Health Care Goes Offshore, Medical Tourism and Clinical Trials Continue in China, India and Elsewhere

Many people might assume that certain professions could never be outsourced, such as the work of health care professionals. This is not entirely true. For example, in a practice called teleradiology, medical technicians and physicians in India and elsewhere are analyzing x-rays and CAT scans performed in the U.S., diagnosing American patients and relaying results back to American hospitals.

Meanwhile, certain less-skilled health care tasks are rapidly moving offshore. Most notably, tens of thousands of jobs in medical record transcription have been moved from the U.S. to offshore centers. Other business process outsourcing (BPO) tasks related to health care include claims processing, human resources and benefits administration, customer relations and supply chain logistics.

Since clinical trials for drugs are exceptionally expensive to conduct, the opportunity to offshore the work and reduce costs is hard for drug firms to resist. However, significant concerns arose regarding the number of deaths of patients in trials. Starting in 2013, India created much tighter regulatory laws for clinical trials. These include requiring trials to be performed in good clinical practice (GCP)-compliant facilities, approval by an ethics committee, registration with regulators and random inspections, all of which come at significant cost.

Meanwhile, medical tourism likely declined significantly due to the Coronavirus, but it is difficult to measure by how much. Analysts vary widely in their estimations of the number of people seeking medical care abroad, and extremely optimistic forecasts have been made that were unreasonable. However, it is clear that high health care costs in the U.S. and other developed nations have in the past contributed to this trade.

A procedure like a hip replacement or a triple bypass can be obtained in nations such as India at as little as 10% to 30% of the cost of the same procedure in the U.S. A heart bypass, for example, may cost only $18,500 in Singapore and $11,000 in Thailand, according to the Thai Public Health Ministry, but could easily cost $60,000 to $100,000 in the U.S. Since many patients in the U.S. are either underinsured or not insured at all, the cost savings sound very appealing. In addition, in nations like Canada and the UK, where medicine is socialized, the wait to get an appointment with and obtain care from a specialist can be months or even years (and some “elective” procedures are not covered by government payment programs). Consequently, such patients are more likely to consider going offshore. Finally, many physicians in India, Thailand, Singapore and elsewhere received their training in the finest clinics and hospitals in the U.S., Canada and the UK. Several of them have returned to their home nations where they are opening clinics specifically for medical tourists. In many offshore clinics that have been adapted to attract foreign patients, surgery and care are of very high quality and outcomes are excellent.

A business sector has opened up that manages medical tourism. For example, MedRetreat (www.medretreat.com), a medical tourism agency based in Odenton, Maryland, partners with hospitals in Argentina, Brazil, Costa Rica, El Salvador, India, Malaysia, Mexico, South Africa, Thailand and Turkey to provide cosmetic, dental and medical procedures to U.S. patients. The company schedules procedures, arranges flights and hotel stays and assigns guides to facilitate the process.

Another medical tourism company, IndUSHealth (www.indushealth.com), is based in North Carolina and outsources medical procedures to hospitals, clinics and physicians in India. IndUSHealth focuses on companies rather than individual patients. Specifically, these are companies that self-insure or pay employees’ health care costs directly instead of contracting with an insurance provider.

Agencies like MedRetreat and IndUSHealth generate most of their revenue from commissions for booking hotel rooms and taking approximately 20% of fees on treatments offered by the providers in exchange for referrals. However, there is no regulation of this practice, and lawsuits or severe medical problems that arise as a result of a mishandled procedure could cripple this relatively new industry. Despite these obstacles, medical tourism agencies are betting that low prices and Western-trained practitioners will insure their success. Qunomedical (www.qunomedical.com) is an online startup based in Berlin that allows patients to search from 1,000 doctors in 35 countries for a variety of treatments.

India’s famed Dr. Shetty operates a 140-bed acute care hospital in the Cayman Islands, called Health City Cayman Islands, in partnership with the nonprofit health care system Ascension, based in St. Louis, Missouri. Shetty also operates thousands of beds in his respected hospitals in India. Shetty is the world’s leader in reducing the cost of high-quality surgery. His Narayana Health firm is a system of dozens of hospitals in India (with plans to expand to Kuala Lumpur and Malaysia) that provide excellent outcomes at very low cost. Open heart surgery, for example, is provided at his Indian facilities for about $2,000. The project in the Caribbean, only a quick flight away from Miami, could have a dramatic effect on health care in the nearby nations of North and South America. Fees for surgery at Health City Cayman Islands run about one-half of fees typically charged in the U.S. The patient experience is excellent, as the hospital is attached to a luxury hotel via a convenient pathway. North America’s hospital operators will undoubtedly pay close attention to Shetty’s methods, which include high-volume, specialized surgery centers, prompt treatment, and proprietary software called iKare that analyzes real-time clinical data for each patient, and then recommends best protocols for treatment.

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Health Care Goes Offshore, Medical Tourism and Clinical Trials Continue in China, India and Elsewhere, Business and Industry Trends Analysis

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