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regulatory environment

Automation Feeds Desire for Onshore Services | Sherpas in Blue Shirts

By | Blog

There’s a lot of rethinking going on in North American businesses in light of new technologies. In Everest Group’s conversations with clients and in round table discussions we’ve been holding in the industry, we find that these mature companies believe automation gives them the ability to bring their work back on shore.

After more than a decade of achieving value through the offshore labor arbitrage model, one would think that mature organizations that have built GICs or captives, or organizations with extensive use of third-party outsourcing providers, would be at peace with the model. We expected them to move to a model of arbitrage plus automation. But the level of peace and comfort with offshore arbitrage is much less than we expected, and companies are expressing their desire to use robotics automation to repatriate their work.

This is particularly the case in regulated industries with significant compliance requirements. This is where the desire to move work back on shore shows up first. The increasingly regulated financial services industry is especially burdened with complex regulations. These businesses receive a higher degree of scrutiny if operations are in offshore low-cost locations than if they are automated. It’s easier to demonstrate compliance in an automated environment than in an arbitrage labor environment.

Moreover, these companies believe life is easier in an onshore environment than in an offshore environment.

This is not to say the desire to move work back on shore is a sea change. But we are seeing the early stages of this movement.

I think this is a very interesting development. Our hitherto assumption that the market had overcome its xenophobic fears is not correct. It’s quite possible that the steady blast of negative press in the media and the nationalistic pressure from consumers may be starting to play a role in this re-examination.


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BPO: Healthcare Payers’ Swiss Army Knife | Sherpas in Blue Shirts

By | Blog

The healthcare payer market continues to experience rapid transformation as efforts to control costs, minimize waste, and root out fraud and abuse collide with the effects of an aging population, the burgeoning insured population brought on by the implementation of the Patient Protection and Affordable Care Act (PPACA), and advances in technology and medicine. Taken alone, any one of these events would have significant impact on healthcare payers; together they’re nothing short of revolutionary.

Faced with such transformation, healthcare insurers are seeking strategies that can help them to manage ever-increasing demands. Among the more impactful tools they can employ is business process outsourcing (BPO). The healthcare payer BPO market, currently estimated at about US$4 billion, is growing at a healthy 14 percent annually. And it’s no surprise, as BPO is more important than ever in helping healthcare payers to streamline their operations and reduce costs. Beyond the basics, BPO can also help providers to research, develop and launch new products; to glean value from the masses of data they capture; and, to identify and reduce cases of fraud, waste, and abuse.

And there appears to be some evidence that payers are tapping into the power of BPO to help address their most significant challenges. While claims processing remains the most commonly outsourced BPO process, other more strategic areas are driving overall growth:

  • Product development & business acquisition (PDBA) – though the smallest segment of all outsourced healthcare payer BPO market, PDBA grew the most, at about 50 percent, between 2012 and 2013. The implementation of PPACA has forced payers to come up with new plans that are comparable to others and easy for members to understand, driving significant activity in this area
  • Member management – increasing by about 35-40 percent from 2012 to 2013, member management is another fast-growth BPO trend being fueled by PPACA. The Act is driving payers’ need not only to manage more, and increasingly diverse members, but also to take advantage of the vast amounts of data generated by the growing insured population
  • Provider management – changes in the healthcare environment are compelling payers to collaborate more with healthcare providers, in turn driving a need for better provider management. The result is that outsourcing in this area grew at about 35-40 percent year-over-year
  • Care management – As payers increase their direct contact with patients, and as part of their attempts to manage costs, healthcare payers are increasingly getting involved in care management activities, driving growth in the area to about 30-35 percent in one year

The changes in the healthcare market are daunting for even the most prepared and best funded healthcare payers. In order to compete in the increasingly challenging and competitive market, payers have to take advantage of every tool available, and BPO is fast becoming the industry’s Swiss Army Knife.

For more insights on the healthcare BPO market, see our just released report, Healthcare Payer BPO – State of market with PEAK Matrix™ Assessment. Log in or register to download a complimentary preview.


Photo credit: Flickr