Friday, March 26, 2010

qotd: India's outsourcers outsource to U.S.

The Christian Science Monitor
March 25, 2010
US healthcare reform is boon for India outsourcing companies
By Taylor Barnes

President Obama signed into existence not just a historic healthcare reform law but also monumental piles of paperwork: New member registration forms. More claims. Ever-expanding databases.

The bulge in administrative work may look like a nightmare to American insurance firms and government employees. But to outsourcing executives here in India, it's heaven-sent.

The addition of 32 million insured Americans is "very significant" for Indian outsourcers, says Ananda Mukerji, chief executive officer of Firstsource Solutions in Mumbai. Companies like his will see "increased opportunities" as US health insurers and hospitals scramble to reorganize to comply with the new law.

This extra work will include processing new enrollments, organizing bigger member databases, processing more claims, providing more support services, and managing more revenue, he says.

The US healthcare reform offers a "natural extension" of the back-office outsourcing that Indian companies already specialize in, says Tu Packard, a senior economist with Moody's

But some services in the US healthcare industry cannot be outsourced beyond America's borders due to regulations. That's one reason major Indian outsourcing firms have set up shop in the United States. In a twist, America's outsourcers are now outsourcing back to America.

Comment:  President Obama and Congress rejected the administratively efficient model of single payer, and have now enacted into law the most expensive and most administratively complex model of reform. In the ultimate of ironies, India is now outsourcing to the United States the profusion of health care administrative services outsourced to them. It reminds you of why Willie Sutton robbed banks.

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