Get new exclusive access to healthcare business reports & breaking news
Healthcare business process outsourcing (BPO) is an outsourced business activity designed to help medical companies become more cost-effective by outsourcing repetitive, manual and redundant tasks to external providers who manage all these tasks.
The latest studies from think tanks point to a bright future for the health services BPO sector. The reports indicate an uptrend despite threats of the COVID-19 pandemic to the global population and economy. Here are some highlights:
The worldwide coronavirus outbreak that started in early 2020 resulted in not less than a 2.9 percent drop in most major economies’ gross domestic product (GDP). In 2020, global GDP stood at close to $85 trillion, nearly three trillion lower than in 2019, according to Statista, a German firm focusing on market and consumer data.
Defined as the combined market value of the final goods and services produced by an economy in a particular period, GDP is commonly used to measure the health of local and global economies. This means that when GDP is on the rise for a few straight years while inflation (the rise in prices of goods and services) remains low, businesses and workers are in better financial and material conditions than was previously the case.
The latest economic outlook from the international policy forum Organisation for Economic Co-operation and Development (OECD) projects global GDP to reach 5.7% in 2021 and 4.5% in 2022. The recovery is expected to remain unsteady mainly because of continued supply chain restrictions as a result of new virus outbreaks.
Experts say the hardest-hit sectors during the pandemic include restaurants, food service, airlines, travel and tourism, hotels, the technology sector, fitness, casino and gaming, auto parts and equipment, beauty and personal care, sports, the performing arts, movie theaters, retail, transportation, and leisure facilities.
Among all industries, the healthcare BPO sector is one of the few bucking the slowdown and is expected to thrive in the years to come.
So why does this sector show resiliency and what makes it different from the rest of the BPO segments?
Before discussing the main reasons for the projected substantial growth in the next five years or so, we have to first learn about the healthcare BPO industry — why do healthcare companies outsource their operations, the pros and cons of outsourcing, how to choose the right healthcare BPO, some major players, and trends, among other factors.
Read on and find out.
Information services firm Gartner defines BPO as the delegation of IT-related business processes to an outside service provider. The external vendor owns and manages the said processes according to quantifiable performance metrics.
Based on this definition, healthcare BPO can then be explained as an activity in which a healthcare company outsources its non-core operations to a third party. The healthcare provider contracts with a vendor to continue operating its secondary activities for them. Some companies hire a firm specializing in outsourcing, such as a call center, while others opt to subcontract directly with freelance professionals.
Healthcare companies and institutions include hospitals, doctors’ clinics, outpatient clinics, orthodontics offices, dental offices, laboratories and diagnostics clinics, nursing homes, assisted living facilities, and specialists’ offices and clinics.
Organizations prefer to outsource their non-core tasks so they can concentrate on their core business of providing efficient treatment for their patients. Depending on outside employees and facilities to handle nonmedical patient issues, accounting, and technology related to computers and information services allows healthcare providers to put more, if not all, of their effort into patient care.
Outsourcing firms can manage supply chain, revenue cycles, claims, patient and customer relations, IT functions, finance and accounting, team member training, and human resources.
Healthcare providers’ back-office tasks are as important as their core competencies to keep the entire range of business operations up and running. Many opt for outsourcing because they lack the financial, human, or technical resources or expertise to maintain their back-end support.
According to an article posted on the website of marketing agency Escalon Services, there are nine reasons why the healthcare sector outsources to BPOs. These are:
Diagnosing and treating patients is the main operation or core competency of healthcare companies. Non-core functions, which account for a significant part of business expenses and conditions, are generally outsourced to BPOs or other third-party vendors to decrease costs. Below are some of the industry’s non-core functions:
The area of IT is among the frequently outsourced areas in the healthcare sector. The global healthcare IT outsourcing market is expected to reach $64 billion by 2027, increasing at a CAGR of almost five percent within six years.
Based on this report released by iHealthcareAnalyst, a healthcare market research and consulting services firm based in Missouri, the expansion is attributed to the availability and early use of affordable third-party technology services.
