National Nurses United

For California Nurses Association President Deborah Burger, RN, the consequences of outsourcing on care—and on jobs—may not be immediately obvious. But in time, the effects may be disas- trous, pointing to other industries that are "hollowing out" their infrastructures. "There is a growing concern about the outsourcing of nursing and medical procedures," she said. "The industry has not figured out all the ways to do this, but we are not totally immune to the potential drain of jobs in our profession." From Records to Radiology Outsourcing began in the mid-1990s with medical transcriptions, a $16 billion industry that is growing at an annual rate of 15 per- cent. In the old days, a doctor would write up a report and submit it to an insurance company. Now, just talk into a phone and the report goes off into digital cyberspace, to be downloaded to Eu- rope, Asia, or Latin America. But medical transcriptions were just the toe in the door. "Telemedicine" now covers (reader, take a deep breath) medical billing, accounting, creation of patient information, patient regis- tration, checking insurance coverage and eligibility verification, medical coding, insurance denial/rejection analysis, drug research and testing, analysis of digital lab slide images, creation of digital templates for prosthetics, and biopsy analysis. So far, "telemedicine" has not figured out how to take your tem- perature, but a Swiss company called LifeWatch can monitor your vital signs from a fair distance away. Telemedicine, it seems, is less about cutting-edge technology than it is about the cutting back on bucks. When Health Partners of Minneapolis sends a report to the Philippines, the information technology (IT) programmer works for one-ninth of what an IT programmer makes in the States. When medical billing specialists Alpha Thought axes a $10-an-hour job in Chicago, it ships it to New Delhi, and realizes a 25 percent savings. Some firms, like Cbay Systems of Annapolis, Md.—the fourth- largest medical transcription company in the United States—send virtually all their work abroad. Cbay outsources 95 percent of its transcriptions to India and is projected to earn $100 million in 2005. Since an American accountant can earn up to $4,000 a month and his Indian counterpart $400, it isn't hard to see where that $100 million comes from. Few politicians have challenged the collateral damage inflicted by outsourcing medical services like shipping sensitive patient in- formation abroad. Tennessee legislators recently enacted a bill that gives preference in awarding state contracts to data entry and call- center firms that agree to keep jobs in the United States. Some 30 other states are considering similar legislation, reflecting growing concerns over medical records and privacy. In California, SB 1451 was approved by the legislature in September 2004 but vetoed by Gov. Arnold Schwarzenegger. The bill would have provided priva- cy protection for patients whose medical records are outsourced. National legislation (HR 4366), introduced by U.S. Rep. Edward J. Markey (D-Mass.), would require a patient's approval before any such information could be shipped abroad. There is also a Senate bill (SB 2481) to restrict the U.S. government from offshoring med- ical records and jobs. However, since most hospitals and all med- ical firms in the nation are private, the bill skirts the real impact of the trend: job loss. Suresh Menon of HealthScribe, one of India's largest medical transcription companies, put his finger on the legislation's weak- ness: "Most hospitals in the U.S. are under private control and the bill does not seek to debar third-party U.S. contractors from out- sourcing work to Indian medical transcriptions." The legislation certainly hasn't overly alarmed the Indian mar- ket. Anand Mahindra, president of the powerful business lobby, the Confederation of Indian Industry, told the Asia Times that the legislation was "unfortunate," but its impact would be "small" be- cause U.S. federal contracts are a trifling part of the industry. Jobs To Go According to a study by Forrester Research, the United States will move some 3.3 million jobs offshore by 2019, jobs that translate into $136 billion in lost wages. U.S. residents are supposed to see a revival of jobs because of those sizable corporate tax cuts. In the drug industry, for exam- ple, Bristol Myers-Squibb, Merck, and Pfizer successfully lobbied for a tax "holiday" provision in the recent $137 billion tax reduc- tion bill: $100 billion in foreign drug sale profits will be taxed at 16 J A N U A R Y / F E B R U A R Y 2 0 0 6 C A L I F O R N I A N U R S E Feature Story To create lush landscaping for the Vanenburg IT Park (above), which leases "high-quality office infrastructure to offshore software development, global back-office and business process out- sourcing centers" according to its website, India's Andhra Pradesh state government is siphoning off desperately-needed water from farmers.

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