Politico: UPMC outsourced medical transcription jobs in 2013, displacing workers

A recent rise in "alternative work arrangements" — such as independent contractors, on-call workers and temps — is poised to fundamentally change the American employment landscape, according to a recent Politico analysis by assistant editor Danny Vinik.

In the decade between 2005 and 2015, the number of people employed in alternative work arrangements increased by 9 million, accounting for 16 percent of all U.S. workers. Alternative work arrangements, also referred to as the "contingent workforce" by many economists, contrast traditional full-time employment, which declined by 400,000 workers during the same period.

As an example of the changing employment landscape, Mr. Vinik investigated a 2013 decision by Pittsburgh-based UPMC to outsource its medical transcription workforce to Nuance Communications, a Burlington, Mass.-based voice and language solutions provider.

Here are six takeaways from the Politico analysis.

1. In 2013, a UPMC representative told roughly 130 medical transcriptionists — whose jobs comprised transcribing audio recordings from physicians into written reports —  their positions would be outsourced to a third-party contractor.

2. The unidentified UPMC representative reportedly told the employees the contractor, Nuance, would rehire them for the same positions and pay. However, the employees later learned the companies' agreement to pay employees the same hourly rate only applied during their first three months at Nuance. If the employees declined the offer to work for Nuance, they would not be eligible for unemployment insurance.

3. One former UPMC medical transcriptionist, Diana Borland, told Politico after her first three months at Nuance, employees were paid six cents for each line transcribed. Ms. Borland, who had 13 years of medical transcription experience, said she had earned $19 per hour at UPMC. Her first paycheck with the per-line rate at Nuance was under $6.36 per hour.

4. UPMC told Politico the decision to outsource medical transcription served as a way to save these employees' positions given that the health system's demand for transcriptionists declined after implementing new voice-recognition technology.

"Traditional transcription volume at UPMC declined steadily while transcriptionist productivity increased, allowing UPMC in 2013 to reduce transcriptionist staff through normal attrition," a UPMC spokesperson told Becker's Hospital Review in an emailed statement Jan. 8. "While the implementation would have eventually led to significant reductions in transcriptionists, in an effort to provide longer term employment opportunities for these staff, UPMC elected to outsource the transcription function to Nuance and arranged for Nuance to offer employment to the UPMC transcriptionists."

5. Eric Tinch, vice president of global operations for Nuance Healthcare Solutions, told Politico in a statement the company offers "a highly competitive benefit package to full-time and progressive part-time employees who work more than 32 hours per week." The UPMC spokesperson also told Becker's Hospital Review Nuance "further agreed to recognize employees' years of service with UPMC in relation to pension vesting and vacation allotments."

6. Across the U.S., contingent workers in the healthcare support sector — which includes positions like medical transcriptionists — rose from 9.5 percent in 2005 to 17.9 percent in 2015. Politico noted an employee's shift from full-time employment to contract work not only tends to carry lower wages, but often forgoes workplace protections like minimum wage, health insurance and pensions.

To access the Politico analysis, click here.

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