The study adds that changing market dynamics, rising cost pressures, and demand for faster development cycles contribute to the exponential increase in healthcare IT outsourcing over the specified period. A growing geriatric population coupled with new implementations outlined in the Affordable Care Act urged healthcare providers to look for digital ways to reduce costs, assist in regulatory compliance, and enhance operating efficiencies.
The report also notes that the demand for next-generation technologies, such as cloud computing, analytics, data storage, smart medical devices, cybersecurity, electronic health record management, and interoperability have served to promote healthcare IT outsourcing market growth.
Global IT outsourcing is grouped according to application, end-user, and geography. The application segment includes healthcare IT administration, healthcare management, and healthcare IT infrastructure management. The end-user group consists of patients, payers, and providers as grouped by region (North America, Europe, Asia Pacific, Latin America, and the rest of the world) and countries.
Based on application, IT administration is the most frequently outsourced area and occupies the biggest sector of the overall healthcare IT outsourcing market. The reason is that healthcare providers continue to put more effort into perfecting administrative processes, such as operations management, billing, asset management, data management, and electronic health records (EHR).
Industry experts view technology as a crucial element of the healthcare system. As technology advances, IT outsourcing becomes more common among healthcare providers. The mounting costs of acquiring and maintaining the latest technologies given a budget-constrained situation put pressure on healthcare providers to outsource a part of their IT operations to third-party vendors.
An article on the Massachusetts-based IT and data storage service provider TOSS C3 website lists the types of healthcare organizations that need IT outsourcing. These are:
IT outsourcing can help bring down their operating costs without the expense of patient care. Offshore providers can manage the substantial responsibilities for hardware, data storage, software, security, backups, and other IT-related costs. All the hospitals have to do is pay a periodic (typically monthly) rate to benefit from these services.
By contrast, information found in healthcare records, such as social security numbers and parents’ names, is highly difficult to change. But with IT outsourcing, doctors can transfer the specialized task of medical information security to a service provider.
The article adds that the other organizations that can effectively take advantage of IT outsourcing are laboratories and diagnostics clinics, dental offices, orthodontics offices, and outpatient clinics.
Outsourcing is also offered beyond IT. Melissa Powell, COO of Brooklyn-based healthcare service company The Allure Group, says frequently outsourced healthcare services currently include clinical and non-clinical services.
The clinical services are medical tourism, pharmacy radiology, occupational health therapy, home-delivered healthcare, medical and technical offerings such as laboratory services for pathology and microbiology, speech and language therapy, dialysis, physiotherapy and rehabilitation, mental health services, nuclear medicine, and magnetic resonance imaging.
Non-clinical frequently outsourced services are patient transport, meals, procurement, facility management, security, and sterilization, to name some.
An article on the time-tracking software provider Time Doctor website identifies three common healthcare services that healthcare providers can outsource to a BPO.
The first service is medical coding and billing. Healthcare organizations, especially hospitals and medical clinics, deal with a large volume of medical records daily. Medical coding and billing are challenging processes compared to coding and billing in other business sectors. Medical bills and records normally use a variety of scientific codes, such as HCPCS (Healthcare Common Procedure Coding System), ICD (International Classification of Disease), and CPT (Current Procedural Terminology).
A BPO consists of a trained staff who can properly handle these bills and records. The specialist team is well-equipped with the knowledge and required resources to perform the tasks efficiently, accurately, and timely. Outsourcing this type of service lets healthcare companies focus more on their core competencies, such as patient care and treatment, and medical research.
The second service is claims processing. Always having accurate patient claims for insurance companies is a crucial healthcare task. However, maintaining accuracy for every single patient is difficult to achieve when hundreds of claims have to be processed daily.
A well qualified external service provider has the experience to make sure medical claims are in order and updated. An outsourcing company has skilled employees and relevant technologies to efficiently and accurately manage high volumes of claims. Healthcare providers can continue doing what they do best without worries about the details of the claims.
The third area is data entry service, an activity involving healthcare companies to process and maintain large amounts of medical data daily. Some of the data to manage include patient insurance details, prescriptions and drug inventory, test and laboratory reports, and other hospital records.
An established healthcare BPO can help healthcare institutions process medical data entry, which can be more complex and technical than the data entry activities in other industries. This type of service is regarded as the safest to outsource because it is a straightforward task.
