Healthcare BPO

business man with chartThis upward trend is supported by an improving overall economy and rising revenue in the human resource, finance and accounting, customer relations management and insurance sectors. All provide a large portion of BPO business.

“Additionally, rising wages and increased operating costs associated with the passage of Patient Protection and Affordable Care Act (PPACA) helped drive employers to BPO companies as a method of cost control,” says Stephen Morea, IBISWorld Industry Analyst. As a result, in the five years through 2014, BPO Services industry revenue is expected to increase at an annualized 4.1 percent to reach $127.4 billion and includes a 4.5 percent increase in 2014 alone.

IBISWorld is an independent source of industry and market research. It offers a comprehensive database of information and analysis on every US industry.

This study mirrors findings from August 2013. According to a study released by Markets and Markets, the U.S. healthcare outsourcing market has great potential for growth owing to the measures taken by the government to curb the ever-increasing healthcare costs.

BancTec predicted such an impact from the Affordable Care Act, which IBISWorld now confirms. Read our blog post The Affordable Care Act Simplified and Its Impact on Outsourcing or our ebook Untangling the Administrative Knot of the Healthcare Industry for more information.

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shutterstock_183135302When it came to healthcare, in the past, there were two options: either the doctor made a house call and came to you or you went to the doctor. However, virtual care may become an increasing significant third alternative. In many regards, patients are already turning to virtual solutions — with or without the actual doctor. Two-thirds of all U.S. broadband households have visited a healthcare website in the past year. Thirty-six percent visited a health portal like WebMD. Sites like these can be tremendously helpful. However, they can also confuse patients when a symptom like “dizziness” could lead to such varied conclusions as middle ear infection, carbon monoxide poisoning, or diabetes.

Providers are exploring virtual healthcare technology to better serve patients. Virtual health kiosks and portals, remote consultations, and electronic personal health records present new opportunities. These digital doctor-patient visits could create a new healthcare claims conundrum. In these instances, an experienced healthcare BPO company can improve efficiency and reduce costs.

According to, by 2018, 22 million households will use virtual healthcare, up from less than a million in 2013. Average visits among these adopter households will increase from 2 per year in 2013 to 6 per year in 2018, which include both acute care and preventive follow-up services in a variety of care settings—at home, at retail kiosk or at work.

Benefits include:

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medical recordsOctober may seem far off, but for physicians and hospitals, the rush is on to comply with HITECH (Health Information Technology for Economic and Clinical Health Act). This mandate requires the adoption of electronic records by the Fall 2014 deadline. If hospitals fail to do so, they face penalties in the form of reduced Medicare/Medicaid payments.

Adopting EMRs (electronic medical records) is a no-brainer for doctors and hospitals. Electronic medical records allow doctors to work more efficiently. However, as reported by, some doctors find that EMRs hinder them.

First and foremost, physicians want reliable electronic medical records. The Atlantic reported on one such error. According to Dr. Richard Gunderman:

An intern recently presented a newly admitted patient on morning rounds, reporting that the patient was “status post BKA (below the knee amputation).” “How do you know?” the attending physician inquired. “It has been noted on each of the patient’s prior three discharge notes,” replied the intern, looking up from his computer screen. “Okay,” responded the attending physician. “Let’s go see the patient.”

When the team arrived in the patient’s room, they made a surprising discovery. The patient had two feet and ten toes. Where did the history of BKA come from? It turned out that four hospitalizations ago, the voice recognition dictation system had misunderstood DKA (diabetic ketoacidosis) as BKA, and none of the physicians who reviewed the chart had detected the error. It had now become a permanent part of the electronic medical record — as if written in stone.

The intern’s mistake highlights a growing concern about government-mandated electronic medical records. Will doctors spend more time in front of computer screens and less time with patients?

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The U.S. Government Shutdown Impact on Healthcare and Healthcare BPOThe U.S. federal government’s partial shutdown entered its seventh day as of Monday. More than 800,000 federal employees across dozens of agencies were furloughed, causing certain service-providing departments across the country to shutter. Additionally, preschool programs like Head Start, government contractors, and hotel/tourism businesses dependent on national parks have all been impacted. Lockheed Martin began furloughing roughly 3,000 employees this week. Since the shutdown began as an attempt to defund key parts of the Affordable Care Act, the shutdown could shape healthcare and some aspects of healthcare business process outsourcing.

