End of a Dream?

The poor quality of services (QoS) has been the most important reason why the
medical transcription (MT) industry has failed to take off in the country.
Inadequately trained personnel, lack of sufficient investment, infrastructure,
and onsite marketing have all contributed to the poor QoS.

"Now, doctors and hospitals in the United States are shying away from
Indian MT companies primarily because of their low-cost, poor quality
image," says T K Velayudham, CEO of Enter Technologies. Enter Tech, a
provider of MT, data entry and management services at the Technopark in
Thiruvananthapuram, is yet to break-even after two years of operations.

of another bubble?

Moreover, it is difficult for companies here to establish a direct link with
clients in USA and most often, business is routed through agents who pocket a
sizeable margin in the process. The agents are also supposed to act as ‘gatekeepers’
and ensure an accuracy rate of 98 %. "MT companies do not get paid for
lines that have an accuracy rate of 97 % and below. This has affected the
profitability of MT companies to a great extent," explains Velayudham.

There were over 135 MT companies functioning in Bangalore in 1999-2000 but
hardly 12 to 13 companies have survived. "In Kerala, the number of MT
companies was relatively less, but they have by and large survived the initial
hiccups," informs V S Pradeep, Managing Director of Iridium Technologies
(India), an MT company based in the Technopark. After two-and-a half years,
Iridium has managed to break-even thanks to the investment in developing a
skilled pool of medical transcriptionists. "We had invested Rs 3.5 crore in
the development of these professionals and we now have skilled MT’s in our 175
member team who can achieve even 100 % accuracy," points out Pradeep. A
small company cannot achieve this with an investment of Rs 10 lakh or Rs 15 lakh
and by working on 20 or 30 terminals, he adds. As in any business, there is a
gestation period. For MT, this could range from 3-5 years with a minimum
investment in the region of Rs 3 crore to Rs 5 crore.

Several MT companies today are saddled with over capacity. Seaview Support
Systems, a pioneer in MT in the country has also significantly reduced the
number of its seats. Iridium Technologies plans to recruit 50 more MT
professionals immediately, but they can become productive only after the18 month
training sessions are over. Establishing a marketing presence in the US is
costly but it will definitely bring results. Iridium Technologies for instance,
started a marketing outfit six months ago in Delaware USA and now over 60 % of
the business is being conducted directly with clients.

Faced with a market that is growing gradually, MT companies are now
diversifying into related areas. Enter Tech is now into data entry, back office
processing and allied services while Iridium is into legal transcription,
business transcription and business process outsourcing. "We plan to shift
a set of MTs to diversified areas every year. These employees will then become
more productive for the company," says Pradeep.

"Getting people with the required aptitude is a problem faced by MT
companies," says R P Lalaji, MD of Seaview Support Systems. Pradeep adds
that during the last recruitment drive conducted by his company, 1300 applicants
were tested and only 40 were shortlisted while the requirement was much higher.
According to Velayudham of Enter Tech, a MT has to have at least 50 % of the
knowledge regarding anatomy, medicine, diseases, and symptoms. However, not many
are able to attain these skills even after a year on the job.

"High bandwidth and educated manpower are Kerala’s assets when it
comes to promoting IT enabled services," according to Ujual George, Head
ITES, The Kerala IT Mission.

Many feel that the Nasscom-McKinsey report on ITES, released two years ago
has misled many people. The report had projected a high growth rate for this
sector that could result in annual revenue of $17 billion -$ 18 billion by 2008.
With the slowdown in the US, hospitals and insurance companies are cutting down
on MT costs. Here Indian companies have an advantage. While an American MT could
cost $30,000 per annum, Indian MT can do the job at 50 % less and still ensure

Aswathy V/ CNS in Thiruvananthapuram

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