Medical Transcription

By Evelyn J. Graham

Can Industry Production Standards Work for

MEDICAL TRANSCRIPTION?

Industry standards have been widely used for years by word processing business owners. If applied to the medical transcription industry, these standards would be a measuring stick against which employers could evaluate medical transcription performance and MTs could track their career growth.

(Editor’s note: This article originally ran in the August 1998 issue of MT Monthly.)

RULER Fast forward to the year 2000. You’re sitting in your office and the phone rings. It’s the health information management (HIM) director of Big-Volume Hospital asking if you can transcribe about 1,000 minutes of dictation a day and, if so, what you charge. You tell the HIM director that yes, you can handle that volume for $0.xx per line of transcription or $x.xx per minute of dictation. Big-Volume Hospital’s HIM director agrees and asks if you can start in two weeks. You say yes and suggest a time to get together and sign the contract.

Wow! Wouldn’t that be great?

Why can’t it be that easy today?

It is! But you have to think “outside of the box.”

Industry standards have been widely used for years by word processing business owners. In fact, The National Association of Secretarial Services and Executive Suite Network is getting ready to publish the fourth edition of Industry Production Standards while we have struggled for years–unsuccessfully–to agree on an industry standard definition of a line. There is no quantitative difference between a line of word processing and a line of medical transcription.

Here’s how the Industry Production Standards can work for the medical transcription industry. The production standard for good quality medical dictation is 4.9 minutes of transcription for 1 minute of dictation (1:4.9 ratio). Applying this ratio to Big-Volume Hospital, the job will take 4,900 transcription minutes (81.67 hours). If a company hypothetically charges $25.00 an hour for basic services, then 1,000 minutes of dictation will cost $2.04 per minute (81.67 hours times $25/hour divided by 1,000 minutes).

But wait a minute. Big-Volume Hospital wants a price quote for a line of transcription. Well, that’s easy enough. The production standard is 10,840 characters per hour. Using the hypothetical hourly rate, the equivalent price per line is $0.1499 ($25/hour divided by 10,840 characters/hour times 65 characters/line).

OK, but we’re back to square one. What constitutes a line? Well, look at this page you’re reading. You can see printed characters and you can see spaces between the words, right? Now, count 65 sequential printed characters and spaces, and you will have one standard line. (The issue of format codes, etc., is addressed in Industry Production Standards, but space limitations here preclude a discussion.) But remember, there is no quantitative difference between a line of word processing and a line of medical transcription.

Meanwhile, back at the office your phone is ringing. The HIM director at Big-Volume Hospital wants to know if you can provide 12-hour turnaround time and weekend coverage. You explain that Industry Production Standards defines basic service as 24-hour turnaround time, five days a week. However, you can accommodate Big-Volume’s requirements for X-amount premium for 12-hour turnaround time and Y-amount premium for weekend coverage. You might even want to offer an incentive to do business with your company, such as not charging the Z-amount premium for after-hours coverage or offering a volume discount.

Invoice Samples:
For period 01/01/01 00:01 hours thru 01/14/01 23:59 hours @ D:T ratio 1:4.9 and transcription hourly rate $25.00.
Sample #1:
16,000 Dictation Minutes @ $2.04/min = $32,640.00
Sample #2:
1,306.67 transcription hours @ $25/hour = $32,666.75
Sample #3:
1,306.67 transcription hours x 10,840/65 @ $0.1499/line = $32,665.06

The definition of a line has been quantified, standardized and widely used for many years. In conjunction with the Industry Production Standards, each company sets its hourly rate and its schedule of non-standard premiums based on sound business pricing practices. Customers get full disclosure of equitable pricing that is readily comparable in the marketplace. Compare this to the medical transcription industry where prices are quoted almost exclusively by a line that has no industry-defined length and where customers have difficulty verifying invoices or comparing price quotes.

I submit it is not coincidental that, in the last 10 years, medical transcription prices have increased about 15 percent and the size of the line has increased about 35 percent, whereas word processing prices increased about 50 percent and the size of the line remained constant. I also submit it is foolish to compete on the basis of who-has-the-largest-line-for-the-lowest price. It’s hard enough recruiting qualified medical transcriptionists (MTs) when we are competing for the lowest price without the largest line component.

Finally, I submit that we are vendors of medical transcription services. We assume the costs and the risks of producing the end result–the medical record. Why, then, have our customers reaped the economic rewards of our production efficiencies and technological advances? Think about it.

What’s in it for the MTs? The Industry Production Standards are a measuring stick against which employers can evaluate medical transcription performance and MTs can track their career growth. Employers can set more realistic production expectations for MTs. As the MT’s speed and skills increase and his or her salary level increases, so should revenue to the employer.

I say it’s time for medical transcription service owners to adopt, industry-wide, the proven and well-established Industry Production Standards. What do you think?

Submit your arguments for or against the adoption of standards, and specifically industry-wide adoption of Industry Production Standards, to ADVANCE, 2900 Horizon Dr., Box 61556, King of Prussia, PA 19406-0956; HIMedit@merion.com. *

Evelyn J. Graham owns CMT Corp., in San Francisco.

To determine price per minute of dictation:
Evaluate dictation quality and select dictation: transcription ratio.
Multiply #1 by company hourly rate.
Divide #2 by 60 minutes.
To determine price per line of transcription:
Divide company hourly rate by 10,840.
Multiply #1 by 65 characters.

Industry Production Standards is published by The National Association of Secretarial Services and Executive Suite Network. The current publication, Third Edition, June 1995, can be purchased from the Association of Business Support Services International, Inc., 22875 Savi Ranch Parkway, Suite H, Yorba Linda, CA 92887-4619.

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