Should insurers outsource clinical services?

Outsourcing certain administrative services has proven successful for health insurers. Some companies, including WellPoint, are starting to send even more business functions overseas in hopes of saving more money.

The second largest health insurer has begun outsourcing clinical services, including pre-service nursing programs that help patients assess their needs and determine treatment methods, to countries like India and the Philippines, the Los Angeles Times reported.

WellPoint's "sourcing strategies have enabled us to make our services more effective, accessible and affordable to our customers, while allowing us to expand our programs and maintain our service levels," spokeswoman Kristin Binns told the Times. But she clarified that employees overseas do not make decisions about denial of procedures or treatment.

In 2010, WellPoint formed a separate business unit called Radiant Services to help advance outsourcing various services, including laying off pre-service nurses in Colorado and Nevada and transferring those jobs to Manila. Since creating Radiant Services, WellPoint has since eliminated thousands of jobs in the U.S., dropping its total employment from 40,500 to 37,700.

However, Binns said that fewer than 2.5 percent of WellPoint's current 37,000 employees have lost jobs because of outsourcing, and only about 50 of the eliminated positions involved clinical management of care.

Although WellPoint is sending some clinical jobs offshore, Binns said it's a small part of its overall outsourcing program, which affects multiple departments and functions involving claims, enrollment, billing, post-service clinical claims review, utilization management and pre-service nursing.

But WellPoint isn't the only insurer beefing up its outsourcing. Aetna has an arrangement in place with EXL Service, a U.S.-based company with operations in Manila, to provide "targeted care-management support," spokeswoman Cynthia Michener told the Times.

Health Net has been farming out administrative and IT jobs to other countries. It recently laid off dozens of IT and accounting employees to outsource those jobs to India.

Blue Cross and Blue Shield of North Carolina (BCBSNC) also has outsourced some IT functions, including contracting with a U.S.-based company with facilities in India to extract and analyze data from its electronic data warehouses.

"People are looking at all the tasks that can safely and responsibly be moved," said Kaveh Safavi, head of the North American health practice for Accenture, which has partnered with WellPoint's Radiant. "It's still an emerging market. We're still trying to understand the market's tolerance for it."

To learn more:
- read the Los Angeles Times article

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