Medical Transcription Outsourcing: How the United States Can Save Up to $6.2 Billion a Year

Outsourcing medical transcription work to offshore service providers has proven extremely effective in reducing overall transcription costs of individual health practitioners, clinics and hospitals. Organizations who outsource their work to offshore transcription providers save anywhere from 40 to 70 percent of the cost compared to doing the transcription in-house, or utilizing U.S.-based medical transcriptionists.

However, aside from the reduction in costs, another important advantage of using offshore providers is the increase in the quality of transcribed work: offshore providers utilize multiple personnel for transcribing, editing, quality assurance and checking, thereby ensuring quality output.

The cost savings are possible because of the availability of highly-skilled, low cost medical graduates in prominent outsourcing destinations such as India and the Philippines. Based on a salary survey report for medical transcriptionists conducted by Payscale, the median salary for hospital-based medical transcriptionists is around $31,287 per annum, or approximately $2,600 per month. In contrast, the average salary of a medical transcriptionist in the Philippines, based on an online salary survey conducted by Jobstreet, a leading online job portal in the country, is a maximum of $280 per month! This is 89 percent cheaper compared to the salaries of their U.S. counterparts.

Even if we consider the support costs and profit margins of offshore service providers, their final cost structure is still highly-competitive compared to U.S.-based transcripionists. To illustrate:

1. The monthly pay per transcriptionist in the Philippines is $280

2. The support costs (salaries of editors, quality assurance specialists, admin, office costs, utilities) are more or less equivalent to effectively $300 per transcriptionist

3. Assume a mark-up of around 30%, and you add around $174 per transcriptionist per month equivalent to the profits of the offshore provider.

4. Combine the three items and you get a figure of $754 per transcriptionist per month cost, significantly lower versus U.S.-based costs.

U.S.-based transcriptionists earn an average of $2,600 per month. Outsourcing, therefore, can save U.S. healthcare organizations up to $1,846 per transcriptionist per month, or around 71 percent in possible savings!

But aside from the savings, another important consideration is the marked increase in quality. Compared with utilizing a U.S.-based transcriptionist, which is primarily a one-person operation, with outsourced transcription, the healthcare organizations has an entire transcription organization servicing your needs: transcriptionists, editors, quality assurance specialists, efficient organizational processes.

It is estimated that U.S. annual spending on medical transcription will reach $16.8 billion in 2010. Of that figure, only 40 percent of the work is farmed out to offshore service companies. Assuming 60 percent cost savings in offshoring, this represents possible annual savings of $6.2 billion per year for the U.S. Healthcare Industry ($16.8 billion x balance 60% outsourced x 60% cost saving). Outsourcing transcription work, therefore, is a significant opportunity for reducing U.S. healthcare costs.

Mr. Arthur Policarpio is the President and CEO of Leadscribe Transcription Company (www.leadscribetranscription.com), a leading offshore medical transcription service provider based in the Philippines. He is also the President and CEO of Snapworx, Inc.(www.snapworxdigital.com), a leading digital marketing agency based in the Philippines.Article Source: http://www.articlesbase.com/