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Obama's healthcare plan may help Indian IT players

By SiliconIndia | Thursday, 15 October 2009, 19:37 Hrs | 6 Comments

Obama's healthcare plan may help Indian IT players

Bangalore: Indian IT services companies, who were depending on the recession-proof healthcare sector to tide over uncertainty, now seeing multi-billion dollar opportunities after Obama's proposed American Recovery and Reinvestment Plan.

It seems that U.S. President Obama will achieve a near-universal healthcare system, which has dramatically improved after a lone Republican Senator Olympia Snowe of Maine, prepared to vote with Democrats for a compromise proposal. This gives Obama a much better chance of achieving the 60 votes he needs to pass a Bill in the Senate.

The reinvestment plan, which proposes to create electronic health records (EHRs) for all Americans by 2014 with an investment of $20 billion, can open up new vistas of opportunities for Indian IT services firms including Infosys, Wipro, TCS and MindTree in areas of EHR implementations, upgrade, integration and interoperability-related works.

"Obama's stimulus plan proposes to allocate $150 billion to healthcare. Of this, nearly $20 billion is proposed for healthcare IT alone, most of which is expected to be spent on EHR. This allocation, as part of the American Recovery and Reinvestment Act, is opening up the healthcare IT market like never before. It is bringing in a host of opportunities for EHR vendors, healthcare IT service providers and hospital systems," says Rajiv Shah, Senior Vice-President, Healthcare Services SBU (strategic business unit), Wipro Technologies.

Apart from the EHR implementation and upgrade, the proposed Act has brought new opportunities for service providers to engage more closely with EHR vendors, which can open up more strategic partnerships and alliances.

"The Obama administration's healthcare plan will benefit not just Infosys but also many other Indian IT services companies. We see this as an area of significant opportunity for the future, and that is an area where we are investing now. IT will play a significant role in bringing down the healthcare costs as proposed under the plan," agrees Kris Gopalakrishnan, CEO and Managing Director (MD) of Infosys Technologies.

If the American Recovery and Reinvestment plan as proposed by Obama goes live, it will help hospitals to maintain a digital record of the patients. If a patient decides to change his/her healthcare provider, the hospital can easily share the EHR with the next healthcare provider, thus ensuring portability for the EH

The IT vendors will have to play a huge role in ensuring the EHR created by one provider is compatible with the IT systems used by another, in the absence of which there can be a loss of information. "Due to these fears, the patients might be restricted with regard to his choice for the right care. We are in a position to help build software to access the central database for doctors and hospitals," said Sridhar Perepa, GM, R&D, MindTree.

Traditionally, the healthcare industry was quite slow in adopting technology, a bottleneck in integrating various healthcare systems. However, defying the recent recessionary markets, the healthcare sector has remained quite steady in terms of investment, which has kept alive the hopes of most IT services firms with a little focus on the sector.

The U.S. presently suffers from a high-cost delivery healthcare model arising from high medico-legal compliance cost. The U.S. patient is paying for treatment based on process inputs, rather than outputs linked to benefits received. Analysts feel that the Obama administration's first priority will be to remove inefficiencies in the medicare delivery process, thereby reducing the cost of delivery. However, this may not directly benefit the Indian IT services providers, but opportunities will gradually trickle down in the form of long-term partnerships with the U.S. healthcare industry.

"As the U.S. healthcare system is generally well supported by tested technology platforms, the Obama plan on healthcare is, by itself, not likely to create significant new opportunities for the Indian IT industry in the normal course. However, if Indian technology players can build new solutions to assist the U.S. healthcare industry to prevent leakages, improve efficiency, reduce the cost and wastage, and transform the core process of delivery, then they have a significant opportunity," said Pradip Kanakia, Head of Markets and Healthcare Services, KPMG in India.

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Reader's comments(6)

1: Thanks to Mr.Obama for introducing a new plan. which would benefit all the people in U.S and to the INDIAN people.
-Provides job opportunity to INDIAN people and revenue to both the country.
-It provides,the work more smother to perform for the Doctors and for patient by less time consuming.
-errors will be reduced by Doctors in reports because it his visible by all the people.

hope it will be approved the U.S government.

Posted by:Balu Raju - 19 Oct, 2009

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2: It seems to be a great step by the US president,,and yes it will definitely help indian IT companies if they get this project to maintain EHR of the americans,it will open up opportunities for employees too..simply great

Posted by:ashish gautam - 16 Oct, 2009

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