Obamacare could mean boom in biz for Indian outsourcing

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. 

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

Srinivas Kulkarni

About Srinivas Kulkarni

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 and is a passionate travel blogger.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • concerns over privacy / unemployment

    I have two concerns with this scenario. *One* is my personal information that is supposed to be HIPAA protected flying over international boundaries to another country. Based on previous experience in a job that dealt with trade secrets and offshoring -- doesn't matter what they sign here, over there they don't take those things as seriously as you would think. *Two* is with all the unemployment in this country, why not hire people here? This is like a couple of stories I heard about NC offshoring their food-stamp help line and Indiana offshoring their unemployment check processing. HELLO!! Even if you save a little taxpayer money by offshoring this, that money is no longer in the local economy to be further taxed or spent in the local economy. That and the disregard for their responsibility and promises to their constituencies about providing jobs and reducing unemployment. It doesn't count if you create jobs in INDIA!
    • Agreed. People are forced to obtain healthcare at a cost

      if they're working, with unemployed exempt, so no coverage. How does this get healthcare to the masses if the jobs go overseas and those without jobs still aren't able to afford insurance?

      If you're forcing people to pay for something, wouldn't your fist step be to make sure people have a job to pay for the service your making them buy?
      • If you're not working you don't pay anything

        I fact, if you're not working, youre under the 138% poverty line, and most-likely, you'll get free health care. Stop watching FOX News. They are extremists that want you to vote for policies that protect big business and hurt you. The only way you'd do that is if you are afread of the opponent. So tehy fill you with fear and dread and then tell you to give up your health care coverage and in stead give big bisnesses all sorts of tax breaks. Would you rather Walmart get a tax waver or your kid get preventative care or treatment if they get cancer? Don't be the idiot most people in other countires think we are.
        A Gray
        • Yeah right!

          If you are above the poverty line when you get laid off! You get nothing!
        • Sorry, A Gray I haven't gotton the info from Fox New,s as you assume

          it's from being involved with the departments at our corporation that does deal with this, so it's first hand knowledge.

          Laid off? No problem, just take that measly unemployment check and go on Cobra, even though it cost you ALOT more now.

          What go to that Private Exchange instead? Sure, but without the employer contribution you had before, that unemployment check will really go far towards paying your premium through the Exchange, yes sir!

          Wouldn't the simple solution be to keep as many jobs here as possible, instead of shipping them to some Indian business overseas, and avoid these "minor" complications?
        • Because its FREEEEEEEEEE

          The money to pay for "free" healthcare is simply part of that trillion dollar deficit each year and that 16 trillion debt that we never seem to pay off.

          And don't forget that Obama phone while your at it, its also FREEEEEEEE
          Rann Xeroxx
        • In the "refusenik" states

          such as Florida and Georgia, if you are poor but not poor enough you get BUPKIS. When the law was written it was assumed that ALL states would be expanding Medicaid, but since the Supreme Court upheld the rest of the law but not the mandate to expand Medicaid, many "red" states, whose Medicaid thresholds are almost Dickensian already (and have the most people who NEED it, yet are bamboozled by GOP propaganda into voting against their own needs), have decided not to expand the program, and not to accept the money to do so.

          So if you make less than $1000, Obamacare (until it is fixed, which the GOP in Congress would never allow) will not give you a subsidy, because expanded Medicaid is supposed to fill in, but if your state did not allow the expansion, you are unfortunately out of luck (but you will not be liable for the penalty either, so you are NO WORSE off than pre-Obamacare), because your own state's officials decided to keep you uninsured.
          • Right, jallan32!

            It's all the Republicans fault, because you and I both know that Democrats would never, ever pass something that isn't 100% perfection.

            Case in point - We're fortunate that all those Senators and whatnot coming off of the FEHBP will get to keep their 72% Government contribution towards their healthcare, the same percentage us regular citizens will be getting should we be forced onto one of the healthcare exchanges!

            You're right, Democrats have swooped in and saved us again from those nasty and mean Republicans!
    • that's a myth...

      HIPAA Adherence is a myth. Some companies do fine with it but, call centers for insurance and pharmaceuticals actually allow work at home for people with direct access to your personal health information and some financial information.

      These setups literally have no way of stopping somebody from taking pictures of the screen or writing down your credit card / banking info. This is improved by using Call Centers but, companies are in this to save money and the next step will be getting these bozos running the country to allow outsourcing of all this information over seas.

      Oh and for the record, Pharmacists are the only function prohibited from being off shored at this time but, I bet somebody is working on that. Also, only your company stands in the way of all of it being handled by some call center in a 3rd world country.

      Remember when Tony Montana's cousin was killed and he looked at the guy who did it and said, that's just business? Yeah, that's the state of healthcare in this country when it comes to outsourcing / off shoring to India.
    • Also National Security

      The identify thefts that may occur from outsourced data bases could also be used to apply for false US passports for terrorists, enabling them to enter the country "legally" while posing as those citizens. Too many "horses" have already "left the barn" but there is no excuse to keep the door open and let more out. Congress has allowed profits for US companies to override their responsibility to our nation.
  • Surprised?

