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Cambridge UK, 9th October 2003: In the early 1990's demonstrations of ehealth applications usually involved an x-ray being transmitted from a remote part of the developing world to a hospital in Europe or the USA. A clinician would eagerly relay a diagnosis to the patient's local hospital. These systems were unsustainable and collapsed when funding dried up. However, soon, the flow of x-ray images could be in the other direction - from hospitals in the west to diagnostic centres in the developing world. While, this time, the business case is sound clinicians are less enthusiastic.

A report by Cambridge based ehealth consultants, Wireless Healthcare, points to a number of key drivers it believes will bring about an increase in the use of outsourcing within the healthcare sector. However it also warns companies they face significant resistance from clinicians, health service management and, in some cases government departments. This will be especially true where clinical processes are relocated overseas.

While clinicians fear outsourcing will lead to a loss of skills within the UK, Wireless Healthcare suggests that cost savings would free up resources and allow the NHS to concentrate on core competencies such as surgery. At present surgery is being outsourced from overseas as patients arrange their own operations in other European countries.

Wireless Healthcare warns outsourcing companies not to play down the low cost of their services in the hope of overcoming resistance from clinicians. Claims by outsourcing providers that they are merely exploiting their geographic location to provide services out of UK working hours are unlikely to placate the fears of health workers who are well aware of the impact of outsourcing on the IT sector. At the same time understating potential savings will discourage potential early adopters of offshore outsourcing within the private healthcare sector.

The report suggests that outsourcing companies may also face a degree of resistance from the government. As one of the largest employers in the UK, the NHS is a useful tool for channelling government spending into the economy. Spending on the health sector finds its way into other sectors of the economy well within the four-year electoral cycle. It is therefore in the government's interest to forgo the savings (estimated to be up to 40%) of outsourcing work overseas and, instead, bring health workers to the UK where the bulk of their wages are spent within the UK economy. The NHS recently decided not to include a proposal, from the India based outsourcing company Wipro, in its current IT planning.

There is, according to Wireless Healthcare, a compelling argument for offshore outsourcing in that it provides access to a large number of people of working age in countries such as India - where the demographic profile is the mirror image to that of Europe.

Wireless Healthcare believes the impact on countries providing outsourced healthcare will be neutral. At first sight outsourcing appears to offer an alternative to the wholesale recruitment of medical staff by the NHS. However medical workers employed in diagnostic centres run by outsourcing companies are just as inaccessible to local patients as medical staff who have moved overseas. The report, does though, point out that both direct recruitment and employment within outsourcing companies will encourage young people to train for a career in medicine which in turn will increase the pool of medical workers available to local health providers.

The report predicts that in the long term pressure from a growing number of retired people for lower cost healthcare will force the government and the NHS to seriously consider outsourcing. At the same time a number of private health initiatives built around outsourcing may gain popularity and bring about a 'creeping privatisation' of the UK healthcare sector.

According to Peter Kruger, a senior analyst with Wireless Healthcare, "In a globalised market it matters little where in the world a product or service is made available, eventually it will find a channel to the consumer. Healthcare seems to be one of the last sectors of the economy to wake up to this fact."

Wireless Healthcare sees an analogy between outsourced manufacturing of consumer electronics and outsourced clinical processes. As Peter Kruger points out. "Just as the widespread ownership of personal computers was made possible by low cost electronics manufacturing in the Far East so universal access to medical services will become increasingly dependent on clinical processes outsourced from offshore medical centres."

Wireless Healthcare ( is a UK based consultancy specialising in mobile healthcare and the development and management of ehealth projects.

The report, "eHealth - Unlocking The Outsourced Healthcare Market."

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