Qualms Arise Over Outsourcing Of Electronic Medical Records

Published on November 2, 2010
by Amol Sharma and Ben Worthen

Indian technology companies are eyeing a coming wave of U.S. spending to digitize health-care records. But sensitivity over outsourcing and resistance by American hospitals to sending medical information overseas could thwart efforts to win big contracts.

The U.S. government next year will begin to dole out billions of dollars to health-care providers who adopt electronic medical records. Doctors also face a federal mandate to upgrade software as the U.S. switches to a new system of insurance billing codes.

For Indian companies with experience in software outsourcing, the flurry of health-related tech spending in the U.S. is “like another Y2K opportunity,” says Pradep Nair, head of the health-care practice at New Delhi’s HCL Technologies Ltd., referring to the turn-of-the-millennium computer glitch that provided work for Indian tech firms.

But cashing in on what Forrester Research expects to be a nearly $50 billion U.S. health-information market in the next two years won’t be straightforward for Indian companies. While they have had success handling outsourced work for pharmaceutical companies and insurers, Indian companies have struggled to win business from U.S. hospitals, which will do the bulk of new health-tech spending.

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