    Everything that socialist does is for the benefit of NON US Citizens.
    • Surprised that anyone would believe Obama to be a socialist

      Here in Canada we have a genuinely socialist political party called the NDP. It has never been elected federally, but has from time to time served as the provincial government in the provinces of British Columbia, Saskatchewan, Manitoba, Ontario and Nova Scotia, as well as in the Yukon Territory. It is currently the Opposition (minority) party in the federal parliament as well. No one in Canada fears the NDP. Because the NDP has been in power at various times provincially, and its support has been crucial at times federally, Canada achieved such things as a national unemployment insurance plan, a guaranteed old age security pension, free taxpayer-supported hospital care, a national contributory pension plan, and a signle-payer national medical care plan (which doctors really like, in which patients choose their own family doctor and can visit him/her any time they need to without charge, and which has put all the predatory private health insurance companies out of business). One can certainly call these measures socialist, but then one should also call U.S. social security system and medicare for the aged by that name, although I suspect you'd have a hard time convincing beneficiaries to give up the assured income or the rather limited health care that these plans provide.

      Both Canada and the U.S. are mixed economies with a few popular social benefits pasted onto a largely capitalist system. In both countries capitalist, predatory, freeloader companies like Wal-mart, the oil companies, etc. are attempting to claw back the few soial benefits that people have managed to squeeze out over the decades as a result of pressure from unions and left-of-centre politicians. Unfortunately, in the U.S. there are only two major political parties, both of which are owned outright by mercantile interests like Wall Street bankers or the evil Koch Brothers, so the dominant trend since the 1960s has been away from social justice and towards concentration of wealth in the hands of the few, whilst approving tax exemptions even for giant corporation like General Electric and Wal-Mart which ship manufacturing jobs overseas to non-unionized countries and try to pay their domestic workers lower and lower wages.

      In addition, you have the baleful effect of Rupert Murdoch and Roger Ayles's weirdly unbalanced and consummately unfair Fox News, which has 24-hour propaganda on behalf of the super-wealthy 1 percent and against the interests of the 99 percent and which regularly spreads ignorance and outright lies in the name of journalism. Even more culpable idiots and demagogues like Rush Limbaugh pollute the publicly owned but privately controlled radio airwaves.

      From any random Fox News host one is liable to hear the allegation that Obama is somehow a "socialist." How I wish it were true. A real socialist, however, would not have supported former Sen. Max Baucus's sleazy effort to exclude the possibility of a single-payer health system such as Canada or France or the Scandinavian countries have. Instead of excluding single-payer, a much more rational and much cheaper system, America got an insurance-company supported scheme intended to enrich insurance companies whilst creating massive complexity for individual taxpayers who will now be forced to choose among privately owned insurers and who will, if their incomes are low, have a portion of their otherwise unaffordable premium paid through government. That is not socialism; that is capitalism straining to keep from collapsing under its own burdensome exploitation of the poor and the middle classes.
  • Alternative meaning of the article title

    When I saw the article title, I interpreted it in a completely different way that is, nevertheless, probably true--

    In MANY fields, not just insurance support, jobs that currently exist in the U.S. but don't require being tied to a specific physical area will probably wind up being outsourced overseas so the company doesn't have to pay for healthcare.
    • Was true a few years ago but...

      Many of the overseas call centers that businesses outsourced to are being brought back into the US mostly due to language issues. I respect anyone who can speak a second or more language but if you do not speak english clearly enough and I have to ask you to repeat yourself over and over again, you are wasting my time.

      Every vendor that we deal with, if their support is overseas, we put them on notice that its not acceptable to us. Most of these vendors have roadmaps to move them back or have already moved them back to the states.

      But... this is the government mandated health exchange. This is the modern version of the DMV. You do not have a voice, a choice, etc. Enjoy.
      Rann Xeroxx
  • Much like with tech support

    The last person i wan to talk to about healthcare issues is a person whose first language isn't English.
  • Jobs in US

    You'd think there was no-one unemployed in the USA !!

    If it's anything like the UK/EU, India fails on most data sharing bilateral agreements, so it's unable to provide insurance/finance/healthcare, and it's basic IT, cell phone, fitrat line call centre activities - with varying levels of competence in conversational English.

    Personally I'd legislate that Healthcare info stays within the US, and be done with it, and take the jobs it will generate as a benefit.

    That's before you even get to legislation like HIPPA etc.
  • There is no free

    Whether you are above or below the established poverty line doesn't change the fact that some one is paying for the health care, the call centers and the premiums even if you never use the health care. US taxpayers pay for it. Taxes are the cost of running a civilization. Sadly some are currently being used to buy votes through the government charity programs but that's off topic. I vote the money be used to hire unemployed or underemployed Americans. After all one of our presidents big claims for the new health care was new jobs for Americans.
    • Ha...

      ...or no one is paying for it and its added to the trillion dollar deficit and added to the 16 trillion dollar debt.
      Rann Xeroxx
  • Unintended Consequences

    I'm still waiting for an 'unintended consequence' of Obama KKKare that is positive for the ones who will wind up footing the bill.
  • Hmmm

    I think you're underestimating the degree to which american companies are fed up with indian 'quality.' Even infosys realized this and are trying to focus more on providing high end technical resources than the call center and low skill developer types.

    I don't see a general IT flee to india, they'll just assume it as the cost of doing business in the first place given general IT salaries in the US. For the smaller firms and shops that don't treat people well you might see some fleeing, but I think the Ukraine, Romania, etc are far more likely.

    People here have even begun to realize that hinglish is like english, but the words have drastically different meanings. It's one of the primary sources of ineffective due to both parties assuming they understand one another.
    BridgeT Roll