CBay bags $14 million healthcare transcription and document management outsourcing contract in the US
June 5, 2001

CBay Systems, Ltd. (“CBay”) Chairman, V. Raman Kumar, announced today that it has finalized a $14 million outsourcing contract of transcription and document management services from an Illinois based physician-owned and managed healthcare services company. Currently, there are over 1,700 physicians in 15 clinics and 7 hospitals associated with this company.

CBay won this contract competing against all the major transcription technology and services companies like L&H-Dictaphone, MedQuist-Speech Machines etc. The total value of the contract is about $14 million over the next 1-3 years. Speaking about the volume of work that will be outsourced to its Indian Production centers, Mr. Kumar observed "Overall, it is estimated that the company transcribes, including both in-sourced and outsourced solutions, 142 million lines of transcription per year. Of this total, they will look to initially outsource 35 million lines annually via this anticipated preferred arrangement. It is further estimated that the company will look to outsource approximately 26 million additional lines of transcription over the next 1 to 3 years."

Mr. Kumar also added “We will be bringing this entire business into India over the next few months. Right away we are planning to bring their main clinic, with over 400 doctors, into production within the next 3 weeks. CBay, along with its production juggernaut in India, has emerged as a formidable player in the Healthcare Information and Process Outsourcing Business.

In yet another significant development, Mr. Kumar announced that CBay Systems, Ltd has signed a Joint Venture Agreement with another US company, Arrendale Associates Inc, offering full document management functionality to its hospital and clinic clients as part of its efforts to upwardly integrate and become an “end to end” transcription and document management company.

The JV will facilitate joint marketing efforts, systems development and cross investment between the two companies. Being a preferred medical transcription provider, CBay will benefit from the over $30 million medical transcription business at Arrendale’s existing 112 hospital clients. For CBay, this arrangement will also open up the $150 Billion US Healthcare Information Management services market, which is reeling under the pressure of the new and far reaching healthcare legislation, HIPAA (The Health Insurance Portability and Accountability Act). HIPAA stipulates that healthcare information systems must comply with HIPPA regulations by February 2003, which is causing a massive redeployment and updating of IT systems, as well as the management of such systems. Many experts are comparing the effect of HIPPA on IT services as similar to Y2K remediation, estimating the costs between $18 to $23 billion over the next few years.

CBay has just concluded its latest round of funding with Godrej. Godrej’s investment follows similar investments in CBay by other prestigious groups including TDA Capital Partners, Ltd., Elite Global Operations, a part of the Americorp Group, and Sunil Wadhwani and Ashok Trivedi, the founders of IGATE Capital Corporation (NASDAQ: IGTE).

“We are extremely proud to note that, despite being a new player in the Healthcare segment, CBay has established its quality as the gold standard in medical transcription in the United States,” said Skip Conover, President of CBay, who is known widely in India as the “Father of the Indian Medical Transcription Industry.” “After two years of concerted efforts with our Indian colleagues, we have developed a recipe of success for medical transcription and the entire Indian services industry. We now consistently get better work from our Indian production centers than we can get from Americans available for work within the U.S. The contract only reconfirms the fact we are now recognized as a mainstream national transcription services company in the U.S.”