The healthcare business and knowledge process outsourcing services company, Omega Healthcare's CEO Gopi Natarajan talks about the company's growth journey and its plan of doubling revenue by 2020 and expanding to other geographies…
Gopi Natarajan's stint in the US healthcare industry from late 1980s gave him deep insights on the evolution of the sector. It helped him identify different business potentials and set out on his entrepreneurial journey in 2003 along with Anurag Mehta. The duo started Omega healthcare Management Services in 2003 with a vision to be the global leader and provider of healthcare business and knowledge process outsourcing services. The company handles medical coding, revenue cycle management and related work for large U.S. based companies. It started its operations in Bengaluru and now has its presence in Chennai, Trichy and Bhimavaram in India, and Manila and Cebu in the Philippines.
Initially, the company had a joint venture with the Manipal group along with another entity in the US. Eventually, in 2005, the partners raised a bridge loan and bought out both the JV companies' share. "We were able to attract PE investment in 2006 with Healthedge Investment Company. They were with us for 7 years and helped us grow at a rate of 30 per cent CAGR growth and had a successful exit in 2013," says Natarajan. Soon after that, a family fund from the US invested in the company.
With a strong focus on clients, the company does millions of transactions on a daily basis. It currently employs almost 12500 people and largely caters to the US market but is looking at entering geographies like Australia and UAE.Growth drivers
"From the time our new investors came on board in 2013 till date, we have more than doubled the company in all the parameters – revenue, people, cities etc," says Natarajan. Omega acquired a data analytics company, White Space Health, in March 2017 as it believed in the technology they have built. "We will be able to offer value added solution – data analytics – to our clients which is the hardest thing now for most companies," says he.
The company also crossed the three digit revenue milestone from an annual perspective. "We are already tracking over a US $ 100 million in annual revenues and will close the year 2018 well above that number," adds the CEO.
There have been many growth drivers over the last couple of years, one of the biggest being increased inflow of visibility and acceptance of the work the company does. "We handle healthcare information which is sensitive data and the acceptance of using /outsourcing this work has increased dramatically over the last few years. Initially, it was the physician industry that was using our services, but in the last 5 years, hospitals have got on to this bandwagon," says Natarajan.
Industry is more accepting of what is going on off shore. There was a lot of reservation in the past as data was sensitive but the industry has matured now
Not just this, the bigger companies are now aware of the security and compliance requirements of this industry and ensure that other players also adhere to the international security and compliance requirements.
Omega does not have a sales team and it has been the co-founders who have been handling customer acquisition so far. The duo have largely built their customers through referrals and networks. "Even though Healthedge has exited, they still refer people to us. We do work for two of their current portfolio companies," states a happy Natarajan. The company is now trying to build a sales team.Talent acquisition and training
Everything comes with its own set of challenges and for Omega it was being able to get the right talent in India. The company currently employs 12500 people in India and about 700 in Philippines and 25 people in the U.S. to service its 120 clients in there.
It provides 3 distinct functions to its clients. Medical coding which is reviewing the medical charts, looking at patient's complaints, doctor's diagnosis, looking at insurance information and identifying how to assign codes that will drive the reimbursement from the insurance company. "Physicians code differently while hospitals code differently. This is a critical thing and one needs to be accurate. We have almost 97 per cent to 98 per cent accuracy," says Natarajan. The company, which primarily recruits life science graduates or anyone with biochemistry or pharmacy background, has the largest number of coders – over 3000 – for its medical coding activity.
It also requires people with typing and little analytical skills for its Data Management activity.
For their Accounts Receivable activity, Omega needs people with good command over English language as they make calls to the insurance company and the patients to collect money.
The company has started recruiting nurses in Philippines and started a new service line called critical care management type of service. "We recruit nurses who will call the patients and walk them through things to do after discharge. It is clinically oriented type of call which is like a preventive care," says he.
For all its activities the company has a separate training program. For Medical coding, it has a new entity called Omega Medical Coding academy and – OMCA which is present in Bengaluru, Chennai and Trichy. The company employs students who graduate from there and they can also seek placement in the open market.Scaling up strategy
The company has had a revenue growth of almost 35 per cent in the last one year while the employee head count increased by 1,800 to 2,000. "Industry is more accepting of what is going on off shore. There was a lot of reservation in the past as data was sensitive but the industry has matured now. This apart, the work quality is a big driver," says Natarajan.
By 2020, the company aims to double its revenues and add technology service offering (through its acquisition) and is also looking at few other technologies to augment its services. This apart, all its clients continue to grow on a yearly basis.
Omega also plans to enter clinical care management that provides nurses in Philippines. "As the healthcare industry changes in the U.S., its reimbursement pattern also changes. We believe that services like these critical care management will have tremendous opportunity," states Natarajan. The company also works with large insurance companies. "We will be adding analytics platform that we acquired and developing solutions to sell to the insurance companies," adds he.
This apart, it plans to enter new geographies – Australia and UAE – and get a strong foothold there over the next 2 to 3 years.
"We will also be adding people. We will also grow primarily by using a lot of technology as opposed to just adding people. Having said that, we will increase our headcount by 50 percent, to around 18000, by 2020," says Natarajan on a concluding note.Read More