By Shailaja NeelakantanFar Eastern Economic Review
November 6, 2003
By upgrading its technology, gaining greater familiarity with Western medical protocols and improving its image in terms of quality and cost, the Indian health-care industry is attracting a global clientele to emerge as a top medical-tourism destination in Asia
Two-and-a-half-year-old Noor Fatima, from Pakistan, had a congenital heart ailment. She had multiple holes in her heart, a defective valve and a wrongly connected blood vessel. Her parents, the Nadeems, had been told by a relative--a nephrologist in Boston--that India was their best option for surgery. In the United States and Europe, complex open-heart surgery of the kind Noor needed would cost around $70,000 and the Nadeems couldn't afford that. The procedure was too complicated for any hospital in Pakistan, where heart surgery is performed but paediatric heart procedures are rare.
So in July, when India and neighbouring Pakistan decided to renew bus services between the two countries, the Nadeems secured a visa to visit India and rushed Noor to Narayana Hrudayalaya, a top cardiac-care provider in Bangalore. In the event they didn't have to pay a cent--thanks to the hospital's goodwill and a groundswell of support from all over India. But if even if they had paid for the procedure, it would have cost them only $4,400.
Noor Fatima has become a symbol of the goodwill that exists among ordinary Indians and Pakistanis. But she is also emblematic of a quiet revolution sweeping India's health-care sector. India's private hospitals are becoming sought-after destinations for people around the world who need a range of medical procedures. Analysts say that as many as 150,000 medical tourists came to India last year. Some industry watchers say that number is higher, as 70,000 people came for medical treatment from the Middle East alone. A study last year by the Confederation of Indian Industry, or CII, and international management consultancy McKinsey & Co. said medical tourism could earn India $2 billion a year by 2012. The Indian government predicts that India's $17-billion-a-year health-care industry could grow 13% in each of the next six years, boosted by medical tourism, which industry watchers say is growing at 30% annually.
Quality and Cost
India isn't exactly a poster child for health and hygiene. As much as 43% of the population lives below the poverty line and has no access to basic health care, adequate nourishment and clean drinking water. The country, for instance, accounts for 20% of the world's pregnancy- and childbirth-related deaths among women. So why is India becoming a health-care destination? Because of a combination of quality, availability and cost. Health-care costs are touching prohibitive levels in the U.S. and Britain, while in post-liberalization India, even as private-hospital facilities have improved rapidly, infrastructure costs remain a fraction of what they are in the West.
Since India's economic liberalization 10 years ago, private hospitals are finding it easier to import equipment and other items. Medical technology used to be what differentiated the care available in developed countries from that on offer in India. At private hospitals in India, this gap doesn't exist any more. "For instance, for our cardio unit, we have been able to acquire a new solid-state, flat-panel detector, the Digital Cathlab System, that gives the best image quality with very few side effects to the human body," says R. Basil, chief executive at Bangalore's Manipal Hospital. "This is at par with what is offered in the best hospitals in the West, and now at least five major [Indian] hospitals have this system." And with the Indian government having woken up to the economic benefits of medical tourism and slashed duties even further on medical equipment last year, purchasing costs are only going to get cheaper.
Medical-equipment companies are also realizing that India is a potentially huge market. When medicated stents for angioplasty came to market in 2001, they were launched in India barely a month after their initial launch in Paris and even before they were launched in the U.S., says Dr. Prathap C. Reddy, chairman of the Apollo Group of Hospitals, the world's third-largest private health-care provider.
India's medical schools produce a large number of skilled professionals; there are more than 35,000 specialist doctors of Indian origin in the U.S. alone. But patients' familiarity with Indian doctors abroad didn't necessarily translate into a comfort level with Indian hospitals. Doctors here had excellent clinical knowledge but medical colleges didn't have high-end equipment for diagnosis. That is changing, and with private Indian hospitals now at the same technological level as hospitals in Europe and America, a lot of Indian doctors who have practised abroad are returning home. "Most Indian doctors would have had some kind of exposure to British and U.S. protocols, and at least 60% of doctors in leading Indian hospitals have international qualifications. That makes people more comfortable," says Basil.
