Medical transcription scripts a revival

NEW DELHI: You could call it the rise of the phoenix. A report by Pune-based research firm, Valuenotes, says the once written off medical transcription outsourcing industry is set for a major revival.

Revenues, the report says, could soar to from $195 million to $647 million by 2010. At that point, the report says, the sector will employ 52,000 people, against 18,000 now.

Industry players unanimously agree. “The potential is huge,” says Suresh Nair, CEO of Bangalore-based Spheris India. All the key medical transcription companies, he notes, have been logging 30-50% growth. “We are all scrambling for capacity and this is because transcription companies in the United States are scrambling for capacity.”

Indeed, that’s what is driving this growth. While the $12 billion medical transcription industry there (US), points out Veer Sagar, president, Gurgaon-based Selectronic Equipment and Services, is growing at 20%, the growth of employees is only 10%. The industry, says Valuenotes, will grow to $16.8 billion in 2010.

Around 30% of the work is outsourced in the United States, of which around 10-15% comes to India, which offers a huge cost advantage - work here is 30% cheaper. “There is a growing belief that it is possible to do this out of India,” says Nair.

Medical transcription was among the first IT-enabled services to be outsourced to India. It is the process whereby one transcribes medical records dictated by doctors and others, including history and physical reports. It is in demand in the US as the entire healthcare industry there is based on insurance and detailed medical records are needed for processing these claims.

After a boom in the mid-1990s, when a lot of mom-and-pop shops erupted on the scene, the industry went bust around 2001, following a huge decline in the quality of work.

Work, says Varun Goyal, executive vice-president of Bangalore-based Ajaxdotcom eServices, is beginning to come back. Agrees Nair: “The players who have been around for several years now have got over the credibility problem.”

Indian companies are also now focusing on spending on marketing, says Sagar, something they were not doing earlier.

But growth will bring its share of growth pangs. The main issue, all players agree, will be the availability of skilled workforce and the lack of training facilities. Companies have to invest nine months in training people before they are allowed to take on work and this means that keeping up with fast paced growth will be quite a challenge.

And though Nair is glad that there are no fly by night operators in the industry now, unlike in the earlier phase when they had the run of the field, Sagar, for his part, is worried that the huge demand will spur another rush into the industry. “Once again we will see a lot of people burning their fingers,” he warns. But if that happens, the bigger damage, he cautions, could once again be to the credibility of the country as an outsourcing destination.

That’s a sobering thought.