Recently the New York Times newspaper ran a story about an American patient who was flown all the way to India to successfully undergo a heart procedure at a top notch private hospital in Bangalore. At the same time, the reporter noted, in that metropolitan vicinity in the latest 'hooch tragedy', more than a hundred migrant labourers lost their lives after drinking illicitly brewed liquor, a death toll whose numbers rose because many of their families could not reach or afford proper medical care in time that might otherwise have saved precious lives. This perceptive report brought to the reader's attention two seemingly anomalous features that nevertheless seem characteristic of recent developments in India.
The first is that of rampant and deeprooted poverty of the many (a persistently large number) amidst the presence of plenty of a few (though substantial and growing of late). Unequal access to (and often absence of) health care is the familiar variant, yet nonetheless more tragic because of it, of the iniquitous dualism that even after nearly six decades of 'development' still characterizes social and economic structures in India.
The second is the more novel phenomenon of citizens of the 'first world', rich and developed nations, choosing to undergo medical procedures or treatment in a 'third world' country such as India, albeit in multi-speciality hospitals. These well equipped hospitals with state of the art equipment, often staffed with doctors and nurses with substantial work experience acquired from working in hospitals abroad, boast and deliver medical care comparable or superior to what is available in most developed country hospitals at a fraction of the cost. These hospitals advertise and offer 'medical package tours' that not only include medical operations and procedures but also travel to and from the hospital, stay and recuperation at 'five star facilities' to attract the attention and custom of first world patients as well as well-heeled domestic ones. This phenomenon is commonly termed health or medical tourism.
As an aside on terminology, for our current purposes we shall treat health and medical tourism as similar though in its proper sense they may differ in the domain of activities that each encompasses. For instance medical tourism may sometimes be narrowly defined as involving only a subset of those activities limited to the medical procedural-pharmaceutical complex while health tourism may sometimes be more broadly understood to involve activities that include 'alternative' medical treatments, therapies, lifestyle and health resorts etc. The distinction is sometimes useful as when we focus on issues related to 'medical insurance' and the 'health care industry' and at other times less useful when we try to discern the larger social and economic impact of health or medical tourism.
Medical Tourism: Is it a new thing?
In one sense medical tourism is hardly a new phenomenon. For long, people have travelled to other places in search of better medical treatment. The presence of reputable medical services has often acted as a spur to local economic activity either directly or as a spin off. One only need look at the hive of small businesses bustling around the location of any medium large hospital to realize the truth of this statement. You not only find pharmacies, laboratories and medical supply stores but also a number of eateries, hotels, lodges, banks, general stores and transportation hubs. Secondly India and transportation hubs. Secondly India has also for many decades now served as a destination for those seeking better medical treatment or facilities within theSMRC and West Asia region. In general,most Indians themselves are likely to bemedical tourists at some level determinedprimarily by their disposable incomeDepending on their economic circumstances Indians are no less likely to travel long distances, even abroad, seeking better medical treatment as the experiences of many politicians and film stars can duly attest. Having established that medical tourism itself is not a new thing, even in India, it is still important to point out what is new about its latest manifestation. In a nutshell what differentiates the Indian medical tourist from the global medical tourist is the focus on not 'better' treatment but on 'cheaper' treatment. What prompts the global medical tourist, for e.g. the American patient, to fly half way around the globe to a hospital in India is not because health care in India is better but because the costs of standardized medical and surgical procedures in India is far less.
Medical Tourism as a Facet of Globalization
The determining factor that lower costs play in driving medical tourism cannot be overstated. According to Dr. PrathapC. Reddy, Founder and Chairman of the Apollo Hospitals Group, "Compared to countries like the UK or the US, procedures like heart bypass surgery or angioplasty come at a fraction of the cost in India, even though the quality of doctors and medical equipment is comparable to the best in the world. A heart bypass surgery in India costs USD 6,500, while in the US it costs between USD 30,000 and USD 80,000." The great emphasis placed on keeping costs down makes medical tourism part and parcel of the process of globalization. The economic logic that has resulted in the transfer of industry and services to regions where costs of production are the lowest is the same that underlies medical tourism as well.