The corporatization of the sector has also helped in boosting the image of health care in India. "Now it is not only the clinical talent and the technology here that is world class but also service standards, the way hospitals are being managed, patient services, administrative services, etc.," says Vishal Bali, general manger of the Bangalore-based Wockhardt Hospital & Heart Institute. Wockhardt is recognized by the giant U.S. insurer Blue Cross Blue Shield Association, whose clients are covered for treatment in Wockhardt's hospitals in India. More such arrangements are in the offing.
Britain's National Health Service has a huge waiting list of people who need medical procedures. "They have been considering increasing the support staff from India, but we have made a presentation to them saying patients should be allowed to travel to India. There, a knee-transplant patient has to wait 18 months; here, I can do it in five days and send the patient home in 15 days. We are waiting to get feedback," says Reddy.
If this is reminiscent of the information-technology boom in India, it is no accident. But in contrast to the IT industry where services moved to India initially for cost and then stayed for quality, the health-care industry is starting off with a definite qualitative advantage, albeit at a low cost. With health, unlike with software, fewer people are willing to take chances.
India's success rates in operations are remarkable, says Reddy. At Apollo, for instance, surgeons have had 98.5% success in the 50,000 heart operations they've performed. Of 138 bone-marrow transplants, 87% have been successful, and of 6,000 kidney transplants, 95% have been successful, says Reddy. "People say that these procedures have a high infection rate, but look at our success rates overall, we are obviously doing things right," he adds. These success rates are comparable to those at the world's top hospitals.
In fact, doctors at Indian hospitals have in recent years corrected problems that have gone wrong when treated in the West. "We have had quite a few cases like that," says Reddy. "One patient from Nigeria, a businessman of Indian descent, had lost his index finger six years ago and had been using his middle finger and thumb. But a tendon slipped and he went to Europe to correct it at a huge price. The problem worsened. We fixed it in 10 days, gave him physiotherapy and he's going to be back in three months because we are going to give him a new finger. He has sent 45 patients our way from Nigeria."
Dr. Devi Shetty, one of three surgeons who operated on Noor Fatima, believes that in the next 10 years, doctors of Indian origin will define the way surgical procedures are done. "When a surgeon in the U.S. retires, he would have done 2,500 operations. At Narayana Hrudayalaya, we have surgeons in their 30s who have already done 3,000 procedures," he says.
The cost differential across the board is huge: only a tenth and sometimes even a sixteenth of the cost in the West, says Wockhardt's Bali. Open-heart surgery could run up to $70,000 in Britain and up to $150,000 in the U.S.; in India's best hospitals it could cost between $3,000 and $10,000, depending on how complicated the case is. Knee surgery (on both knees) costs 350,000 rupees ($7,700) in India; in Britain this costs Â£10,000 ($16,950), more than twice as much. Dental, eye and cosmetic surgeries in Western countries cost three to four times as much as in India. "Coming to India for cosmetic surgery is really going to take off, because these procedures are not covered by insurance in the West, and even if you include the cost of an air ticket to India, it is still much cheaper to come here and get it done," says Apollo's Reddy.
Thailand, which became known as a medical destination in the 1970s for its sex-change specialists, already has an edge in cosmetic surgery. Now, the country's hospitals are expanding their offerings to include procedures like hip and knee replacement and, to a lesser extent, heart surgery. "A bypass operation in a government hospital in Malaysia costs around 600,000 rupees, while we charge 90,000 rupees," says Devi Shetty.
Currently most of the medical tourists to India are Indians living in the U.S. and Britain, residents of neighbouring Pakistan, Nepal, Bangladesh, Mauritius and the Maldives, or citizens of African and Middle Eastern countries. That is changing as hospitals are trying to build a brand image in the West. Apollo sends representatives regularly to international symposiums to present its success rates. Wockhardt and Apollo, among others, were part of a CII health-care mission to Britain to showcase Indian health-care facilities in the areas of cardiology and cardiac surgery, oncology, minimal invasive surgery and joint replacement.
But the industry would flourish even without Western medical tourists. Afro-Asian people spend as much as $20 billion a year on health care outside their countries--Nigerians alone spend a whopping $1 billion a year. "Most of this money would be spent in Europe and America. But this is coming to India now and will only increase," says Reddy.
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