As US President Barack Obama's new health insurance plan takes effect this month, Indian outsourcers handling customer care for insurers there are expecting a big boost in business.
These BPOs are betting on confused customers jamming phone lines and cluttering inboxes seeking clarity on what kind of health coverage they are eligible for, what they need to do to sign up and how much it will cost them.
The landmark overhaul nicknamed Obamacare, which brings an additional 30 million Americans into the health insurance net, is already being targeted by Indian IT services companies, such as Cognizant, Infosys, HCL Technologies and Wipro, who are vying to build parts of the technology backbone of online health exchanges that link customers to insurance plans.
The US Department of Health and Human Services estimates that the call centres will receive 42 million calls about the federal marketplaces this year—a daily average of up to 200,000—plus answer 2,400 letters and 740 e-mails, and host 500 web chats daily.
The US government has already awarded a $28-million, one-year contract to Vangent, a unit of General Dynamics, to handle consumer questions. The Indian BPOs scent an additional business opportunity as well.
"US healthcare reform will mean incremental business because consumers will want to know how they are affected. It is still early though; the industry is waiting and watching," said Sandeep Aggarwal, chief marketing officer at Serco Global Services. The Indian BPO industry had revenues of $18 billion (Rs 1.1 lakh crore) in the last fiscal year, with US clients contributing more than half of the business.
"The federal government stimulus lead by President Obama's Patient Protection and Affordable Care Act (Obamacare) is driving major growth in the market," Jennifer Mazzucca, senior research analyst at Gartner said in an email. "We expect major growth in business to consumer services offering opportunities for ICT (information and communication technology) firms as payer organisations are working to keep up with the technology demands driven from healthcare reform."
Mazzucca added the US healthcare payer market is expected to grow by 6.05% to reach $ 17.9 billion in 2013. Business process outsourcing with a growth rate of 9.8% and expected market size of $ 1.66 billion will show the strongest growth in 2013. There is a precedent to a new law boosting business for BPOs.
When the US government amended its Fair Credit Reporting Act over a decade ago to allow customers to receive a free credit report annually from the agencies, it sparked a flurry of calls to Indian BPOs, which had to boost capacity to deal with higher call volumes.
US insurance companies have started taking steps to deal with the surge in calls, according to IT advisory firm ISG. "Many payers are planning for the anticipated surge in customer queries by ramping up staff augmentation efforts and providing script-based training so that agents can respond to specific queries," Al Denis, director at ISG, wrote in a blog on the company's website. Denis added that companies should also use analytics to better understand customer queries and formulate better action plans.
But the uncertainty over the US healthcare law is preventing insurers from making the investments necessary to deal with the influx of calls. Though the healthcare law was enacted in 2010, numerous attempts by the US Republican party to have the law repealed and a Supreme Court hearing on its legality added to uncertainty about its implementation.
"Everyone knows they are going to have a surge in volume and are looking at their BPO partners to support the same," said Venkatraman KR, executive vice president of FirstSource. "The uncertainties around the timing and the accuracy of the reform's outcome are leading to many insurers not making significant capacity increase commitments."
The current US government shutdown also involves the law, as the Republican Party has refused to approve funding for the US government unless Obamacare implementation is delayed.Venkatraman added the company was looking at different models including what they call an "overflow model" - in which the BPO would provide peak period support on a per call pricing model - or a more standard agent-price model but that there was uncertainty over how long the contract add-ons would last.