Offshore medical transcription provider Spryance, Waltham, Mass., has acquired another transcription company with extensive offshore operations, the Heartland Information Services division of Toledo, Ohio-based HCR Manor Care, with the merged company to be called Heartland Information Services with headquarters in Toledo, the companies have announced.
Spryance provides transcription services to more than 175 U.S. hospitals using the services of 1,200 medical transcriptionists with offices in Chennai, Mumbai and Pune, India. Heartland has work centers in Bangalore and Delhi. Combined, the new company will have more than 200 U.S. hospital customers and 2,500 medical transcriptionists, according to a news statement.
The extent of offshoring in the medical transcription business is unknown. The American Association for Medical Transcription estimated several years ago that 4% to 5% of total U.S. transcription services are performed by overseas workers, but officials for the Modesto, Calif.-based trade association for medical transcriptionists acknowledged those figures were mere extrapolations and were little more than a guess. But going offshore is no guarantee of profitability, and mergers and acquisitions will continue to be driven by market demand, according to Peter Preziosi, executive director of the American Association for Medical Transcription, Modesto, Calif.
In April, HCR Manor Care, which operates more than 500 nursing homes and long-term care facilities, announced it was planning to sell its 5-year-old transcription business after taking a noncash charge of $7 million against first-quarter earnings, as net income dropped 37.5% to $25 million year-over-year for the period.
Preziosi said that the AAMT this summer helped place some of the roughly 100 U.S.-based medical transcriptionists that Heartland laid off. Fortunately, Preziosi said, the domestic demand for qualified medical transcriptionists is so great and the supply is so limited, "some of the transcription companies were offering sign-on bonuses there is such a shortage."
In August, SPi, a Nashville-headquartered unit of the Philippine Long Distance Telephone Company with a medical transcriptionist workforce based in the Philippines and India, purchased CyMed, Richmond, Va., with transcriptionists based mostly in the U.S., for $35 million, according to an SPi media statement. It is a sign of the times, according to Preziosi.
Offshore transcription companies "have the same challenge that we have in the U.S. of building scale," Preziosi said. Companies need to be able to take on large volumes of business quickly, he said, but "it takes a while to build up that capacity, and one of the challenges is that it's been so commodified, you don't have people investing in the continuing education and training and in the technology that you need. That's why I think you'll see more consolidation."
See Joseph Conn's special report on medical transcription Lost in Translation.What do you think? Write us with your comments at [email protected]. Please include your name, title and hometown.