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August 29, 2005

In the News: Mergers and Billing Methods
By David Iwinski, Jr
For The Record
Vol. 17 No. 18 P. 12

Commentary on a couple of topics…

Merger Mania
Over the last two years, there has been a spate of significant mergers and acquisitions in the medical transcription industry. To name a few, CyMed purchased ProScribe, Spheris (a 2003 combination of Total eMed and EDiX) acquired Avicis (previously known as HealthScribe), Transcend bought Medical Dictation, CBay procured Godrej Remote Services, and ScanSoft scooped up MedRemote Services. These are just a sampling of the transactions between the larger industry players, a big change from five years ago when MedQuist was the only significant buyer in the market as it brokered deals as fast as it could.

Whether these buying sprees are positive or negative for participants or the industry in general is unclear. Without “naming names” (and thus depriving numerous law firms of massive billable hours), there is considerable anecdotal evidence that in many of the merged companies there are ongoing struggles with integration and quality resulting in some loss of customers, market share, and profit margins. Other bits of evidence come from firms that have announced new customers (or newly “bought” customers), who then find that those customers are back on the street in less than a year looking for new suppliers to fill their needs.

The companies that do best are those that take the challenges of process integration and operational excellence to heart and understand that in the medical transcription business an acquisition is not merely a financial roll-up on the balance sheet with inevitable positive income statement results. Medical transcription is a personal, one-to-one business, and intense customer knowledge and commitment to developing relationships are keys to maintaining quality and customer satisfaction. Of course, in theory this approach takes longer to extract the value of the acquisition. In reality, if thorough and thoughtful integration is not performed, the result is a long-term reduction in overall customer and company value.

Management guru Tom Peters once quipped that “most corporate mergers are an attempt to mate an elephant with a hippo with the intention to produce a gazelle.” Well, in the transcription world it is clearly mating season and in the next 12 months we’ll witness the outcomes.

MTIA: Can We Move From BMP to QMP?
The medical transcription industry is plagued with numerous companies employing questionable billing practices, which casts a dark shadow on all legitimately run operations. That is one reason why there are enthusiastic supporters of the Medical Transcription Industry Association (MTIA) BMP (Billing Method Principles) Committee’s Beacon Award program. As this column has noted for many months, two critical elements umbrella organizations need to maintain credibility are strong and consistent standards that can be measured and evaluated. The BMP program is a step in the right direction.

The entries were judged in the following areas: billing method approach shared with prospective and existing clients; how this reflects/supports the ideals of MTIA’s billing method; a description of various company activities used to communicate billing practices (including operational, technical, and business components); and a case study that highlights use of the BMP in the marketplace. While these elements are key to compliance with BMP, they are not the real secret why the program was such a success.

The primary reason for the strength and credibility of the Beacon Award program is the depth, experience, and objectivity of the panel of industry specialists who reviewed the various candidates. Rather than a “self-award” from the usual suspects, the evaluators were drawn from senior management at the AHIMA, the Medical Group Management Association, the Healthcare Financial Management Association, the American Association for Medical Transcription (AAMT), and the sponsor, Modern Healthcare magazine. Clearly this was a significant and serious panel of experts that took much care and consideration selecting the winners.

MTIA, working with the AAMT and others, should take the next logical step and carry out the same rigorous analysis and support the establishment of QMP (Quality Method Principles). It should develop another Beacon Award program with a strong panel of independent and accomplished industry experts that can carefully sift the evidence and award recognition for the true delivery of quality and satisfaction. This may be quite a challenge—the definition of quality isn’t as objective as billing methodologies—but it would be well worth the effort. I am certain that many companies that are serious about quality would enthusiastically get behind this endeavor and assist with their own expertise and experience in developing criteria.

The formal establishment of procedures, measures, and practices that define the industry gold standard for that elusive goal of “quality” would finally usher in an era when the performance of medical transcription service organizations can be evaluated by a strong, independent panel of objective experts. This would provide clear and validated guidance to customers and suppliers alike and help establish a benchmark for performance that could be used for practical comparisons among various internal and external service providers. Such a program would also firmly establish MTIA, the AAMT, and others as the most credible and reliable industry representative organizations in the transcription business. We should all strongly support this effort.

— David Iwinski, Jr, is CEO of Acusis LLC.

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