Outsourcing of US healthcare services to power Ajuba

Ajuba International, a third party BPO firm specialising in revenue cycle services for the US healthcare industry, is upbeat on its future growth as an increasing number of US healthcare organisations are looking at outsourcing of the complete patient access, billing, medical records, and follow-up insurance claims to reduce costs and improve cash flow.

The company, which reported a revenue of $10 million for 2005, expects 25-30 growth in its revenue on an annual basis for the next 4-5 years. It is likely to add 250-300 people every year.

Devendra Saharia, president, Ajuba Solutions India Pvt Ltd, told Business Standard that the healthcare institutions in the US were increasingly finding it difficult to improve revenue-cycle performance.

The government funding to hospitals had also come down over the period following a very high fiscal deficit. The hospitals failed to make investments in technology like automation of services and most of them were operating at about 4 per cent margins. There are about 5,000 hospitals in the US and only about 10 per cent of them are profitable.

He added that poor investment in technology by hospitals was helping the company address this market. The total addressable market size for the company in the US was about $10 billion.

The healthcare institutions in US are turning to India for outsourcing of such services not necessarily because of cheap labour, but also because of quality of the manpower, he said.

He said Ajuba, which started in 2001, was able to clean out the claims early resulting in significant savings for the healthcare institutions.

At present, the company's annual collection bill is about $2 billion. It is bullish on its future growth and would like to stick to its present domain of providing end-to-end oursourcing services for revenue cycle management. "We want to be a key player in this segment," he added.

Ajuba, a US-headquartered firm having offshore operations in Chennai, has about 15 clients which include hospitals, medical centres and physicians. About 60 per cent its total workforce of 1,000 are involved in call centre works, focusing on collections.

Stating that emphasis on training, people and processes was the key differentiator of Ajuba, he said that its spend on training accounted for about 5 per cent of the total operational cost.

Saharia said that medical coding was the major challenging area in the revenue cycle management for the healthcare institutions, which didn't have sufficient number of experienced staff and the records were not uptodate with the latest guidelines.

According to him, hospitals could save about 70 per cent on coding alone by outsourcing the services to Ajuba. A medical coder in US charges a fee of $60-$70 per hour.

"Our primary challenge was in the coding. We were, however, able to start well and probably we have the largest team of coders," he said, adding that the present team strength of 100 will be scaled up to 150-175 by the end of this year.