July 5, 2012: Obama administration’s new healthcare reforms introduced last week will unlock new deals worth $22 billion for the outsourcing industry in India. Last week, US Supreme Court approved a new law designed to bring reforms to the healthcare sector in America. As per the new healthcare act signed by Obama and which was later brought as a law, it makes mandatory for all the American citizens to buy health coverage in 2014 or else pay huge penalties if they fail to buy. Also as per the new law, the employers should offer healthcare coverage for their full time employees and their dependents or they will face penalties.
The new law was opposed by Obama’s opponents as they felt that it questions the right of the people to choose. However, by 2014, 30 million Americans would likely buy healthcare insurance. Outsourcing industry experts from India feel that the new decision will definitely benefit the industry by the way of bringing new projects valuing around $ 22 billion. The reform will bring business for the Indian BPOs in the form of data creation and conversion, claims processing, management of health records and sales of insurance.
According to the BPO/IT trade body, NASSCOM, out of $70 billion software outsourcing business in India, $30 billion business is from insurance and financial services. The average value of healthcare benefits outsourcing market in India is $5.4 billion, but with the reforms coming into effect, the market size will grow to $20-22 billion. The new reform will benefit the IT/BPO companies many ways. One such benefit is that BPO companies will win contracts largely from single medical practitioners as the reform requires them to maintain centralized data and covert the data to digital forms.
Indian BPO has carved a niche for themselves in the area of healthcare benefits outsourcing market. Main benefits the healthcare players see in outsourcing their process to India are:
- Increased efficiency and high productivity
- Minimal capital expenditure
- Skilled workforce
- Accuracy in data processing
- High data security and confidentiality
- Easy accessibility to processed data
The new reform will only increase these capabilities of the Indian IT/BPO companies by the way of improving their services to the clients. This reform will provide the space for Indian BPOs to improve their process and services and improve the capabilities of their employees. The companies need to upgrade their technologies to meet the new demand and the challenges associated with it.
It is anticipated that Indian companies need not wait till 2014 to bag the outsourcing contracts as the new decision will prompt the insurance players to opt outsourcing as a way to understand the new complex compliances. It is widely believed that Barack Obama’s new reform announcement is going to help the Indian IT/ITES companies to leverage their existing capabilities.