Indian firms hope to cash in on U.S. health-care law

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By Rama Lakshmi
Washington Post Foreign Service
Thursday, March 25, 2010; 8:04 PM

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

Indian companies are working with U.S. insurers handling back-office operations, including claims processing, supply management and transcription services. The extension of health care to 32 million Americans over the next decade will mean that the need for those services will grow, executives here said.

"The health-care reform bill is a very, very big opportunity for us," said Ananda Mukerji, managing director of Firstsource Solutions. He said about 40 percent of the company's business comes from dozens of U.S. hospitals and insurance companies.

"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," he said.

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 health-care . . . 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."

India's outsourcing industry was shaken last year when President Obama declared that 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."

It has responded with new efforts to reach out to U.S. workers.

In anticipation of the health-care law, many Indian companies are establishing a toehold in the United States 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 after a multimillion-dollar deal with a U.S. health-care company.

"We plan to use El Paso as a major hub to deliver health-care services that are required by regulators to keep sensitive data-processing operations onshore," Sanjiv Kapur, head of Patni Business Process Outsourcing, said by e-mail.

Instead of "offshoring" work, Mukerji, of Firstsource Solutions, calls it "right-shoring," combining employees in India and the United States. He said his company employs 2,000 Americans.

"President Obama made that famous statement about outsourcing of jobs last year," Mukerji said. "Today, I would like to say to him that we have created jobs in both Buffalo and Bangalore."


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