Global Medical Transcription market continues its growth till 2019 due to Cost Savings

According to Transparency Market Research Report, Medical Transcription market globally is expected to grow at a CAGR of 5.6% from 2013 to 2019, to reach an estimated value of USD 60.6 million in 2019, the market was valued at USD 41.4 million in 2012.  The report classified the medical transcription services based on service types into History and Physical Report (H&P), Discharge Summary (DS), Operative Note or Report (OP), Consultation Report (CONSULTS), Others (Pathology Report (PATH) & Radiology Report (X rays or radiographs)) market. CONSULT reports is largest among all the other reports in the medical transcription services market as these reports are repeatedly produced for single patients undergoing treatment each time the patient visits the specialist. It is expected that the global market fort CONSULT reports will reach USD 21.1 million with the market growing at a CAGR of 3.3% from 2013 to 2019. H&P reports share of overall medical transcription services market has increased as both inpatients as well as outpatients are being maintained both to reduce the risk of reimbursement issues. Outsourcing is the most preferred mode of service procurement in medical transcription as internationally operating healthcare organizations need to efficiently run the operations, reduce costs, maintain up-to-date patient health records, facilitate reimbursement and claims process, and also due to regulatory constraints.

Medical transcription jobs are outsourced to offshore companies and freelancers as the hospitals and healthcare organizations have savings in terms of overhead costs of setting up for in-house department for medical transcription and the staff costs are high compared to low cost countries like India and Philippines where the staff costs will be one third of the cost in United States. United States followed by United Kingdom and Canada outsource medical transcription jobs to low cost countries like India, Philippines, etc. Medical Transcription vendors can handle significant volumes efficiently and maintain the health and medical records without errors will allow the hospitals and Medical professionals to focus on improving the services to patients and also improve the healthcare. With significant changes in the United States Healthcare like Patient Protection and Affordable Healthcare Act, compulsory health insurance and aging populations the market is expected to continue its growth in the next five years. The North America medical transcription services market was worth more than USD 18 million and is expected to grow at a CAGR of over 5% in the forecast period. But Indian Medical transcription vendors are facing severe competition from Philippines, China and other countries as the vendors in these countries with support of government incentives are also bidding for the contracts. Moreover India is losing its labor arbitrage as the cost of living increases. Even the Healthcare payers and providers in the United States are also looking to cut costs due to increase in competition and government regulations.

Healthcare Outsourcing 2013 – Indian IT Vendors current scenario & Outlook 2020

Cognizant Technology has a far lead in this regard as they moved into healthcare long before and for them Healthcare is the second largest vertical after BFSI. Cognizant is the largest IT services provider in healthcare, earning $1.97 billion from the segment in the year to 31 March 2012, more than three times the $602 million healthcare and life sciences revenue of India’s largest software services provider TCS. Infosys earned $680 million from healthcare, Wipro $615.5 million and HCL $500 million. As on 31 March 2012, healthcare was the second-largest source of revenue, behind only financial services, for Cognizant. It made up 25.2% of the company’s revenue, compared to 11.3% for HCL Technologies Ltd, 5.2% for Tata Consultancy Services Ltd (TCS), 9% for Infosys Ltd and 9.9% for Wipro Ltd. Cognizant ranked sixth in the 2013 ‘Healthcare Informatics 100’ list of healthcare IT services providers by revenue in the US, while Infosys Public Services Inc. a subsidiary of Infosys, ranked 15 and was the only Indian IT services provider to figure in the list.

HCL Technologies has also seen growth in its healthcare revenue, which grew 55.8% in the 12 months to 31 March, and at a compounded annual growth rate of 37.66% in the last three years. The company acquired UK-based SAP consulting company Axon Group Plc., in December 2008, which enabled it to position itself as a system integrator to its life sciences and healthcare clients globally. The company also announced that it will actively engage in new business (accountable care) and technology business models by 2014. The focus areas include healthcare reform and member experience management and testing. Infosys and Wipro are also sharpening their focus on healthcare capabilities. Infosys over the last three years has invested in building several key capabilities in healthcare in the US. Infosys is assisting several clients in multiple opportunity areas: setting up state exchange, onboarding health insurers to public exchanges, end-to-end testing etc. according to Eric Paternoster, chief executive officer and president, Infosys Public Services.

Sangita Singh, senior vice-president and head, healthcare and life sciences, Wipro said Company strategy is to focus on select few customers to co-create solutions that can drive patient-centricity and reduce costs. There is, therefore, a huge thrust on domain-specific solutions, combined with Wipro’s strongholds of infrastructure services, BPO (business process outsourcing) and custom apps. Indian outsourcing companies have mostly focused on presence in the health insurance sector but not in the provider (hospital) market. There has been a significant slowdown in health insurance sector which forces Indian vendors to look at healthcare provider market where they have not been able to make a dent in the provider market, which is growing rapidly. The established players make $50- 60 million from each large EMR implementations in the provider segment. Healthcare outsourcing in India is growing at about 31% and is expected to reach USD 280 billion by 2020 and the global healthcare BPO market is growing at a CAGR of over 21%. Healthcare BPO offers tremendous opportunity to companies in India, according to Talent Neuron blog post.