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January 10, 2009

Regulations needed for Outsourcing Industry

Corporate regulations are not clearly understood and implemented in India. Many Indian corporations never had to follow regulations because there never had any publicized scandals. Very similar to US in the pre-Enron days. Knowing what happened to Anderson, PwC should have done their due diligence more clearly and closely.

SOX regulations are not very clearly understood in India and in many cases; it is almost seems an alien regulation. What happened to Satyam is very unique and interesting. It is the first time, that Indian investors revolted and forced Satyam to forgo its dubious plans to invest with Maytas, which ultimately resulted in the collapse of Satyam.

It was also felt, at least in India, that the Indian economy is largely decoupled from the US. That is never further from the truth. US still have over 50% of out sourcing business with India. Not just IT, but industries as diverse as textiles, tutoring, medical tourism, steel, legal transcriptions, and call centers etc. India and US are more connected than the eye can see.

Our service sector depends on the success of the Indian Outsourcing companies. We can no longer ignore what happened at Satyam as something bad happening in a Third World country, but not necessarily affecting us. Imagined what would happen if Infosys, Wipro, TCS and Cognizant shuts down. The affect of this will be much different than what happened with the demise of the investment banks. US will lose its ability to serve its customers if the outsourcing industry collapses. US will lose its ability defend itself say if the Indian steel industry collapses. US will hurt a lot if something bad happens to the Chinese manufacturers.

Our inability to serve our customers will further send us deep into a more severe recession. We need corporate governance around the world and not just in US. US companies should regulate its outsourced partners as much as we regulate our own business units.

The US feds and its banks have bailed out the industry as a result of the mortgage led investment bank debacle. But who will bail out the Indian outsourced industries (if the worse happens)? The G-8, G-12 and the IMF need to sit down and talk about global inter-governmental industry regulations.

I believe that regulations in the Indian industry starting first with the Outsourcing industry will greatly benefit everyone especially the Indian Outsourcing industry. I request SEBI, NASSCOM and the SEC to partner together and come up with a system that prevents what happened to Satyam, but at the same time provide opportunities for innovation and growth. This is a global economy and we need to think and act globally.

Posted by Jay Barua at 7:15 PM | Comments (1)

September 24, 2008

Use of Outsourced Providers to Find Gaps in Care

It is quite difficult for analysts to understand healthcare outcomes data - whether it is clinical, financial or even operational. Imagine if you can have an army of well trained Physicians poring over your claims and clinical data and finding out gaps in care.

Problem is you cannot get Physicians in USA to do that for you. They are too expensive. But there are Physicians in Asia who will gladly help you mine such data at a fraction of the cost.

Posted by Jay Barua at 2:15 PM | Comments (0)

August 28, 2008

Measurement of Healthcare Provider Productivity- What are the drivers ?

The current credit squeeze resulting from the mortgage meltdown is having a tremendous impact on everyone. Healthcare industry has started to see the impact like everyone. Healthcare CEOs are seeing margins decreasing resulting in fewer and fewer dollars available for discretionary spend as well capital investments.

More and more healthcare provider organizations like Hospitals, Clinics, State run care facilities etc are looking at ways to reduce their operating costs.

What are the costs to keep Physicians and Nurse Practitioners employed ? Are they productive from a cost and revenue perspective? What are the different measurement methods we can use to measure Provider productivity?

One method I found useful is by measuring RVUs (Relative Value Units) across different Provider delivery mechanisms. RVUs take the subjectivity out of the equation.

For example many Hospitals struggle to measure productivity, since they differ in the basic ways they treat costs related to in-patient and out-patient visits. Even Health plans struggle with the inconsistencies of measurement due to the fact that the costs for a same treatment or diagnosis, done by a provider may be different in different economic, demographic, social or geographical situation.

RVU measurement provides a good standardized measurment. So if we know the direct and in-direct costs and revenues for providers and the number of RVUs billed, we can come with our own formulae to measure Provider productivity.

Hospitals, Clinics and Care facilities then can do long range financial and operational planning to improve provider productivity and thereby reduce operational costs.

Now that is something a Healthcare CEO will definitely like to do.

Posted by Jay Barua at 11:30 AM | Comments (0)

August 13, 2008

Business Intelligence and Intervention Outcomes

Healthways studies has shown a clear link between telephonic member contact intervention process and clinical testing for a large geographically diverse diabetes disease management population. It shows that continued telephonic intervention resulted in increase levels of A1C testing.

Using techniques of combining business intelligence, data mining and predictive modeling we can take this correlation studies to the next level.

Predictive modeling is the process by which a model is created or chosen to try to best predict the probability of an outcome. In this case we wanted to show how patient behaviors can be influenced by interventions resulting in positive outcomes.

Many BI tools like Microstrategy have the ability to import predictive models from SAS into its rich math and statistical engine to ultimately mine the data. Closed loop feedback mechanisms can used to refine the models and understand the several correlations at a finer level. There is no limit to the multi-variate analysis that can be done on such data sets.

The results of this study can be fed to the Clinical intervention systems and ultimately improve the interventions themselves to achieve even higher levels of A1C testing.

This is the real power of Business intelligence tools that many organizations should tap into.

Posted by Jay Barua at 4:15 PM | Comments (2)

July 30, 2008

Pay Performing Physicians (3P)

There has been great debate and discussion in many forums on this topic. Why is this such a sensitive issue? And more importantly why is it so hard to implement?

If you look at most professions, we get compensated because we perform. So why it is too much for us to institute payments and incentives tied to a direct correlation of Physicians efforts in improving the quality of care and reducing the cost of care at the same time.

The heart of the problem lies in the fact that we are living in a world of healthcare contradictions. For instance

1. PDPs (Prescription Drug Plans) are rewarded to focus on low cost drugs, while Physicians are rewarded on quality of care often at cost of prescribing costly drugs thereby taking the uninsured out of the mix. The perception that generics do not guarantee quality forced most Americans (till very recently) to shy away from no-name drugs.

Solution: In a world of such contradictions - we need to embrace the "AND". Drug companies and Health plans needs to be mandated and rewarded to create formularies, tiers based on both quality and cost. Not one at the expense of other. Once we take cost out of the question, we can focus on quality and measure Physicians based on a quality index.

2. Data unavailable to determine Physician performance
We have struggled with this for a long time. How do we track a physician's performance after we have set goals? Do we measure against quantity data (no of hours worked/RVU) or measure against qualitative data (increased quality of care)? What are the data elements and where are they available. Encounter data? Claims data? Pharmacy data? This is where Business Intelligence techniques can help. A 360 view of Healthcare data from a Provider, Services and Patient perspective linked together in a common denominator framework can be invaluable for us to provide data to track a Physicians performance measures. We not only need data but they have to be linked together.

Jay Barua

Posted by Jay Barua at 4:15 PM | Comments (3)