The TriZetto Group is beefing up its business process outsourcing services in the wake of an analyst's report that more health plans are turning to BPO services.
The Greenwood, Colo.-based company, which provides healthcare IT services to payers, has reportedly purchased all of the voting stock of Tela Sourcing, Inc., a privately held, Baltimore-based provider of BPO services with extensive operations in India.
"Tela Sourcing has been a key supplier for us for about five years for our BPO business," said Mike Jenner, TriZetto's executive vice president who leads the company's services business. "This is a significant growth business for TriZetto and an area that will see significant growth because of healthcare reform."
TriZetto officials said the Tela acquisition nearly doubles its number of BPO customers to more than 70, while also allowing for significant cross-selling opportunities to roughly 350 payer customers that are already using TriZetto's IT offerings.
"We think it makes sense that many of our software customers will also want end-to-end services that we can offer with our BPO services," Jenner said. "Tela represents a significant expansion of both the range of BPO services we can offer, as well as increasing our capacity and flexibility to blend on-shore and off-shore capabilities to fit customer needs."
Fueling the drive toward BPO services are a number of research reports published over the past couple of years, from the likes of IDC Health Insights and analyst firm NelsonHall, indicating payers' increased use of BPO services will lead to double-digit compound annual growth rates for the next few years. A January report by Gartner analyst Maureen O'Neil, titled "BPO Gives Health Insurers the Opportunity to Shine Competitively," served to confirm this trend.
"Interest by health insurers in business process outsourcing (BPO) services blossomed in 2009 under the shadow of an economic downturn, demands for increased regulation and a renewed focus on healthcare reform," O'Neil wrote. "To remain competitive in such a challenging environment, health insurers need new business and IT approaches that provide competitive differentiation, superior financial performance and regulatory compliance. Against this backdrop, BPO is becoming a key strategic option among many U.S. health insurers."
One of the biggest factors leading U.S.-based payers to use BPO services is the pressing need under health reform to control and reduce administrative costs, while also providing the services required to expand health plan offerings.
"In today's environment, outsourcing is a strategic choice made by payers to help contain premiums, improve customer service and increase administrative efficiency," said Brij Sharma, Tela's CEO, who will lead TriZetto's combined BPO operations. "We have worked with several TriZetto clients. The combined TriZetto BPO team will now have more than 700 professionals in the U.S. and India, dedicated to delivering business rules configuration, front-end claims administration, enrollment and billing solutions that meet the business and operational needs of health plans and TPAs. Together, we will have a world-class, industrial-grade end-to-end BPO capability that can provide the flexibility, capacity and cost efficiency to meet a wide range of customer needs."