Once we recognize that health care is a service industry just like the 'call centres' in India that fulfils the needs of various customers in the United States and other first world countries much of the radicalism of medical tourism seems very ordinary and common place. It is no different from the business process outsourcing (BPO) model that underpins the rapidly growing information technology (IT) sector in India. The same cost cutting impulses that lead multi-national corporations to off-shore and outsource business processes and production to other countries, also compels private and national health insurers to encourage their customers to consider undertaking certain medical procedures in India. It is crucial to note that it is not only the penny pinching or uninsured individual who is looking for a cheaper deal as it were, but increasingly large private or public health carriers who are looking to rein in the galloping costs of health care on the one hand and to whittle down long waiting lists of patients requiring medical procedures in the developed world. For example, according to the non-profit Kaiser Family Foundaiton, a leading health policy foundation in the U.S., "expenditures in the United States on health care surpassed $2 trillion in 2006 ... [and] accounted for 16% of the nation's Gross Domestic Product (GDP). Total health care expenditures grew at an annual rate of 6.7 percent in 2006, a slower rate than recent years, yet still outpacing inflation and the growth in national income." It is therefore no wonder that health care providers are actively exploring facilities in India as a way to reduce costs.
Why India?
The advantages that India offers as a destination for medical tourism are similar to those that make it an attractive option for IT off shoring. Much like the legion of engineers that dominate the IT sectors, Indian doctors are educated in English under a medical curriculum that was closely modelled on the British system. After independence the Indian government expanded medical education starting a number of new medical colleges at the state level and also financing medical centres of excellence such as AIIMS. In the last decade or so there has been growing private investment in medical education as well, with a number of private medical colleges being started. The cost of a medical education has been relatively cheaper in India with a bulk of the expense being subsidized by the government. A peculiar feature of medical education in India is that the numbers have been skewed disproportionately in favour of graduating doctors rather than nurses compared to other countries. Consequently India has exported
doctors to other developed countries such as the United States, the United Kingdom and those in West Asia, a typical example of brain drain and the subsidizing of first world health by the tax resources of an impoverished third world country. No doubt these physicians have been able to acquire greater skill by working with state of the art technology and being exposed to the latest developments and best procedures in medical science.
Indeed a major selling point of medical tourism is precisely its ability to attract these Indian doctors to return from abroad to work (either full time or part time) in these multi-speciality hospitals where they would not lack for the latest and the best in equipment or technology. Newly returned non-resident Indian (NRI) physicians have served not only as the poster-boys (and girls) of medical tourism in India but in some cases have been prime movers in setting up such hospitals incorporating the latest in medical technology and medical practices, and often bringing with them their entire support staff in order to replicate in minute detail the environment of a first world facility.
Of course this reverse brain drain of NRI physicians could not have taken place without certain enabling factors. These relate to the process of opening up of the Indian economy itself, involving the ability to undertake larger quantum of private investment (including foreign investment) in the health sector (multispeciality hospitals require heavy capital investment upfront), more perrnrssrve rules on importing medical technology and improvements in transportation and communications infrastructure. The potential to establish backward and forward linkages with a maturing Indian pharmaceutical industry and growing sophistication of indigenous medical equipment manufacturers may well be another reason that makes India an attractive destination.
Medical Tourism: A Mixed Blessing
There are certainly large sums being bandied about the full potential of medical tourism in India. A much cited CIl-McKin-sey study estimates that medical tourism can contribute Rs 5,000-10,000 crore additional revenue for up-market tertiary hospitals by 2012. Leaving aside these astounding figures for the moment, a few preliminary remarks may be in order here regarding the larger effects of medical tourism for Indian economy and society. There is legitimate concern that medical tourism, much like economic liberalization, will further exacerbate the divisions between the haves and the have-nots which now will include those with access to the best medical facilities and those whose lives will be tragically cut short because of the continuing lack of access to basic preventable health care.
