5,000 medical transcriptionists as of May 2005 and this figure is expected to reach a whopping 25,000 by 2010.

"Canada, Ireland, and the Caribbean countries are also emerging locations for providing MT services. Countries who adhere to building a strong education and credentialing programme will achieve success in the marketplace," says Preziosi, whose organisation will soon launch entry-level `Registered Medical Transcriptionist' certification in the country.

Ultimately, the state of `well-being' of the industry will hinge on building a strong education infrastructure for medical transcription; projecting the profession as a life-long career; adhering to professional standards of practice, and promoting credentialing for medical transcription practitioners, he adds.

moumita@thehindu.co.in

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