June 18, 2006

Healthcare outsourcing

Head of cardiology at a corporate hospital in Chennai told me once (this was years ago) that they needed to do 12 surgeries a day to be able to maintain three operation theatres, meet loan repayment schedule on equipment, and fulfill dividend expectations of shareholders. He was not merely a reputed cardiac surgeon, but also a board member – ‘I’ve to take care of the shareholders’ interests’.

Specialty hospitals have emerged good business, a sure-fire foreign exchange earners and have made India a destination for healthcare outsourcing. We hear hospital management circles talking of ‘medical tourism’, a term I despise. Overseas visitors in need of surgery and their concerned companions do not exactly fit the definition of ‘tourists’, a word I would normally associate with vacationers and pleasure-seekers. Travelling to get a heart bypass can’t be much fun. Most of those making the trip to India are folks who can’t afford it in their own country. Heart surgery that costs $200,000 in the US can be done in India for $10,000.

Hip resurfacing costs in Mumbai $6,000 while the same surgical procedure done in the US would set you back by $25,000. If you don’t have insurance cover in the US, and can’t raise that kind of money, even the Lord would be reluctant to help. I once met a lady at a Phoenix soup kitchen whose family became homeless, because her husband got pneumonia. His insurance cover had lapsed. And they had to sell their house to pay hospital bills. It was a matter of $11,000.

Thousands of US patients are said to be opting India as healthcare alternative, to take advantage of the cut-rate heart surgery, gastric bypass and hysterectomies. Economics professor Milica Bookman, of Philadelphia St. Joseph’s University, is quoted in People magazine as saying, “from what we’re hearing, the quality of care is certainly as good as what you find in an American hospital”. The professor is writing a book on medical outsourcing.

A school bus driver in Lakeville, Minn., who had hip resurfacing done in Mumbai has set up a website to share her experience and offer guidance to those looking at healthcare options in India.


Blog-Capt. Anup Murthy said...

Medical tourism, yes I hate the term too, is picking up in countries such as Singapore, better organized and better marketed than India. The country is actually doing hard sell of its heaelth care system, offering quality of healthcare at lower costs. Mainly, patients come in from Australia and the U.K. and Singapore is advertising in the US as well.

Here in India, some of the leading ones trying to get into the market is Apollo and Fortis hospitals. The latter is a promoter group company of the Air Charter company that I am presently aviation consultant for and poised to be the biggest hospital chain in the next year or so. As part of the growth plans, we are going for additional jet Aircraft and helicopters for medevac (medical evacuation).

Insurance industry is still in the nascent stage in India with respect to medical insuarance and seldom would they pay for evacuation by air but those things may change, like it has elsewhere. Otherwise, our clients are going to be, as usual, high networth individuals. There are quite a lot of them around these days, by the way. It also seems like higher your net worth, more the medical problems you have! Comes with the territory, I guess.

Anonymous said...

There is something else that you might not have heard. After interning at Appollo Hospital in Chennai a cousin of mine told me how the accounts department works. Apparently for NRIs and foreigners, they are told to add more to the bill, and it will not make any difference to the payee's pocket. There are certain minimums NRIs and foreign 'health tourists' are expected to pay, whether their actual costs run that high or not. In fact, when my father went there for a sore throat, he was asked to have an MRI done... that wasn't even remotely justified, was it?

Blog-Capt. Anup Murthy said...

Super speacialty hospitals and why, even your neighbourhood doctor can fleece you. a friend came on a visit from the US with a ear pain, your friendly neighbourhood doc, coming to know where he was from, referred him to a Sup Spec hospital here for all kinds of scans. It seems all docs make a commission out of this. Can happen to Indians, forget foreigners. My dad had stomach problems last week when I was away and he was told to get the intestine scanned, he did it of course, only to find that nothing was wrong. Regarding billing foreigners, India has a long history of fleecing them, even in your normal restaurants there used to be (and still is in some places) a different menu with higher prices. Why, the Government of India is also in the act. They charge foreigners ten times what an Indian pays to get in the Taj Mahal. Why blame hospitals, Indians are born to scam!

While I appreciate your comments and agree Mr. Anonymous, please use your identify, otherwise, it looks like talking behind someone's back! Thanks.

Nataraj KR said...

What is discussed out here is one side of the story. I had an uncle of mine, who was heading the marketing division of a famous pharmaceutical company, which was based in Mumbai. His was a residence cum office during those days. We were witnessing their marketing approach to "bag" the docs with free samples and at times with "mamools" to be given by med reps to push their products against rival competition. Huh, after all, in the corporate jargons,these are termed as "strategic selling".