Barack Obama’s re-election has sparked fresh interest in the healthcare, insurance and medical technologies sectors of the $100-billion Indian information technology industry, which hopes to gain from reforms initiated by the US President in his previous term.
About 50 million uninsured Americans are expected to buy healthcare insurance because of the reforms that come into effect on January 1, 2014. The Patient Protection and Affordable Care Act, often referred to as ‘Obamacare’ , is a major overhaul of the American healthcare system that is expected drive up demand for IT services in the new year.
As a result of the new reforms, IT projects are expected to be awarded for data conversion, creation and management of electronic health records, as well as claims processing and insurance sales.
“Health insurance companies have started to invest in what we are calling the SMAC stack: social media, mobility, analytics and cloud. We expect demand for services in these areas to be robust,” said Patricia Birch, vice-president of consulting and healthcare practice at Cognizant . She said Cognizant is helping health plan providers customise or evaluate new IT products and platforms .
Though Obama had signed PPACA into law in 2010, it was upheld in the US Supreme Court only in 2012. The Republicans had vowed to overturn the legislation if they came to power. The global healthcare benefits outsourcing market is currently about $5.4 billion (about Rs 29,000 crore) annually, according to offshore advisory firm Everest Group.
The market has the potential to touch $20- $22 billion, which the healthcare reforms will help unlock. Obamacare will impose a $2,000 per employee penalty on employers with more than 50 employees who fail to offer a health insurance plan. But not all are likely to turn to employers for coverage.
New biz models to tap healthcare
“Many millions are expected to flock to health benefit exchanges, an entirely new marketplace created under the Act that will pool private insurance plans and allow people to buy coverage at affordable rates,” said Pradeep Nair, senior vice-president of healthcare at HCL Technologies.
“For payers to deliver on these expectations they need to create and manage customised, unified experience across channels like web, social and mobile,” he said. While for HCL, healthcare has been one of the leading verticals, growing at more than 50% over the last three years, the segment accounts for about 4% of the Indian IT-BPO industry.
“IT companies need to start thinking about new business models to tap this emerging area ,” said Kumar Parakala, partner and chief operating officer for advisory services at KPMG.
With many of the provisions of the healthcare overhaul set to take effect in 2014, businesses are rushing to retool “developing new marketing analytics will give payers new capabilities for targeting, capturing, and retaining consumers,” said HCL’s Nair.
“Clients are investing in building good infrastructure either through renewals or afresh,” said Sangita Singh, senior vicepresident of healthcare and life sciences at Wipro. “We plan to focus on three or four providers, where we can scale and grow our services.”
If health plans invest in an integrated front-end sales system that helps customers compare products, it could open another opportunity for Indian IT companies The plan to put exchanges where citizens can customise and buy their own healthcare plans, however, are facing roadblocks as states like New Jersey have vetoed against them.
Via: Times Of India