BPO companies zero in on healthcare outsourcing

ndian software services BPO companies are setting their sights on the healthcare outsourcing market. Hospitals and large physician groups in the US outsource activities such as patient records, handling claims, medical policies for the government and third party administrators (TPAs), so that hospitals do not have to bear these overheads.

Indian BPOs, which earlier forayed into the healthcare segment through medical transcription, which involved necessary documentation to satisfy regulatory and insurance provider requirements, are now looking at high-end outsourcing contracts.

Recently, companies like Wipro, Firstsource and Apollo Health Street, the BPO arm of the Apollo Group, have acquired companies in the US to grab a lucrative share of the healthcare market.

“Healthcare outsourcing deals cost $30-60 per hour, which is three times more than normal BPO work, Canaan Partners’ Alok Mittal said.

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Apart from the higher dollar billing rates, the size of the healthcare outsourcing market is also huge. The size of the US hospital care market is around $700 billion and administrative costs are estimated to be around 14 per cent or $100 billion, Ananda Mukerji, managing director, Firstsource, said.

Sensing this market potential, Indian companies are positioning themselves as an end-to-end service provider “Our Infocrossing acquisition would enable us to bring in expertise in health plan and payer management segments,” Suresh Vaswani, president, Wipro technologies, said.

Explaining the strategy behind Indian companies’ acquisition spree, an analyst from a leading brokerage house said earlier Indian players used to get sub contracts from hospitals and TPAs, whereas now can get these contracts directly through acquisitions in the segment.

Another area of business that Indian companies are eying along with the BPO part is the infotech business, which could give them more predictability in generating future revenues.

“This acquisition in the US comes with a significant IT business, Apollo Health Street, managing director, Sangita Reddy said.