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Spiralling costs for outsourced medical transcription puts pressure on strained health budgets, says HEU

News release
February 25, 2013

The cost of outsourcing medical transcription services in the Lower Mainland has increased by an average of 26 per cent a year over the last five years, according to financial documents produced by health authorities.

Yet despite the high costs of outsourcing, these same health authorities plan to completely contract out in-house medical transcription later this year and fire about 130 medical transcriptionists (MTs), who currently work directly for health authorities.

HEU secretary-business manager Bonnie Pearson is urging the B.C. government to reel in health authorities’ plans in order to control costs and protect patient services.

“Last Tuesday’s budget signalled a very tough year for cash-strapped health authorities and overstretched front-line health care workers,” says Pearson.

“But health authorities’ failure to manage costs of outsourced medical transcription puts other programs and services at risk.”

Providence Health Care (PHC), which manages transcription on behalf of all Lower Mainland health authorities, recently admitted that there was currently a “significant backlog” in medical transcription, despite massive outsourcing of the service.

“We have about 130 skilled and experienced hospital MTs working to full capacity with huge amounts of overtime to deal with the growing backlog of patient reports,” says Pearson. “And they also spend a lot of that time fixing errors by outsourced workers.”

HEU is also concerned about the accuracy and privacy of patients’ medical reports when transcribed by a network of home-based workers across the country, and recently asked B.C.’s privacy commissioner to launch an investigation into the matter.

Between 2007 and 2012, Lower Mainland health authorities’ outsourcing costs for medical transcription have increased from $1.7 million to $7.8 million. Currently, about 50 per cent of medical transcription volume is outsourced.

PHC recently signed a contract with private-for-profit M*Modal Canada to take over Lower Mainland medical transcription services.

Backgrounder

Medical transcription costs skyrocket by more than $6 million over five years

According to financial disclosure statements published by Lower Mainland health authorities and Providence Health Care (PHC), medical transcription outsourcing costs have increased by an average of 26 per cent a year over the last five years.

Annual increases in the volume of medical transcription have historically been in the range of 10 to 15 per cent, according to Providence Health Care, which manages the service on behalf of other Lower Mainland health authorities.

PHC has announced plans to contract out all remaining medical transcription in an effort to save $3 million. This is part of a government-mandated consolidation exercise which is intended to shave $100 million from the budgets of Lower Mainland health authorities.

But so far, partial outsourcing of medical transcription has resulted in $6 million in additional costs to health authorities.

Payments made by Lower Mainland health authorities and Providence Health Care to Accentus Inc. and Expedite Transcription Services fiscal years 2007 through 2012

Fiscal Year ending Mar.31

Providence
Health Care

Fraser Health

Vancouver Coastal
Health*

Provincial Health
Services

TOTAL

Annual Increase

2007

$129,786.50

$360,555

$744,519.93

$425,667

$1,660,528.43

41.35%

2008

$252,040.49

$755,414

$1,116,601.20

$707,354

$2,831,409.69

29.10%

2009

$369,823.08

$1,011,235

$1,305,693.31

$1,307,023

$3,993,774.39

12.72%

2010

$588,422.95

$988,846

$1,455,525.13

$1,542,796

$4,575,590.08

26.91%

2011

$917,214.75

$1,419,324

$1,608,610.21

$2,314,707

$6,259,855.96

19.48%

2012

$1,367,506.85

$1,941,239

$2,002,234.17

$2,463,591

$7,774,571.02

41.35%

AVERAGE ANNUAL INCREASE: 25.91 per cent

Source: Financial disclosure documents posted by PHC and health authorities on their websites pursuant to the Financial Information Act.

*Vancouver Coastal figures include payments made to both Accentus Inc. and Expedite Transcription Services. All other health authorities and Providence Health Care include Accentus Inc. only.

Tags: MT, medical transcription services, medical transcription

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