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US healthcare expansion means big business for India

world Updated: Mar 26, 2010 23:35 IST
Rama Lakshmi

While the contentious political battle over the new healthcare law continues in the United States, here in India, the outsourcing industry is seeing it as a boon for business and is salivating over its prospects.

Indian companies are working with American insurers handling back-office operations, including claims processing, supply management and transcription services.

The extension of healthcare to 32 million additional Americans over the next decade will mean the need for those services will grow, executives here said.

“The healthcare reform bill is a very, very big opportunity for us,” said Ananda Mukerji, managing director of Firstsource Solutions. About 40 per cent of the company’s business comes dozens of American hospitals and insurance companies, he said.

“A big part of what we do for the American companies is eligibility assessment services, where we assess eligibility of a patient for the Medicare program. We also work with hospitals to submit claims and enroll new patients. With the new bill, all this work will increase.”

The new law requires some insurance companies to devote more of the premiums they receive to direct health care and away from administrative costs.

“The healthcare ... law will create a huge pressure on American insurance companies to cut costs,” said Rana Mehta, vice president of health care at Technopak, an independent consultancy firm in Gurgaon. “Ultimately it is a business decision to outsource. All this new work has to go somewhere, and India will gain.”

Just last year, India’s outsourcing industry was shaken when President Barack Obama declared he wanted to change “a tax code that says you should pay lower taxes if you a create job in Bangalore, India, than if you create one in Buffalo, New York.” They have responded with new efforts to reach out to American workers.

In anticipation of the healthcare law, many Indian companies are establishing a toehold in the US by negotiating mergers and acquisitions in recent months. This month, Patni Computer Systems, India’s sixth-largest IT firm, set up an office in El Paso, Texas, after a multimillion-dollar deal with an American healthcare company.