Thus far medical tourism has benefited from the benign neglect of the govern- ment which has saved it from being smothered in its infancy by overregulation. However it is inevitable that in the coming years due to the sheer potential size of this service sector the government will have to shake off its habit of indifference. The Confederation of Indian Industry (CII) has of late been pressing the government to treat medical tourism as a national priority sector which would bring in its wake a full blast of tax and other incentives. The need for greater state involvement arises from another less savoury aspect as well. This has to do with the seamier side of medical tourism which has also benefitted from the absence of state regulation or more commonly ineffective implementation. There exists a class of medical tourists who see India as an easier source to obtain transplant organs such as kidneys for which they may have to wait for years in their own countries. Going by the frequent reports in the media about organ and kidney rackets there is cause to believe that this kind of predatory medical tourism is a serious problem. Given the enormous social and economic inequality and deprivation prevalent in India the possibility of exploiting weaker off sections in this medical organ trade is only too real. It is also not inconceivable that despite protestations to the contrary, even the most reputed of hospitals may playa passive facilitating role in this organ trade. It is imperative that the government should take a more active regulatory role in order to prevent medical tourism from descending into an extension of the illegal organ trade. There is a strong case to be made for greater government regulation and vigilance in order to protect medical tourism from its own worst excesses.
The revenue oriented models that trumpet the benefits of medical tourism suffer from the moral tension that national health and welfare cannot be held captive to the profit motive. And sceptics may well point out that providing low cost health options to foreigners does little to improve health overall for Indians. It is also clear that medical tourism cannot be an excuse for continued government neglect of public health or of retreating further from this arena pleading financial and budgetary constraints. If medical tourism is indeed a net revenue generator for the government it would do well to increase its allocation for public health.
The more durable gains of medical tourism may be more imperceptible gains that are difficult to precisely quantify. One of the immediate benefits may be that of reversing the brain drain, with more trained personnel opting to stay back in India as opportunities for employment and professional advancement increase. These may have valuable spill-over effects for the rest of the economy but more importantly for the health sector itself. To continue to attract a reliable stream of clients, Indian hospitals catering to medical tourism have willingly adopted (and have had to maintain) very high standards of medical practice. This may spur greater efforts towards effective selfregulation among these hospitals as they realize the importance of protecting the 'market brand' where the short-sighted practices of a few renegade members can cause industrywide damage and loss of confidence which may be impossible to regain. Much like export firms, exposure to a competitive global market will induce gains in cost efficiency and quality consciousness which may in turn be passed on to domestic consumers. Hopefully along with medical technology, better medical practices will also be adopted by second tier hospitals catering more exclusively to a domestic clientele. Indeed once exposed to superior medical practices, it is more than likely that Indian consumers will demand better quality in their own care.
Lower costs being the bedrock of medical tourism, this capital intensive service industry cannot sustain itself on temporary cost advantages. In order to ensure that costs remain lower, the industry will have to encourage, directly or indirectly, investment in medical education and research. This may take the form of lobbying the government or accreditation bodies such as the Indian Council of Medical Research (ICMR) to periodically raise the quality of medical and nursing graduates and the standard of the medical curriculum. It may take the direct form of setting up new medical colleges with updated educational curricula and facilities, increased focus on research and development of various kinds, or more plausibly greater avenues for apprenticeships and training of medical personnel so that skills are continually updated.
The question of sustainability allows one to consider another possibility that will have a more direct bearing on health care for the Indian masses. In a globalizing world of cut-throat competition this new medical industry may soon discover that its most valuable asset is its pool of domestic customers. As extemal demand waxes or wanes for their services, the industry may out of its own self interest press the Indian state to institute some form of comprehensive health coverage for its population as part of its social safety net. It is possible to contemplate a future when this may well dovetail with a government that takes its own rhetoric of economic and social justice seriously. With certain kinds of central government employees already being allowed to avail themselves of treatment at these private multi-speciality hospitals, it may prove politically and morally untenable for the government not to offer some kind of coverage for the rest of the population, It is not an impossible dream that the migrant workers which this article briefly referred to in the beginning and the medical tourists from the first world who today seem to belong to two different universes, may ultimately both manage to live in the same one.
