Globalization of health care in high gear

Dr. Shetty

As evidence that market forces are moving faster to transform the delivery of health care than government reforms can ever accomplish, consider medical tourism’s latest development: the creation of a $2 billion “health city” in Cayman.

Dr. Devi Shetty, an Indian medical entrepreneur, has teamed with Ascension, the largest Catholic provider in the United States, and they will break ground on the first phase of the complex in August. It will be a 140-bed unit, with plans to expand to 2000 beds over 15 years.

Dr. Shetty already runs the Narayana Hrudayalaya Hospitals of India, a chain of 14 hospitals and 5600 beds. Its hallmark is high quality care and low costs. With that model, the two formidable partners hope to attract medical customers from the Caribbean, Latin American and North America.

Their venture comes at a time when the Medical Tourism Association, a new organization, estimates that six million Americans will leave the country for health care this year. “The primary reason they are leaving is cost,” said Jonathan Edelheit, its CEO. “But no one is going to travel for lesser quality.”

He cited a Gallup poll that showed up to 29% of Americans would consider going abroad for surgery. Among ethnic groups in the states, 50% would travel for medical care. “They’ll go overseas in a heart beat,” he said.

He cited Costa Rica as a destination that has convinced travelers that the quality is good enough and the savings are huge. Replacing two knees could cost $100,000 in the United States and $15,000 in Cost Rica.

He said the listing of such bundled prices abroad has “really pushed transparency in the U.S.” The demand for such orthopedic procedures will explode, he said, as baby boomers become a bigger segment of the population. He also predicted a boom in overseas dentistry.

Corporate payers are getting into the medical tourism game, at least on a domestic basis. And they will push the envelope. Edelheit uses Lowe’s as a case study. Lowe’s cut a deal with the Cleveland Clinic to be its Travel Surgery Center, for which the company gets a bundled price and its 123,000 plan members get free surgeries and concierge care coming and going.
Its first ten “tourists” in 2010 gave Cleveland Clinic straight tens out of ten for their care.

The time for return to work for heart bypasses has been cut to 5.5 weeks, compared to 6 to 12 weeks as a national average, another benefit for employer and employee.
Such centers of excellence are “the way of the future,” according to Edelheit.

Note that all these centers are competing on value, the combination of quality, price and service, not the size of their edifices.
With 33 million Americans now in consumer-driven health plans, can a full- fledged marketplace for health care be far away? Dr. Shetty is betting not.

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