Here’s what you need to know about how the shutdown will affect healthcare in general:

  • Ironically, the most prominent part of the healthcare law is not affected. Eligible uninsured Americans are still able to sign up for online healthcare exchanges. Most of the money for the Affordable Care Act comes from new taxes and fees, as well as from cost cuts to other programs like Medicare and other types of funding that will continue despite the government shutdown.
  • The most dramatic impact that the shutdown could have on the healthcare law would be to make it harder for the government to address bugs in the online health insurance exchanges. This is especially problematic when it comes to the young adult demographic, who have the highest expectations for purchasing products online and are expected to be a key part of the Affordable Care Act buy-in.
  • The National Institutes of Health will stop accepting new patients for clinical research and stop answering hotline calls about medical questions.
  • The Centers for Disease Control and Prevention will stop its seasonal flu program and have a “significantly reduced capacity to respond to outbreak investigations.”
  • New applications for Medicare and Social Security benefits will not be able to be processed.

How the shutdown may affect healthcare BPO:

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National Health IT WeekThe 8th annual National Health IT Week is being held this week, September 16th to 20th. The week consists of events in Washington DC and across the country. It’s a collaborative forum where public and private healthcare constituents work in partnership to educate industry and policy stakeholders on the value of health IT. Approximately 200 public and private sector organizations are participating in the event — vendors, provider organizations, payers, pharmaceutical/biotech companies, government agencies, industry/professional associations, research foundations, and consumer protection groups — to express the benefits that health information technology brings to U.S. healthcare.

Comprehensive healthcare reform is not possible without system-wide adoption of health information technology. And as a result, healthcare business process outsourcing coordinates with health IT to play an important role in improving the quality of healthcare delivery, increasing patient safety, decreasing medical errors, and strengthening the interaction between patients and healthcare providers. BPO can do so by easing the medical records transition from paper to electronic records.

“Meaningful Use” sets the standard for electronic records

The transition to electronic records is especially important to stakeholders in health IT. A quality BPO company can convert paper records to electronic files with medical-specific scanning, indexing, sorting and archiving. Such companies can also convert microfilm to an electronic format. The conversion would help providers and hospitals to eventually achieve “meaningful use” standards.

Meaningful use is the set of standards defined by the Centers for Medicare & Medicaid Services Incentive Programs that governs the use of electronic health records and allows eligible providers and hospitals to earn incentive payments by meeting specific criteria.

The benefits of the meaningful use of EHRs include:

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Outsourcing solutions exist to simplify the added administrative burden.On October 1st, less than two months away, the health insurance exchanges portion of the Affordable Care Act (ACA) will go into effect. The ACA is a large and complicated law – nearly 1,000 pages long. Some portions went into effect as of 2010 with major provisions phased in by 2014 and remaining portions by 2020. Changes in the healthcare industry have led to a growth in healthcare BPO. But how exactly will the Affordable Care Act impact outsourcing?

First, it’s important to understand the key provisions. The ACA will consist of:

  • Basic benefits package defined by the federal government
  • Increased Medicare payroll tax on upper income earners
  • Penalty for employers (with 50+ employees) who do not offer healthcare
  • If an employer doesn’t offer insurance, people will be able to buy it directly in the Health Insurance Marketplace.
  • Tax credits to small business – by 2014, 50 percent of the employer’s contributions.
  • The Medical Loss Ratio. At least 85 percent of all premium dollars collected by insurance companies for large employer plans must be spent on healthcare services. For plans sold to individuals and small employers, at least 80 percent of the premium must be spent on benefits.
  • Eliminating annual limits on insurance coverage for new plans and existing group plans.
  • No out-of-pocket for many preventive services. All new plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance.
  • Children up to age 26 can stay on their parent’s health insurance plan.
  • No denial of coverage due to a pre-existing condition.
  • Insurance companies cannot limit the coverage someone receives over his or her lifetime.
  • Expand who will be eligible for Medicaid. States will receive 100 percent federal funding for the first three years, phasing to 90 percent federal funding in subsequent years.
  • The law provides consumers with a way to appeal coverage determinations or claims to their insurance company.
  • Tax credits for middle-low income uninsured. These individuals may also qualify for reduced copayments, co-insurance, and deductibles.
  •  The Individual Mandate. People who are not already covered or fully subsidized will be required to purchase coverage or face a penalty – with some eligible to receive subsidies towards private insurance premiums.

