HITECH Act 'Like Another Y2K Opportunity' for Outsourcers

Ann All

Last summer after reading several posts my IT Business Edge colleague Lora Bentley wrote about the HITECH Act, specifically its provisions for hospitals and other organizations to show "meaningful use" of electronic health records, I speculated the HITECH Act sounded like a big opportunity for Indian outsourcing companies.Hospitals would have to comply within a given timeframe to win stimulus funds. As I wrote then:

Hmmm. Technology projects with a short timeline and lots of manual processes. Reminds me of Y2K, the millennium non-event that was a boon for outsourcers' business.

I am not the only one who thinks so. A recent Wall Street Journal story quotes Pradep Nair, head of the health care practice at India's HCL Technologies, as saying the coming push for e-health care records is "like another Y2K opportunity."


But the Indian companies face challenges. As the article points out, hospitals are leery of sending work offshore. Nishant Verma, vice president at India's Tholons Inc., refers to the reluctance as an "emotional barrier." More pragmatically, hospitals are understandably concerned about outsourcers' abilities to comply with HIPAA and other data privacy regulations.


Some Indian companies, such as HCL, are beefing up their U.S. presence in hopes of gaining more work related to e-health records. HCL has some 2,400 American employees and a software facility in Raleigh, N.C. U.S. clients have the option of having work performed onshore, says Nair, although it will be less expensive if delivered from India.


In addition to e-health records, outsourcers expect to win business related to software upgrades required to accommodate a new system of insurance billing codes and other technical changes associated with health care reform legislation. Big U.S. services companies such as IBM, Accenture and Xerox are also vying for the business.


Data security isn't the only concern. The article quotes Darren Dworkin, CIO of Cedars-Sinai Medical Center in Los Angeles, who says designing and installing new medical systems "is hard to do off site, let alone offshore" because much of the work involves in-depth knowledge of a hospital's terminology and the work processes of its medical personnel.

Add Comment      Leave a comment on this blog post
Nov 4, 2010 6:30 AM JImChiang JImChiang  says:

I think the caution is understandable.  That's why it's important to prove value beyond purely cost savings.



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