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Nasscom summit: IT-BPO sector sees contract windfall from US healthcare market

Goutam Das     February 14, 2012
Goutam Das
The Indian IT-BPO industry sees a contract windfall from the US healthcare market, as reforms due to 'ObamaCare' kick in and the US transitions to 'The International Statistical Classification of Diseases and Related Health Problems' (ICD-10) from ICD-9 - an advanced classification for disease coding.

In the BPO segment itself, the payer market is expected to jump 10 per cent to $13.5 billion by 2015 as insurance companies offshore more backoffice claims management work. The BPO opportunity in the provider segment (hospitals) has a compound annual growth rate (CAGR) of 14 per cent between 2011 and 2015 when the available opportunity would be $9 billion.  

The Patient Protection and Affordable Care Act, popularly called ObamaCare, was signed into a law in March 2010. The law, among other things, expands access to insurance for over 30 million US citizens.

While large hospitals in the US hardly outsourced IT services, they could feel the pressure now to improve efficiency because of ObamaCare, Laxman Badiga, COO of Anthelio Healthcare Solutions, noted during a Nasscom session on 'IT and Healthcare'.  

Raman Roy's Quattro has identified the healthcare BPO opportunity as the biggest white space.

The huge short-term opportunity, however, appears to be ICD-10, which some experts describe as the healthcare IT's Y2K moment. The transition from ICD-9 has to happen by October 2013 and there aren't enough coders available in the US.

Second, most coders with knowledge of medicine is now over 50 years. Indian IT firms are beefing up capabilities to capitalise, just like they did in the late 90s bagging large orders from US banks.  

It will be no easy task. While India has enough coders, there are very few with the knowledge of medical terminology. Indian firms have started recruiting from nursing schools, even doctors.

"It is a long-haul. We have got to do the heavy lifting by training people and getting them certified. But there is a pot of gold at the end," Raman Roy said.

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