Despite of some problems 4-5 years from now, the interest of the companies are still increasing and outsourcing opportunities may be over $24 billion by then. Another Y2K opportunity for Indian IT industry might declare by the Healthcare regulatory reform in America. Healthcare with the new focus that targeted by some large companies like Wipro, HCL Technologies, Tata Consultancy Services and Infosys. Financial and banking services which are the biggest revenue contributor is experiencing anxiety and hindrance.
The estimated US healthcare market is expected to grow from about $2.5 trillion to $4.6 trillion in 2012 said by the analysts. Around $24 billion is the expected outsourcing opportunity over the next 4-5 years that involve both providers and payer. For the next two years analysts anticipated that Indian IT companies spot the acquisition and mergers segment. The coding system for billing medical processes has to turn from the World Health Organization’s ICD-9 to ICD-10 diagnostic classification by October 1, 2013 based on the instruction passed by the US Center for Medicare and Medicaid Services. An industry sources say that over $1 billion will be the opportunity with this alone.
The ICD-10 implementation has the future to catch up with the Y2K problem by means of cost and impact, this was stated by a Deloitte report. It needs a new medical coding, a thorough update to existing software or a huge wave system review and even innovations with most of its system interfaces. Due to the ICD-10 codes that are very complicated it requires more effort in billing systems, decision and analytical systems, reporting packages, implementing and testing the changes in electronic medical records instead of just testing its data fields. Stated in the report, it will include the training of coders, installing of new code sets and re-mapping interfaces and repairing reports utilized by all individuals who use diagnostic codes.
Nasdaq-listed Cognizant as the only company that is ahead with other companies. The reason for Cognizant quick growth is their focus on its healthcare segment, 27 percent were the company’s contributed revenue and in 2011 it grew to 38 percent. While some giant companies like Infosys, Wipro and TCL still gets a single digit revenue. Last December 31, 2011, Infosys got 1.8 percent while Wipro with its healthcare with life services and science gain 10 percent and TCS with life science as well earns 5.3 percent of its revenue. The HCL’s healthcare division’s revenue was about 8.6 percent and it is about to change for the next 1-2 years.
Nirish Mathia, managing director of Technology Holdings said that both healthcare providers and payers, most huge Indian firms are now evaluating their focus seriously. Over $ 50-100 million was the target revenue of some companies. Indian firms are looking for US companies with powerful healthcare marquee clients and domain expertise.
In the past 25 months, US healthcare had about 100 deals as an average of 4 deals each month that gathers almost $20 billion based on the Technology Holdings survey. Three years after, the US healthcare payer BPO market will move ahead for 15-20 percent from 2011’s 41.2 billion. By 2012, the payer outsourced services will expand to 9 percent compounded annual rate that will reach for almost $15 billion. A partner and technology sector leader, Milan Sheth stated that 20 percent of the market provided by the top 3 players. HCL Tech signed a several deals and each deal was about $250,000 to $10 million in the current years. During the previous year, 55 percent were the growth in HCL’s healthcare vertical.
REFERENCES:
http://www.theoutsourceblog.com/tag/indian/
http://business-standard.com/india/news/us-healthcare-next-big-focus-for-indian-it-sector/467415/
http://www.scoop.it/t/icd-transition/p/1399252004/us-healthcare-next-big-focus-for-indian-it-sector-business-standard
http://www.silobreaker.com/us-healthcare-next-big-focus-for-indian-it-sector-5_2265547405925548077