The first is that of rampant and deeprooted poverty of the many (a persistently large number) amidst the presence of plenty of a few (though substantial and growing of late). Unequal access to (and often absence of) health care is the familiar variant, yet nonetheless more tragic because of it, of the iniquitous dualism that even after nearly six decades of 'development' still characterizes social and economic structures in India.
The second is the more novel phenomenon of citizens of the 'first world', rich and developed nations, choosing to undergo medical procedures or treatment in a 'third world' country such as India, albeit in multi-speciality hospitals. These well equipped hospitals with state of the art equipment, often staffed with doctors and nurses with substantial work experience acquired from working in hospitals abroad, boast and deliver medical care comparable or superior to what is available in most developed country hospitals at a fraction of the cost. These hospitals advertise and offer 'medical package tours' that not only include medical operations and procedures but also travel to and from the hospital, stay and recuperation at 'five star facilities' to attract the attention and custom of first world patients as well as well-heeled domestic ones. This phenomenon is commonly termed health or medical tourism.
As an aside on terminology, for our current purposes we shall treat health and medical tourism as similar though in its proper sense they may differ in the domain of activities that each encompasses. For instance medical tourism may sometimes be narrowly defined as involving only a subset of those activities limited to the medical procedural-pharmaceutical complex while health tourism may sometimes be more broadly understood to involve activities that include 'alternative' medical treatments, therapies, lifestyle and health resorts etc. The distinction is sometimes useful as when we focus on issues related to 'medical insurance' and the 'health care industry' and at other times less useful when we try to discern the larger social and economic impact of health or medical tourism.
Medical Tourism: Is it a new thing?
In one sense medical tourism is hardly a new phenomenon. For long, people have travelled to other places in search of better medical treatment. The presence of reputable medical services has often acted as a spur to local economic activity either directly or as a spin off. One only need look at the hive of small businesses bustling around the location of any medium large hospital to realize the truth of this statement. You not only find pharmacies, laboratories and medical supply stores but also a number of eateries, hotels, lodges, banks, general stores and transportation hubs. Secondly India and transportation hubs. Secondly India has also for many decades now served as a destination for those seeking better medical treatment or facilities within theSMRC and West Asia region. In general,most Indians themselves are likely to bemedical tourists at some level determinedprimarily by their disposable incomeDepending on their economic circumstances Indians are no less likely to travel long distances, even abroad, seeking better medical treatment as the experiences of many politicians and film stars can duly attest. Having established that medical tourism itself is not a new thing, even in India, it is still important to point out what is new about its latest manifestation. In a nutshell what differentiates the Indian medical tourist from the global medical tourist is the focus on not 'better' treatment but on 'cheaper' treatment. What prompts the global medical tourist, for e.g. the American patient, to fly half way around the globe to a hospital in India is not because health care in India is better but because the costs of standardized medical and surgical procedures in India is far less.
Medical Tourism as a Facet of Globalization
The determining factor that lower costs play in driving medical tourism cannot be overstated. According to Dr. PrathapC. Reddy, Founder and Chairman of the Apollo Hospitals Group, "Compared to countries like the UK or the US, procedures like heart bypass surgery or angioplasty come at a fraction of the cost in India, even though the quality of doctors and medical equipment is comparable to the best in the world. A heart bypass surgery in India costs USD 6,500, while in the US it costs between USD 30,000 and USD 80,000." The great emphasis placed on keeping costs down makes medical tourism part and parcel of the process of globalization. The economic logic that has resulted in the transfer of industry and services to regions where costs of production are the lowest is the same that underlies medical tourism as well.
