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April 2013

Mitigating the Risks of Offshoring Transcription
By Elizabeth S. Roop
For The Record
Vol. 25 No. 6 P. 18

A thorough understanding of the complexities involved can lead healthcare organizations to better-informed decisions.

In late 2012, a jury awarded $140 million to the family of a woman who received a lethal dose of medicine as the result of an offshore transcriptionist’s error, holding Thomas Hospital of Bay Minette, Alabama; Precyse Solutions; Sam Tech Datasys of New Dehli, India; and Medusind Solutions of Mumbai, India, responsible for the death.

The case renewed the heated debate about the benefits and risks of sending transcription work overseas. In one corner are those who say offshoring transcription delivers several advantages, including lower costs and faster turnaround times (TATs).

“There are many benefits of working with offshore transcription providers, including economic, service-level adherence, access to advanced technology, and access to industry professionals with generally more experience than what you might find in a traditional hospital transcription environment,” says Christopher Foley, CEO and founder of the global medical transcription and technology services company Clinical Documentation Integrity LLC. “These companies utilize the latest technologies, process controls, medical research resources, and quality assurance [QA] techniques to ensure their clients receive the highest level of service possible.”

In the other corner are those who say offshoring places patients at unnecessary risk in exchange for limited financial gain.

“In my opinion, financial pressures account for 90% of all [offshoring] motivation,” says Steven Bonney, vice president of strategy and business development for BayScribe. “Why would a facility ever want to send PHI [protected health information] and jobs offshore? It’s money motivated, pure and simple. But financial savings must be weighed against all of the concerns [about] quality, physician satisfaction, and [potential] HIPAA breaches.”

Challenges and Vulnerabilities
In the Alabama case, the 59-year-old woman with diabetes originally was admitted to Thomas Hospital for a clogged kidney dialysis port. After developing postdischarge complications, she was referred to Mercy Hospital, where she died after receiving a dosage of Levemir insulin that was 10 times what her doctor had prescribed. Hospital staffers were operating based on the doctor’s discharge summary and a physician admission order prepared by Thomas Hospital.

A four-year investigation revealed that a combination of attempts by Thomas Hospital to cut costs by offshoring key functions and critical errors at the institution itself contributed to the woman’s death.

The tragedy began with a mistake made by a transcriptionist in India—an ultimately fatal error that was not caught before it made its way into the Mercy system. (Note: Precyse, which was authorized by Thomas Hospital to use overseas transcription companies, did not respond to repeated interview requests.)

Bonney notes that, as seen in the Alabama case, quality and accuracy can suffer when transcription is sent offshore, which can have a direct and potentially dangerous effect on patient safety. And while many hospitals hope to speed the transcription process, in some instances it also can negatively impact TATs: When quality is poor, QA personnel must spend more time auditing and correcting information before it can be sent back to the hospital.

“Even the slightest delay in TAT from the offshore group exacerbates this problem, as QA personnel are given even less time to clean up reports,” Bonney says. “While both issues are detrimental in their own right, the combination creates a perfect storm for customer service and poor physician satisfaction.”

Tracy Boesch, president and chief operating officer of TransTech Medical Solutions, concurs that quality is the primary challenge hospitals face with offshoring. Further, while some in the industry justify offshoring by pointing to a shortage of experienced transcriptionists, she says that is simply not the case. “Contrary to what some vendors claim, there is no shortage of qualified professional medical transcriptionists in the United States. That may have been the case 10 years ago, but with the adoption of speech recognition and increased productivity in recent years, we do not see a shortage today,” she says.

Boesch adds that any benefits from lower costs typically are offset by potential vulnerabilities. For example, offshoring vendors tend to move work around among multiple transcriptionists, making the consistency and quality that comes from familiarity difficult to achieve. “Our success is based on consistently staffing our hospital accounts with a core team of seasoned primary medical transcriptionists,” Boesch notes. “This facilitates familiarity with the hospital’s medical staff and community.”

There also are several regulatory and operational challenges to consider when evaluating whether sending transcription offshore is a hospital’s best option. On the regulatory side, under the HITECH Act, business associates, including transcription vendors, are required to comply with HIPAA’s use and disclosure provisions. They will be held accountable in the case of a breach—accountability that extends to the offshore provider. This can create a complex web that a hospital must navigate when it comes to monitoring and enforcement.

