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.
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