North Carolina Blues plan outsources IT work overseas in pilot project

Blue Cross and Blue Shield of North Carolina (BCBSNC) in Chapel Hill for the first time will outsource some work overseas--and some people in the technology-focused state aren't happy. The state's largest health insurer has hired the Boston-based information technology company Keane Inc., to participate in a pilot project to extract and analyze data from its electronic data warehouses, reports the News & Observer. BCBSNC expects a Keane facility in India to conduct at least part of the project work, according to spokesman Lew Borman. BCBSNC wouldn't reveal exactly what the project involves or the terms of its deal with Keane.

BCBSNC has approximately 4,600 employees, primarily in the IT-heavy Research Triangle area of the state. The pilot project doesn't affect "any current jobs," says Borman. "But I can't speak to down the road." The insurer will evaluate the project results this summer to determine whether to keep it going.

The need to improve data management while cutting costs will force healthcare companies to consider outsourcing to global IT providers due to the significant cost differential, says Jim Johnson, a professor of strategy and entrepreneurship at the University of North Carolina's Kenan-Flagler Business School. For example, the average annual IT salary is about $20,000 in India vs. $80,000 in the United States.

However, the state shouldn't allow BCBSNC to export jobs overseas given the still-dismal North Carolina economy, says Dana Cope, executive director of the State Employees Association of North Carolina. Cope has been a vocal critic of BCBSNC's dominant position in the individual health insurance market, as well as how much money the company earns administering the State Health Plan for state employees and their dependents. Cope has forecast a $400 million to $500 million deficit for the State Health Plan in 2011 or early 2012 and wants BCBSNC to share responsibility for getting the plan fiscally solvent.

To learn more:
- read this News & Observer article
- read this WRAL-TV report

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