Once we recognize that health care is a service industry just like the 'call centres' in India that fulfils the needs of various customers in the United States and other first world countries much of the radicalism of medical tourism seems very ordinary and common place. It is no different from the business process outsourcing (BPO) model that underpins the rapidly growing information technology (IT) sector in India. The same cost cutting impulses that lead multi-national corporations to off-shore and outsource business processes and production to other countries, also compels private and national health insurers to encourage their customers to consider undertaking certain medical procedures in India. It is crucial to note that it is not only the penny pinching or uninsured individual who is looking for a cheaper deal as it were, but increasingly large private or public health carriers who are looking to rein in the galloping costs of health care on the one hand and to whittle down long waiting lists of patients requiring medical procedures in the developed world. For example, according to the non-profit Kaiser Family Foundaiton, a leading health policy foundation in the U.S., "expenditures in the United States on health care surpassed $2 trillion in 2006 ... [and] accounted for 16% of the nation's Gross Domestic Product (GDP). Total health care expenditures grew at an annual rate of 6.7 percent in 2006, a slower rate than recent years, yet still outpacing inflation and the growth in national income." It is therefore no wonder that health care providers are actively exploring facilities in India as a way to reduce costs.
Why India?
The advantages that India offers as a destination for medical tourism are similar to those that make it an attractive option for IT off shoring. Much like the legion of engineers that dominate the IT sectors, Indian doctors are educated in English under a medical curriculum that was closely modelled on the British system. After independence the Indian government expanded medical education starting a number of new medical colleges at the state level and also financing medical centres of excellence such as AIIMS. In the last decade or so there has been growing private investment in medical education as well, with a number of private medical colleges being started. The cost of a medical education has been relatively cheaper in India with a bulk of the expense being subsidized by the government. A peculiar feature of medical education in India is that the numbers have been skewed disproportionately in favour of graduating doctors rather than nurses compared to other countries. Consequently India has exported
doctors to other developed countries such as the United States, the United Kingdom and those in West Asia, a typical example of brain drain and the subsidizing of first world health by the tax resources of an impoverished third world country. No doubt these physicians have been able to acquire greater skill by working with state of the art technology and being exposed to the latest developments and best procedures in medical science.
Indeed a major selling point of medical tourism is precisely its ability to attract these Indian doctors to return from abroad to work (either full time or part time) in these multi-speciality hospitals where they would not lack for the latest and the best in equipment or technology. Newly returned non-resident Indian (NRI) physicians have served not only as the poster-boys (and girls) of medical tourism in India but in some cases have been prime movers in setting up such hospitals incorporating the latest in medical technology and medical practices, and often bringing with them their entire support staff in order to replicate in minute detail the environment of a first world facility.
Of course this reverse brain drain of NRI physicians could not have taken place without certain enabling factors. These relate to the process of opening up of the Indian economy itself, involving the ability to undertake larger quantum of private investment (including foreign investment) in the health sector (multispeciality hospitals require heavy capital investment upfront), more perrnrssrve rules on importing medical technology and improvements in transportation and communications infrastructure. The potential to establish backward and forward linkages with a maturing Indian pharmaceutical industry and growing sophistication of indigenous medical equipment manufacturers may well be another reason that makes India an attractive destination.
Medical Tourism: A Mixed Blessing
There are certainly large sums being bandied about the full potential of medical tourism in India. A much cited CIl-McKin-sey study estimates that medical tourism can contribute Rs 5,000-10,000 crore additional revenue for up-market tertiary hospitals by 2012. Leaving aside these astounding figures for the moment, a few preliminary remarks may be in order here regarding the larger effects of medical tourism for Indian economy and society. There is legitimate concern that medical tourism, much like economic liberalization, will further exacerbate the divisions between the haves and the have-nots which now will include those with access to the best medical facilities and those whose lives will be tragically cut short because of the continuing lack of access to basic preventable health care.
