Americans may be sharply divided over the merits of US President Barack Obama’s Affordable Care Act (ACA), but the Philippine BPO sector is happily gearing up for the extra outsourcing business that US health care reforms are expected to send its way. The ACA, better known as Obamacare, aims to create a virtually universal health insurance system through a mix of regulation and subsidies, while keeping most insurance and health care privately run. The new system has enormous potential to outsource administrative work, which it has been slow to take up. “Health care is the last bastion in the US where outsourcing has not yet been done on a large scale,” Jeff Williams, co-founder and president at MediCall Philippines, a US company with most of its staff in Manila, told OBG. “They need to bring costs down and off-shoring is the only way they are going to be able to do it.”
NURSING INFORMATION: The Philippine BPO sector’s health information management segment is already ramping up, with 45,000 employees at the end of 2012, up from 25,000 in 2011, according to data from the Healthcare Information Management Outsourcing Association of the Philippines (HIMOAP), a voluntary industry association servicing the segment. Williams came to the Philippines in 2003 looking for low-cost manufacturing opportunities, but instead spotted a vacant niche in outsourcing for US health insurers.
The groundwork had been partly laid by a longstanding Philippine tradition of supplying nurses to the US, which was stymied as decreasing numbers of visas were issued in the wake of the September 11, 2001 terrorist attack. The Philippines graduates more than 70,000 nurses a year, far more than its own needs. Many get US registered nurse (RN) licences by passing the requisite exam at a licensed testing centre in Manila.
RNs play an important role in the US health care industry’s utilisation review process, by which insurers and managed care providers determine whether procedures and drugs are medically appropriate. Medicall’s main business is to provide such services with its staff of US-licensed RNs in Manila. “Nowhere else outside the US has the sheer volume of US-certified medical professionals,” Williams said.
INTERNATIONAL ATTENTION: Medicall had a staff of more than 750 including 600 US-licensed RNs when it was acquired in late 2012 by Cognizant, a major US multinational IT and BPO group. In its acquisition announcement, Cognizant estimated Medicall’s 2013 revenues would come to $15m. Other companies in the Philippines health information management segment include UnitedHealth Group (a large US managed-care provider), M*Modal, EGS, EXL, SPi and Accenture. Besides utilisation review, outsourcers perform case management, records management, medical transcription, post-discharge follow-up calls and live nurse webchats.
Nurse follow-up calls are crucial to reducing avoidable hospital readmissions, one of the key problems the ACA is trying to tackle. The law introduced penalties for hospitals where readmission rates are deemed excessive. Medicare penalised more than 2200 hospitals for a total of $280m in the 2013 fiscal year, the programme’s first year, according to Kaiser Health News. Maximum penalties were set to increase from 1% of Medicare reimbursements in the 2013 fiscal year to 2% in fiscal year 2014 and 3% in 2015.
NEW NICHES: Besides more widespread use of the outsourced health-related work already being done, opportunities are opening up in data analysis as hospitals digitise patient records, which is scheduled to be mandatory in the US in 2015. By analysing data, insurers will be able to identify at-risk patients and reach out to them for more preventive care and care management. EU and other developed-world health care systems are also transitioning to electronic records.
In the longer run, remote patient monitoring could becoming a major business for outsourcers as technology develops and the global shortage grows of nurses. Remote monitoring could become an affordable option for people who currently are not even being monitored, such as elderly patients living independently.
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