Is Medical Transcription Really a Commodity?

Vol. 14 •Issue 17 • Page 20
Is Medical Transcription Really a Commodity?

Or do price wars make the industry a slippery slope?

Is commodity a bad word? When used in reference to medical transcription, most would say yes.

Commodity is commonly used when speaking of oil and gas, grains and soybeans, livestock, cocoa, coffee, sugar, industrial and precious metals, and wood products. Do any of these items resemble a medical record?

No, and in fact the definition of “commodity” doesn’t seem to give justice to the medical transcription field.

Merriam-Webster Online defines commodity as:

1. an economic good: as a: a product of agriculture or mining, b: an article of commerce especially when delivered for shipment “commodities futures” and c: a mass-produced unspecialized product

2. a: something useful or valued, b: convenience, advantage

3. obsolete: quantity, lot

4. one that is subject to ready exchange or exploitation within a market “the sensitive female singer-songwriter as a viable pop commodity–Elysa Gardner”

So how has this word been recently thrown around in reference to medical transcription?

The Different Theories

Skip Conover, president and founder of CBay Systems, bluntly responded, “There’s no chance that medical transcription is a commodity. Every product is different.”

He explained that he feels some people have made this issue a self-fulfilling prophecy by talking about it and therefore it becomes an issue.

“I believe medical transcription is being talked about as a commodity item, because someone somewhere got confused about what a commodity item is,” he explained. “As a result, other people picked up the idea of commodity and started talking about it and those people are also confused, because medical transcription is as far from being a commodity as anything.”

“As health care costs continue to soar throughout the nation, it has been convenient for the hospital execs to treat us as a commodity,” Kim Buchanan, CMT, FAAMT, AAMT president-elect, explained as her reasoning behind the recent debate. “When only considering what medical transcriptionists (MTs) produce at face value and not factoring in that MTs are the first line for risk management and the foundation for the revenue cycle, it’s easy to see the paradox.”

Buchanan explained to ADVANCE that part of the problem is that the other health care providers haven’t recognized the full worth MTs bring to the table.

“Everyone makes mistakes, including doctors who work 60-hour work weeks and dictate at midnight after surgery,” she assured. “We’re here to help them as patient safety advocates and make sure everything’s accurate. I think that’s our most important role. Promoting our value to the health care community and society at large, especially as we advance toward an electronic health environment, will go along way to help dispel the notion of medical transcription as a commodity.”

Products are usually perceived as a commodity, a service is rarely seen as something so expendable.

Dave Woodrow, DSG Inc., agrees and stated that when dealing with a service, in this case the service being medical transcription, “I think it’s a sad day when the hospital admits to their customer (the patient) that they view documentation of their patient care as a commodity,” he explained.

He feels that such a facility is basically saying that anyone can be a medical transcriptionist, and that a hospital is accepting to pay commodity prices and contract using commodity strategies. “That takes us into the world of commodity, and I don’t think anyone could disagree with those descriptions of what a commodity is, what occurs and how it’s perceived,” Woodrow declared.

The Flip Side

Timothy Stack, CEO of Piedmont Medical Center, Atlanta, disagrees. When speaking to ADVANCE, Stack wanted to make clear that he does not feel “commodity” is a bad word.

“When I was speaking at the Medical Transcription Industry Alliance 2004 Conference, I was concerned because I could tell they still thought of themselves as a special niche. But that business has changed and if you think about it, it has gone from a mom and pop type of business to franchises,” Stack explained.

He equated the evolution of the medical transcription field to the smaller, corner pharmacies becoming a CVS or Eckerd. “The same thing happened with the small medical transcription shops; a lot of them were aggregated to hopefully bring efficiencies to the service and a common platform,” he said.

Stack also mentioned that when he looked “commodity” up in the dictionary it defines it as something useful. Obviously Stack is referring to the second definition given by Merriam-Webster.

“I only wish the medical transcription industry success. I represented MedQuist for a period of time and spent time on the board for three or four years in the ’90s. I know that the work MTs do is valuable. And a commodity is something useful, that’s how I look at it,” Stack explained.

He feels that it’s the evolution of business, “From a small business to a big business, and then to a business that has tremendous competitors that aren’t just national competitors, but world competitors.”

Who’s at Fault?

And those world competitors Stack refers to are the offshore transcription companies.

“I don’t think anyone’s responsible, it’s just the advancement of technology,” Stack assures.

But does it also have to do with the involvement of offshore companies?

A U.S. MT’s gut reaction would be to blame the overseas industry, but Conover has a more detailed explanation.

“I think that people have confused the idea of offshore transcription and the way it’s used,” he assured. “But I do concur that there have been some companies in India that talked about medical transcription in a very generic way, when in fact it’s not.”

Conover explained that since 1998, 640 companies started in India and about 500 of those companies went out of business because they didn’t understand the industry. “It was much more complicated than they expected,” he stated. “Fortunately, we work in an industry that is self correcting with respect to what is good and what is bad, what is fungible and what is not. Ultimately, this process will cause the idea of transcription as a commodity to disappear, with only the providers of high quality surviving.”

Woodrow realizes that offshore is here, and it’s a reality. “My problem with offshore isn’t that it’s done there, but it’s that their business models lend to this issue of a commodity.”

He feels that if the offshore companies continue to advertise that they offer four cents a line when they haven’t even asked the customer what their needs are, they’re adding to the image of a conveyor belt system.

Buchanan agrees that the price war with offshore companies certainly adds to the commodity trend, but that the marketplace is driving commoditization.

“I understand the realities of the environment we work in. There is a definite push to get more lines out in less time and for a lower cost, and I’m concerned about the potential for quantity to overrule quality,” admitted Buchanan.

She would love to see the industry go to an hourly rate of pay with a lower line count requirement, and then maybe have incentives based on line rate. “That’s how a lot of hospitals pay and personally, that’s how I wish the whole business paid, because I think the piecemeal way we do it makes it difficult to focus on quality,” Buchanan explained.

What Is the Business Person to Do?

When prices are in competition, rather than quality—it’s hard to know what’s the best business decision.

Stack assures that no one in the health care field looks at buying a low quality item. “I think we expect high quality and safety. It’s an expectation that we have in this field with whatever service we buy,” he assured.

But how can high quality and safety be assured?

Stack suggested to, “First, go through each company’s references. Check who they’ve worked with and where. And second, place those restrictions you feel necessary on the company up front. If you don’t want the work going overseas, get it in writing.”

But Woodrow still feels that the business is run by the lowest price, and he wants to know how a responsible business person can compete in that kind of market.

“MTs want to know why they’re not making more money. It’s because profit margins are down, technology costs are up, HIPAA costs are way up and it leaves you in a bad situation when you try to have those conversations with the CEOs, CFOs and CIOs of the world,” he explained.

Woodrow’s one suggestion is to educate the customer.

Buchanan agrees and feels the American Association for Medical Transcription (AAMT) can help educate. “We spent the first 25 years trying to convince our MTs that they’re not a commodity. I think we’ve made some progress, but I also think we’ve decided that it’s time to stop singing to the choir,” she explained. “We need to start educating the world at large.”

Woodrow feels AAMT should embrace the opportunities in India. “They should be helping to train the employees in India and accepting the evolution of the industry. If they did that, we would have professional and cultural bridges that would allow U.S. companies to hire qualified professionals worldwide,” he stated.

And Buchanan reminded that on top of high quality, safety and prices, health care has to remain personal as well. “We have to get people to see that it affects everybody. Anybody who has a medical record is impacted by this mindset that medical transcription is a commodity. So they need to put themselves in the equation.”

Tricia Cassidy is an assistant editor at ADVANCE.