Obamacare could mean boom in biz for Indian outsourcing

Summary:The rollout of Obamacare looks like a huge payload of business for Indian outsourcing companies involved in the insurance sector, thanks to an expected spike in public enquiries including 42 million calls this year.

The new insurance plan by United States President Barack Obama called Obamacare, or formally the Patient Protection and Affordable Care Act, kicks in this month, marking a big development and great news for outsourcing companies across India who handle customer care for insurers. It certainly means great influx of business for all the BPOs and KPOs from India. 

outsourcing
Obamacare could mean boom in business for Indian outsourcing companies.

With this news a lot of customers in America who want clarity on their health coverage, eligibility, costs and overall questions lingering in their mind will rely on the BPOs and outsourcing companies in India handling such queries. 

This significant revamp brings in an additional 30 million in to the health insurance bracket and a lot of Indian IT companies such as Infosys, Wipro, HCL Technologies, are hoping to target more business and are looking forward to build stronger technology to support this ramp up. 

As of now the U.S. government has allocated a US$28 million, one year contract to Vangent, a General Dynamics company, to assist consumer questions. Of course, it's likely that Indian BPOs could get additional business too. 

According to the U.S. Department of Health and Human Services, call centres will receive 42 million calls about the federal marketplace this year. On average daily there'll be about 200,000 calls, 2,400 letters and 740 e-mails, and 500 Web chats hosted. 

Sandeep Aggarwal, chief marketing officer at Serco, said in an Economic Times article: "U.S. healthcare reform will mean incremental business because consumers will want to know how they are affected. It is still early though; the industry is waiting and watching." They also highlighted that, the Indian BPO industry had revenues of US$18 billion in the last fiscal year, with U.S. clients contributing more than half of the business.

The article also cited insights from Jennifer Mazzucca, a senior research analyst at Gartner which stated that the federal government stimulus lead by President Obama's Patient Protection and Affordable Care Act (Obamacare) was driving quite a lot of growth in the market.

"We expect major growth in business to consumer services offering opportunities for ICT (Information and communication technology) firms as payer organisations are working to keep up with the technology demands driven from healthcare reform," she said.

According to Mazzuca, Indian outsourcing companies will see growth as  Obamacare kicks in and U.S. health care market is expected to grow by 6.05 percent to reach US$17.9 billion in 2013. BPOs will have a growth rate of 9.8% and expected market size of US$1.66 billion will mean the most amount of growth in 2013. 

An interesting precedent which was also mentioned there and I could vouch for it having worked in credit card collections for American banks for a BPO a decade ago. I remember that when the U.S. government amended its Fair Credit Reporting Act over a decade ago to allow customers to receive a free credit report annually from the agencies, it had a flurry of calls to Indian BPOs and business had seen growth to deal with higher call volumes. 

U.S. insurance companies have begun working out details to handle the higher call volumes according to IT advisory firm ISG. "Many payers are planning for the anticipated surge in customer queries by ramping up staff augmentation efforts and providing script-based training so that agents can respond to specific queries," according to Al Denis, director at ISG, who wrote in a blog on the company's Web site. He also added that companies should also use analytics to understand customer queries and formulate stronger action plans.

Most BPOs in India who handle insurance clients already have a robust technology backing and a strong training process considering the vast nature of the work involved in handling insurance customer care. Considering this development, would mean a lot of business and growth in all segments within BPO businesses in India. 

Well even though the uncertainty over the U.S. healthcare law is a hurdle for insurers from making the investments to handle this workload. Despite the healthcare law being enacted in 2010, several attempts by the Republican party to repeal the law and a Supreme Court hearing on the legality brought a lack of certainty in terms of the actual implementation. We'll have to wait and watch where this goes and how soon these developments happen. 

Topics: Outsourcing, Health, India, IT Employment

About

Srinivas is an avid blogger and a technology enthusiast who has worked for a couple of digital/tech startups in India since 2010. He has also worked with a few technology clients dealing with tech startups in India and Asia-Pacific, giving him an insight on the country's startup space. In his spare time he listens to audiobooks, podcasts... Full Bio

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