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India bids for health care
tourism
By Shehla Raza Hasan
KOLKATA -
India's health care services industry is poised to
become a major driver of economic growth as first-world
patients, driven out of their own systems by high costs
and crowded conditions, look for cheaper places for
medical care. For India, new terms such as such as
health tourism, health care outsourcing and medical back
office support are suddenly gaining currency.
Already, with health care costs having spiraled
to prohibitive levels across much of the developed
world, the British government, for instance, is
contemplating flying its ailing to India to clear up
long waiting periods for treatment and surgery in the
UK's overcrowded hospitals. India's hospital care and
education facilities are rapidly improving after having
been freed from the yoke of 50 years of a command
economy. Hospitals in Kolkata have long queues of
patients from Bangladesh, waiting for appointments with
Indian medical specialists. The opening of bus service
between India and Lahore is expected to bring Pakistani
patients as well.
The statistics are impressive.
According to India's ministry of External Affairs, the
US$17 billion Indian health care industry comprises
roughly 4 percent of the country's GDP. Hospital
services, health care equipment, managed care and
pharmaceuticals are poised to grow by 13 percent
annually for the next six years. According to the
Insurance Regulatory and Development Authority (IRDA),
India's health care industry could grow exponentially,
as have software and pharmaceuticals over the past
decade. The government believes that only 10 percent of
the market potential has been tapped. With global
revenues an estimated $2.8 trillion, health care is
the world's largest industry.
The industry's
growth is being fueled by the rising purchasing power of
the Indian middle class, which is willing to pay more
for quality health care. Indeed, health care is becoming
steadily more available as the private sector becomes
more involved in the industry and hospital management.
With the kind of interest in Indian services that is
being shown by other countries, industry analysts
believe growth could outstrip current calculations.
Privatization is the key to the sector's
resurgence. A Central Bureau of Health Intelligence
study indicates that middle and high-income groups have
more confidence in health care products and services
offered by private hospitals than in government-owned
agencies. On average, private service is 60 percent more
expensive than government-owned service.
Although private health care is a more expensive
alternative for domestic residents, it is cheaper for
the British government to fly patients over and back
after treatment than it is to treat them at home. In
fact, the cost-benefit advantage is phenomenal.
Open-heart surgery costs run $34,000 to $70,000 in
the UK. In the US, routine open-heart surgery runs as
high as $150,000, with complicated problems
considerably more. In India, open-heart surgery could
cost $3,000 to $10,000 in the best of hospitals.
Cost differentials therefore could be anywhere from 200
percent to 800 percent to off the chart. Analysts
believe effective marketing could divert patients from
African and West Asian countries who are going to the US
or UK for treatment to India.
Another niche area
that could be exploited is procedures that are generally
not insurance-covered in advanced countries, like
cosmetic and plastic surgeries and other high-end
lifestyle treatments such as breast implants.
While quality remains an issue, it seems to be
improving in India, with private hospitals increasingly
able to import high-tech medical equipment, a situation
that should improve further with the Indian government's
announcement that import duties on medical equipment are
to be reduced as well. In addition, for decades, doctors
and other professionals have been fleeing India for
more-developed countries where they could practice
medicine or other professions profitably. The US
Immigration and Naturalization Service says a startling
48 percent of "H1-B" category workers admitted to the
United States - those with advanced degrees, exceptional
abilities or professionals with bachelor's degrees or
equivalent and skilled workers - are from India. As
health care salaries and medical facilities and improve
in India, that brain drain should start to reverse, as
it has in the information technology industry.
A
report published by Dr Vinay Kothari, the managing
director of Hospihealth, a hospital and health care
planner and management consultancy, states that a decade
ago India was roughly 50 years behind the US. However,
the report says, over the last 10 to 15 years this gap
has begun to close fast, with high-tech super-specialty
hospitals coming up all over the country. Most Indian
private hospitals are trying to improve quality by
employing quality manpower, better salary structure,
training and arranging for continuing education for
their doctors.
It is therefore increasingly
likely that Indian health care will be close to global
standards in the coming years. According to the Frost
& Sullivan Indian health care Industry Forecast
1996-2006, the industry's growth very much depends on
India's continuing macroeconomic liberalization,
including further tax cuts, a broader tax base and
reduced interest rates for borrowers. The forecast says
that the introduction of product patents in India is
expected to boost the industry by encouraging
multinationals to launch specialized life-saving drugs.
India's natural advantages of lower production
costs and its skilled work force are expected to attract
multinationals to set up research and development and
production centers. The export of bulk drugs and
formulations is set to increase at a compounded annual
growth rate of 20 percent and 10 percent respectively
between 2002 and 2006. Over-the-counter drugs are likely
to drive the market for formulations during this period.
(Copyright 2003 Asia Times Online Co, Ltd. All
rights reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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