Thursday, July 9, 2009

The Future Of The Transcription Industry

Recently, my company has been trying to figure out what to do about the fact that the speech recognition software they rolled out 9 months ago has been dismally inadequate (like everyone — except management and their enablers — predicted). Management predicted a 50% increase in work production (and correspondingly cut remuneration by one third), but an employee-initiated study showed that the increase from using speech recognition was only around 15%. So far, management's response has been "clap louder". However, the workforce is definitely clamoring for a change. I doubt that they... we... will get it though; not for a while at least. Not until enough people quit and work doesn't start getting done.

I know some people think that India will eventually take all medical transcription work, but it won't. There may be 1 billion people in that country, but (1) how many of those people speak English at least as well as you or I do, and (2) how many of those people will choose medical transcription as their source of income instead of call center, or programming, or engineering, or teaching, or any of the other hundreds of job opportunities being brought about by our wired world? Not enough to replace tens of thousands of Americans. And, as Thomas Friedman said in his book "The World Is Flat": Indians don't want Americans to make as little money as they do; they want to make as much money as Americans do. Finally, like I said here, the number of medical facilities requiring electronic medical record services is going to skyrocket in the next 5 years, and it is going to be native English speakers (i.e. Americans) who will be meeting that massive demand... but only once it starts paying a livable wage again.

The problem, I've noted to coworkers, is with the marketing departments of the medical transcription industry: They are currently unable to explain to hospitals and other medical facilities that providing medical record services costs a certain amount... especially when those hospitals know what Indians are getting paid. They can't explain that there aren't enough talented Indians to do all the work; they can't explain that some dictation is too difficult for Indians to ever do. Since they fail to convince clients that a certain amount of money is necessary to provide this service, they go ahead and contract for a lower rate, and then look for ways to cut operating costs... speech recognition being the foremost attempt.

There really are only one of two possible outcomes (with outsourcing, as noted above, being unlikely): One, either transcription companies start charging their clients the actual value of the service they provide, and hospitals agree to pay it; or two, that hospitals start doing medical records in-house, and convince doctors to use on-the-fly voice recognition instead of transcription services, thereby increasing the time doctors spend dictating (and editing and correcting) their own medical records... something which is possible, although (as any doctor will tell you) the time doctors spend on administrative work is already a big complaint and opportunity cost among medical professionals. Physician assistants and nurses could be assigned to do this work, but again in terms of real and opportunity costs alike, this may not be any more cost effective than using a transcription service.

So, overall, I think that eventually (with (1) underpaid transcriptionists leaving the industry... at least temporarily, with (2) Indians being too few in number and likely to start demanding more equitable pay in the future, with (3) medical professionals generally being unwilling to shoulder the time and responsibility for medical record production, and with (4) the upcoming boom in demand for electronic medical records) although American medical transcriptionists are having a rough time now, the inequities currently being experienced will correct themselves.

I think that once the economy improves, and alternate and better-paying opportunities for employment begin to entice transcriptionists away from their current positions, hospitals see a better cash flow, and the work load increases... perhaps in the next 24–36 months... the transcription industry will become an employee-driven market.


Anonymous said...

I dont know didly about transcriptionist work. But the overall economy is really going south currently here in US. All the stimulus money spent appears to be hidden. In my state of Texas our economy is red hot compared to everyone else. We depend on the energy market and it is still slowly plugging away. I am a student for Nursing and I follow the health field hiring trends. Most hospitals are on hiring freezes even in Texas. It is very difficult for Nurses to find employment currently especially new ones. That trend started on both coasts and finally has showed up in TX. Lucky for me I wont be looking for a job until another 2 years. The piont of all of this is even TX economy is feeling this downturn although currently still in much better shape than other states. Many changes are on the way due to Obama efforts. The mandatory electronic health records, universal health care any day now, and lots of adjustments by hospitals to keep up and still make a profit. I believe health fields including yours will thrive within next year or so when more boomers cant work anymore. With all the freezes we still have a nursing shortage. I think many are just waiting for final policies to decide which direction to steer their businesses. Many will merge and many will startup new ventures. I would expect your field to have new companies swallow up the smaller ones and emerge as giant ones. What I do know is no English speaking country will ever completely fill that void. The US is getting more finicky about outsourcing jobs due to collapse of auto industry. The government will probably place more limits on jobs already outsourced and reduce them through legislation. So until some super high tech and error free software which is idiot Doctor proof comes out I think transcriptionists are safe at least for our life times.

from Jakal

Unknown said...

so how much are you making a year now jil?

you were never earning 100k a year from this, look at your quality of life - it sucks

you dont have a car, a house

what happened to all this money you earned?

Tom N said...

Do you think you could make a living as a transcriptionist if you lived in the U.S.? I would think that one of the advantages for you is the lower cost of living in the Philippines.

Jil Wrinkle said...

Owen, I never earned $100K... though I had hoped to back in 2005 and 2006.

