The US Medical Transcription Industry: Perspective on Outsourcing and Offshoring

Currently, medical transcription offshoring from India generates USD 195 million in revenues; and is expected to reach USD 647 million by 2010.

The medical transcription outsourcing grabbed a lot of media attention in India during 1995 – 97, well before ‘BPO’ became a household term. People were excited about the huge opportunity that India had hit upon. However, the industry witnessed a rough patch around 2000. Today, the USD 195 million strong industry is silently supplying to the USD 12 billion medical transcription industry in the US.

We have classified vendors into three primary groups:


  • Indian units of large US players – Typically comprise American companies or Medical Transcription Service Organizations (MTSOs) who have successfully set up their transcription centers in India. The large players include CBay, Spheris, Spryance, Acusis and Heartland. These large players account for almost 70 percent of Indian medical transcription offshoring revenues.
  • Mid-sized players – There are a number of medium sized players (< 500 employees) in India. Most of them work as franchisees or vendors of the larger players and have limited marketing presence in the US.
  • Smaller players – There are a large number of such small players with <50 employees. These players are subcontractors to the other two groups and suffer from unreliable revenue flows.

We estimate the current employment in the India-based medical transcription vendors is approximately 18,000 and expects this to grow to 52,000 by 2010. According to Arun Jethmalani, CEO, ValueNotes, although there will be significant growth in the medical transcription outsourcing space, most of it will be centered around the MTSOs. Adds analyst Neeraja Kandala, “the industry will witness greater consolidation, with large American MTSOs eyeing the smaller Indian offshore vendors”.

The report provides an overview of the buyer scenario and an in-depth analysis of the Indian vendor space along with profiles of major industry players. The report is designed to help:

  • Hospitals, healthcare institutions and medical transcription service organizations looking to outsource/offshore
  • Outsourcing consultants evaluate and compare the offerings of vendors
  • Medical transcription vendors to assess their competitive environment
  • American medical transcription companies looking for Indian partners
  • Venture Capital companies looking for investment opportunities
  • Researchers looking for detailed information on medical transcription outsourcing

The report is based on secondary data as well as extensive interviews with key people at various medical transcription outsourcing companies in India.

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Table Of Contents

1. Executive Summary 
2. Medical Transcription: What & Why?
2.1 How does the process work?
2.2 Offshoring drivers
3. Medical Transcription Service Buyers
3.1 Who are the buyers?
3.2 MTSOs…. Vendor as well as buyer of medical transcription services
3.3 Estimated industry size
3.4 Buyer behavior…. Negative perceptions of offshoring
4. Tapping into Global Resources
4.1 Offshore / Nearshore Destinations
4.2 Philippines…the closest competitor!
4.3 India Advantage
5. Early India Evolution
5.1 Boom – Bust – Revival
5.2 Indian medical transcription industry… Revival!
6. Competitive Landscape: Indian Vendors
6.1 Industry Structure
6.2 Varying business models of leading vendors
6.3 Analysis of business models
6.4 Medium sized players are typically multiservice providers
6.5 Large sized players employ over 65% of the manpower
6.6 Billing Rates
6.7 Bangalore…the MT hub of India!
6.8 Where does Indian vendor get work from?
6.9 Comparative analysis of leading vendors
6.10 Key Industry Issues
7. Trends, Insights & Projections
7.1 Opportunity for India
7.2 MTSOs with offshore centers will reign
7.3 Indian Offshoring Growth Estimates
7.4 Consolidation
7.5 Growth of home based transcriptionists
7.6 Value Chain
7.7 Threat from ‘Voice recognition’ technology
8. Company Profiles
CBay Systems
Focus Infosys
SPI Technologies
9. Directory of Medical transcription Service Vendors in India
10. About ValueNotes

Table Of Figures

Figure 1: The Process
Figure 2: Medical Transcription Employment Break-up
Figure 3: Industry Structure
Figure 4: Establishments in health services, 2004
Figure 5: Buyers
Figure 6: MTSOs in the US
Figure 7: Major MTSOs in the US
Figure 8: Industry break up
Figure 9: Comparison of Destinations
Figure 10: Comparison of Destinations
Figure 11: India and Philippines
Figure 12: Major vendors in Philippines
Figure 13: Wage comparison: India and US
Figure 14: India Talent Pool
Figure 15: Boom – Bust – Revival
Figure 16: Expansion plans announced by large players
Figure 17: Industry Structure
Figure 18: Comparative Analysis of Leading Vendors
Figure 19: Franchisee Model: CBay
Figure 20: HBT Model
Figure 21: Comparative Analysis of Business Models
Figure 22: Services offered by leading vendors
Figure 23: Employment: Large players vs. Smaller players
Figure 24: Revenue break-up
Figure 25: Type and typical turnaround time
Figure 26: Citywise Concentration
Figure 27: HIPAA, Clients and Global presence
Figure 28: Buyer segmentation for offshoring
Figure 29: Comparative Analysis of Leading Vendors
Figure 30: Marketing Presence
Figure 31: Cost structure
Figure 32: The Opportunity Size (for 2010)
Figure 33: Estimated Revenue Growth by 2010
Figure 34: Estimated Employee Growth by 2010
Figure 35: Value Chain

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