Medical transcription firms go through rough patch

By Chupsie Medina
INQUIRER.net
First Posted 09:04am (Mla time) 06/25/2008

MANILA, Philippines -- If there is one business that has been relatively spared by the tripling of crude oil prices and the consequential runaway costs of almost all other commodities including rice and similar food grains, it is the medical transcription industry.

“People -- and Americans are no exception -- still get sick,” says Mila San Juan, managing director of Med Script (MS) Corp., a medical transcription company with its manpower operations center in the country, but with networking relationships in the US.

American doctors and medical care facilities continue to rely on medical transcription as an enabler of public health and safety, requiring patients’ health records to be digitized for easy referencing.

Unmindful of the economic crisis brought about by the multi-billion dollar credit collapse of its housing sector, the demand for medical transcription services in the US continues to grow at double digit pace, last estimated at 18 percent yearly.

With pressure to reduce costs and in view of an aging profile (and decreasing number) of Americans providing onshore medical transcription services, the growth of outsourcing in offshore service firms, particularly India and the Philippines, has gained even more popularity.

And yet, the Philippines does not seem to be taking advantage of the opportunity.

Med Script was founded four years ago on the assumption that Filipinos can compete and grow in such a fertile environment. “The demand is undoubtedly there,” says San Juan.

However, growing the business is a totally different ball game, and Med Script’s experience is no different from the many that had joined the industry hoping to cash in on the boom.

From the hundreds of companies that had been formed during the boom years of the early part of the decade, “only a handful have survived,” San Juan says. Many of those that did not make it were third-party subcontracting operations that operated less than 50 seats.

Being dependent on the industry’s big firms for jobs did not assure continuous cash flow that was necessary to cover the day-to-day operations. With also a smaller profit share on every line that is transcribed, many lasted just months.