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Storm
Clouds
By Michael Alan Hamlin
December 15, 2003
Among the bright stars in the e-Services
sectors is medical transcription. Like call centers, software development
houses, and business process outsourcing service providers, for
instance, medical transcription services has been an important generator
of jobs for Philippine professionals, and the rate at which jobs
are being generated should, judging from market demand, continue
to accelerate.
However, there are storm clouds on the horizon. The local medical
transcription sector, led by the Medical Transcription Industry
Association of the Philippines Inc. (MTIAPI), recently called on
the Philippine government, medical transcription services organizations
(MTSOs), and Filipino-American business groups to fight forthcoming
US legislation intended to ban outsourcing of medical transcription
work to countries such as the Philippines.
A petition opposing the legislation was presented last week during
the launch of MTIAPI, a non-stock, non-profit group formed by nine
Philippine-based MTSOs. Officials of the organization said that
if the ban on offshore transcription services becomes law, it will
leave thousands of medical transcriptionists and administrative
employees without jobs virtually overnight.
"This is why it is important for the government and business
sectors to jointly and aggressively advocate the security and reliability
of Philippine MT services. This can be done by adopting regulatory
policies that will enforce strict compliance with US medical data
policies," Terry Peteete, a partner of local MTSO Total Transcription
Solutions Services Incorporated and an MT industry analyst for the
US and Asia, told me.
The ban on offshore transcription is expected to be introduced by
California state senator Liz Figueroa in January. There are reports
claiming that she became interested in the legislation as a result
of an incident in Pakistan. Apparently, a medical transcriptionist
there threatened to disclose and post confidential medical records
on the Internet unless she received a higher salary. She never did,
and this isolated event seems to be the only reported case in which
an MT professional acted unprofessionally.
"This is not an issue of poor quality or mediocre offshore
MT services. In fact, the high availability of a qualified labor
pool and sophisticated IT infrastructure in the Philippines makes
this country an ideal outsourcing site for medical transcription
services. But it is urgent to provide the US government, its citizens
and MT customers with credible assurance that such an unfortunate
and unprofessional incident will not happen here," Peteete
said.
As a first-step to making that assurance, MTIAPI is now forming
a committee that will request the Philippine House of Representatives
and Senate to develop legislation on HIPAA compliance.
Peteete explained that while MTSOs claim to comply with the US Health
Insurance Portability and Accountancy Act (HIPAA) of 1996, which
outlines the rules for safeguarding medical data, many US-based
organizations believe that US medical institutions that outsource
their MT work offshore have little or no control over information
privacy and security.
"They believe that HIPAA is unenforceable overseas and that
outsourcing to an offshore transcription company poses grave risks
to patients' employment opportunities and privacy. For example,
if medical records are illegitimately posted or distributed online
and an employer discovers information regarding the health of an
applicant, a job offer may be withdrawn or never made. In terms
of privacy, a patient could be discriminated against by his social
peers for health reasons. So it's important for countries that offer
MT services to develop their own regulations for enforcing full
adherence to HIPAA and penalize those who violate it," Peteete
explained.
The US MT market - the largest MT outsourcer globally - is valued
by experts at US$10 to $16 billion and it is believed to be growing
30% annually, according to the Center for International Trade Expositions
and Missions (CITEM).
"Accounting for this growth are the expanding U.S. population,
Americans' increasing awareness of the importance of preventative
health care, and the fact that 6,700 hospitals have yet to convert
their medical records to electronic format to comply with requirements
for federal certification," Josephine Briones-Gonzales, CITEM
IT services director, told me.
In-house MT services comprise 53% of the U.S. market, and the remaining
47% is outsourced. Peteete said that while there is a need for 230,000
transcriptionists to meet this demand, the availability of US medical
transcriptionists is falling at a rate of 10% annually, with an
aging workforce whose average age is 50. "As a result, US hospitals
are now outsourcing offshore to leverage a sizeable qualified labor
pool at cheaper costs."
But not for long, if Ms. Figueroa's bill from becoming law.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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