Teleradiology is the fastest growing branch of telemedicine. Teleradiology enables quicker disease diagnoses, improving patient health care through rapid and specialized assessment of medical data and images, including MRI, CT and ultrasound scans, among others. It is being increasingly outsourced to countries such as India, by healthcare providers in the US. Providers include hospitals of all sizes, physician/radiologist groups, nursing homes, clinics, and individual radiologists.

Heightened demand coupled with enabling technology is fueling industry growth

There are several reasons propelling increased outsourcing activity for teleradiology:

• Heightened demand for imaging services – The US features an aging population, one which is three times more frequent in the usage of imaging services, compared to the young population (according to utilization data by the American College of Radiology). This translates as a sharp increase in demand for diagnostic radiology.
• The opportunity costs for hospitals – According to RSNA news, radiologists on average bill anywhere between US$1.4-1.6 million in revenues for hospitals, meaning that hospitals can rarely afford to have staff vacancies, even temporarily. Apart from being central to medicinal practice, radiology services are a strong source of revenues for hospitals, one of the reasons why providers are considering outsourcing.
• Industry fueled by technology – Traditionally, medical data is transferred via the public internet, from a primary system, to a remote location. With greater adoption of web-based systems, teleradiology providers have also begun offering sans-software, internet based solutions for healthcare providers. The evolution of image compression/decompression technologies and server capacities has also facilitated the transfer of increased workloads over the last few years. Real time communication and collaborative workflows/reporting services are also made available by large vendors, through investments in technology.
• ‘Nighthawking’ – Due to the time zone advantage, Indian teleradiologists are able to cover for emergency cases in real time (with turnaround times as short as 10 minutes), and through different shifts, 24x7x365 services are made possible. The availability of teleradiologists means hospitals abroad can limit the assigning of night shifts to their staff, thereby saving on higher compensation requirements.
• Shortage of radiologists – Several studies in the US signal a severe shortage of radiologists to meet current demand. The US has 30,000 practicing radiologists, with as low as 2% additions each year to the talent pool. Shortages create bottlenecks in patient treatment and care, and are unacceptable in emergency situations for under-staffed hospitals.
• Availability of sub-specialists – Radiology sub-specialities (such as MRI radiology, neuroradiology, pediatric radiology) are on the rise. These experts primarily operate in metro areas, making it difficult for rural hospitals / smaller setups to have access to them, especially in emergency cases Teleradiology outsourcing offers a solution, by enabling remote diagnosis.

Why is it still niche?
The vendor base for teleradiology in India is currently very fragmented, and limited. There are over a dozen teleradiology companies, purely focused on this and related service lines, most of which maintain teams of less than 100. Apart from these niche KPO players, from the IT-BPO giants, only Wipro Technologies has made a foray into this market, through its ‘clinical process outsourcing’ solutions. Other contenders include large Indian hospitals, which are utilizing in-house radiology experts to service overseas hospitals. Significant consolidation can be expected over the next few years, as vendors fight for limited medical talent. There are only ~7000 registered and active radiologists, according to the IRIA. Coupled with this, radiologists in urban areas may not perceive employment at a BPO/KPO as a lucrative career option, compared to hospitals. There are more takers for part-time work, compared to full time employment at outsourcing firms. Scalability is a challenge due to these factors, perhaps steering away larger competitors in the last few years.

Steady industry growth predicted
While the US is the biggest market for teleradiology, opportunities are also arising from providers in countries such as the UK, Australia, and to an extent, Singapore. Strong revenue opportunities definitely exist for this niche service – industry experts claim that vendors could earn up to US$1,500 per scan (averages would be much lower), requiring no more than 45 minutes of a teleradiologist’s time. We believe that as the market for teleradiology grows (due to the reasons discussed above), and as the pioneering vendors establish a sustainable model, the vendor base will grow steadily and consolidate in the next few years. We expect niche healthcare KPOs to emerge, targeting healthcare providers with a range of related KPO service areas.

If you enjoyed reading this article, please watch out for next week’s issue - we plan to cover related healthcare KPO services, as a continuation of this week’s focus.

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