Thus far medical tourism has benefited from the benign neglect of the govern- ment which has saved it from being smothered in its infancy by overregulation. However it is inevitable that in the coming years due to the sheer potential size of this service sector the government will have to shake off its habit of indifference. The Confederation of Indian Industry (CII) has of late been pressing the government to treat medical tourism as a national priority sector which would bring in its wake a full blast of tax and other incentives. The need for greater state involvement arises from another less savoury aspect as well. This has to do with the seamier side of medical tourism which has also benefitted from the absence of state regulation or more commonly ineffective implementation. There exists a class of medical tourists who see India as an easier source to obtain transplant organs such as kidneys for which they may have to wait for years in their own countries. Going by the frequent reports in the media about organ and kidney rackets there is cause to believe that this kind of predatory medical tourism is a serious problem. Given the enormous social and economic inequality and deprivation prevalent in India the possibility of exploiting weaker off sections in this medical organ trade is only too real. It is also not inconceivable that despite protestations to the contrary, even the most reputed of hospitals may playa passive facilitating role in this organ trade. It is imperative that the government should take a more active regulatory role in order to prevent medical tourism from descending into an extension of the illegal organ trade. There is a strong case to be made for greater government regulation and vigilance in order to protect medical tourism from its own worst excesses.
The revenue oriented models that trumpet the benefits of medical tourism suffer from the moral tension that national health and welfare cannot be held captive to the profit motive. And sceptics may well point out that providing low cost health options to foreigners does little to improve health overall for Indians. It is also clear that medical tourism cannot be an excuse for continued government neglect of public health or of retreating further from this arena pleading financial and budgetary constraints. If medical tourism is indeed a net revenue generator for the government it would do well to increase its allocation for public health.
The more durable gains of medical tourism may be more imperceptible gains that are difficult to precisely quantify. One of the immediate benefits may be that of reversing the brain drain, with more trained personnel opting to stay back in India as opportunities for employment and professional advancement increase. These may have valuable spill-over effects for the rest of the economy but more importantly for the health sector itself. To continue to attract a reliable stream of clients, Indian hospitals catering to medical tourism have willingly adopted (and have had to maintain) very high standards of medical practice. This may spur greater efforts towards effective selfregulation among these hospitals as they realize the importance of protecting the 'market brand' where the short-sighted practices of a few renegade members can cause industrywide damage and loss of confidence which may be impossible to regain. Much like export firms, exposure to a competitive global market will induce gains in cost efficiency and quality consciousness which may in turn be passed on to domestic consumers. Hopefully along with medical technology, better medical practices will also be adopted by second tier hospitals catering more exclusively to a domestic clientele. Indeed once exposed to superior medical practices, it is more than likely that Indian consumers will demand better quality in their own care.
Lower costs being the bedrock of medical tourism, this capital intensive service industry cannot sustain itself on temporary cost advantages. In order to ensure that costs remain lower, the industry will have to encourage, directly or indirectly, investment in medical education and research. This may take the form of lobbying the government or accreditation bodies such as the Indian Council of Medical Research (ICMR) to periodically raise the quality of medical and nursing graduates and the standard of the medical curriculum. It may take the direct form of setting up new medical colleges with updated educational curricula and facilities, increased focus on research and development of various kinds, or more plausibly greater avenues for apprenticeships and training of medical personnel so that skills are continually updated.
The question of sustainability allows one to consider another possibility that will have a more direct bearing on health care for the Indian masses. In a globalizing world of cut-throat competition this new medical industry may soon discover that its most valuable asset is its pool of domestic customers. As extemal demand waxes or wanes for their services, the industry may out of its own self interest press the Indian state to institute some form of comprehensive health coverage for its population as part of its social safety net. It is possible to contemplate a future when this may well dovetail with a government that takes its own rhetoric of economic and social justice seriously. With certain kinds of central government employees already being allowed to avail themselves of treatment at these private multi-speciality hospitals, it may prove politically and morally untenable for the government not to offer some kind of coverage for the rest of the population, It is not an impossible dream that the migrant workers which this article briefly referred to in the beginning and the medical tourists from the first world who today seem to belong to two different universes, may ultimately both manage to live in the same one.
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