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26 Apr 2003

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Coach v. First Class Service

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Dear Friends,

We are publishing an article by Julianne Weight, on quality v.
cost of service, originally published in the print edition of MT
Times. Julianne Weight has owned and operated AlphaBest, a
consulting and transcription service in Los Angeles, since 1983.
Excerpts:

"I was discussing a prospective contract with a business associate
and the fact that the pricing would make it necessary to contract
the transcription to an overseas company, but wouldn't allow for a
profit and any kind of quality assurance measures, requiring that
one be sacrificed. My associate said, "Doctors don't read this
stuff anyway." Is that what I'm supposed to tell the client if
someone does happen to read it and finds errors, or if the errors
are so gross that they are evident on cursory review? "I'm sorry,
but you aren't paying enough for us to do a good job," or perhaps,
"Gosh, we didn't think you'd actually read it." A CFO who has to
oversee finances for a facility that must provide the same (or
higher) level of care today at a reimbursement rate that is 10% (or
more) less than it was two years ago doesn't want to hear that what
the facility is paying for medical transcription services isn't
enough to get a good job.

The medical transcription industry seems immune to the law of
supply and demand. With a severe shortage of qualified MTs
worldwide and high demand, transcription pay and prices should have
risen accordingly. Instead, they have remained stagnant or fallen.
In combination with rising healthcare costs and reduced
reimbursements, this is unfortunately largely due to a lack of
standards in the industry and buyers who are unaware of somewhat
creative pricing structures used to make a price sound more
competitive. Even a pricing unit such as a page can become
debatable. I recently worked with a local physician's office that
was proud to have solved the problem of ambiguous pricing by
requiring their transcription service to charge by the page, which
they could easily verify if they chose to do so. However, when
asked if they were charged a full page for every page, even pages
with only signature lines on them, they were unsure. It became
apparent to me that although they selected a page as a unit for
ease of billing verification, they had never actually verified the
accuracy of their bills. At another, I found the transcription
service had won the contract by proposing a relatively low per-page
rate, and then reformatted all the documents with a large font,
wide margins and lots of tabulated and indented paragraphs, which
significantly reduced the number of characters that would fit on
one page. It's the same as finding out the "larger rooms"
advertised at a cheap hotel aren't due to expansion of space, but
to removal of furniture!"

To read the article, please go to:
http://www.mtindia.org/article/default.cfm

Enjoy!

Maj (Dr.) Amit Chatterjee, SM
Strategist / Founder ~ mailto:amit@...
MT India ~ www.mtindia.org
"The Community of MT Professionals"

"It takes years to become an overnight success! Inch by inch, it's
a cinch."

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NEWS AND VIEWS :
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1) Medical transcription's rewriting India chapter

The medical transcription sector in India went through the
boom-to-bust cycle faster than you could say 'business process
out-sourcing.' Today, it is making a quiet return. Players like
Spryance Inc point to the big opportunity the sector represents and
the unique advantages of the country.

"The average age of a medical transcriptionist in the US is 48
years and they are pricing themselves out of the market. Hence,
like every other service which can be outsourced, this too is
headed out of the US. The industry demand is for 20,000 people,
while only about 5,000 Indians work as medical transcriptionists.
The opportunity in the next three years is for $3-4bn, about 60% of
the business. This will be better than the software services
business," Shrikant Inamdar, executive director, Spryance, said.

Currently, Spryance has 22 suppliers, who have 500 people working
for them, besides 300 home based transcriptionists (HBT). "We tried
this on a pilot basis for the past 18 months. For the future, we
will use the HBT route and in the next 12 months, 80% of our
workers will be HBTs," Mr Inamdar said.

http://economictimes.indiatimes.com/cms.dll/html/uncomp/articleshow
?msid=44201838

2) CBay To Double Employee Strength By December

CBay Systems (India) Private Ltd (CBay), the Indian arm of US-based
CBay Systems and engaged in healthcare business process
outsourcing, plans to double its employee strength to 5,000 people
by December 2003, from the current level of 2500 professionals. The
company plans to touch a figure of 10,000 people by December 2005,
said CBay's chairman V Raman Kumar.

"Over the last six months, the scale of operations of our
franchisee centres has risen substantially. We plan to convert a
few of the franchised centres into mega production centres each
employing 500 people. We will also invest in some of our franchise
operations," Mr Kumar said.

CBay Systems also recently received venture capital funding from
GMO Emerging Markets Fund to the tune of $2.5 million (Rs 12 crore)
in convertible debentures. "The fund would be used to meet the
working capital requirements and also for expansion," Mr Kumar
explained.

http://www.financialexpress.com/fe_full_story.php?content_id=32814

3) India's BPO players eye Southeast Asia

The Indian business process outsourcing (BPO) companies are making
plans to establish offshore facilities in destinations like
Philippines, Malaysia and Singapore.

With location redundancy becoming imperative in the current
geo-political situation, companies like Daksh Services, MsourcE,
and others are considering Southeast Asia for setting up
operations. Location redundancy offers a choice of offshore
location, and is key to any offshore outsourcing decision these
days as the outsourcers seek new ways to mitigate risks. "From the
service provider's perspective, it is easier to sell a
multi-locational services rather than the other way around," said
an analyst.

http://www.asiacomputerweekly.com/acw_ViewArt.cfm?Magid=1&Artid=194
60&Catid=4&subcat=34

4) BPO - for a few dollars less!

Business process outsourcing, BPO, in India is beginning to face
prospects of a burnout even before it has peaked. The boom in the
business over the last year has resulted in crowding of the BPO
street and haggling over prices is becoming the norm. Though no
names are mentioned, large and established vendors complain of the
upstarts offering single-digit dollar rates for an hour, from a
process terminal.

Wipro Spectramind's CMD Raman Roy is beginning to worry if the call
centre business is going to go the medical transcription business
way, which got priced out of most large BPO suppliers portfolios
because of extreme price cutting. "Quotes coming from some players
are just not sustainable. Those prices are not commercially
viable," he told CNBC India.

Roy pointed out that while large companies were still placing
orders on established Indian BPO players like Spectramind, they
were using low quotes from other companies to drive a hard bargain,
which is resulting in a margin squeeze. Roy said the companies that
are offering single-digit dollar rates for voice, or call centre
work would go belly up at some stage as charging less than
double-digit rates would leave nothing with them to take home or
re-invest.

BPO companies themselves can no longer say they are investing in
the future by cutting prices and getting their losses funded by
venture capitalists. "Today, you have to start making money from
day one," he said.

http://in.biz.yahoo.com/030421/65/23kr7.html

5) India & Its Language

The really amusing thing is that almost every Indian language group
finds the language, and especially English, of every other group
irresistibly funny. But while we may all merrily laugh at each
other, what about the poor company doing medical data transcription
in Mumbai which was pulled up by its clients for this translation
by one its workers: "The patient's mother said he suffered a
seizure while shopping and chasing pennies." Why on earth would a
patient chase pennies? He wouldn't. Actually, what was dictated by
the doctor was "The patient's mother said he suffered a seizure
while shopping at J C Penneys."

http://www.financialexpress.com/fe_full_story.php?content_id=32807

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