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Medical transcription: Not in the pink of health

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CIOL Bureau
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CHENNAI: Medical transcription, considered the golden goose in IT enabled

services, is having a tough time living up to its name. The quality oriented and

human resource intensive business is not churning out bucks as fast as the small

operators thought it would. Inability to consistently perform up to the high

standards demanded by the Transcription Service Providers (TSP) and hospitals in

the US and the presence of intermediaries, like consultants and associates,

between the clients and the customers are proving to be the bane of the medical

transcription industry in India.

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"Quality is a key factor in the MT industry, and Indians, as a society,

are not quality conscious. Transcribers do not transcribe with the 98.7 per cent

accuracy demanded by the American Association of Medical Transcription the first

time. The content then has to be taken up to the desired level by quality

sub-editors and editors, who are in short supply," says Computer Higher

Education and Software Solution (CHESS) CEO, AS Ravi Venkatesh.

Shaper Info Global, which is into providing solutions in high technology

areas had forayed into MT in 1999 only to pull out after six months. The reason?

The returns were not commensurate with the efforts put in. "Lack of

qualified transcribers and the high mobility rate of the qualified few were

affecting our output, which would in turn have affected our reputation. This

would have automatically disqualified us even if we had not pulled out,"

says Shapre managing director Nagaraj Sharma.

But K Shanmugam, Head of Training Division of Zentech Solutions, which

recently got into production, has something different to say. "Quality, of

course, is a deciding factor. But, it is also a fact that the Indian medical

transcription industry is not fit for small players. Small companies either

would have to cough up huge investments to compete with the big players, which

they cannot, or depend on intermediaries for contracts. And when intermediaries

come into play, the margin of profits for companies doing sub-contracting, which

is what the majority of the small companies are doing, gets drastically reduced.

As of now, there are too many small players in the highly unorganized MT

industry."

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Worldwide, small and medium companies account for about 80 per cent of the

$3.3 billion business outsourced from the $6.6 billion MT industry in the US.

However in India, with things not going too well, many of them are now on the

lookout for alternative sources of revenue. Nittany, one of the pioneers in the

Chennai industry, is said to have jumped ship and is focusing more on medical

billing. Rapid Care is planning to include the entire gamut of healthcare

management such as insurance claims, billing and data management to make its

business more viable.

Contrast these with the story of the Coimbatore-based KG Information Systems

(KGISL), which has grown from a buyer-supplier partner of Heartland Infosystems

Services with 27 people in 1998 to become the joint venture partner of Heartland

now, with about 220 systems and 1,200 transcribers. "It is a large volume

business where there is no space for small companies which do not have a

long-term plan. Moreover, lack of qualified transcribers in the industry due to

inadequate training institutes have marred the prospects of small companies

without in-house training facility," says Vinay, Training Manager, KGISL.

KGISL plans to add 100 more systems and another 1,000 people by the end of next

year.

"MT is a good industry to make money provided the company has a good

training system to produce quality transcribers and a proper HR policy to arrest

the mobility of its employees in place, in addition to direct clients in the

US," adds Nagaraj Sharma.

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Having clients in the US had not helped CHESS, which is a franchisee of the

US-based TSP, CBay. Though it has a production capacity of 30,000 lines per day

with more than 60 systems at its disposal, it produces only 6,000-7,000 lines

per day. "The fault lies with CBay's marketing strategy. There is enough

work for everyone, we need to market ourselves more aggressively. To this end,

we plan to set up our marketing offices in the US and Canada," is what Ravi

Venkatesh has to say about the situation.

"Things are not that bleak. Revenues have crept up to Rs 16 crore this

fiscal from Rs 12 crore in 1999-2000 and Rs 10 crore in 1998-99. But certainly

dropouts among the 45 companies registered with Software Technology Parks of

India (STPI), Chennai, have also increased due to problems with consultants and

associates," says STPI director Rajalakshmi.

"That augurs well for the industry also. This shakeout would weed out

all the non-serious players leaving committed people in the fray," says

Rapid Care managing director M L Venkat Laxman.

With announcements of big time TSPs such as iQ Infotech setting up production

centers in India, the medical transcription industry in the country seems to

take the big route to reach Nasscom's projection of reaching a revenue of Rs

4,000 crore in 2008.

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