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Outsourcing and IT Services Anticipate Boost From Healthcare Reform 1
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by: Outsourcing Insider April 07, 2010  about: G / HEW / INFY / KELYA
/ PTI / WIT Outsourcing Insider picture Outsourcing Insider 42
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A few months back I wrote an article on how outsourcing has already
been helping with cost reductions in the Healthcare Industry, and with
the recent passing of the U.S. Healthcare Reform Bill, many are
anticipating an increase in business opportunities in this sector.
I.T. industries in India are among one of those anticipating new
businesses in the health sector. According to Satish Menon, associate
VP (corporate finance healthcare advisory), KPMG, Infosys (NASDAQ:INFY)
would be one of the beneficiaries of the reform since it’s already in
their line of products and an established robust clientele. Wipro Ltd.
(NYSE:WIT) is optimistic as this reform would be at the intersection
of its strategic units of health care and government said Rajiv Shah,
senior vice president, healthcare vertical, at Wipro Technologies.
Another company that has already had a strategic deal with a US-based
healthcare insurance provider that involved taking over part of its
operations in El Paso, US is Patni Computer Systems Limited (NYSE:PTI).

Outsourcing companies such as Kelly Government Solutions, a division
of Kelly Services (NASDAQ:KELYA) , was recently awarded a $750 million
contract to provide the National Institutes of Health, an agency of
the U.S. Department of Health and Human Services, a wide array of
professional, scientific and technical expertise in support of its
missions. Genpact Limited (NYSE:G) was considering acquiring firms in
the healthcare space who provides services like revenue cycle
management, process optimization and revenue clinical and non-clinical
supply chain management for both payers and providers.
It’s not just outsourcing companies who will be cashing in on the
prospect. Some, like oDesk, a virtual outsourcer, along with Guru.com
and Elance, will also benefit from this bill since they have already
started offering health insurance to its workers. Other BPO firms like
Firstsource Solutions Limited (BOM:532809) which has 37% of its
revenues derived from the healthcare sector would increase onshore
presence in a bid to provide clients with a comfort level. And still
other companies that would not provide direct services related to the
implementation of healthcare could still cash in like Hewitt
Associates, Inc. (NYSE:HEW) is doing, which is providing independent
analysis of the bill and its implications to employers, individuals
and insurance companies.

The U.S. market opportunity is estimated to be around $25-30 Billion.
As for the question of how large a part the IT and outsourcing
industries will play in providing services such as medical
transcription, insurance and claims processing; the answer is still
unknown. It would be largely dependent on the unique combination of
cost advantage and quality these companies would be able to provide.
And even though there is a positive outlook on future prospects,
experts warn to approach this step with caution. Companies that would
want to dive into this opening should be able to maintain quality
support in this sector as well as be prepared legally as litigation
cases related to healthcare in the U.S. are frequent.
With the passing of the U.S. Healthcare reform Bill, its consequences
and future ripple effects into the U.S. society can not be determined
for certain. One thing is sure however, the bill will be supported by
billions of dollars upon implementation and in the end that money has
to go somewhere. It’s up to the companies to make sure they have a
slice of that pie. It will be years until the bill will be able to
reach its full potential but as they say, “the early bird catches the
worm, or in this case the multi-million contracts”.

Disclosure: No position
About the author: Outsourcing Insider Outsourcing Insider picture
Infinit-O is the preferred and trusted partner in business process
outsourcing (BPO) and knowledge process outsourcing (KPO) solutions
for small and medium-sized businesses.

Company: Infinit Outsourcing Inc.
Blog: Outsourcing Insider

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• Notable Outsourcing Contracts Won, But Will Mega Deals Make
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• Optimistic on Outsourcing Prospects
• What Three Outsourcing Companies Are Doing to Stay Ahead

• Outsourcing and IT Services Anticipate Boost From Healthcare
Reform
Related stocks: G, HEW, INFY, KELYA, PTI, WIT Related themes: IT
Services & Outsourcing, India Outsourcing, Drug Manufacturers, Health
Plans, Hospitals/Care Facilities 1Comment on this article

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John Mylant

Comments (104)
 

John Mylant  39
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Residing in Colorado Springs, Colorado. Self-employed Business
owner, has been trading and coaching in option trading for 10
years. Philosophically conservative in philosophy and a technical
trader who believes in protecting and hedging trades to get
maximum profits while guarding against loss. ... More
Company: Empowered Investing Now

Blog: John's Money Blog
 "Outsourcing companies such as Kelly Government Solutions,
a division of Kelly Services (NASDAQ:KELYA) , was recently awarded
a $750 million contract to provide the National Institutes of
Health, an agency of the U.S. Department of Health and Human
Services

I really like this new contract. I think the stock does also,
after it finishes resting here, this stock is going to go another
20% before it is really challenged again.
John Mylant
mylantsmoneyblog.typep.../ Apr 07 11:53 AM Reply

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