Synergies Drive Perot’s Offshore Acquisition and Create New Value Proposition in Outsourced Medical Billing Services | Article
When Automated Medical Systems, a US provider of medical billing management services, encountered challenges with recruiting and retaining night-shift data-entry staff, the company decided to outsource those functions to specialist Vision Healthsource, a Chennai, India company founded in 1997. Their outsourcing relationship was born in 1998 during the early “prove it to me” phase when people had seen success with sending IT work offshore but were still highly skeptical that sending business process outsourcing (BPO) work to India was a wise strategy.
According to Marc Bolh, president of Automated Medical Systems, his company selected Vision because, unlike its offshore competitors, Vision understood medical billing transactions and issues. “Vision has medical staff, and that’s very important because so many relationships and data must be entered different ways. Other companies provided only batch-process data entry–you send them paper, they key it into a computer, and then you import the data and load it into your files. But none of them had any knowledge of data entry for medical billing.” Vision was also the only one with expertise in an online solution.
But at that time, Vision had only one customer. So Bolh first polled Automated Medical’s clients then moved forward with Vision when the clients responded they would not have a problem with a plan to use offshore expertise.
Vision also understood the importance of long-term commitments as well as face-to-face meetings and promised to travel to the United States for regular visits. In addition, a Vision employee spent two months at Automated Medical Systems to bring more discipline into the process workflow and ensure a smooth transition.
When the data-entry work became predictable and dependable, Vision began providing voice-based support for accounts receivables management. Then Automated Medical began evaluating whether other functions might benefit from the offshore solution. That led to Automated Medical collaboratively training Vision’s staff to do medical coding. “We did that over the phone with cameras so we could see each other on computers,” recalls Bolh. “We were thrilled with their coding skills, and Vision’s staff was tested and certified after one year.”
Their relationship has been so successful that it was nominated for a
Moving to Next-Gen BPO
As Vision’s founder and CEO Anurag Jain says, the success of BPO in India quickly moved beyond the “prove it to me” phase into “scale it for me.” He describes today’s model as “manage my business for me.” This next-generation version of BPO calls for another level of sophistication, he explains, with increasingly complex process expertise and management; technology enabling business transformation; and a global presence with offshore/onshore offerings and onsite presence. To command stature in this arena, Vision needed global, end-to-end healthcare claims processing capabilities.
Enter Perot Systems Corporation, which was seeking offshore healthcare processing capabilities as a key facet in its healthcare transformation model.
With a high level of synergistic value for both organizations, in August 2003 Perot Systems acquired Vision Healthsource India Private Limited and Vision Healthsource, Inc. (together known as Vision).
In less than a year, Vision grew more than 100 percent and began building state-of-the-art infrastructure and capabilities for additional expansion. It now has more than 1000 associates who process more than 45 million transactions (in excess of US $1 billion annually in provider claims for physicians and hospitals across the United States) and one million phone calls per year.
More than 80 of those physician/hospital clients and six million of the annual transactions are included in the scope of Automated Medical Systems’ arrangement with Vision, and there was suddenly a new player involved in the work. Bolh says his company looked for assurances that Perot Systems–a much larger company–would not lose interest in continued investments benefiting Automated Medical Systems.
Bolh acknowledges that Perot Systems’ involvement “validates for some companies the concept of performing medical BPO work offshore”–although Automated Medical and Vision already proved it years ago.
Despite initial concerns, Perot Systems’ acquisition has been good for Vision’s first “real” client, Automated Medical. Bolh says communication remains effective, operations are still transparent, services and quality improvements continue to expand, and trust continues to grow. Summing up, he states: “They pull out all the stops to meet our needs and expectations.”
Lessons from the Outsourcing Journal:
- More and more niche providers will be acquired by larger providers now that the offshore BPO model has proven to be highly effective in outsourcing capabilities. Buyers should consider this possibility as they perform due diligence on potential offshore solutions.
- Buyers should evaluate an offshore provider’s long-term commitment and willingness to ensure effective communications and ongoing face-to-face meetings in the “home” country of the buyer.
- Both the buyer and provider in successful relationships will benefit by collaborating on how they can increase the scope of outsourced work.