Obamacare a blessing to PHL’s BPO industry

A new United States law enabling more Americans to obtain health insurance is expected to further boost the booming business process outsourcing (BPO) industry in the Philippines.

“We have high hopes that Obamacare will drive new demand for health insurance-related business support services that may be readily provided by BPO firms in the Philippines,” said House Deputy Majority Leader Roman Romulo.

Obamacare refers to the US Patient Protection and Affordable Care Act, which will allow an additional 30 million Americans to get hold of health insurance.

As a result of the new statute, US health insurers will have to manage and process millions of new policies and claims, according to Romulo, a key backer of Manila’s BPO sector.

“This will surely translate to increased business opportunities for BPO firms in the Philippines, particularly those providing back office services to US-based insurers and healthcare facilities,” Romulo said.

He cited the case of multinational BPO provider Exlservice Holdings Inc., which is expanding its Philippine operations by putting up a third delivery center in the country.

New York City-based Exlservice said it intends to establish a new 500-seat facility in Cebu by the first quarter of 2013, amid the growing demand for healthcare and insurance-related support services from US-based clients.

In a regulatory filing, US NASDAQ Stock Market-listed Exlservice said the extra operation will reinforce its two existing delivery centers in Pasay City that have a combined 1,800 seats.

Exlservice’s two centers at the SM Mall of Asia are staffed by college-educated, fluent English-speaking Filipinos performing multifaceted insurance and healthcare business support functions.

These include claims processing, premium and benefit administration, agency management, account reconciliation, policy research, underwriting support, new business processing, and policy servicing.

Romulo also cited medical data transcription, a component of the BPO and information technology (IT)-enabled services industry in the Philippines, as another potential beneficiary of Obamacare.

“With a greater number of Americans enjoying health insurance, US hospitals, clinics and outpatient service providers will have to look after more patients,” he said.

Only recently upheld by the US Supreme Court, Obamacare provides subsidies and tax credits to American employers and individuals, among other mechanisms, to quickly expand health insurance coverage. It also mandates reforms to simplify and cut down the cost of health care in America.

Romulo is author of the new Data Privacy Act of the Philippines, which is anticipated to further encourage global corporations to either establish in-house back offices in Manila, or relegate their non-core, business support activities to independent BPO firms operating here.

The new Philippine law commands all entities, including BPO firms, to protect the confidentiality of personal information collected from clients and stored in IT systems, in compliance with rigorous international privacy standards.

The Philippines’ highly labor-intensive, IT-enabled services industry encompasses contact center services; back offices; medical, legal and other data transcription; animation; software development; engineering design; and digital content.

The industry is projected to produce $27 billion in revenues and directly engage some 1.3 million Filipino workers by 2016.

This year, the Business Processing Association of the Philippines sees the industry generating $13 billion in revenues on a labor force of 764,000.

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