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Kaiser exporting privacy
From: Dave Farber <dave () farber net>
Date: Sat, 17 May 2003 08:51:34 -0400
******************************* San Francisco Gate Kaiser exporting privacy David Lazarus May 14, 2003 Oakland's Kaiser Permanente reported some mighty impressive numbers the other day -- quarterly profit of $301 million on revenue of $6.2 billion. Even so, the health care provider is quietly outsourcing costly computer operations to companies in India, and workers in Northern California are worried that their jobs could be next to go. Moreover, Kaiser's 8.3 million members and thousands of other employees may have additional reason for concern. Included in the information being made available to Indian techs-for-hire are: -- Patients' medical data, including lab results and drugs being taken. -- Members' personal information, including financial records and home addresses. -- Payroll information for 135,000 Kaiser employees and 11,000 physicians, including salaries, benefits and Social Security numbers. "It's a disaster waiting to happen," said Beth Givens, director of the Privacy Rights Clearinghouse, a San Diego nonprofit. "After all, who regulates these companies in India? People should be extremely wary of the possibility of fraud." Kaiser tech workers voiced similar worries. "If I was a patient, I'd be really worried about my information going offshore," one told me. "And employees should be worried about their Social Security numbers. Think of the potential for identity theft." To be fair, many U.S. companies out-source high-tech and customer-service operations both at home and abroad. Half the Fortune 500 is said to make use of India's well-educated, English-speaking and significantly lower-paid workforce. Within five years, according to a recent study, Indian outsourcing firms will comprise a $21 billion industry, employing 1.2 million people. Yet it's one thing for telecom giant SBC, for example, to out-source online tech support for Internet subscribers, and quite another for one of America's largest health care providers to open the door on members' and employees' medical and financial records. Garry Hurlbut, Kaiser's vice president of information technology, stressed that the company's data will remain in Kaiser's own computers. But he acknowledged that nearly a half-dozen Indian outsourcing firms will have remote access. "A lot of others were doing offshore work before we got interested," Hurlbut said. "We're only working with the most reputable companies." He added that overseas technicians are granted only limited access to systems depending on maintenance required. However, access will increase in the future as more of Kaiser's tech operations are transferred abroad. "We're trying to move a good part of system maintenance offshore and free up employees for new opportunities," Hurlbut said. At least 160 tech workers so far have been reassigned to new gigs within the company as a result of the outsourcing. To date, no one's gotten the ax. Still, workers at Kaiser's Walnut Creek computer center are increasingly anxious about their future. "Morale is very low," one worker said. Employees' concerns have been exacerbated by the fact that nearly three dozen Indians from one outsourcing firm -- New Delhi's HCL -- are now at the computer center learning the various systems. Kaiser workers have been instructed by supervisors to make time over the next few months to train the Indians in nearby conference rooms. The Indians will then go home and train others at their firm. "They're very quiet, very polite," one worker said. "But they're not dumb. They know what's going on." I'm not suggesting that Indian techies are less reliable or trustworthy than their American counterparts. Dell Computer, for one, is so pleased with its Indian partners that the company has moved the bulk of its tech support to the subcontinent. What I do take issue with, though, is the growing trend of American companies shipping jobs overseas for the sake of saving a few bucks. The U.S. unemployment rate climbed to 6 percent last month. Customer-service representatives at call centers in the United States make as much as $12 an hour. Their Indian counterparts, who frequently are told by employers to conceal their whereabouts from callers, make about a third of that amount. According to an internal memo distributed to Kaiser tech workers, an American contractor might charge the company up to $85 an hour, while an Indian outsourcing firm can do the same work for as little as $20 an hour. "We must operate as a business as well as a caring organization," the memo says. "By gaining access to highly trained professionals at a greatly reduced rate, Kaiser Permanente can become better stewards of our members' dollars and get a better return on our investment in technology." It adds: "Although there are no long-term guarantees, (Kaiser) is not planning to eliminate employee positions due to our use of offshore resources." Claire Holmes, a Kaiser spokeswoman, said that affected workers are given 90 days in which to find a new position within Kaiser. If no such position opens up, she said workers will be offered severance packages based on the amount of time they've been with the company. "Everyone feels trapped," one worker told me. "We have to cooperate with what management is doing because there's no other IT work out there. But we know our jobs are on the line." Holmes was more upbeat about the situation. "Nobody likes to be forced into change," she said. "But we're pretty happy with the results at this time." ******************************* ------ End of Forwarded Message ------------------------------------- You are subscribed as interesting-people () lists elistx com To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/
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