In 2006, I earned $80K; in 2007, I earned $60K. This year, so far, at the halfway mark, I've earned just over $15K. So, in 2 years, I've gone from $80K to about $30K.

I used to transcribe 400 lines per hour, and got paid an average of 10 cents per line, plus overtime. It used to average out to $50 per hour.

Now, I am transcribing about 200 lines per hour, and am getting paid about 6.5 cents per line, with zero overtime. Now, I'm earning $14 per hour.

The quality of my life is great, considering: I'm putting my sister-in-law through college, supporting a family of ten, paying bills and rent, and still have enough left over to keep Epril in a new dress once a month, and a night out on the town once a week... all on about $2,500 per month.

Of course, the quality of my life back in Thailand was much better when I had 3 times as much money. I was out for $50 dinners every Friday, drinking and partying every Thursday, I was traveling, I was shopping, supporting Pui's family, and I was also paying off old debts. I was renting a big house for $2,000 per month. And, don't forget, keeping my visa current was costing me quite a bit of money as well in Thailand.

Obviously things are in a rut right now, but the good thing is that I'm in no danger of losing my job. My company (for all its faults) is stable and growing. I'm in one of the best places on earth (the Philippines) to weather this kind of work situation. (There are transcriptionists back in America who have to quit their job because they can't afford to keep their houses, or keep the electricity or internet on to continue working.) As far as my situation goes, I'm better off than the 800,000 people back in America applying for unemployment for the first time every month.

And no: Don't have a car. We could actually afford one if we wanted to really stretch our budget, as the new Kia sedans cost $500 per month for 2 years, but I don't think that is a good idea at this point in time. The motorcycle works fine when it isn't raining, and a car would only get used once or twice a week when I was driving.

Epril wants to buy one of those Multicab Vans that are popular here, and they cost $5,000 new and like $2,000 used... and I might do that for trips back and forth to CDO next year, plus something to use if we ever open up a business.

And Tom, you are absolutely right: There is no way I could survive in any way (other than in my mother's basement) in America on the money I am currently making as a transcriptionist.

Unknown said...

Pretty typical of an american.
But money makes money, and you blew the small oppurtunity you had.

Stan doesnt pay anything for his girl, except on birthdays, yet has quite alot of assets. Tightness is often a trait of the rich (not that stan is that rich, just relative to yourself).

Jil Wrinkle said...


Life is filled with opportunities. Based on the various ones that have presented themselves to me, I'm pretty happy with the opportunities I have taken advantage of and the ones that I have taken a pass on, and the life it has led me to so far.

It was my old friend Rick back in Pattaya who, as he built up a new life from scratch (for the sixth time or so) at the age of 65, said, "Life will always offer you opportunities, but experiences are harder to come by." He told me how some of the most enjoyable times he had in his life was when he and my other old friend, Willie, used to scrounge up money by selling Polaroids to tourists on Walking Street.

I'm coming up on 40 years next month, and I can say that my life so far has been a blast. I have no regrets at all.

(Now, if I had spent the last 20 years slaving away in an office, chained to a mortgage, and had 2 kids getting ready to start college next fall... knowing that the life I have now could have been my reality instead... well, then we could talk about regrets and missed opportunities.)

Issarat said...

It seems like you are doing just fine Jil.
Yes, it's a change from your days in Thailand and even in the USA but you sure seem happier in PI.
Owen, I hope we never meet-you pompus twat. (sorry if you mom reads this Jil)

Jil Wrinkle said...

I think I am equally happy here and in Thailand. I feel more at peace here, I have more fun there.

And be nice to Owen, Issarat. He asked some fair questions, even if he wasn't polite about it.

Tom N said...

So that's about 125,000 pesos a month. I think there are many Filipinos that would "kill" to earn that much.

And if your prediction about the industry pans out, you could be in a very nice situation.

Jil Wrinkle said...


Well, 125,000 is before taxes... but yes, it's very good for The Philippines.

Regardless of what Owen says, my (and Epril's) quality of life here (when compared to the average middle-class American family) most certainly doesn't suck. We go out more than the average American family, have more family time than the average American family, have more travel and vacation than the average American family, and our disposable cash to pay for it all after paying bills is a larger portion of my income than the average American family. Epril and I have a household staff (maid Susan, houseboy Mark, chef Ednil, laundress Fatima, and guard Danny... all family or friends, granted) to do all the chores and take care of us.

Regarding the future of the transcription industry, another one of my plans is to open a medical transcription school here, and teach what I know.

I would need a space for the school and about 60 computers (30 in a classroom and 30 in a practice room).

I could charge 100 pisos per student per 2-hour class, and teach three 30-student classes 6 times per week, for a total of 54,000 pisos per week, or 225,000 pisos per month.

The only problem with that plan is that it wouldn't work here in Jasaan: Too far from most of the potential students in CDO.

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