Offshore Challenges
Operationally, Lori Eytel Langley, RHIA, vice president of HIM services for MedScribe, identifies the following four specific areas of concern for hospitals in the offshoring process:

Maintaining consistent quality: Daily production tends to be lower offshore, and many cultures do not support a productivity-based pay scale. Despite arguments to the contrary, removing productivity requirements tends to decrease quality because multiple staff members are involved in the same file.

“It is much more desirable to utilize one highly skilled and trained US [healthcare documentation specialist] as opposed to many layers of minimally skilled specialists who are often totally disconnected from the fact that a patient is ultimately relying on complete and accurate documentation in order to receive the best possible care,” Langley says.

Contracted service-level management: Managing TAT and other service-level requirements can be challenging with offshore transcriptionists because cultural differences often do not translate to the same level of urgency, which ultimately can result in excess workload for a facility’s staff.

Service support: Language barriers can add time and stress when working with an offshore help desk to resolve issues.

Privacy of medical information: Inadequate safeguards can leave PHI vulnerable to breaches.

“If facilities focus primarily on the bottom line, decisions are often made that result in sacrificed quality for the sake of saving a few dollars,” Langley says. “It is imperative that each facility explores these risks to consider whether or not the short-term and often short-sighted decision to reduce operational costs outweighs the potential exposure for poor quality which directly affects patient care.”

Offshore Benefits
Despite the challenges, there are numerous benefits to offshore transcription that make it an attractive option for many hospitals. While the most obvious benefits are cheaper and more plentiful labor and lower transcription costs, the value of offshoring is not purely financial.

Foley notes that offshoring “offers a number of benefits beyond the bottom line. Having staff located around the world allows the company to operate 24/7. Transcription company workers on a day shift in India or the Philippines can handle evening or overnight operations for US customers.”

The value a hospital can realize in terms of TAT enhancements and cost savings varies by service-level requirements. However, it is not uncommon to save 20% to 30% on annual transcription costs by partnering with a global provider.

Foley refutes the idea that quality must be sacrificed in exchange for savings, noting that “most transcription companies are well suited and highly capable of producing high-quality and timely work even with the most demanding requirements.”

 The key is to carefully evaluate any potential transcription partner. Good starting points are reputation, the number of years in the business, expertise in the facility’s specialties, and the ability to contractually agree to service-level requirements. References are useful but should be taken with a grain of salt because no organization will provide a negative reference by choice.

Finally, Foley strongly recommends partnering only with US-based corporations with company-owned offshore facilities. This provides the best protection and ensures expectations will be continuously met. “Partnering directly with an offshore entity is risky and could create many problems for a hospital,” he says.

Managing the Relationship
When negotiating an agreement with a medical transcription service organization (MTSO) that provides offshore transcription services, the key lies in a well-written contract that details all specific requirements and expectations.

“Term, pricing, indemnification, remedies, and cancellation provisions are the most important, following a detailed breakdown of service levels, such as turnaround times and quality assurance levels,” Foley says. “Most transcription companies will provide you with their contract version. I would strongly suggest your legal department review and build upon it, ensuring every detail is addressed and what happens if things don’t go as planned.”

For example, if the expectation is that PHI will be retained in the United States, the contract should spell that out clearly and include proper protections to ensure that wish is being honored. “If this is a concern at all, facilities should have frank discussions with their MTSO and ensure PHI is hosted within the US,” Bonney says. “I would also suggest strong financial penalties as well as ‘for cause’ early termination clauses in the contract if [keeping data onshore] is a priority for the facility.”

Langley also recommends building strict safeguards and severe penalties into all contracts, including the right to inspect at will and periodic audits to ensure compliance. Other points to consider include the following:

• When appropriate, clearly preclude the use of offshore labor.

• Prohibit subcontracting without the hospital’s prior approval and knowledge.

• Preclude the use of subcontracting.

• If subcontracting is approved, limit the ability to transmit the hospital’s information across US borders.

• Require indemnification from the vendor and any of its contractors for breach of confidentiality.

• Require that all confidential PHI be kept within the United States.

• Ask the vendor to provide a list of assigned team members and their credentials.

• Ensure each report is transcribed by one of these team members.

• Ensure that the contract contains language to support termination for cause and no cause.

“Finally, if in doubt, simply ask your account manager or other company representative. They may be under the impression that if you don’t ask or voice concern, you don’t care where the work gets done,” Langley says. “If you’re not comfortable with the answer, seek out a satisfactory resolution or find another vendor that can make you comfortable with this concern.”

— Elizabeth S. Roop is a Tampa, Florida-based freelance writer specializing in healthcare and HIT.