Outsourcing Medical Care

India's medical service providers attract patients from around the world to their hospital resorts.

Staab is one of a growing number of people known as "medical tourists" who are traveling to India in search of First World health care at Third World prices. Last year, an estimated 150,000 foreigners visited India for medical procedures, and the number is increasing at the rate of about 15 percent a year, according to Zakariah Ahmed, a health care specialist at the Confederation of Indian Industries.

Eager to cash in on the trend, posh private hospitals are beginning to offer services tailored for foreign patients, such as airport pickups, Internet-equipped private rooms and package deals that combine, for example, tummy-tuck surgery with several nights in a maharajah's palace. Some hospitals are pushing treatment regimens that augment standard medicine with yoga and other forms of traditional Indian healing.

The phenomenon is another example of how India is profiting from globalization -- the growing integration of world economies -- just as it has already done in such other service industries as insurance and banking, which are outsourcing an ever-widening assortment of office tasks to the country. A recent study by the McKinsey consulting firm estimated that India's medical tourist industry could yield as much as $2.2 billion in annual revenue by 2012.

India has a largely intelligent and educatable population, but India's political institutions (largely socialist policies) neither harness their talents nor motivate their initiative to produce. Hence, they are largely poor with a per capita income of just $2,900. They are a third-world country. Their recent attempt at privatizing their industries and moving to a more market capitalist oriented economy, although successful, was rebuffed, largely because of envy--some of the most innovative and entrepreneurial were becoming rich while others, mostly rural farmers, weren't, at least hadn't yet.

Taken as a whole, India's health care system is hardly a model, with barely four doctors for every 10,000 people, compared with 27 in the United States, according to the World Bank. Health care accounts for just 5.1 percent of India's gross domestic product, against 14 percent in the United States.

On the other hand, India offers a growing number of private "centers of excellence" where the quality of care is as good or better than that of big-city hospitals in the United States or Europe, asserted Naresh Trehan, a self-assured cardiovascular surgeon who runs Escorts and performed the operation on Staab.

Trehan said, for example, that the death rate for coronary bypass patients at Escorts is 0.8 percent. By contrast, the 1999 death rate for the same procedure at New York-Presbyterian Hospital, where former president Bill Clinton recently underwent bypass surgery, was 2.35 percent, according to a 2002 study by the New York State Health Department.

So you have highly skilled medical technicians in India with primarily low income customers who, consequently, cannot afford to pay much for the advanced medical care offered. They might also simply not demand it for other reasons, most notably religious reasons. Demand for medical services among Indians, then, is less than it is in the U.S., as well as among patients in countries with nationalized health care systems who currently must wait months, if not years, for medical procedures. Indians also have a more elastic demand for medical care. The solution? Market your services to foreigners who are willing to pay more than what Indidan residents are willing or able to pay, but less than what foreign medical service providers are charging them. Toss in a resort setting as an ammenity and you now have a destination medical community. Market competition once again best serves the consumer.

What makes medical care in India cheaper than medical care in other countries should give pause to those pushing for national health care, and it should make John Edwards think long and hard about the consequences of his profession.

Moreover, he added, a New York heart surgeon "has to pay $100,000 a year in malpractice insurance. Here it's $4,000."

In addition to patients from other developing countries, top Indian hospitals derive a significant share of foreign business from people of Indian origin who live in developed countries but maintain close ties to their homeland. But the same hospitals now are starting to attract non-Indian patients from industrialized countries, and especially from Britain and Canada, where patients are becoming fed up with long waits for elective surgery under overstretched government health plans.

"If you can wait for two years for a bypass surgery, then you don't need it or you're dead -- one of the two," Trehan said. "Similarly, if you're wobbling on your frozen joints for two years because of a waiting list, it's a human tragedy."

One such patient is Tom Raudaschl, an Austrian who lives in Canada and earns his living as a mountain guide. Suffering from osteoarthritis in his hip, Raudaschl last year decided to undergo "hip resurfacing," a relatively new procedure that involves scraping away damaged bone and replacing it with chrome alloy. He learned he would have to wait as long as three years if he wanted to have the operation under Canada's national health plan, a delay that would have cost him his job, Raudaschl said. In the United States, the procedure would have cost $21,000, he said.

Comments

[navindave]

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[Peter]

Well, what did it cost Tom Raudaschl in India?

[ben]

The ongoing professionalization of American left politics have meant broad outsourcing among progressive political organizations for a variety of functions, including advertising, research, online marketing, membership, and even campaign strategy.

[Norma Pankey]

Why you did not post the cost for Tom Raudaschi's operation. I am intreted in this type of surgery. Please let me know some more information and cost.

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