Paper on Outsourcing of Radiology Services

Offshoring Radiology Services to India For submission to Journal of International Business Studies, Special Issue on ‘Offshoring Administrative and Technical Work: Implications for Globalization, Corporate Strategies, and Organizational Designs’ Frank Levy 1 and Kyoung-Hee Yu 2 1 Corresponding author: Professor of Urban Economics, Department of Urban Studies and Planning, Massachusetts Institute of Technology. E-mail: flevy@mit.edu. Address correspondence to: Room 9-523, Massachusetts Institute of Technology, Cambridge, MA 02139. Tel. (617) 253-2089, Fax (617) 258-8594 2 Ph.D. Candidate, Sloan School of Management,

Massachusetts Institute of Technology. The authors wish to thank the Alfred P. Sloan Foundation for generous financial support, the two teleradiology firms in India for allowing us to study their organizations, and numerous radiologists and other healthcare professionals in India, Singapore, the United Kingdom, and the United States for helpful discussions. Many of these people asked that their names not be acknowledged. The people who we can acknowledge include Henry Aaron, Jane Adam, Nick Barr, Satish Kumar Bhargava, Adrian Dixon, Howard Forman, Richard Frank, Ari Goelman, Gordon Harris, Julian Le Grand, Barbara McNeil, Manoj Mohanan, Jonathan Sunshine, Katherine Swartz and Shih-Chang Wang. 1 Abstract: We discuss teleradiology and medical image reconstruction from the perspectives of both India and its client countries. Radiology is an “extreme” professional service with extensive usage of tacit rather than codified knowledge. The importance of tacit knowledge leads to long training periods, a limited global supply of radiologists and heavy government regulation, all of which are obstacles to a “flat world”. Computerization of low-end diagnostic radiology ultimately poses a bigger threat to the profession than offshoring. Keywords: offshoring, outsourcing, institutions, professional work, skills, technology 2 Introduction When people discuss the world’s new flatness, the conversation often...

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