Blue Cross Blue Shields Opening Doors to Global Sourcing

Don't be surprised if you see a job posting on a blue cross website for a "Global Sourcing Manager". If you trace the history of adoption of offshore outsourcing/global sourcing the private Payers have lead the pack, followed by pharma and lifesciences companies. A new trend is in the making - more and more blue's are opening the doors to offshore outsourcing. Blue's have been shy of outsourcing and have always adopted onsite contractor model.

Here are some of the drivers for the adoption

• The private payers have already adopted offshore and are saving money, to compete in the market Blue's have little choice but to start looking for IT talent globally
• Pure quality IT skillset shortage is forcing exploring offshore options like India
• A very unique reason that I have heard lately is - "When we hire IT contractors, most of them seem to be of Indian origin. So why just get a skilled person when you can drive significant value by working with tier 1 offshore players"
• Migration and integration projects are favourites for offshore - these projects are driven by technology and do not have as strong a business case.

Perot's, IBM's, Accentures and CSC, watch out for offshore tier1 and tier 2 companies in your safe heavens.

Managed Services for Providers

I am sure most of you have seen presentations on the IT market in Healthcare, its huge and makes the mouths of big technology companies water. The moment they start analysing the Provider market they start realizing that it is the most fragmented segment in the world today. There are over 5000+ providers (hospitals) and most of them are in the medium segment.

A typical 400 bed hospital would probably have 20-150 FTEs in their IT department based on how much is already outsourced. Most of these employees are internal talent pool that has been with the company for long. With new standards and integration needs emerging these departments are feeling the crunch. Add the regulatory constraints like HIPAA on top of it and you have a boiling pot.

Efficiencies and quality of care is so much dependent on building robust systems in these small to medium hospitals. That is the challenge and every big IT company suddenly realizes that they are no equipped to handle a fragmented market like Providers.

So what is the solution? There are many - one of the key areas that is catching up steam is managed services, be it IT Infrastructures managed remotely by a shared team that services other customers or Application management. The business model is sustainable and fits in the scale considerations of larger IT service companies. I see a lot of scope for managed services in the Provider industry. Wipro just released a HIPAA managed compliance service that is a fixed fee model for managing HIPAA compliance, HP has had similar models for IT Infrastructure.

Hope to see Hospitals embrace the managed services models more aggressively for better IT systems and superior patient care.

Providers - Opening up to Offshore Outsourcing?

GE set the trend by outsouring to India and showcasing a model of leveraging global talent and actually showing hard dollar savings. The India offshore model is a proven model for IT now. Typically the early adopters were the wall street, manufacturing and retail companies that run thinner margin or higher greed.

Slowly the model is shifting from a cost to value model, the healthcare industry is at a stage where talent is in shortage and offshore outsourcing is a way out. First it was the pharmas, followed by Payers and Medical device that embraced offshore outsourcing.

In the past few months I have heard from multiple provider executives that leveraging a global delivery model may be an option. US based outsourcing compaines like Perot, First Consulting Group etc are already leveraging offshore talent in India. The HIMSS board is also supposed to be visiting India soon. Providers may be the next big trend in the offshore outsourcing space. The local biggies like Wipro, Infosys and TCS seem to have ignored the market for some time and trying to get their act right.

Bottomline - like it of not, Providers are in line to embrace the global nature of IT delivery.

The AHIP Conference

There is always a debate on what conferences to attend and what to not, if you are a vendor. Where do you get max ROI for your investment? Well after all the debate the best way to find out is to attend one and decide if you are going to attend the next year. So I attended the AHIP conference in Las Vegas.

My first impression of the conference was - it was worth it. The who's who of the industry was there, the right levels that a vendor needs to sell were present. The booth floor was huge, I did not expect it to be so big.

None the less here are a few key things I captured of my one day visit.

• Sun Microsystem launched "Payor Alliance" an alliance of Sun partners that will be able to provide end to end technology solution for driving consumerism in Payers
• Healthways had a good presence, I attended one of the sessions on Disease Management and I thought it was very informative and appropriate.
• A key area of interest for me has been the evolution of Offshore vendors in the healthcare market. I saw booths from Wipro, Infosys, Cognizant and VeeJee Technologies.
• IBM locked down its blues customers in a private dinner, not sure how the NASCO initiative is going for them.
• Intuit and Ingenix had their good presence, and Intuit showcased Quiken for Healthcare, interesting product - time will tell if they have hit the bulls eye.

I only wished I had more time to spend at AHIP. Other than consumerism and disease management I did not hear many key words that have been the buzz in the Health Plan Industry. Maybe had "Sicko" been released before the conference the themes could have been a little more spicier.

If you wish to build a networks in Health Plans - AHIP is definitely a conference to attend.