In his Forbes article, entrepreneur and bestselling author Deep Patel explains outsourcing pros and cons and advises interested companies to understand beforehand the effects subcontracting services may have on organizational culture.
One major advantage is that a company no longer needs to hire additional employees. Outsourcing involves paying an external provider as a contractor. So the organization itself is not required to acquire more employees, thereby reducing costs in benefits, training, and the like.
Another benefit, he adds, is access to a bigger talent reserve. Hiring local employees means that companies have access to a limited talent pool. Outsourcing allows them to tap more skilled and better-qualified workers in other parts of the globe. A larger talent pool prevents organizations from compromising because these human resources are trained to be specialists in certain fields.
Cost-effectiveness is one of the most significant gains when outsourcing services to offshore firms such as BPOs. Bringing down labor costs is one of the main reasons why the United States outsources about 300,000 jobs annually. The process enables US companies to find and get the right talent for the job at the right price.
Patel notes, however, that one drawback of outsourcing is a lack of control. Companies have to give up a certain degree of control with this process despite giving the third-party service provider directions to accomplish stated goals. A hired contractor or group of employees working away or offsite can make it challenging to keep the control level that organizations want.
Another potential disadvantage is communication issues. Effective communication is a crucial factor for companies to thrive and grow. Communication is a primary concern among US-based employees and is often seen as a possible problem with an outsourced vendor. Communication issues include different time zones between the company and the contractor, the means to communicate (phone, email, or instant messaging), and a reliable internet connection.
The quality issue is an important area to consider. Companies will be unable to fully reap the fruits of outsourcing if the quality of service they receive from a third-party provider is below their expectations. Successful outsourcing entails organizations discussing with an external vendor their quality standards and outlook.
By far, healthcare BPOs are the ideal vendors to handle healthcare providers’ outsourced non-core activities. Experts view health service BPOs as the recommended industry to process payments, supervise medical data and charges, and handle claims and bills, to name a few. Here are some of the reasons why:
An article posted on the Ukraine-based IT company devabit website says hiring a healthcare BPO helps lower expenses for business owners who want the most efficient means to reduce costs to stay competitive. Outsourcing certain tasks allows them to save money because they do not need to recruit more internal staff who would require training and continuing education courses.
A medical practice can minimize the number of errors made in non-core activities via outsourcing. A reputable healthcare BPO firm can assist the organization with services, such as data entry, product information management, data conversion, data processing, data cleansing, and data mining.
Improving the quality of the medical practice is the other motivation for healthcare institutions to adopt outsourcing as a business strategy. A healthcare BPO partner can assist companies to offer and maintain high-quality medical services to their patients and other customers. Sustained efficient services translate to higher earnings for the firms, resulting in business expansion and a stronger healthcare industry.
The article adds that healthcare BPO firms can avail themselves of up-to-date technologies that make collaboration faster, simpler, and more efficient. With broad experience in their respective fields, third-party service providers can offer assistance to healthcare companies to ensure services are implemented according to plan.
Working with a healthcare BPO organization empowers healthcare service companies so they can focus more on their specialties while spending less time and effort on non-core tasks. Time-consuming and routine activities such as data processing, data mining, data entry, and billing are delegated to outside experts. Efficient time management is an important part of the service a BPO can offer these healthcare service organizations.
In general, when choosing an outsourcing company, organizations normally consider its reliability, experience, flexibility, communication skills, and affordability.
The healthcare industry recognizes the vital role healthcare BPO partners play in helping the sector’s continued growth amid prevailing global economic and social challenges, such as the COVID-19 pandemic.
Here are eight points to consider when looking for the ideal outsourcing firm:
A third-party provider should invest in the talent acquisition process to make sure that qualified clinicians are designated to the healthcare company’s clinical workflows.
For instance, Shearwater Health, a healthcare IT solutions provider headquartered in Tennessee, hires staff from the Philippines where the nursing curriculum standard is almost the same as that of US nursing. The company searches for Filipino nurses who are more affordable to employ and have at least two years of relevant work experience
An article posted on the New Jersey-based analytics and IT firm Outsourcing Insight website says patients are more concerned about the level of services they receive than who provides them. When outsourced healthcare provider-related workers deliver first-rate customer service it helps support high patient loyalty and retention.
