June 20, 2011
Foreign Conquest: Tips for Opening Offshore Operations
By Lindsey Getz
For The Record
Vol. 23 No. 12 P. 20
As owners of medical transcription service organizations and coding staffing companies can attest, finding qualified transcriptionists and coders these days isn’t always easy. Several factors have created a situation in which some of these businesses have opted to look for help outside U.S. borders, setting up shop in foreign countries in an effort to meet demand. In fact, according to various industry reports, it’s estimated that between 10% and 30% of transcription work is now performed offshore.
However, relocating to offshore offices isn’t as easy as a simple change in postal code. These businesses face numerous challenges that must be addressed if they are to prosper in a foreign land.
“By its very nature, the transcription business is a 24/7 zero-defects kind of business,” says Scott D. Faulkner, principal and CEO of InterFix, LLC, an international development and transcription consulting firm. “In the developed world, we understand what that means—whether it’s banking, logistics, or medical transcription. But in the developing world, they don’t have a business model for these types of businesses. They may have the necessary technical infrastructure, but they don’t always have the same work product expectations required in a zero-defects type of industry.”
Faulkner says this may be one of the biggest challenges a transcription service faces when opening an offshore office. If the culture does not support a 24/7 zero-defects model, then the business is destined to fail because when it comes to medical information, there’s no room for error. “Only perfection is acceptable because the moment you start delivering poor documents, you lose your customer,” he says. “We’ve seen that happen. A worker may shrug his or her shoulders and say, ‘Close enough, I did my best.’ But when it comes to a person’s medical record, that’s not acceptable. So I’d say a major challenge is to identify a culture where these high expectations can be met.”
Along with trouble grasping the importance of a 24/7 zero-defects business model, Faulkner says the way medical transcriptionists are paid has also posed challenges. “The idea of production-based pay in many cultures is just a totally foreign concept, but of course in the U.S., that’s the model by which the entire industry runs,” he explains. “Great quality and a quick turnaround time mean getting paid by that volume. In developing nations, many workers want to simply know what is the hourly rate. They can’t get their arms around the notion of being paid on productivity, and that’s been a barrier to overcome for some offshore offices.”
Finding the right leadership team is an important first step to overseas success, but it can be a tricky proposition, according to K. B. Anand, chief operations officer of global operations at Acusis, a Pennsylvania-based medical transcription company.
“There is sometimes a struggle between sending someone from the U.S. to the offshore office or having someone already there to take over leadership,” explains Anand, who is based out of Acusis’ Bangalore office, one of the company’s four offices in India. “Oftentimes, the parent office does not give absolute control. The corporate team still wants to control everything from a remote location. The challenge is in confidently believing in the leadership team from the offshore location—enough to delegate responsibility and associated authority.”
Anand says if authority cannot be fully delegated to an overseas leadership team, then it’s important the amount of control is clearly defined. In other words, everyone must know their boundaries, otherwise it can create discord in the ranks. “If authority is not clearly defined, there may be problems running the operations of the offshore site,” he says.
Ensuring personal health information is properly protected is another potential headache that offshore operations must manage carefully. In the case of remote coding, however, geography shouldn’t be much of a factor, says Jeff McQuillan, vice president of NCO Healthcare, a provider of business processing outsourcing solutions.
“If you’re a remote coder working from home in Atlanta, you’re using the same technology as a worker in Manila,” he says. “The technology doesn’t get weaker based on the distance, so it becomes a physical security issue. My opinion is that someone working remotely from home is less secure than someone sitting in a secure office building in Manila. We have extremely stringent physical securities as well as Internet and technical securities already in play.”
Certainly some cultural differences have been challenging for American companies looking to succeed overseas. To avoid that struggle, some transcription and coding outfits target expansion to foreign countries that better understand American business practices.
For NCO Healthcare, the Philippines has been a favorite locale. “It’s an English-speaking country with very highly educated people who make excellent employees,” says McQuillan. “We hire employees who have four-year degrees from nursing schools, and we give them intensive hands-on training to become CCS certified. The objection that overseas workers are unqualified has been done away with. As nursing school graduates, our coders are up on their anatomy and physiology and are fully certified.”
Despite any similarities foreign countries may share with the United States, there is always the possibility of a collision among cultures. Anand says there are quite a few cultural gaps between the United States and India that Americans need to adapt to if they are going to make a successful transition. Dress code, traffic, landscapes, and even expectations and beliefs can all be quite different.
