Philippines and the Billion-Dollar Medical Transcription
The Billion-Dollar Medical Transcription Promise
Next to call centers, the Philippines is looking for the next big thing in outsourcing and medical transcription (MT), while still relatively small, offers a lot of promise. In fact, according to the Medical Transcription Industry Association of the Philippines Inc. (MTIAPI), the Philippines has barely scratched the surface of a billion-dollar global MT industry.
It is therefore no surprise that MT companies are sprouting like mushrooms all over Metro Manila and other key cities nationwide. MTIAPI alone has a little over 50 member companies and the association itself acknowledges more players outside of it.
There are so many MT companies in the country that it almost seems as if any businessman who has the money to invest could start his own company. Which, for entrepreneurs in search of the next big thing, begs the question: What does it take to set up and run a medical transcription business?
In 2003, the Philippine peso was losing over the US dollar because of the political turmoil in the country; businesses in almost all industries then seemed to be very unattractive, recalled Juanloz Botor, president and CEO of Naga City, Camarines Sur-based Text Switch Unlimited Inc.
“I believed then that a business based on a US dollar currency has a better chance of surviving since it is a currency that is very stable,” said Botor in an interview with Computerworld Philippines, when asked what made him to decide to venture into an MT business.
Three years ago, medical transcription was new and, according to Botor, there were only about 20 MT companies in the business when he put up Text Switch.
Believing that survival on a dollar-based venture was high because of lesser competition then, and seeing the availability of skilled manpower and a reliable high speed Internet access in his area, further boosted Botor’s decision to venture in the MT business.
Botor gained exposure to the MT industry through attending conferences in Metro Manila and in the US through which, he said, he got a deeper understanding of the industry.
Months before the company was started, a good friend of his added actual production input which he followed up with weeks of research on the industry. Afterwards, he laid out a final proposal on the table with the company’s would-be board of directors for project planning, approval, funding, and implementation.
Text Switch began operating in January 2003 with an initial pool of 12 MT trainees. After four months of daily training, Botor was able to sign up 10 doctors as the companyâ€™s first set of clients.
“I got my very first client through some business offers I made in the Internet to US-based MTSOs (medical transcription service owner). I grew the account from there through referrals and by maintaining a good track record,” he said.
“After assessing my companyâ€™s selling points, I put up direct partnerships with US-based MT companies early this year in order to position our company for large scale projects. I personally market for my company in the US.”
According to the company’s website, Text Switch has marketing partners in Florida, New York and Los Angeles in the US. It also has a liaison office in Cainta, Rizal not too far away from Metro Manila itself.
Instead of setting up in Metro Manila, Botor and the board of directors at Text Switch decided to establish the business in Naga City since the key elements of an MT businessâ€”skilled manpower, high-speed Internet access, and reliable power source, were already present there and in nearby Legazpi City.
Cost of operation in the countryside is also relatively low; therefore allowing the company to maximize supposed earnings and provide better incentive to employees.
“I have predicted that companies in Manilaâ€”because of their abundance and proximity with one anotherâ€”would suffer a great deal of problem in maintaining their staff as skilled MTs (medical transcriptionists) and MEs (medical editors) move from company to company to seek better benefits, if not pirated by competing companies,” he added.
Botor started with 12 PCs and, in a span of six months, was able to expand to 50 PCs while also expanding his company’s physical office space. TextSwitch now has two facilitiesâ€”one in Naga City and another in Legazpi City about a hundred kilometers apartâ€”with a combined capacity of 150 seats.
Meanwhile, legal regulations requiring healthcare providers in the US to document health records led to the establishment of Transkripyo Inc. about six years ago, according to the companyâ€™s CEO Michael Chua.
The Pasig City, Metro Manila-based company had less than 10 employees when it started. “With a big pool of qualified medical transcriptionists at that time, the shareholders of the company saw big potential and opportunity,” said Chua.
“The company has had its share of difficulties during startup, but with perseverance and with focus on quality and its people, the company grew from less than 10 to more than 100 employees today.”
While a big pool of qualified medical transcriptionists encouraged MT companies to set up back then, the lack of this very resource is becoming an increasingly big challenge for the industry today.
“While there are thousands of graduates from allied medical course graduates, there is still a severe shortage of qualified medical transcriptionists,” said Chua. And people who want to go into the business will find this a major challenge.
Text Switch’s business model could then be a viable solution since, Chua noted, Metro Manila is already saturated with MT companies. He advised: “A businessman who wants to set up may consider setting up in areas where there are less competition and where there is available English-proficient workforce provided they have the available infrastructure.”