Healthcare companies also have to make sure that their BPO partner has an efficient customer service process flow. This process facilitates the large quantities of work call centers manage, such as billing issue resolution, new account creation, technical assistance, or other healthcare-related concerns.
According to an article posted on the Shearwater Health website, a common concern among healthcare companies is that partnering with a healthcare BPO may compromise the quality level of service.
Outsourcing services to an external provider that prioritizes quality is a way to address this prevalent issue. Healthcare organizations should check certain areas in the vendor’s processes, such as its training framework and opportunities, team performance monitoring, and quality reports to clients, to name some. To ensure that employees are using up-to-date protocols.
The potential healthcare BPO should possess a broad record of accomplishments and be prepared to provide references to interested healthcare companies. Obtaining references means these providers can reveal whether the third-party vendor offers top-notch services or meets clients’ expectations and goals. References are also a way to let the BPO know its former clients can be contacted for further research and background checks as a way to ensure continued good performance.
The ideal healthcare outsourcing partner should have efficient and seamless implementation and communication processes that enhance the patient experience as well as that of other customers. In this regard, the potential healthcare BPO should use the latest office phone systems to help deliver high-quality customer service.
Like other industries, the healthcare sector is a business. Critical to a healthcare provider’s business success is the ability of the healthcare BPO to help manage the provider’s revenues and expenses. The third-party vendor should have extensive experience with streamlining processes and reducing costs while maintaining an above-average customer experience. It should also constantly explore the means of improving efficiency at all levels and be skilled in dealing with unexpected financial issues.
Healthcare companies should look for BPO companies located in non-English speaking countries that adopt English as their second language. For instance, more than 90% of Filipinos speak and understand English. The Filipinos’ ability to adjust their English accents and speak in different conversation tones gives them an outsourcing advantage over other countries.
Healthcare providers should consider an external vendor that offers accent neutralization training and has a workforce with high English telephonic capability (speaking, reading, writing, and listening skills).
The healthcare BPO should be 100% HIPAA compliant. HIPAA deals with issues of privacy concerns over patient information or data.
The Health Insurance Portability and Accountability Act (HIPAA) governs companies and organizations in managing patient data. Grave criminal charges plus fines of up to $50,000 per violation are imposed on a healthcare firm or professional proven to violate this law.
HIPAA-compliant BPO companies have high-security measures set to protect critical patient information and can guarantee healthcare providers that such data will never be compromised or fall into the wrong hands.
Additionally, healthcare providers should look for potential BPO partners that are HITRUST and URAC certified as well as SOC 1 & 2 compliant. URAC stands for Utilization Review Accreditation Commission, HITRUST is short for Health Information Trust Alliance and SOC means System and Organization Controls.
Ireland-based market research firm Research and Markets lists some of the world’s healthcare BPO providers to assist healthcare companies in finding the right vendors for their businesses. Here are 15 of them:
The company offers integrated and business process management (BPM) solutions for clients around the world. The BPO helps clients attain cost reduction goals, enhances process efficiencies and effectiveness, and provides a first-rate customer experience. It has 35 delivery centers in 14 countries across the globe and employs about 48,000 staff from 120 nationalities. The firm says it processes six million claims yearly and offers service to at least 15,000 providers via data management.
Main healthcare BPO services: claims management, provider network management, member management, care management, plan.benefit management
A leading BPO company, WNS Global Services combines industry knowledge with technology and analytics expertise to deliver transformational solutions with clients in 10 industries, including healthcare, banking and financial services, utilities, shipping and logistics, insurance, retail and consumer packaged goods.
With 60 delivery centers in 16 countries and about 43,000 employees, the company is HITRUST and URAC certified and partners with over 35 global healthcare organizations to offer care management solutions.
