While foreign workers make up an increasing percentage of the U.S. workforce and in turn the workers' compensation universe, the actual handling of some claims can take just the opposite route in going overseas.
Philippines-based Medicall US today employs an army of nurses and other claims professionals in the Asian archipelago handling in the comp realm everything from utilization review, clinical case triage, case management and support services to pharmacy benefit support services.
San Francisco area-based IT executive John Chess started the operation five years ago after gaining familiarity with both India and the Philippines in his previous career.
He chose the latter "because of concerns that potential clients have with accents and such, I believe the Philippines is a much more suitable location."
And the fact that the country has over 200 nursing schools that use U.S. nursing school curriculums and textbooks was also a factor in the decision.
"So our whole model is to take advantage of incredibly high quality nurse resources," he says.
Philippines employees at Medicall deal for utilization review issues with any number of people in a carrier's organization. "And we have many other programs where we are dealing with physicians, injured workers and insurance plan members," he says.
Medicall serves, according to Chess, several of the largest national group health plans, workers' comp third party administrators and carriers.
While the Philippines may make sense from both an economic and language standpoint to serve as a center for this business, Medicall remains the only such business there or overseas in general as far as Chess knows.
"We are the first company that the Utilization Review Accreditation Council has given their accreditation to that is an offshore provider," Chess says.
Currently offshore businesses consist of call centers and business process centers.Chess says his firm has started a new niche of healthcare services outsourcing.
The company maintains a client service and program design center in the States, "but most of the work is done offshore."
As far as client concerns about moving these operations offshore, Chess says the first remains newness of it all. "It has taken some time to get them to feel comfortable with it, and even to become aware of this option."
Training Filipino nurses for the job has its challenges. "Workers' comp does not even exist in the Philippines, so there is a lot of education going on and training to take very highly qualified and fluent English speaking nurses and yet to train them on the systems and applications and even the concept of what workers' comp is."
An estimated 350 people staff the offshore office with 20 in the stateside office.
Medicall can either take over a carrier's entire operation or merely supplement it with different shifts.
"When a claim comes in at 4 pm EST, rest assured that one will even address that the next day," Chess said. "On a lot of our programs we staff a couple of shifts so if a claim comes in at 4 Eastern Time, when a client comes in the next morning, the initial work is done. So we are reducing the cycle time."
As for any cost savings, Chess says it depends on a wide variety of factors, but put the figure overall at 35 percent to 40 percent."
For some functions the savings can be greater. "When you talk about UR, a nurse has to do that and there is a nursing shortage in the U.S. So, what a nurse makes here is substantially greater, and on that type of program the savings is even more substantial," Chess says.
As for any other companies looking to set up a similar operation, Chess says "I imagine some people are intrigued by it but setting up a unit with maybe 100 employees would be difficult for all the start up and training costs involved."
As a former American colony that celebrates its Independence Day on July 4, Chess says the country's embrace of U.S. culture has made it a perfect setting for this business.
But not all agree.
When Sedgwick Claims Management Services landed a big automotive client two years ago it looked into the possibility of setting up a similar operation in the Philippines.
"But it was never in really serious consideration," says Bradley Johnson, Sedgwick executive vice president.
Instead, Sedgwick settled on Dubuque, Iowa and contends that it enjoys an estimated 35 percent cost savings when compared to a large metropolitan area that it was also looking at.
The quality of the college educated labor force and productivity per worker figures sealed the deal in Sedgwick's mind, Johnson says.
October 1, 2008
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