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Medical Outsourcing: The Next Big Thing

Author: Nidhi Mishra

How about doing the work you are best at & outsourcing the rest?

That sounds different, right? But it has gained a lot of momentum and brought a revolution in the medical stream.

Before coming to medical outsourcing let us see the rise of the healthcare industry.

The Indian healthcare sector is one of the fastest growing sectors with high contributions in terms of revenue as well as in employment. This sector includes hospitals, health insurance, clinical trials, medical tourism, medical outsourcing and many more.

There are several factors that cause this sector to increase tremendously. Some of them are listed below –

• Market factor – Growing population, aging, income base, mainstream economy, innovation to create customized products to meet the needs of all income segments, changing disease prevalence, and growing awareness among the middle class to focus on early detection and disease prevention.
• Non-market factor – Development of infrastructure, favorable regulations, FDI inflow, government initiatives to improve healthcare access through insurance schemes such as RSBY (Rashtriya Swasthya Bima Yojana), Aarogyasri etc.
• Disease patterns in India – India has earned the dubious distinction of becoming the ‘Diabetes Capital of the World’. According to World Health Organization (WHO), the number of people suffering from diabetes rose from 108 million in 1980 to 422 million in 2014. In India, there were nearly 77 million diabetics in 2017.(About Diabetes Prevalence in India, n.d.)

The healthcare sector has been a focal point for last 24 months due to COVID-19. In this phase the research and development, insurance segments relatively had a boost of benefit but one of the most pressing problems was a shortage of medical infrastructure and trained manpower in the medical stream. This includes doctors, nurses and another service provider.

After COVID-19, the government and people are investing more in the healthcare sector due to its increased demand and necessity of it. The digital healthcare market in India is estimated to reach INR 485.43 billion by 2024, expanding at a compound annual growth rate of ~27.41% during the 2019-2024 period. It has been seen that 80% of healthcare systems are aiming to increase their investment in digital healthcare tools in the coming 5 years. Digital healthcare tools include mobile health apps, electronic health records, electronic medical records and many more. (Healthier India, n.d.)

In the Economic Survey of 2022, India’s public expenditure on healthcare increased to 2.1% of GDP in 2021-2022 which was 1.8% and 1.3% in 2020-21 & 2019-20 respectively.

Health expenditure allocation in 2021-22 showed a rise by 73%. (Ministry of Finance, n.d.) However, there are many countries that take healthcare a very important sector and spends the GDP ranging from 11 to 18%. Example – Japan, Switzerland, Germany, Canada, US. So, India has to do a lot more work and research in order to improve the healthcare system.

Apart from this, the Indian medical tourism market is expected to be valued US $ 7,417 million in 2022 and it is projected to surpass US $ 42,237.47 million by 2032 which was facing a dip due to the pandemic. (India Tourism Market Outlook (2022-2032), n.d.)

Since, we have discussed the healthcare sector, now will talk about the medical outsourcing as it is one of the emerging sectors in the healthcare.

First let us understand,

• WHAT IS MEDICAL OUTSOURCING?

According to Wikipedia, Medical outsourcing is a business process used by organizations like hospitals, nursing homes, and healthcare provider practices to obtain physician, nursing, healthcare technician, or other services in a managed services model. (Medical outsourcing, n.d.)

Rather than doing the work by themselves hospitals hire, third-party firm to perform the work for them.

• WHY THERE IS A NEED FOR OUTSOURCING?

As we all know that apart from treating the patients, hospitals also have to deal with the billing services, insurance services, transcriptions, coding, pathological services, pharmaceutics such as medicine dispensing and many more.

In the retrospect, it was all done by a team of executives who were managing all the facilities and had complete control & accountability of the same. Plus, it was quite difficult (& expensive) for the team to handle everything while giving top-level facilities.

But today, we live in a world where highly skilled specialists can provide the different services in which they are best at with utmost professionalism. So, the hospitals which was like a closed box business started to open only to attract the firms which are confident enough to provide the various facilities. Due to this, hospitals started to focus more on the patients care rather than being worried about administrative work.

Let’s take an example,

As we all know everything is becoming digital and advance. So, in order to get along with that, hospitals also have to generate new ways for the administrative work such as keeping the patient’s record, admission systems, billing, registrations, transcriptions, health information management, ordering & receiving lab results, and specialist software for things like radiology or IV pumps. That’s where IT comes into the picture and the need of IT firms arises. Highly professional and skilled IT firm provides the above-mentioned services that increases workflow efficiency. Not only this outsourcing has extended its reach well beyond IT.

• RISE OF MEDICAL OUTSORCING

India emerged as the second largest destination after the US in the healthcare outsourcing sector. The particular reason for these circumstances is the large pool of well-trained medical professionals, latest technology solutions and the cost-effective services that India provides.

SSC- Shared services center]

(Deloitte, n.d.)

Medical outsourcing includes-

• Medical device outsourcing
• Medical Information Technology outsourcing
• Medical coding & billing outsourcing
• Medical practitioner outsourcing

and many more.

1. Medical device outsourcing – India is growing fast as a key market for medical device outsourcing. The industry has seen tremendous growth over the last decade and the current development trends indicate even greater potential in the coming years.

The global market of the medical devices sector is predicted to reach the US $400 billion this year. However, India will also play a major role in it. India is the 4th largest market for medical devices in Asia, among the top 20 markets for medical devices worldwide. The country’s medical devices market industry stood at the $11 billion. By 2030, the industry is projected to be worth the US $50 billion. This can be due to the country’s growing population, an increase in the number of hospitals, and a greater need for sophisticated medical devices and better healthcare. (Fostering innovation for improved health, n.d.)