Main healthcare BPO services: utilization management, case management, customer service, claims service, quality improvement, payer analytics, medical billing and coding, revenue cycle management, telehealth solutions, care management
A global IT services company, HCL assists businesses in re-inventing their operations with its digital technology transformation approach. The India-based firm operates in 32 countries and employs more than 110,000 staff from diverse nationalities. It offers a comprehensive and multiservice delivery in various industries, such as life sciences healthcare, telecommunications, travel, transportation and logistics, manufacturing, publishing, and media.
HCL offers an integrated portfolio of services using an approach called Mode 1–2–3 growth strategy. Mode 1 aims to make clients’ businesses and IT systems lean and agile. Mode 2 specializes in experience-centric and outcome-oriented services while Mode 3 strategy focuses on driving the business and IT ecosystem.
Main healthcare BPO services: cost management, consumer experience, care delivery, digital analytics, application services, infrastructure services, digital process operations, research and development services
Sutherland Global has been operating for over 35 years, serving industries such as healthcare, insurance, technology, retail, logistics, hospitality, banking and financial services, and telecommunications. It is a digital transformation company that offers services, platforms, and products that are focused on artificial intelligence (AI) and automation.
Comprising a team of about 38,000 global professionals, the company has a digital backbone covering more than 140 countries, 61 digital centers around the world, and over 43 million monthly transactions.
Main healthcare BPO services: revenue cycle management, provider data management, claims processing, experience consulting, contact center, coding, analytics, health information management, population and payment services
Headquartered in Connecticut, Xerox Holdings is a company engaged in selling print and digital document products and services in over 160 countries.
In 2010, the Fortune 500 company bought Affiliated Computer services for more than $6 billion. Six years later, it separated its business process service operations into a firm called Conduent. This new company offers different healthcare services, including patient support services, medical billing, Medicaid screening, customer experience management, pharmaceuticals and life sciences solutions, and community health management.
Main healthcare BPO services: health records automation, virtual health consulting, virtual clinic, interface design and development, digital patient, workflow automation solutions
The company offers various outsourced solutions using automation, analytics, and proprietary technologies. The almost 20-year-old BPO specializes in revenue cycle management business processes and employs over 17,000 workforces in the Philippines, India, and the US.
Omega Healthcare also focuses on coding and collections processes and medical billing as well as develops revenue cycle automation tools to improve cost savings. It offers virtual nursing services covering clinical documentation improvement, readmittance avoidance, triage, and care continuation.
Main healthcare BPO services: payment posting, medical revenue cycle management, patient support solutions, insurance verification, medical coding and billing, account receivables analysis and management, charge entry, insurance and patient follow-up
SYKES, which is a part of the contact center company Sitel Group, is among the biggest providers of customer experience solutions. The merger brought the total number of employees to around 160,000 across the globe. The group serves millions of customers daily in over 50 languages.
A provider of customer engagement services for the top 2,000 companies around the world, SYKES offers multi-channel demand generation and helps its clients and partners with their customer relationships, care, and support.
Main healthcare BPO services: claims inquiries and processing, telehealth, lifestyle and wellness coaching, scheduling, billing plans, prescription drug assistance, healthcare system navigation, and mail order Rx support
A leading provider of cost-effective health services across the globe, Accenture delivers medical and administration services in over 45 countries, such as the Philippines, India, and the US. The company assists clients and partners with broad experience in healthcare delivery and subject matter expertise using AI, automation, human talent, and analytics.
Accenture also supports providers, payers, and government institutions in reducing costs, advancing health outcomes, and increasing group satisfaction. It likewise helps clients and partners boost their revenue, lower reliance on old systems, and improve savings reallocation to care management.
Main healthcare BPO services: claims services, utilization management, care value, membership services, provider services, population health, pharmacy benefits management, medicare services, and cash flow improvement analytics
A subsidiary of the Indian multinational conglomerate RP-Sanjiv Goenka Group, Firstsource is a global provider of business process solutions to over 100 businesses, including 17 Fortune 500 companies and nine FTSE 100 companies. With more than 28,000 employees across India, the Philippines, US, and United Kingdom, the company serves different sectors, such as healthcare, media and technology, banking and financial services, and communications.
Firstsource uses a strategy called “Digital First, Digital Now,” which is a technology-based solution that streamlines complex business processes, enhances customer experience, and generates value across business operations.
