Health care outsourcing
RAVI (NOT his real name) is a 32-year-old computer engineer from India, working in Chicago for three years. He experienced severe abdominal pain and the emergency room doctor diagnosed a kidney stone. The urologist he was referred to reviewed his X-rays and explained to him that he was suffering from a partially blocking kidney stone and advised extracorporeal shock wave lithotripsy (ESWL) of the stone, wherein the stone will be disintegrated into small particles by shock waves.
Ravi checked with the hospital regarding the cost of the procedure. He is insured by his employer. However, he has to pay a 20 per cent deductible. His father in India consulted a local health care facility and informed him that the cost of the procedure in India and the airfare for his travel to India will be less than the 20 per cent deductible. Ravi travelled to India, had the ESWL procedure done, and returned to Chicago and went back to his work.
When a patient in Altoona, Pennsylvania, needs an emergency brain scan in the middle of the night, a doctor in Bangalore, India, is asked to interpret the results.
These incidents described are not becoming uncommon scenarios, more so as the escalating health care costs in the United States are driving health care and its technical components to overseas markets. The medical processes being outsourced to India and other countries, apart from health care itself, include medical transcription, insurance claims processing, revenue cycle management, medical billing, and coding.
Over 75 per cent of the U.S.'s $10 trillion economy is in service industries, amongst which health care rides high in the ladder. The reason for the global outsourcing is obvious: lower costs (50-70 per cent savings) and productivity improvements that result from outsourcing. Health care outsourcing is a part of Business Process Outsourcing (BPO), which is a large growing global business. The BPO to India had exceeded $300 billion by 2004, according to conservative estimates, primarily from the United States, Europe, Canada and Japan.
Mecca of health tourism
India has become the centre of this "health tourism" because of the technologically advanced health care facilities, medical specialists, a large proportion of whom are trained in countries like the U.S. and the U.K., and of course the cost advantage. A heart surgery in the U.S. costs $30,000, while the same could be done for $6,000 in India. Indian health care facilities are a haven to patients with chronic renal failure, seeking kidney transplants. Not only is there a greater choice of live donor kidneys, the procedure itself costs a fraction of its cost in the United States. In countries like Canada and the U.K. with universal health care, where there is a long waiting line for procedures like coronary bypass surgeries, the patients are travelling to India.
With shortage of U.S. radiologists and the practice of technologically `advanced' medicine that prompts sophisticated scans for scores of ailments, the U.S. radiological services are being outsourced to the other side of the globe. The night time emergencies are being read and interpreted in places where it is daytime. So, shortage of night-time-on-call radiologists is being taken care of. That means radiologists in Australia, India, and Lebanon are reading scans of U.S. patients. A two-man U.S. trained radiology services, Teleradiology Solutions, in Bangalore, is being utilised by 40 U.S. hospitals, including Altoona, PA.
Escalating costs
Business Process Outsourcing (BPO) created a hysterical outcry from political and legislative leaders and made headlines during the American Presidential elections. According to McKinney & Co., a U.S. business organisation, this hysteria is misguided. Every $100 of labour cost outsourced offshores creates over $112 of value for the U.S. economy through savings, new revenues and repatriated profits.
American capitalism is based on the idea of protecting the welfare of consumers. Health care is no exception; the health care `industry' has out-priced itself with costs beyond the reach of the middle class and the elderly. With more than 45 million Americans uninsured, it is not only the uninsured that are not able to afford the escalating costs of health care, but also the middle class and the elderly whose life savings can be wiped out by one major illness in the family. It is time to evaluate the microeconomics and restructure the cost of the health care in the United States before finger-pointing at other countries that they are invading into its service industries.
Dr. SIVAPRASAD MADDURI
Poplar Bluff, MO, USA
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