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Let's Do the Math
A reality check on MT productivity-based pay
By Dale Kivi, MBA

I entered the outsourced medical transcription service industry about 20 years ago. Back then, essentially the entire workforce was domestic, wages and benefit packages were strong, and there was a constant stream of new talent entering the profession through scores of dedicated training schools and/or community college programs. Today, all the schools are gone, a single position posting garners hundreds of highly qualified applicants within 24 hours, and even those with exceptional skills and years of experience struggle to make better than minimum wage with little-to-no benefits.

When I started (early 2000), speech recognition was in its infancy as a viable, cost-effective production tool for medical transcription. Most felt they could deliver reports faster and cheaper (and with better quality) by doing it the traditional, manual way. Given the basic speech recognition user interfaces and the technology's ability to accurately recognize medical terms back then, they were probably right.

Between 2000 and 2010, every service had a handful of superstars who earned as much as $70,000 or even $80,000 per year as manual transcriptionists, while a high percentage earned $35,000 to $40,000 per year—solid money for an important job that requires specialized training and significant skill.

During those high-rate days, most service contracts were signed for 16 cents a line or more and many production-based pay team members earned 10 or 11 cents a line, occasionally more for difficult specialties and/or off-hour schedules. As time went on, however, most team members saw their production-based pay rates cut in half as they were transitioned to speech rec editors since production levels were expected to double, although arguably that would be impossible. Currently, most national services use back-end speech for at least 85% of their volumes.

Manual Transcription Earning Potential
Manual transcriptionists are expected to average 150 lines per hour, as almost every national service vendor requires staff to deliver 1,200 lines per eight-hour shift to be considered a full-time employee. This has long been considered the minimum level of production to work for an outsourced service. According to the current typical industry pay scale of eight cents per line, that equates to $12 per hour, which could be argued as a reasonable starting point in the industry, especially knowing that in time earnings could certainly reach $20 per hour as production speeds increase. (See chart below.)

Speech Rec Editing Earning Potential
Editing speeds reported by major vendors only count while the editor is working in the document. This means they ignore the time required to access the job, download the voice file, and open the document along with the multiple clicks required to confirm edits and close the document on the back end. Accordingly, system-generated management reports suggest productivity between 250 to 350 lines per hour, but true productivity is closer to 80% of those targets or 200 to 240 lines per hour. Under the current industry average pay scale of four cents per edited line, this means most speech recognition editors are earning between $8 to $10 per hour. (See chart below.) It's important to note that even with artificially inflated rates that don't consider in/out time, no one reaches 400 lines an hour or more.

Reality Check
Even today, medical transcriptionists can make a decent wage when transcribing manually, although those jobs are increasingly difficult to find. With outsourced services, manual transcription is typically restricted to the most difficult dictators where the speech engine is not capable of generating draft documents without significant errors. Of course, that inherently limits expected production speeds.

Speech recognition editors can do marginally OK at four cents per line, but the overall profession is a shell of what it once was. It's now filled more with longtime professionals who don't have other options and not enough new entrants looking to begin their careers. The lack of new talent is evidenced by the closure of essentially all dedicated transcription schools. Although some university HIM programs still offer a course or two, their curriculum, almost without exception, is focused on managing such efforts rather than developing the skills to potentially enter the profession.

Between physician-centric documentation schemes with certified EHRs that rely on dictators self-editing documents created with front-end speech and the universal shift of traditional service environments to back-end speech recognition editing over manual transcription, the once-respected profession of domestic transcription is in serious trouble.

Adding insult to this significant domestic workforce injury, a number of national service vendors now penalize their workforce for sending documents to quality assurance (QA). This attempt to minimize their QA costs by placing the financial burden of such efforts onto their front-line transcriptionists has the dual effect of reducing their pay and negatively influencing quality as the staff is more likely to guess at something to avoid the penalty. There are numerous ongoing conversations suggesting just that approach in chat rooms at such industry websites as www.MTStars.com and www.MTDaily.com.

Without exception (to my knowledge), the only vendors that penalize their staff for sending documents to their QA pools are firms with large offshore labor forces. Considering the reported average pay scale of only $2 per day for such laborers—who don't seem to be subjected to parallel personal income penalties—it's clear these firms are intent on forcing domestic workers to quit so they don't have to pay severance.

As an example of this strategy, the domestic workforce for one major vendor began blowing up the MTStars website on February 7 for just-announced major pay rate reductions on the heels of QA penalties. Prior to this reduction, the vendor paid the industry average of eight cents per line for manual transcription and four cents for speech recognition editing. Now those rates have been dropped by 12.5% for manual transcription to seven cents per line and by 25% for speech recognition editors to three cents per line.

As noted earlier, since most national vendors use speech recognition to support at least 85% of their volumes, the vast majority of the staff for this vendor was hit with a 25% reduction in pay. Applying those lowered rates to the charts presented above results in new pay scales (see below). And given it is rare for any editor to average 300 lines per hour, this reduction puts the bulk of their domestic staff essentially at or below minimum wage. It's no surprise the conversations on MTStars suggest the staff wants to just quit or go on strike.

Growing reliance on front-end and back-end speech recognition combined with offshore labor rates has devastated the domestic medical transcription profession. Even the production-based pay scales outlined above are best-case scenarios. They presume 50 lines per report, which although reasonable for acute care documents, far exceeds the industry's 35-line average for clinic reports or 10-line average for radiology reports. Those who transcribe such shorter documents have a greater per hour burden for opening and closing reports, effectively reducing their hourly earning potential.

As long as there are low-cost offshore labor options, some service vendors will exploit those price differences and try to squeeze out domestic labor. The reality is, some clients will always accept the cheapest price. In the end, you get what you pay for, and our domestic labor force deserve more than what some vendors are now willing to pay. Our best hope is for the quality differences to become so obvious that buyers realize domestic labor is more than cost justified. I see it happening more and more, especially with some of the recent international vendor operational changes, and it gives me hope.

— Dale Kivi, MBA, is a former member of the Medical Transcription Industry Association's board of directors and recipient of their Beacon Award for best promoting billing ethics and accountability to the industry. He is one of the coauthors of AHIMA's standard 'Clinical Documentation Quality Assessment and Management Best Practices' and a member of For the Record magazine's editorial advisory board. He also serves as vice president of business development for FutureNet, a 100% domestic transcription service provider. He can be reached at dale.kivi@fnehr.com.