Press Release - July 23, 2007 - PRnewswire

Small Physician Practices Struggle With Profitability

Interviews conducted by CBaySystems reveal that managed care, government regulations and high administrative costs all take a toll.

ANNAPOLIS, Md., July 23 /PRNewswire/ -- Most physicians had an idealized image of what it would be like to work in a solo or small group practice. They expected the opportunity to do meaningful work they enjoyed, and practice medicine in an environment where they could focus more time on patients - and make a comfortable living.

But as interviews recently conducted by CBaySystems have revealed, today's reality is much different. Faced with an increased workload, building pressures on claims reimbursement and the enormous amount of medical data they need to collect and manage, physicians are frustrated, dissatisfied, and making less money than they had expected.

"I became a physician to treat patients, not to handle paperwork," says Diego Escobosa, M.D., from Bayside Pediatrics. "Every day, I'm seeing more and more patients and making less and less money. I've seen it happen in my practice, and with all of the other physicians I know who work in small practices."

According to Frost and Sullivan, the workload in physician's offices keeps growing, in some cases exceeding 150 patient visits per week. Additionally, every patient visit generates about 10 pages of documentation and paper work, on average, from insurance claims to prescriptions. As a result, it becomes very difficult for a physicians office to complete the work and also maintain patient data. Some studies have reported that physicians are spending 25% to as much as 55% of their revenues on administrative overhead.

-- Managed care and government agencies both are putting an incredible burden on physicians. Stretching their administrative staff, requiring them to see more and more patients than ever before, and causing delays in their ability to collect money (and causing them to collect less than they're entitled to)
-- Rejected claims from managed care and government agencies create an administrative burden and cash flow problems. Physicians end up leaving too much money on the table because of things like inadequate documentation, incorrect codes, and their administrative teams have to spend hours and hours on the phone trying to fix problems and collect what the physician is due.

"The deck is heavily stacked against small practices," says Dr. Escobosa, "I have to hire and dedicate a large number of staff just to properly complete paperwork - and then fight to get paid. We need to find a way to break this cycle."

CBaySystems has been studying these problems for years, and is presently in Beta with CBayPraxis, an integrated practice management solution designed to help physicians take back their time and money, at a fraction of their current costs.

"At CBay, our sole focus is on helping physicians and hospitals run with greater efficiency and performance," says Chris Foley, President of CBaySystems and Services, Inc. "By giving small practices the ability tooutsource much of their back office functions-including patient verification services, medical transcription and billing-they can significantly reduce their administrative burden. In the coming months, we'll be introducing CBayPraxis, a breakthrough technology and services platform that can improve productivity, and reduce costs in even more dramatic ways."

Challenges Facing Physician Practices

According to the interviews conducted by CBaySystems, the following are the biggest challenges facing physician practices today. Each of these is being targeted as a solution focus in the new CBayPraxis offering.

1. Understaffing and job turnover

Physicians can't afford to pay administrators enough to keep them on board because their practices are being stretched too thin. Administrators are overworked and stressed dealing with all of the hassles related to insurance, billing and collections to the point that they are unable to focus on their core practice management and patient service responsibilities.

2. Inadequate Financial Reporting

The administrative staff doesn't have the time or training to follow-up on every insurance claim or gain a clear idea of the practice's true financial status. Most practices fall outside of MGMA financial benchmarks for accounts receivable management and aren't even aware of it.

3. Expensive, complex technology

Software systems are expensive, hard to implement and hard to use, requiring a huge investment in money and training. Even once implemented, they require a lot of time and attention, forcing physicians to perform IT maintenance. In all, a Practice Management System typically costs physicians 20-40% of their Adjusted Gross Income.

4. Lost revenue due to submission errors or bad insurance claim follow-ups

According to the ACGroup, 45% of payments are delayed due to improper documentation, incorrect date and missing deadlines.

5. Unsatisfactory patient service

The administrative team is spending time chasing the insurance company rather than taking care of patients. Meaning that patients feel neglected and dissatisfied.

6. Patient data is disorganized

Frost and Sullivan reports that the number of visits is increasing everyday; there are some physician offices in the US which get more than 150 patient visits every week; every patient generates about 10 pages of documentation and paper work on average, from insurance claims to prescriptions.

About CBaySystems

CBaySystems is a provider of medical transcription to large hospitals, healthcare networks and physician practices throughout the United States and has a growing presence as a provider of patient financial services to hospitals and hospital-based physician practices in the United States. Sources estimate that in 2000 the medical transcription industry was worth $22 billion. In 2004 the patient financial services business was worth $15.4 billion. The Group utilizes Internet technologies combined with its India- based delivery model to deliver its service and product offerings to US healthcare providers.

CBaySystems' services and solutions are currently focused in two main areas: medical transcription services and patient financial services. Medical transcription is an IT-enabled service that converts voice recordings of doctors into electronic text documents to be added to patient records. CBaySystems is the third largest medical transcription service provider in the world (Source: Value Notes, May 2006), where it operates in a marketplace with over 1,500 competitors (Source: Zavata Information Memorandum, November 2006).

The Group also provides delay management analytics, accounts receivable management and reimbursement analytics and services to hospitals and hospital- based physician practices in the United States through its patient financial services division.

The Group's back office operations are conducted through a network of 34 owned and outsourced processing centers in 10 states in India and one in Oman. These centers engage a workforce of over 5,000 medical language specialists and customer service professionals, approximately 1,800 of whom are employed directly by CBaySystems' Indian-owned operations and the rest through its partnership programs and through other joint ventures.

CBaySystems is currently developing a new technology-enabled service, a practice management solution platform called CBayPraxis, which is a service designed to bring together a range of practice management technology offerings combined with transcription, electronic medical records, ePrescription and billing services on a single desktop application. The CBayPraxis application will be delivered through widget technology on a high-definition dashboard. CBayPraxis will target smaller physician practices in the United States, typically in the range of one to four physicians, and is currently undergoing tests with commercial use anticipated to begin by mid 2007.

CBaySystems Holdings Ltd joined the AIM market of the London Stock Exchange on 18 June 2007 and trades under the ticker symbol CBAY.

For additional information, please contact
Stacey Cassidy
Director of Marketing
Tel: 410.940.6900 x3195
scassidy@cbaysystems.com