Offshoring of healthcare services: the case of US‐India trade in medical transcription services

The issue of offshore outsourcing of healthcare services is a critical but little‐examined problem in healthcare research. The purpose of this study is to contribute to filling this void.

A library‐based study was carried out of the development of the Indian medical transcription offshoring industry.

Cost‐saving potential and the degree of outsourceability are higher for medical transcription compared with most services. Offshoring experience, typically in a low‐value BPO, helps to enhance productivity and international linkages required for the success of medical transcription.

An important area of future research concerns comparing India's factor endowments in medical transcription outsourcing with other services. Further research is also needed to examine how India differs from its regional competitors in terms of factors endowments associated with these services. Another extension would be to investigate the drivers of offshoring of higher value services such as radiological readings.

ICT infrastructures needed for outsourcing require much less investment compared with leading capital‐intensive industries. The development patterns of the Indian medical and offshoring industries indicate that India may attract higher skilled medical functions in the future. The Indian offshoring industry is shifting its focus from BPO to knowledge process outsourcing (KPO). Developing countries need to shift to greater automation and greater levels of skill training to retain and reinforce their comparative advantages.

This paper's greatest value stems from the fact that it examines the drivers of a new but rapidly growing healthcare industry.