An 'Indian lesson' for America's bloated healthcare system

New York: Amid growing concern about runaway health spending, American industry leaders have said the medical industry can find inspiration in India’s ability to provide low-cost, high-quality health care.

“More medical industry innovations will occur in India than any other part of the world,” Jeffrey R Immelt, chief of General Electric Co., told the three-day “Cleveland Clinic Medical Innovation Summit”.

“In India, consumers are more directly involved in their health care because they lack health insurance, forcing the country to come up with low-cost, highly innovative ways to address health care,” said Immelt.

[caption id=“attachment_101076” align=“alignleft” width=“380” caption=“GE chief Jeff Immelt believes that India’s combination of low-cost needs and outstanding engineering talent a world-class medical-devices industry. Reinhard Krause / Reuters”] [/caption]

He believes India’s combination of necessity and outstanding medical and engineering talents will produce a world-class medical-devices industry.

Immelt expects energy and health care to drive GE’s revenue in India to $10 billion in five years. Immelt has already invested heavily in R&D in India and expects GE to develop products for the country, as well as export. GE unveiled two products in March this year - GE Healthcare MAC 600 and the GE VIVID P3 ultrasound system - designed by Indian engineers.

GE Healthcare will be investing $50 million in India to develop diagnostic products. It plans to roll out 10 devices annually that include compact CT systems, scanners and molecular imaging systems.

“Consumers in India pay out of pocket for medical treatments so they tend to be more value-conscious,” Omar Ishrak, chairman and CEO of Medtronic Inc., told the summit.

“This means many of our company’s future technologies could become available in developing countries before they do in other parts of the world,” said Ishrak, who recently visited India, and sized it up as a $3 billion opportunity for Medtronic which sells defibrillators and spinal devices.

Not just about cutting costs

America may be looking to India to learn lessons from a frugal innovator but there is more to India’s approach than merely cutting costs. Surgeons at Apollo Hospitals have performed over 50,000 heart surgeries with a remarkable 98.5 percent success rate. It hasn’t gone unnoticed. Apollo is already sought out by US clients to design, build and run medical facilities.

Apollo’s trained nurses have also been wooed by other countries and many have left Apollo for jobs abroad. With attrition seeming inevitable, Apollo capitalised on the shortage of nurses in the developed world by operating nursing schools and the Global Nursing Program (GNP), which trained and placed nurses in the US, Britain, Middle East and Asia.

Deceased management guru C.K. Prahalad also trumpeted other Indian examples like Aravind Eye Hospital for creating a new business model. Aravind’s founders use a tiered pricing structure that charges wealthier patients more for fancy meals or air-conditioned rooms, letting the firm cross-subsidise free care for the poorest. Aravind rotates its staff at its five hospitals to deal with both paying and non-paying patients so there is no difference in quality.

Ever since Prahalad talked about Madurai-based Aravind Eye Hospital in his bestseller The Fortune at the Bottom of the Pyramid, the West has been fascinated by Aravind’s business model which does not just depend on pricing, scale, technology or process, but on a clever combination of all of them. Aravind Eye Hospital performs one million eye surgeries each year and works with 249 hospitals in India and abroad.