MEDICAL TRANSCRIPTION: Not in the Pink of Health

The golden goose of IT-enabled services, medical transcription, is having a
tough time living up to its name. The quality-oriented and human
resource-intensive business is not churning out bucks as fast as small operators
thought it would. Inability to consistently perform up to the high standards
demanded by transcription service providers and hospitals in the US, added to
the presence of intermediaries like consultants and associates between clients
and customers, is proving to be the bane of the industry in India.

"Quality is a key factor in the medical transcription industry, and
Indians, as a society, are not generally quality-conscious. Transcribers do not
transcribe with the 98.7% accuracy demanded by the American Association of
Medical Transcription the first time around. The content then has to be taken up
to the desired level by quality sub-editors and editors, who are in short
supply," says AS Ravi Venkatesh, CEO, Computer Higher Education and
Software Solution (Chess).

Shaper Info Global, which is into providing solutions in high technology
areas, forayed into the field of medical transcription in 1999, only to pull out
after six months. The reason? Returns were not commensurate with the efforts put
in. "Lack of qualified transcribers and the high mobility rate of the
qualified few were affecting our output, which in turn could have affected our
reputation. This would have automatically disqualified us even if we had not
pulled out," admits Nagaraj Sharma, managing director, Shaper.

K Shanmugam, head, training division, Zentech Solutions, which recently
kicked off production, however, differs. "Quality, of course, is the
deciding factor. But it is also a fact that the Indian medical transcription
industry is not fit for small players. Small companies either have to cough up
huge investments to compete with big players, which they cannot, or depend on
intermediaries for contracts. When intermediaries come into play, the margin of
profits for companies doing sub-contracting gets drastically reduced. As a
majority of smaller companies are doing just that, the applecart is upset. There
are much too many small players in this highly unorganized industry."

Worldwide, small and medium companies account for about 80% of the
$3.3-billion business outsourced from the $6.6-billion MT industry in the US. In
India, however, with business not being too hot, many companies are on the
lookout for alternative revenue sources. Nittany, one of the pioneers in the
southern region, is said to have jumped ship and is focusing more on medical
billing. Rapid Care is planning to include the entire gamut of healthcare
management such as insurance claims, billing and data management to make its
business more viable.

Contrast these with the story of the Coimbatore-based KG Information Systems,
which has grown from a buyer-supplier partner of Heartland Infosystems Services
with 27 people in 1998 to become the joint venture partner of Heartland now,
with about 220 systems and 1,200 transcribers. "It is a large volume
business where there is no space for small companies which do not have a
long-term plan. Moreover, lack of qualified transcribers in the industry due to
inadequate training institutes has marred the prospects of small companies
without in-house training facilities," says Vinay Kumar, training manager,
KG Info. The company plans to add 100 more systems personnel and another 1,000
other specialists by the end of next year to its ranks.

"MT is a good industry to make money provided the company has a good
training system to produce quality transcribers and a proper HR policy to arrest
the mobility of its employees in place, in addition to direct clients in the
US," adds Sharma. However, having US-based clients has not helped CHESS,
which is a franchisee of US-based TSP, CBay. Though it has a production capacity
of 30,000 lines per day with more than 60 systems at its disposal, it produces
only 6,000—7,000 lines per day. "The fault lies with Cbay’s marketing
strategy. There is enough work for everyone, but there is an urgent need to
market ourselves aggressively. To this end, we plan to set up our marketing
offices in the US and Canada" says Ravi Venkatesh about the situation.

"Things are not all that bleak. Revenues have crept up to Rs 16 crore
this fiscal, up from Rs 12 crore in 1999—00 and Rs 10 crore in 1998—99. But
certainly, dropouts among the 45 companies registered with us have also
increased due to problems with consultants and associates," says
Rajalakshmi, director, Software Technology Parks of India, Chennai.

"That augurs well for the industry. This shakeout would weed out
non-serious players, leaving only committed companies in the fray," says ML
Venkat Laxman, managing director, Rapid Care.

Nevertheless, the industry is slowly moving towards some set targets.
Recently, iQ Infotech, one of the biggies in the industry, announced plans to
set up production centers in India. With that as the yardstick, Nasscom’s
projection of MT revenues of Rs 4,000 crore in 2008 seems achievable, but the
industry certainly seems to be taking the long route to get to that target.

Cyber News Service, Chennai

Leave a Reply

Your email address will not be published. Required fields are marked *