Slashing Health Care Costs, and Slashing, and Slashing
The numbers alone say a lot: A heart surgery that costs between $20,000 and $40,000 in the United States can cost only $2,000 in India.
The medical tourism industry has always taken advantage of lower health care costs in India and other developing countries. Some, however, are thinking beyond that. The Wall Street Journal recently profiled Dr. Devi Shetty, an Indian physician who has radically rethought the way heart surgery is managed and priced to make it more affordable than ever before.
Quite simply, Dr. Shetty is making heart surgery cheaper by doing more of it, says The Journal. The heart hospital he opened in India has 1,000 beds (the average U.S. hospital has 160 beds), and the sheer number of surgeries it performs gives it a lot of bargaining power for the equipment that it buys — carefully chosen for its cost. His physicians do more surgeries per day and repeat the same procedure more often than American doctors, giving them invaluable experience and expertise. Dr. Shetty plans to expand his private hospital complex significantly in the the next five years — a move that will give him even more leverage over suppliers.
Dr. Shetty's cost-cutting drive was propelled by a desire to make heart surgery affordable for Indians, after he understood the incompatibility of expensive health care and poverty. $2,000 for a life-saving surgery can be prohibitively expensive for some Indians, so many patients pay their medical bills through a special insurance plan developed by Dr. Shetty, in partnership with government officials from the state of Karnataka.
Dr. Shetty suspects that this kind of health care is likely to appeal to Westerners as well. He plans to open another hospital in the Cayman Islands specifically to serve Americans who want to lower their own health bills.
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Comments
Fast Food Medicine?
As a business educator, I get the idea that one gains a comparative advantage with economies of scale. It makes sense with commodities like hamburgers and radios, I suppose. But heart surgery? I guess I'm a little uncomfortable that one day I might find myself on an assembly line of surgeons who might have done a hundred surgeries that day and on the 101st decided to day dream just a little. Interesting article.
As the WSJ reported, some
As the WSJ reported, some experts have similar qualms. However, the number of surgeries these doctors are performing is actually closer to two or three per day, six days per week. The fact that they perform the same surgeries more often than U.S. surgeons who might have less opportunity to specialize is what creates that large volume of procedures for each doctor.
Re: Fast Food Medicine?
If you go to Bangalore and see Dr. Shetty's establishment (as I have), you would be surprised and impressed rather than concerned. Their success rate is at the level of the best medical institutions in the US. The scale of operations is incredible. I wonder if people had the same reservations about making cars before Henry Ford developed the assembly line. Dr. Shetty is now opening a branch in the Cayman Islands.
Re: Fast Food Medicine?
I don't think we should be sceptical about the medecine level in India. In fact Indian surgeons are as well educate as the US or European doctors, and the country spends a lot on education in general and medical education in particular. The fact that the people of the country get very cheap health insurance comparing to our costs in the US just depends on the whole living standards, after all.
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