Four observations on how the Affordable Care Act will impact healthcare BPO:

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New Market Research Shows Growth in Healthcare BPOWith the ever-changing landscape of the U.S. healthcare system, the U.S. healthcare business process outsourcing market is undergoing a significant transformation. This year, the U.S. healthcare payer, provider, and pharmaceutical outsourcing markets are valued at $11.1 billion, $6.8 billion, and $65.6 billion.

According to a study released this month by Markets and Markets, the U.S. healthcare outsourcing market has great potential for growth owing to the measures taken by the government to curb the ever-increasing healthcare costs.

Other factors that have led to the growth of the market include developments and innovation in information technology and regulatory changes. Approximately 75 percent of U.S. healthcare companies outsource their work to external locations. This is due to the shortage of qualified staff in key positions, such as nurses and coders, and due to the new set of rules and regulations that they need to comply with. Some services that are commonly outsourced are insurance claims processing, adjudication and receivables management, billing and coding services, radiology reporting, transcription services, and clinical outsourcing, among others.

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Claim Processing Paperwork
From the outside, the average billing cycle for a medical appointment looks pretty simple: Go to the doctor, pay for the visit (with your own money or insurance), repeat as necessary.

For healthcare providers, though, that couldn’t be further from the truth. The reality is more like this:

  • Identify the patient
  • Pre-register the patient
  • Patient arrives, is treated
  • Patient pays, or, in most cases, insurance claim is filed
  • Claim is processed
  • Insurance company may follow up to dispute claim, or deny coverage
  • Office follows up with patient to receive disputed payment
  • Payment may go into debt collection
  • Account closed.

From a two-step process to a nine-step process, in the blink of an eye. The thing is, providers only really care about one thing: getting paid. And that’s where business process outsourcing can come in. Providers receive payments and explanations of benefits in a variety of forms, forms that vary from payer to payer. Aetna may have one form, while Medicaid and Medicare may have others. The manual matching of these forms, and syncing them to a specific provider’s system can take weeks, delaying payment along the way. According to industry data, 2.5 billion commercial payer healthcare remittances are handled manually every year.

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Affordable Care Act Business Process OutsourcingAs President Barack Obama’s Affordable Care Act starts to take hold nationwide, the opportunities are beginning to come into view. And aside from patient care, one of the biggest changes may be a boon to the business process outsourcing world: There will be paper. Lots of paper.

The United States spends more on healthcare — both as a proportion of gross domestic product and on a per-capita basis — than any other nation in the world. Current estimates put U.S. healthcare spending at approximately 15 percent of GDP, and the health share of GDP is expected to continue that upward trend, reaching 20 percent of GDP by 2016.

Worldwide, the global healthcare BPO market is growing 21 percent year over year; provider-specific BPO is growing at an astonishing 32 percent rate. All of those numbers can only grow with the ACA.

According to the Society of Actuaries, insurance companies will pay an average of 32 percent more medical claims due to the ACA, and premiums are expected to rise as well. Claims costs will also rise because insurers will no longer be allowed to turn down patients with pre-existing conditions. More patients, more paperwork, more business process outsourcing.

“I think it’s very likely we’ll see outsourcing grow” as a result of the Affordable Care Act, Joanne Spetz, professor at the Philip R. Lee institute for Health Policy Studies and Center for the Health Professions at UC-San Francisco told California HealthLine.

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Business Process Outsourcing | BPO SolutionThird in a series

In healthcare, automating every step of the pre-adjudication cycle – meaning anything that happens before the payment of a claim – allows claims to be processed more efficiently and more accurately. As claims processing improves, auto-adjudication rates rise and the total cost per claim falls.

Healthcare payers and benefit administrators are provided with pre-adjudication technologies that replace error-prone human processes and provides applications for PPO network management, document management, workflow and overpayment protection. These solutions improve adjudication rates, increase payment accuracy and enhance customer service. Simply put, business process outsourcing can provide better, faster and more cost-effective processing than any manual, in-house paper-based method.

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