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This is the time to act for Indian IT Firms to win in the highly competitive healthcare space, and they need to move quickly on several fronts.

The U.S healthcare reform, President Barack Obama's top domestic priority which seemed to have only limited relevance to India, is now throwing light on the untapped opportunities for Indian IT giants. According to  Business Standard, a leading business daily in India, The US healthcare reform creates three opportunities for Indian companies: providing IT services to support implementation of electronic healthcare records (EHRs), business process outsourcing (BPO) to reduce costs and give the capacity required for payers to serve the newly insured, and data analytics services to support act-based decision-making throughout the healthcare system.

In order to drive the adoption of EHRs President Obama allocated $37 billion of stimulus funding.  McKinsey, the worldwide management consulting and research firm estimates the resulting growth in EHRs will require an overall spend of $175 billion over the coming decade, of which nearly $50 billion will be devoted to IT services and training. The EHR adopyion and implementation process, which is considered to be sophisticated in nature, will create highly time-bound demands for IT services.  Hospitals will require help in system set-up, installation, beta-testing, conversion of archival data into compatible formats and heavy initial training of clinical and administrative staff to use the new system.

The factors that creates opportunities for the Indian companies includes the expertise that they posses in services such as systems integration, application management and legacy modernisation. On top of that Indian IT firms has got another advantage that established EHR software vendors lack the manpower to install and implement the system on a national scale, and also provide service and support on an ongoing basis.

India, being well known in the sphere of outsourcing is going to get another opportunity that lies in BPO services which are going to evolve as the part of Reform plans. The reform will see an influx of over 30 million newly covered individuals; insurers will be on look out for outsourcing partners to help them enroll new members and process their call and claim needs. In addition, the increased cost factors also will pressurize insurers and hospitals to concentrate only on few core functions (such as benefit and services design, sales and marketing) and outsource back-office (member database management, claims processing) and support services (enrolment processing).

Another opportunity for Indian firms lies in the emerging market for data analytics. Together with claims data, EHRs will generate enormous amounts of “real world data” to drive large-scale healthcare analytics. These could range from comparative effectiveness research into different treatments or drug combinations to analysis of call, claims and clinical data for customer lifecycle needs and marketing. McKinsey estimates that the overall market for “real world data” analytics could be worth over $10 billion.

The three main healthcare openings which the U.S Health reform created, plays to both the strengths as well as the ambitions of India’s technology tigers. Moreover, to ensure success in the highly competitive healthcare space, Indian firms need to move quickly on several means. Speed is critical since many of the promising healthcare openings are highly perishable. However, speed without insight could prove expensive and fruitless. Ambitious players need to develop a deep understanding of the needs and intricacies of the US healthcare landscape. Another key element of success is to devise an operational set-up that appropriately balances offshore and onshore locations to optimise value as well as service.

Except for few, Indian companies do not enjoy a long track record in healthcare. This means they need to quickly establish their reputation and credentials in this fast-evolving space either through partnerships with established insurers and hospital networks, or by making very competitive proposals for high visibility contracts.

Source: Business Standard

You can discuss more about Healthcare reform and emerging opportunities in our Healthcare Reform Group