Genpact sees pace in healthcare growth, eyes expansion

By Bijoy Anandoth Koyitty

BANGALORE (Reuters) - Business process outsourcing company Genpact (G.N) expects its healthcare services business to grow at "a good pace," and is looking to expand the segment in the United States, India and the Europe, its chief executive said.

"This is one (segment) that can grow at very large double digits mainly because it is a relatively untapped market," Genpact Chief Executive Pramod Bhasin said in an interview.

Genpact, which provides services in asset management, hospital administration, supply chain logistics and finance, gets about 7 percent to 8 percent of its revenue from healthcare outsourcing.

The company, which draws majority of its revenue from banking, financial services and insurance, and manufacturing sectors, reported revenue of $1 billion (607 million pounds) in 2008.

Healthcare organizations, especially in developed countries, are increasingly looking at opportunities to outsource as the need for a cost-effective healthcare system - with trained but cheap manpower - becomes acute.

Soaring healthcare costs in the United States, where health spending is estimated to hit $2.5 trillion in 2009, undermine the competitiveness of businesses, strain state and federal budgets and drive many Americans into bankruptcy, even as 46 million Americans remain with no health insurance.

U.S. President Barack Obama aims to expand healthcare coverage to all Americans, provide better care and reduce wasteful spending for medical errors, fraud and unnecessary treatments through his proposed healthcare overhaul package.

Obama's proposed health reforms and the healthcare overhaul package are going to put a lot of pressure on hospitals to reduce costs, Bhasin said.

Genpact, which draws about 75 percent of its revenue from the United States, has been focussing on building expertise in areas such as hospital administration, supply chain logistics, equipment and doctor utilization, asset management, and finance and administration, the CEO said.

To make the best use of global opportunities, thrown open by the growing significance of cheaper healthcare, Genpact is planning to expand the business in the United States, India and Europe.

"Healthcare is interesting because it is an area where frankly, anytime, you can actually take this expertise to any part of the world," said Bhasin, who is also the chairman of National Association of Software and Service Companies (NASSCOM), the IT trade body in India.

Genpact got its start in 1997 as the India-based business process services unit of GE Capital, General Electric's (GE.N) financial services business, and became independent in 2005. GE is the company's top client, contributing almost half of its revenue.

Genpact, which competes with International Business Machines (IBM.N), Accenture (ACN.N) and WNS Holdings (WNS.N), counts GlaxoSmithKline (GSK.L), Kimberly-Clark (KMB.N) and Cadbury Schweppes (CADB.LG) (CBRY.L) among its other clients.

(Editing by Ratul Ray Chaudhuri)