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Wednesday, Sep 20, 2006

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Medical tourism and its side-effects

G. Ramesh

India may be a destination for medical care-seekers from abroad, but where will that leave domestic patients?

There is much optimism in the medical field in India. Outsourcing is now turning its attention to medical care. From medical transcription to mediclaim processing and diagnosis it is now moving towards hospital itself. Medical tourism is the new buzzword. There are stories galore of foreign patients coming to India for heart surgery or knee replacement procedure. Yet, this is not an unmixed blessing. There can be unintended side-effects.

It Tapers at the Top

The Waterfall Model refers to people in the higher reaches having better access to resources than those in the lower reaches.

Medicare ranges from primary to super-specialty; the unequal spatial reach from rural to urban care; the quality of care, ranging from palliative to curative; the difference in public to private hospital care, and from nursing-home-type care to super-deluxe hospitals, more like five-star hotels.

Depending on one's socio-economic status, one can access these services. If one can afford it, the Indian system is the best as it gives immediate access even to super-specialist care without the need for a referral system. And one can shop around also.

Little wonder that hospitals are aggressively gearing themselves to attract foreign patients. `Medi-cities' are coming up and perhaps even an SEZ will be set up. Hospitals are taking steps to get accredited by international agencies, much like software firms.

They are also trying to get empanelled by insurance companies abroad. A positive side to these developments is that they may bring discipline to the hospital industry and force it to adopt world-standard systems and standardise processes.

In the hospital industry a key element is cost that has a tendency to rise, taking medicare beyond the reach of many.

One reason for the high cost of care is the low capacity utilisation of hospital infrastructure. Higher volumes in the private hospitals will help bring down the costs.

But this is countered with the argument that hospitals need to constantly spruce up their infrastructure and processes, especially those facilities that handle foreign patients.

Even more than infrastructure or investment is the availability of doctors. It is much easier to build hospitals than groom doctors. The incubation time for doctors is much longer than for hospitals. There is again a pyramid-like structure in the medical profession, with few specialists at the top, conforming to the waterfall model. Of course, in this case, the base is made up of general physicians who are the key to diagnostics. What the country needs, especially if it wants to sell the medical tourism model, is people at the top.

Surely, foreign patients are not going to come for simple procedures; they will come mainly for specialty care. It is here that India faces a problem, for, unlike software professionals, medical specialists are not scalable in a short time.

NRIs may come back

One possible scenario is that Non-Resident Indian medical professionals will start returning as they might find India lucrative enough.

Or, hospitals might go the airlines way; the latter are flying their planes with foreign pilots. So, the country's hospitals may fly in both patients and doctors.

Only, the local medicare-seekers may get pushed down the pecking order. The plight of the poor patients can be imagined. Government hospitals would be fighting a losing battle to retain talent.

Can the country afford to dedicate its scarce medical resources to care for the global market? It is only a tiny segment now but, then, the segment that gets specialty care in India is also tiny.

(The author is Visiting Professor — Finance and Control Area — Indian Institute of Management-Bangalore.)

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