2. Medical Information Technology outsourcing – IT is playing a major role in the hospital industry to store database and software for easily accessible laboratory/radiological results. It is also helping in making modern care accessible, available and affordable to all by lowering the cost of the product or delivery.

The market for medical technology in India is still small, but rapidly expanding. It is highly fragmented with limited indigenous manufacturing – imports constitute over 75% of the estimated US $2.75 billion market. (Medical technology industry in India, n.d.)

3. Medical coding & billing outsourcing – In simple terms the medical coding & billing is the bridge between the healthcare insurance company and the patients/hospitals. It is also useful for the hospitals to store the patient’s billing history. The market for medical coding & billing outsourcing is growing at a substantial rate due to the rising use of IT resources in the healthcare business and steady government support. The rising patient load and the need to address the ever-growing records and bills are creating a large market for medical coding & billing outsourcings firms. It has been seen that there is increase demand of medical coders over 40% in this year.(Medical Coding and Billing – Opportunities in India, n.d.)
4. Medical practitioner outsourcing- It has been observed that there are many hospitals where there is a smaller number of medical practitioners are available. Therefore, many hospitals outsource the doctors. For example, if the patient requires a brain surgery, then the surgeon is outsourced who is specialist in neuro surgery and can do the precise surgery than the general surgeon. Medical practitioner outsourcing is one of the sectors which is increasing gradually who are providing the highly skilled medical doctors.

So, as we have seen the medical outsourcing as emerging market, there are many companies who provide various facilities in India. Few of them are listed below-

1. Fusion BPO service
2. Staffingly
3. Outsource2india
4. BOSS healthcare
5. First source solution
6. Access Healthcare
7. Anion healthcare services
8. Genpact
9. Medphine

These above-mentioned companies provide highly professional, well-trained medical servicers who do their job precisely.

• PROS OF MEDICAL OUTSOURSING

1. Focuses on patients care- It was always used to be difficult for the medical practitioner to do administrative work as well as cure the patient. Now due to medical outsourcing medical professionals can navigate this work to the respective firm who are expert in the particular field.
2. Increased accuracy- Being highly expert in the given field medical outsourcing company can provide the services with high accuracy.
3. Low cost- By hiring an outsourcing company hospital can save on salaries, training and the purchase or update of hardware. Many hospitals opt for specialist who gives high quality services at lower cost.
4. Improve patient satisfaction- Now that specialists are doing their job in which they are best at and trying their best to offer excellent services to their patients with minimum error. This improves the level of satisfaction of the patient and it also builds the trust of the patient towards the hospital.

• CONS OF MEDICAL OUTSOURCING

1. Difficulty of monitoring quality- When hospital outsource the healthcare service, they are relying on another company to provide the facility to their patients. This can be difficult for the hospitals as they are not in control of the quality of care their patients are getting. So, it is extremely important to select the company who has good record track of providing the service.
2. Loss of control- When you outsource the service, you are handling over a section of your organization to the company and it can be difficult to do that because hospitals are used to having full control over their operations. It is important to choose the company who can meet the hospital’s expectations and can act as an extension of your organization.
3. Difficult to adapt the working pattern- While the third vendor company is trying their best to understand the hospital working pattern. Sometimes company may take longer period of time to understand the hospital’s working system.

To sum up everything that has been stated so far medical outsourcing is a booming sector in healthcare industry across the globe. In coming years, it is going to become even bigger market. It will also play a major role in changing the landscape of healthcare industry.

In India too, these major changes will also appear and outsourcing will play an important role in healthcare sector. For India outsourcing will going to be THE NEXT BIG THING!

References

(n.d.).

About Diabetes Prevalence in India. (n.d.). Retrieved from https://www.healthline.com/health/diabetes/diabetes-in-india#by-the-numbers

Deloitte. (n.d.). 2021 Global Shared Services and Outsourcing Survey Report. Retrieved from https://www.deloitte.com/content/dam/assets-shared/legacy/docs/analysis/2022/gx-2021-global-shared-services-report.pdf

Fostering innovation for improved health. (n.d.). Retrieved from https://www.investindia.gov.in/sector/medical-devices

Healthier India. (n.d.). Retrieved from https://www.investindia.gov.in/sector/healthcare

India Medical Tourism Market. (n.d.). Retrieved from https://www.futuremarketinsights.com/reports/india-medical-tourism-market

India Tourism Market Outlook (2022-2032). (n.d.). Retrieved from https://www.futuremarketinsights.com/reports/india-medical-tourism-market

Medical Coding and Billing – Opportunities in India. (n.d.). Retrieved from https://www.pharmaknowledgecentre.com/medical-coding-and-billing-opportunities-in-india/#:~:text=India%20is%20emerging%20as%20the%20hub%20for%20healthcare,find%20a%20new%20avenue%20to%20polish%20their%20careers

Medical outsourcing. (n.d.). Retrieved from https://en.wikipedia.org/wiki/Medical_outsourcing

Medical technology industry in India. (n.d.). Retrieved from https://www2.deloitte.com/in/en/pages/life-sciences-and-healthcare/articles/medical-technology-industry-in-india.html

Ministry of Finance. (n.d.). Retrieved from https://pib.gov.in/PressReleasePage.aspx?PRID=1793817