Main healthcare BPO services: claims operations, broker management, risk adjustment, appeals and grievances, patient outreach, medication adherence, telehealth support, provider life cycle management, and medical billing
Genpact started in 1997 as a subsidiary of General Electric and became an independent company in 2005. It is a professional services company consisting of more than 90,000 employees and operating in over 30 countries.
The publicly-traded company specializes in delivering digital transformation through analytics, AI, and consulting skills to reinvent the business processes of clients and partners. Its healthcare solutions help decrease revenue loss and improve margins, supervising over 35 million claims transactions and arbitrating at least one million a year.
Main healthcare BPO services: procurement and accounts payable processing, enterprise performance management, record to report (R2R) processing, and analytics services.
Established in 2000, Invensis is located in Bangalore, India, offering back-office outsourcing solutions for clients across the globe. The pioneering BPO company provides a wide range of end-to-end administration and support services, allowing clients to focus on their core operations.
Among the provider’s clients are Fortune 500 companies, such as GRM, 3E, Philips, and Trend West. It also serves small and medium-sized businesses located across Canada, Australia, the UK, and the US.
Main healthcare BPO services: medical coding services, claims processing, medical records indexing, data entry services, payment posting and charge entry services, billing and collection, medical billing services, and revenue cycle management services
Cognizant is a publicly-listed professional services firm formed in 1994 as part of the IT company The Dun & Bradstreet Corp. Based in New Jersey, the outsourcing provider offers its services to 20 sectors, such as healthcare, retail, manufacturing, and banking and financial services. It has operations in different countries, including the US, China, and India.
The company focuses on software, cloud computing, AI, and the internet of things (IoT) to help clients and partners to meet their day-to-day business requirements and remain competitive.
Main healthcare BPO services: help desk services, revenue cycle management, health intelligence and analytics, patient care and administration programs, and clinical services and data integration
Founded in 1982, Parexel is a clinical research organization offering consulting expertise and clinical development services to clients and partners across the globe.
The Massachusetts-based company assists biopharmaceutical and life sciences customers in turning scientific findings into new treatments. Its technical, functional and therapeutic capabilities range from regulatory consulting services to applying real-world insights to distributed clinical trials.
Additionally, the healthcare provider specializes in early and late phase clinical research, patient and site recruitment, biotechnology, medical device consulting, regulatory and product development consulting, and eClinical solutions.
Main healthcare BPO services: clinical monitoring, clinical study and project management, data management, statistical programming, biostatistics, pharmacovigilance, regulatory operations, medical writing, medical affairs, and translational medicine
Headquartered in New York, IBM is a cloud platform company and considered as the world’s biggest technology and consulting employer, with over 350,000 staff in about 170 countries and 12 research laboratories across six continents.
The company has a division known as IBM Watson Health that helps clients with healthcare solutions, and clinical and medical research via the application of data analytics, cloud computing, and AI. These latest technologies enable Watson to assist healthcare providers in anticipating future outcomes, maximizing workforce time, and streamlining complex processes.
Main healthcare BPO services: healthcare digital transformation, patient engagement, revenue cycle management, healthcare data management, and clinical trials optimization
UnitedHealth Group is a healthcare conglomerate providing a wide range of products and services through two divisions. These are Optum, which specializes in information and technology-based health services, and UnitedHealthcare, which is engaged in benefits services and healthcare coverage
Incorporated in 1977, the diversified public company consists of around 340,000 employees who work with governments, partners, providers, and employers to serve 146 million clients worldwide. It is reported as the world’s eighth-biggest corporation and the second-largest healthcare company in terms of revenue, and the biggest insurance firm in terms of net premiums.
Main healthcare BPO services: analytics, revenue cycle management, purchasing and claims processing, ambulatory care coordination, utilization management service, health insurance plans, Medicare, Medicaid, dental, vision, and supplemental plans
According to Derek Gallimore, founder of the Philippine-based BPO company Outsource Accelerator, global outsourcing still experiences growth due to increasing demand mainly brought about by the COVID-19 pandemic that unexpectedly improved the confidence of businesses in their service providers.