“You may come across folks over here who are not extroverts,” Anand notes. “They may not initiate conversation unless spoken to. And even simple things like eating times are very different. I recall when one of the visitors from the Pittsburgh office came to India for the first time, and we took him to dinner at 10 PM. He was exhausted.”
While these cultural gaps can seem overwhelming, Anand says they’re nothing that can’t be overcome. “That’s the beauty of human psychology,” he says. “All of these gaps look huge, but if given enough time, maybe even just 10 to 15 days, you get adjusted. Cultural barriers exist, but they can be overcome. Most people who visit us here in India are pleasantly surprised by the professional work ethic. There’s a high loyalty factor and a very hardworking and intelligent work pool.”
One cultural roadblock that can be a bit more stubborn to defeat is a language barrier. “How we speak to each other is no small thing,” says Faulkner. “If an underlying language does not support a contextual or modality differential between a heart attack and a broken heart, then there are going to be some real problems in achieving zero defects in medical documentation. English may be the official language of the country, but regional colloquialisms may be incredibly different—maybe to the point where you might not even realize they’re speaking what we call American English. It’s important to realize that American English is still a challenge, even in English-speaking nations.”
On top of these concerns, even something minor, such as time zone differences, can pose a challenge to businesses. “As the East Coast in the United States is waking up and getting to work, India is about to close their day,” says Anand. “That may mean that the Indian counterpart may need to extend their day or that the U.S. counterpart may need to start much earlier in order to communicate. However, working from home, flexi-timing, and telecommuting have greatly helped to mitigate these limitations and the possible restrictions they may pose.”
While establishing a business in an unfamiliar country and dealing with strange rules and regulations sounds daunting, Faulkner has found many foreign governments to be quite receptive to the transcription industry.
InterFix has been hired by five foreign governments to start transcription training schools and production centers essentially from scratch. The arrangement benefits both InterFix and the host country. “Their motivation for getting into this industry is economic diversification,” explains Faulkner. “Many of these countries are already well versed in manufacturing, farming, and maybe even banking, but they want to diversify further. The governments want to create jobs for their people. So I’ve found many of the foreign governments I’ve personally worked with to be very supportive of this industry.”
Anand says when working with foreign government, it’s important to play by the “law of the land” and take the appropriate legal steps toward establishing operations. “In India, in order to open a business, there are sanctions required from multiple agencies,” he says. “You have to sometimes submit multiple applications to different agencies. It can look huge from a distance, but consulting agencies are always there to help you. The most important thing is to comply with all the statutory requirements. As long as you have professional local support for setting up the business and getting the right approvals, it can be handled easily.”
While there have been failures, several coding and transcription companies are flourishing overseas. Faulkner says because success has been demonstrated in so many markets, the formula can work just about anywhere as long as it is not approached with short-sightedness.
To achieve a zero-defect model, companies have to be willing to view the project over a timeline of five to 10 years and accept the fact that setbacks are bound to occur during the early stages. “Unfortunately, what often tends to happen is that companies and even the foreign governments do not want to be associated with failure at any level, so they decide to alter their course,” says Faulkner. “But in order to succeed long-term, you have to be focused on the future, and you have to plan to lose money for a few years. There’s no question it’s a tough business.”
In the end, Faulkner says success comes down to training. “There can be no shortcuts in training,” he says. “It’s a critical component of the overall success. Find a trainer that has already worked overseas. Much of the process is going to be immersed in training so that you can get to a point where you’re producing work that fits into that 24/7 zero defect business model. It can definitely be done—with a lot of hard work.”
McQuillan agrees: “We’ve spent a lot of time and money training our employees and getting them CCS certified. Exemplary training has been the key to our success.”
And just like on these shores, keeping the client satisfied by producing topnotch work—whether it’s produced in Tallahassee or Timbuktu—will make long-term success much more attainable.
“You ultimately want to look at the ease of being able to do the work well for the client,” says McQuillan. “If the quality isn’t good, the price really doesn’t make a difference. We’re extremely conscious that coding should not be generating audits or causing RAC [recovery audit contractor] problems for our clients. But in the event of an audit, we are confident we will pass those audits because in the end if the quality is not good, it doesn’t matter how fast you produced it or what you spent.”
— Lindsey Getz is a freelance writer based in Royersford, Pa.