Outsourcing Biz, by V. Raman Kumar
Economic Times - July 5, 2001

BUSINESS Process Outsourcing Services are defined as services that consist of IT-intensive business functions that encompass IT hardware and software, IT management services, functional operations and process workflows that are outsourced on a contractual basis.
As companies are increasingly under pressure to concentrate on core activities in the post Internet bubble bursting economic scenario, BPO is beginning to gain more and more momentum.

BPO possesses greater intellectual capital than any traditional IT outsourcing since the value is created by enhancing and optimising business processes through proprietary workflows, labour and non-technology inputs in addition to economies of scale with technology.

The broad BPO service areas and functions cover administration, finance and accounting, human resources, payment services, logistics and distribution and sales, marketing and customer care.

Claims processing, document management, billing, risk management, payroll and benefits, materials management, telesales and web marketing are functions that fall within these service areas.

BPO services are most successful in industries that have transaction intensive business processes that are highly standardised. Take the case of the document and transcription management opportunity in the US healthcare industry.

Healthcare Information Management is the process of controlling critical patient data. HIM is a segment of the US health industry that spends over $45 billion collating patient information and assimilating it into a meaningful centralised record of a patient’s stay.

Within HIM are products and services performed by vendors specialising in sub-segments of HIM like coding, transcription, chart management, record management, risk management, quality assurance, physician compliance, institutional compliance and certification of the confidentiality process.

Transcription is the most labour-intensive segment of HIM. Paper generated from transcription represents up to 50 per cent of the patient record.

For the most part transcription is a manual process, requiring a person to listen to physician dictation, type it, forward it to quality assurance if needed, get it to the physician for signature then distribute it to the chart, wherever it is.

In the HIM department of a typical hospital, about 40 per cent of the total personnel staff is dedicated to managing transcription and other paper documents that could be electronically managed.

About $24 billion in the direct costs to hospitals and clinics could be automated by outsourcing document management to full service “end to end” service companies.

Outsourcing would cost about $14 billion, resulting in a direct savings of over $10 billion to the industry.

Patient data can be in the form of a piece of paper, copy of driver licence, insurance forms, consent documents, laboratory results, physicians orders, nurses’ notes, clinical follow-up and anything else relevant to each patient visit to a hospital or a clinic.

Transcription is the mechanism used to convert physician dictation into physical records. Managing the transcribed documents is mostly a manual process and is labour intensive.

Because transcription is the point of intersection between the physician using dictating systems to input patient data into the record, and that data being available in an electronic document format , it is the key to the success of penetrating this market.

(The author is Chairman, CBay Systems)