Healthcare BPO services provider
Zavata India’s $80 million contract from four major
hospitals in the US in November last year is likely to set a
strong precedent for more contracts involving turnkey
end-to-end Revenue Cycle Management (RCM) Services.
A range of services beginning from the admission to
post-discharge of a patient including medical coding,
billing, medical transcription, claims generation, patient
follow-up, etc. are referred to as revenue cycle management.
Although more than half of the hospitals in the US are
directly or indirectly offshoring various components of
healthcare services, offshore vendors can now expect more
end-to-end work. Rising cost pressures, coupled with
increasing workload are forcing healthcare institutions to
explore the outsourcing / offshoring option.
Currently most of the offshore vendors focus on either the
large hospitals or the physician market space. But in
future, Indian vendors offering RCM services can look to tap
a huge opportunity from the relatively un-addressed and
large segment consisting of mid-size hospitals (<500 beds)
in the US. So far, this segment had been beyond the radar of
most vendors, but the Zavata deal, which demonstrates the
rising comfort level with offshoring by mid-sized hospitals,
is likely to spark off a new wave of deals and contracts.
Arun Jethmalani, CEO of ValueNotes says, “a key trend we are
seeing is the increasing ability of Indian vendors to
provide end-to-end services for healthcare revenue cycle
management. Related to this is the likely increase in
penetration of offshore vendors into the hospital segment.”
India-based vendors in this segment range from large,
healthcare focused players such as Apollo Health Street,
Ajuba, Zavata and Perot Systems to small, home run outfits,
including freelancers. With larger buyers looking for
service providers to provide the entire range of services,
vendors will gear up to add or extend their service
offerings. Investment capability – for capacity addition,
expansion in services and greater automation – will be the
critical factor for smaller companies to survive and grow in
the long run.
“US Healthcare Revenue Cycle Management - Offshoring of
Medical Coding & Billing Services”, a recently released
report by Pune-based ValueNotes, leading provider of
outsourcing research and information shows that the share of
work from hospitals forms 20% of the total medical billing
and coding work offshored to Indian vendors. Although the
market is currently small – total revenue earned by players
in 2006 was $125 million – this is expected to more than
triple by 2011, while the number of employees engaged in
billing and coding will increase to 17,500. Analyst Neeraja
Kandala says that with increasing vendor capability,
offshoring is expected to grow by at least 25% CAGR for the
next three years.For
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