The Hindu : Medical transcription industry staging a comeback

Online edition of India's National Newspaper
Sunday, Mar 21, 2004

Business

Business

Medical transcription industry staging a comeback

By P. Vikram Reddy

HYDERABAD, MARCH 20. Just when everyone thought medical transcription was down and out, it is staging a recovery and is all set to grow exponentially in India. Cbay Systems, incorporated in the U.S. as early as 1998, in the thick of the last round of IT euphoria, has emerged as the fourth largest medical transcription company in the U.S. and has started implementing its gigantic expansion plans based on its model of 95 per cent outsourcing from India. And it seems quite unfazed by the ongoing BPO controversy in the U.S.

With 33 franchisees and five of its own centres in India, Cbay now employees about 1,200 people (which it has trained) and recorded revenues of $33 million and a 70 per cent growth rate. Its expansion plans are a mindboggling 10,000 people working to generate revenues of about $100 million by 2005, says, V. Raman Kumar, the U.S. based Chairman and founder of Cbay Systems. Mr. Kumar was here recently, visiting their new facility Ckar, which is managed by Karvy Consultants, under a management tie-up (without being a joint venture).

It is talking to companies in Delhi, Ahmedabad and Chennai for further expansion. In Andhra Pradesh it is looking at stepping up the headcount from 700 in four franchisees and Ckar, to about 5,000 people, and is looking at places like Guntur also to set up operations. Mr. Raman says it has 50 clients (mostly missionaries) in the U.S., none of them government. While they do not fear any backlash, he says only one hospital dropped out — but on religious grounds and not due to the ongoing controversy. The U.S. medical transcription industry alone is put at about $20 billion, of which only $3 billion is outsourced to U.S. based companies. Hardly $40 million is outsourced to India, which is quite small, he points out. So far Cbay has raised $20 million from venture capitalists and equity investors, and is planning to raise another $25 million for its next round of big expansion in India.

The Indian market is put at about $40 million with about 5,000 trained medical transcriptionists working and appears all set to grow. As Mr. Raman says there is now a critical shortage of qualified MTs in the U.S., which is expected increase drastically as demand grows at double-digit rates. The shortage is expected to be to the tune of one lakh medical transcription by 2004 end, and India is obviously the destination to fill this void.

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Medical transcription industry staging a comeback