Those who get accepted at MT companies are typically graduates of medical and allied courses, although not necessarily so. “There are, however, a growing population of non-medical MTs; these are those people who are highly proficient in English and are willing to learn and work under pressure,” described Chua.
At Text Switch, the first two batches of trainees were strictly composed of graduates of medical and allied courses.
“As we proceeded with production, I realized that MT is a high-profile encoding occupation requiring not just knowledge in the medical field but more so on English writing and a lot of common sense,” said Botor.
Over the years, Text Switch has established its own pre-qualifying exams that tests applicantâ€™s general IQ and English proficiency. Botor said the company accepts graduates of non-medical courses as long as they pass company exams.
WHERE THE FISHES ARE
Marketing is another concern that should not be neglected by companies. With an aging workforce, the US remains the primary market for MT service providers.
“Having experienced actual marketing in the US myself, one should never expect that after he sets up a company in the Philippines, US doctors will knock on the door to offer work,” Botor said. He added, “We need to go where the fishes are to catch a fish.”
Chua of Transkripsyo, for his part, emphasized quality of service as key to success and thus, investment should be prioritized on training employees while avoiding pirating people from rival companies, which he regards as unethical practice.
While it is true that the industry has a billion dollar market, he said getting clients is not as simple as what it seems to be, saying “There is hard work; you have to understand the business, get involved in what your people are doing. You have to have partners in the US and you need someone to service your clients.”
One major challenge is keeping up with the client’s quality requirements, shared Botor. “The problem with medical transcription is that there are doctors who really dictate badlyâ€”that no matter how well-trained one is, it’s really close to impossible to get along with the doctorâ€™s very fast dictation, blurry voice, slang, etc.” he said.
A very comprehensive MT training as well as a good quality auditing plan is needed to address this challenge, he added.
Another challenge is keeping up with the timing between work availability and MT’s training. By the time that new MTs have finished training and are ready to start “live” work, actual work should correspondingly be available, said Botor.
“I missed this timing several times and I have poured in huge money paying off salary while the MTs do training and dead files for a couple of months,” he said.
Although the US remains the primary market, other areas worldwide are seen to become huge markets for MT.
“The concept of doctors dictating medical reports is now being followed by most progressive and ultra modern healthcare facilities in Europe, Canada, and Australia. Hence they are likely to be the next in the line to require overseas transcription service,” Botor said.
Growing from the bottom
According to Botor, a businessman interested in the MT business should have enough capital to cater to the infrastructure cost (including software licenses), training, marketing efforts and sufficient “buffer” funds to sustain operations while employees are being trained prior to handling actual MT work.
“Make sure also to hire an experienced consultant in order to set up the facility without much waste of time, effort, and resources,” he added.
Depending upon location of the business in the Metro Manila area, one has to spend at least P5 to P6 million to set up and operate a 12-seat MT business, according to Botor’s estimates.
“A suburban location would require at least P3 million to P4 million to set-up the same size MT operation; the cost would include 6 to 8 months budget enough for the business to start and take off independently, be self-sufficient and earn,” he said.
Botor has one advice for people who wish to invest in the MT business: Do not be in too much of a hurry to recover their investments as the company really has to grow from the bottom. What’s important is that once the business is running, workers are exposed to medical reports and are able to hone their skills and improve.
“Businessmen should also bear in mind that we are helping the country by providing mass employment and that by itself should give us enough satisfaction already as we wait for the company to grow and spell for us the perceived return on investment,” he said.
Medical transcriptionists had median hourly earnings of $13.64 in May 2004. The middle 50 percent earned between $11.50 and $16.32. The lowest 10 percent earned less than $9.67, and the highest 10 percent earned more than $19.11. Median hourly earnings in the industries employing the largest numbers of medical transcriptionists in May 2004 were:
$13.83 – General medical and surgical hospitals
$13.40 – Offices of physicians
$13.40 – Business support services
Compensation methods for medical transcriptionists vary. Some are paid based on the number of hours they work or on the number of lines they transcribe. Others receive a base pay per hour with incentives for extra production. Employees of transcription services and independent contractors almost always receive production-based pay. Independent contractors earn more than do transcriptionists who work for others, but independent contractors have higher expenses than their corporate counterparts, receive no benefits, and may face higher risk of termination than do employed transcriptionists.
by Jenalyn M. Rubio of ComputerWorld.com, photo from totaltranscription.com
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