US Healthcare Regulation, Technology Advancements Spell Boom for Outsourcing
Advancements in healthcare technology, apart from improvement of quality of care, are almost always associated with cost cutting. The US has the highest spending on healthcare in the world, at over 17% of its GDP. It is likely to reach $4 trillion by 2015. Steps aimed at reducing costs include mandatory implementation of EMR/EHR, maintenance of minimum medical loss ratios for hospitals, and an overall emphasis on cost effectiveness. Many healthcare organizations use some form of outsourcing, offshoring or a mix of both.
When technology is combined with outsourcing, the result is a solution that improves cost and resource efficiency. There are several areas where outsourcing has emerged as a ‘service’ to the healthcare industry. For example the process of documenting healthcare records from speech recorders into transcribed text formats formed the basis of the booming ‘medical transcription' profession. Advancements in technology, allow this service to be automated where speech recognition software (SRS) captures and populates records. Due to the rigors of healthcare professionals, their strict time schedules, and the sheer ease and feasibility of transferring these jobs externally, supplementary services like transcription, coding and billing are typically outsourced. A recently released ValueNotes report discusses the opportunities for outsourcing providers in revenue cycle management, IT / IT enabled outsourcing and related areas. We believe that recent regulatory changes to US healthcare system have created a window of immense activity for code set conversions, electronic medical record (EMR)/ electronic health record (EHR) implementations, and healthcare IT /ITES among others.
As these laws are implemented, there will be a growing need among healthcare providers to increase outsourcing. This need arises from a shortage of resources for support services like data transaction, processing, coding and billing. Providers are therefore unable to upgrade to newer versions of software or compliance standards without some form of external assistance. It is interesting to note that a majority of American hospitals already outsource a significant portion of their ‘non-core activities’. These include support services like revenue cycle management (RCM), data capture, billing, coding, and collection of payments. Healthcare vendors are moving up the value chain and providing higher end services like data analytics and account reconciliations. Some vendors have capitalized on regulatory changes and are assisting providers with testing and software to implement EMR systems.
Source: ValueNotes Research
We believe that the next few years are going to be critical in terms of RCM services. Where outsourcing providers stand to gain from multi-billion dollar opportunity, healthcare providers stand to gain from quick and effective mandatory compliance, faster processing of documentation, all this over and above significant cost savings.
Have Your Say
Rate this feature and give us your feedback in the comments section below