Sunday, May 13, 2001

By Tim Knauss

When a doctor at Internist Associates of Central New York dictates notes about a patient, the words are converted to data, encrypted and sent some 8,000 miles across telephone lines and undersea cables to southern India.

There, in Cochin, a port city near the equator, a medical transcriptionist listens to the recording and types it up. By the next day, in most cases, the written version has been transmitted back to Syracuse, where it is printed and placed in the patient's file.

All this takes about half as long as it did when Internist Associates sent the recording to be transcribed by a local service, said Jan Abbott, director of clinical services at Internist Associates.

"We had a significant problem with the turn-around time before," she said.

The overseas medical transcription is provided by a subsidiary of Spectrum Software Solutions, a small family-owned company in Salina that is doing what it can to make the world a smaller place.

Frank Kunnumpurath, 36, an accountant and entrepreneur, founded Spectrum in 1995. He recruited software consultants from India to work temporarily at American companies, such as Welch Allyn and Corning. As technology improved, Spectrum found ways to send some of the work overseas, to the worker.

With a dozen employees in Salina and about 125 in Kunnumpurath's hometown of Cochin, Spectrum derives a little more than half its revenue from services such as software programming and medical transcription that are performed in India for U.S. clients. The company also employs 14 home-based medical transcriptionists in Central New York and nine software consultants working at U.S. companies.

"In the past, most of these things needed to be done here," Kunnumpurath said. "Physically, the people needed to be here. The Internet took away that kind of requirement."

Spectrum is not alone in tapping India's labor market, which The Economist recently called the "back office to the world." India expects huge growth in its exports of cyber-based services to North American companies.

In a recent study conducted for the Indian government's information technology ministry, Stevens International Consulting of Florida predicted that India's exports of IT-enabled services will grow from $264 million in 2000 to some $4 billion in 2005.

Medical transcription is a big part of that trend, second in importance only to call centers. India has developed a work force of some 10,000 transcriptionists in just the past few years. They did about $30 million worth of work for American medical practices last year, Stevens reported.

Michael Stevens, the consulting company's managing director, expects the number to reach $800 million by 2005.

Call centers have been popping up in India ever since GE Capital Services opened one in 1995. Last year, check printing company Deluxe Corp. cut 90 data-entry jobs from its Syracuse operation and shifted the work to India.

If he finds the right corporate client, Kunnumpurath plans to open a call center in Cochin to provide customer service or technical support for U.S. customers.

The reason for all this is simple: India's work force is large, literate, English-speaking and paid a lot less than America's.

"When we talk about global trade, it is all about labor arbitrage," Kunnumpurath said, referring to the business practice of buying cheap in one market to sell dear in another. "That's all it is."

A medical transcriptionist makes about $450 a month in India, on average, compared with $2,200 here, Kunnumpurath said. Much of that difference is eaten up by higher telecommunications costs, lower worker productivity and other disadvantages of doing business in India. Nevertheless, Spectrum saves about 40 percent on each transcriptionist it employs in India, Kunnumpurath said.

But the incentives to use Indian labor go beyond simple wage comparisons, said Michael Stevens, the consultant to India's government.

Indian companies have much lower employee turnover rates than their American counterparts, even for clerical jobs, he said. American call centers, for example, often replace 80 percent of their employees each year, he said. Indian turnover rates are closer to 10 percent.

Stevens predicts that India's productivity in medical transcription will improve rapidly. Today, the average Indian employee transcribes 400 lines a day, compared with 1,000 lines for U.S. workers. By 2005, as the Indian work force matures, Stevens expects productivity there to reach 750 lines per day.

"India's significant advantage, I think, is the educated people and the value addition they can bring," Stevens said. "More and more, people are going (to India) not so much because of cost but because of these other intangible factors."

There are about 250,000 medical transcriptionists in the United States, said Bonnie Bakal, president of the American Association for Medical Transcription. The AAMT is neutral on the subject of exporting transcription overseas.

"Some of the people who have been in this business a long time are very protective of it going anywhere," she said. "And then there are others who think we need some help."

In many areas of the country, the amount of work is growing faster than the number of people to do it, Bakal said.

"I think there's enough work for everybody," she said.

Kunnumpurath, who is a U.S. citizen, grew up about 15 miles outside Cochin, a city with a long history in the spice trade. His father and grandfather were wholesale grocers.

After three years of college in India, Kunnumpurath went to Rutgers University, where he studied accounting and finance. He worked at financial institutions while his wife, Ancy, a doctor, completed a medical residency at Rutgers.

In late 1996, Ancy took a job as physician at Community Medical Group in Mattydale. Frank moved his business from New Jersey to Salina in 1999.

When Kunnumpurath decided to start a business in 1995, his first effort was to develop a software program to enable people to file their taxes over the Internet. Because of concerns at the time about Internet security, the venture quickly fizzled.

Meanwhile, a boom was under way in information technology, and Kunnumpurath's proGrammars were being recruited by headhunters.

He decided to go into the software consulting business, placing professionals on-site at companies and doing project work off-site for others. Eventually, Kunnumpurath began sending some of the software projects to India, where his proGrammars completed them and sent them back to the client by e-mail.

Bill Wittreich, managing partner of GraphicVision in Denver, Colo., said he's never met Kunnumpurath or the Spectrum proGrammars who developed facilities management software for his company.

"I've never met those guys, but I've been very happy with them," he said.

Spectrum's "off-shore" programming required a robust Internet link to Spectrum's office in Cochin. Because he was paying for the link, but not using it all the time, Kunnumpurath launched an Internet service in India to use the extra bandwidth.

Spectrum added medical transcription to its services last year, after buying a Central New York transcription service called Word For Word. Ancy Kunnumpurath, who at first questioned whether a service based in India would work, eventually bought into the idea. She decided to leave her medical practice and head up the transcription service, which does business under the name SpectraMedi.

Besides serving American clients, the Indian side of the Spectrum business, called Spectrum Softech Solutions and owned by Kunnumpurath's mother, does a fair amount of business in India. Its Internet service has nearly 3,000 subscribers, mostly businesses.

The company also does programming and Web development for Indian clients. Spectrum Softech is vying for a major contract to create an online version of the pepper exchange in Cochin.

But over the long term, Kunnumpurath sees the greatest growth prospects for his company in the United States.

He is on the verge of launching a Syracuse-area Internet service called Aboutcny.net. In addition to services such as Web design and hosting, Aboutcny.net will offer dial-up access beginning at $30 for 100 hours a year.

Programming and e-mail technical support for Aboutcny.net will be provided from - where else? - India.

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