What Is Medical KPO?

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  • Written By: Terry Masters
  • Edited By: Allegra J. Lingo
  • Last Modified Date: 19 October 2019
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Medical knowledge process outsourcing (KPO) is the transfer of responsibility for skilled medical tasks to third-party consultants, typically located offshore. Tasks that have been successfully outsourced internationally include coding, transcription services, and certain types of testing. The biggest markets for these services is the healthcare industries in the US and UK. Medical KPO service firms hired by medical companies and healthcare institutions are typically located in countries that have skilled, English-speaking workforces, such as India and the Philippines.

The healthcare industries in countries with high standards of living have experienced an increasing demand for services in the first decade of the 21st century as a result of the aging of growth spurt generations. While the supply of doctors has been steady, the numbers of skilled technicians available to handle the wide array of tasks associated with medical testing, billing, and recordkeeping has not kept up with demand. Medical KPO attempts to address the need for credentialed technicians by outsourcing these tasks to developing countries with favorable exchange rates, educated English-speaking workforces, and wage scales that are much lower than the industry standard in the home country.


Outsourcing unskilled jobs to foreign countries in the manufacturing industry, known as business process outsourcing (BPO), is an established part of the corporate operational toolbox. KPO applies BPO strategies to outsource jobs that require specific knowledge and credentials. Advances in communications technology and Internet connectivity have made it feasible for a hospital, for instance, to rely on remotely-located expert technicians in its administrative and diagnostic process chains. It is no longer necessary for a technician to be located where the data collection takes place. Data files can be accessed from anywhere in the world and work conducted that updates to the hospital system in real time.

Medical KPO can include administrative or diagnostic projects. The healthcare industry has had the most success outsourcing administrative tasks, such as medical coding. Coding requires a trained expert to determine the appropriate billing codes that can be applied to a doctor's diagnosis of a patient. This is a relatively discrete billing-related task that does not directly affect patient care.

Diagnostic projects, conversely, directly impact patient treatment. Examples include outsourcing the interpretation of x-rays, processing tests in areas such as oncology and genetic profiling, and providing innovative services such as telemedicine, where some diagnostic services are conducted over the phone or Internet. Outsourcing these sorts of projects offshore has been less successful overall. While medical KPO can be cost effective and efficient in theory, the practice of exposing patient information to workers in foreign countries raises privacy and reliability concerns and increases legal exposure through the perception that medical processes that are outsourced offshore are cheaper and of lesser quality than comparable services provided by workers trained in the home country.


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