IT infra is key to healthcare BPOs
Gopi Natarajan, CEO and co-founder, Omega Healthcare, who was in India earlier this week, spoke to FC about the road ahead.
Omega Healthcare is the largest healthcare BPO in India. With over 10,000 employees spread across four centres in Bangalore, Chennai and Tiruchi, besides Manila in Philippines. Omega Healthcare is among the fastest growing BPO/KPO sector in India, providing an opportunity to garner $4-5 billion healthcare business from the US by 2020. Omega handles Revenue Cycle Management (RCM) and other related works for large US- based companies. Growing at 30–35 per cent per annum, the company also handles high-end, value-driven work pertaining to medical coding. It is focusing on establishing bases in tier II and tier III Indian cities and tap the vast manpower opportunity available there. Gopi Natarajan, CEO and co-founder, Omega Healthcare, who was in India earlier this week, spoke to FC about the road ahead.
Can you recall the Omega Healthcare journey so far?
I have been based out of the US for a long time. My business partner, Anurag Mehta and I started the company by end of 2003 and started the operations in early 2004. I have been in the healthcare industry in the US for about 30 years and developed a tremendous amount of contacts and network, and realised the potential of what we could do. Even though several companies were already in this space, no one had the kind of relevant industry experience we had which was a huge revelation for us. Since, we already had a lot of experience in the revenue cycle management niche, we knew we can do it better than others. Once we started, we could show the difference in our capability and delivery. We are No1 by far now in this space in India and growing very rapidly because of our unique attributes. These include very seasoned healthcare executives, our unique 'wholesale' business model, where there is no channel conflict and the clients being appreciative of the fact that both Anurag and I have been in their shoes running the same type of companies they are in. We deal with billing companies, aggregators and coding companies which we understand the nuances of very well. We can relate to our client's pain points and address them with ease because of the depth of our experience and understanding of this industry. We surpassed many companies because of our pure play business model, as against others who had conflict of interests with their own clients.
In Tiruchi, we are the largest white-collar employer with over 3,500 people. We feel comfortable in operating in the South. Going forward, over the next 3-5 years, we will certainly look at starting operations in more tier II and tier II cities. Besides the educated workforce, another key requirement is infrastructure, especially IT connectivity and internet bandwidth. Availability of these is key since our jobs are all productivity- based that comes with strict service level guarantees.
Of late, you have been active in the coding space. You have been offering training as well as providing coding services in India and the Philippines. How far have you been able to grab the ICD 10 upgrade opportunity in the US?
Yes, we have the largest number of coders in a single company in the world. We have around 3,300 coders. No one has such a large selection anywhere in the world and this is a fantastic achievement. Medical coding is like a binary science – either you get it right or it is wrong. There are other companies, who tell their prospective employees that if you are trained by Omega, you are trained extremely well. When it came to ICD10, we invested a significant amount of money in training all our people. Since any learning curve will take time, we had more employees to offset any drop in productivity and that helped. These efforts stood out and we have very little attrition, despite attempts of poaching by competitors. As a result, the transition from ICD9 to ICD10 was smooth, even though the industry overestimated the difficulty of the transition. There was a six-month grace period and the honeymoon period is getting to a close by the end of this month. It was a big change and the industry geared up well for this new way of medical coding. We were able to grab the opportunity much faster than others and plan to add over 1,000 coders to our rolls this year.
Is this still limited to physician practices or have they moved up to hospitals?
Still, good amount of business today in the revenue cycle management (RCM) niche is in the physician space compared to hospitals, which have been a bit slow to adopt use of offshore services. However, over the last two years, they are more receptive and are starting to utilise more offshore resources for their needs. Around 20 – 25 per cent of our work comes from the hospital side and it is growing really well. Hospital revenue cycle is much bigger in terms of dollars and we see lot of opportunity and tremendous amount of work coming in. We anticipate growth dramatically from the hospital/inpatient side.
What is the current status of the patient interactive services and case management services you had launched from your Manila facility. How has been the growth in these segments?
We have been in Manila for two years and have close to 500 employees. We struggled initially but once we had a couple of referenceable clients, it has taken off very well. We had less than 100 employees in the first year and have added 400 in the last year. We are looking to expand into a second office, which may not be in Manila, but somewhere close by and it would come up in the later part of this year.
Some of the higher end coding services we provide requires clinical knowledge and nurses in Manila are better suited to provide those kinds of services. We are very positive about the Manila operation since things have changed dramatically in the last 12 months compared to the first year. In the US, because of Obamacare, there is a lot more shift towards patients getting involved in the care delivery decision making process and taking responsibility for payments. As this becomes more pervasive, I see that picking up and also our growth in Manila in the next 3-5 years or so.
What are the prospects for Indian companies in taking up voice-based patient interactive services for US hospitals?
It is a bit limited, only because of our accent which is not as close to the American accent compared to the Philippines. We provide training to neutralise the accent so the pronunciation, diction and pace are closer to how Americans speak, however it is still better suited to converse with insurance company agents and not with patients. Conversing with patients is a completely different skill set and needs to be very close to the American accent. This is where countries like Philippines score better. They have friendly ties and their business culture is very similar to that of the US. Most of the new development and infrastructure in Philippines is developed by American companies due to better trade agreements.
Can you elaborate on how your revenue cycle management business has been growing and also throw some more light on the general growth of the company?
We are growing at about 30 – 35 per cent year over year and will continue to grow at that level over the next 3-5 years. We have a good order pipeline for the next three years. We doubled our turnover in the last two and half years so you can imagine the kind of growth we have been achieving rapidly.
We are now over 10,000 employees and will probably add another 2,000 – 2,500 people in the near term. We are privately held and hence cannot reveal the revenues, but suffice to say that the growth has been pretty spectacular and the future looks very bright.