He lists the main outsourcing trends that will likely affect the entire industry including healthcare BPOs in the next ten years.
The pandemic has made remote working or working from home (WFH) a common work arrangement in which the employees are not required to travel to an office building or a similar workplace. Since 2020 when this global health issue started, many companies and organizations, including the outsourcing sector, have been adopting this work mode as a permanent option for their staff.
Gallimore says recent studies showed the benefits of distance working in terms of productivity. New York-based technology market research firm Enterprise Technology Research (ETR) expects these efforts to grow at least twofold soon.
However, some BPO companies still advise their WFH employees to gradually return to the office. A skeleton workforce is needed to continue business operations because third-party service providers adhere to stringent policies and compliances at work.
BPO companies, particularly in the healthcare sector, see the vital role that cloud technology plays in their efforts to digitize business processes. Forbes points out that approximately 77% of organizations in 2018 have migrated one or two of their processes to the cloud platform.
The Forbes study was released before the pandemic. The figures have risen lately with 90% seeing cloud infrastructure as a significant technological factor in the outsourcing business, based on a Deloitte survey. Cloud-enabled outsourcing services result in more scalability and flexibility to their customers and partners, according to Gallimore, adding that the use of virtual storage and cloud-related services will go up for better collaboration among outsourced teams.
One of the company’s main concerns is cybersecurity issues. As remote working has increased so has exposure of critical data and private information to suspicious online activities or cyber intruders.
Gallimore points out that Sweden reported a record high of over 350 cases of cyberattacks in 2020 from the previous 100-150. In London, 47% of remote workers fell victim to phishing scams mainly because of human error while working.
Both BPOs and clients have tightened their cybersecurity measures and policies amid the rise in remote work arrangements. Outsourcing companies further their efforts in carrying out higher data security measures.
Many companies believe that offshoring revealed more disadvantages than advantages during the pandemic.
Be that as it may, nearshoring destinations in Eastern Europe and Latin America have been growing in number. Companies see the practice of moving their business operations to a country close to their locations as a viable outsourcing option. Outsourcing their secondary functions or non-core services to neighboring countries is also cost-efficient and collaborative-friendly.
In the years to come, businesses will increasingly use social media networks, such as Facebook, Instagram, LinkedIn, and Twitter, as customer service channels. Gallimore says the global social media penetration rate stood at a high of 49%, an indication that companies want to be more connected to their customers who are frequent users of such platforms.
He adds that using social media lets businesses of all sizes be where their clients are – online. The multiple platforms enable companies to have a closer and smoother experience with their current and potential customers.
The healthcare BPO industry and the other outsourcing sectors are expected to invest more in AI technology to boost productivity and efficiency for their clients and partners. Experts say that using AI along with automation will give those who thoughtfully expend funds in AI an edge over their competitors.
In particular, AI can help transform the healthcare industry and aid the community in solving some of its issues and challenges. AI solutions can also offer support to healthcare providers in many areas, such as improving patient experiences, enhancing access to healthcare services, and increasing efficiency in care delivery and outcomes.
The need to reduce rising healthcare costs is one of the major reasons why a large number of healthcare providers are outsourcing some of their business processes to third-party providers in countries that offer affordable operational costs.
Many of these outsourcing healthcare companies are based in the US and Canada. Research group MarketsandMarkets reports that North America accounted for the biggest market share of almost 50% in 2020 and is forecast to post a CAGR of almost 11% in the next five years.
Total healthcare spending in the US has been increasing for the past 50 years. Health expenditures rose from nearly $75 billion in 1970 to close to $4 trillion in 2019, according to data from the Centers for Medicare and Medicaid Services (CMS), a federal agency that provides health coverage to over 100 million individuals.
The coronavirus outbreak at the start of 2020 saw a moderate short-term decrease in health services spending as a result of social distancing practices and patients who suspended their medical appointments and procedures. With the worst of the pandemic behind us, CMS projects that health expenditures will rise until 2028, reaching over $6 trillion.
An article posted on the Utah-based benefits administration software provider PeopleKeep website discusses the causes of the rising healthcare costs in the US. Below are the reasons:
High chronic illness rate
The National Center for Biotechnology Information reports that about half of the US population has one or more chronic conditions, including diabetes, asthma, or heart disease. Over three-fourths of the country’s healthcare spending is used to take care of people with chronic diseases. Contributing to this issue is that overweight or obese individuals account for more than 40% of adults in the US, according to the Center for Disease Control and Prevention.
The article adds that as the number of the chronically ill who are insured increases so does the cost of insurance premiums. From 2015 to 2020, yearly premiums for family coverage went up 37% to roughly $21,000 from about $15,000, based on data from the Kaiser Family Foundation (KFF), a non-profit organization on health policy analysis and health journalism located in California.
According to an article on the CNN website, overall healthcare costs have been rising due to high spending on ambulatory care, such as ER (emergency room) and outpatient hospital services. Yearly spending on ambulatory care expanded to around $700 billion in 2013 from approximately $381 billion in 1996 or by around $319 billion higher.
Additionally, data from The Peterson Center on Healthcare and KFF website says that in 2018 the US spent almost twice as much on health per individual as comparable countries or almost $11,000 compared to about $5,500 per person on average. Americans also paid about $6,600 per head on inpatient and outpatient care; similar countries spent roughly $2,700 on average, less than $3,900 per person.
Lack of information and transparency healthcare costs
The PeopleKeep site points out that no standard method is used to explain treatment choices and the costs that come with them. It is difficult to compare costs of the same medical treatment in different health institutions. Oftentimes, service prices are hard to navigate and learn once they are available.
An article on the Investopedia website also says the lack of transparency makes it problematic for everyone to find out the real cost of healthcare. Complicated medical bills prevent people from knowing the actual price and knowing what they are getting. Estimating medical expenses is tricky when all the details are inaccessible.
Patients keeping away from medical care because of COVID-19 and costs
Staying away from medical care due to expected associated high costs is a common sentiment among the public. The Investopedia site points out that a 2019 survey by the Physicians Advocacy Institute (PAI) showed that one reason why people avoid care is that they cannot afford to cover the deductibles under their HDHPs or High Deductible Health Plans.
Similarly, a KFF poll reveals that about 50% of the public have either turned down or canceled medical care owing to concerns about the coronavirus outbreak. Avoiding care leads to higher total healthcare costs since any postponement makes treatable illnesses more expensive to treat.
MSD Manuals, the global standard in medical reference for doctors, students, and consumers, defines defensive medicine as diagnostic tests or treatments that providers offer to patients as protection against the possibility of malpractice litigation. Such tests and treatments may not be needed anymore. For instance, a physician may hospitalize a patient immediately instead of giving the person an outpatient treatment first. This is being done to avoid a potential lawsuit if an adverse outcome arises from providing outpatient care.
The Western Journal of Emergency Medicine estimates that the overall cost of defensive medicine ranges from $46 billion to $300 billion, although most experts placed it between $50 and $65 billion. The defensive practice accounts for about 3% of total healthcare costs.
Expensive latest technologies
PeopleKeep goes on to say that medical breakthroughs using the latest available technologies can advance health and prolong human life. The trade-off, however, is that the use of costly next-generation technologies significantly adds to rising healthcare costs.
According to VIE Healthcare Consulting, a patient services provider in New Jersey, online patient portals, electronic health records, upgrading and maintaining the IT systems also contribute to the substantial increase in healthcare technology costs.
The company further notes that 40% of US healthcare providers say their IT budgets are expanding, with an annual budget of $40 million on average. Clinical healthcare IT spending amounted to almost $19 billion in 2015 (the latest year for which information exists) and technology spending at physician-owned multi-specialty practices has gone up by over 40% since 2009.
A big part of the US population does not pick their own healthcare plan
The PeopleKeep article points out that the KFF data showed that nearly 50% of the American public obtain their insurance through their employer who already prepared plan options for them. Most employees are not allowed or don’t have the opportunity to choose their own insurance plan. Management always makes the decision.
As such, companies tend to buy expensive healthcare plans because the amount they pay for insurance coverage is tax-deductible for them and tax-exempt to the employee. Low deductibles or small office co-payments also promote health plan overutilization, further pushing up cost and demand. [END]