Insurance cos, corporates to fuel growth in medical tourism

Insurance cos, corporates to fuel growth in medical tourism
Comment E-mail Print Share
First Published: Thu, Feb 22 2007. 12 27 AM IST
Updated: Thu, Feb 22 2007. 12 27 AM IST
Paul Doherty first heard about medical tourism in India on an episode of 60 Minutes, a popular television programme in the US. The programme featured Americans visiting India for various surgical procedures.
The 41-year-old California resident set out to find more information on Indian hospitals. Doherty suffers from avascular necrosis—a condition that results in the deterioration of the hip joints—and was looking for inexpensive, but good treatment.
India fit the bill. “I have no insurance and could not possibly afford the surgery in the US. I had to consider other options and I found that it would be far more economical to have the surgery done in India,” says Doherty. After some research, he chose Mumbai’s Wockhardt Hospital, where he had a bilateral hip-resurfacing surgery last week. For some time now, there has been a steady stream of uninsured patients like Doherty coming to India. Now, insured patients from developed countries are coming to India looking for more cost-effective treatment options.
“Insurance companies who are looking for better cost arbitrage and corporates who are trying to pare employee health-care costs will fuel the next wave of growth from other geographies,” says Vishal Bali, CEO of Wockhardt Hospitals.
A North Carolina-based company, Blue Ridge Paper Products, is one of the early movers. The company is considering allowing its 5,500 employees and their dependents to come to India for certain company-insured procedures. It sent one patient to India last year for shoulder and gall bladder surgeries. As an added incentive to get the surgeries done in India, Blue Ridge even paid him a portion of its $10,000 savings.
Indian health-care providers see a big opportunity in insured patients and companies, with most large hospital chains negotiating with them for a share of the business. “We are in talks with companies in the US and expect to see some agreements in place shortly,” says Bali. According to Harpal Singh, chairman of Fortis Healthcare, this is just the beginning. “We have raised the ante of Brand India in many of the developed countries and we are sure to see a significant increase in the number of patients coming from the developed world,” he says.
Bali estimates that the number of foreign patients coming to India is growing by about 35-40% annually. Currently, Wockhardt has 10 foreign patients at its hospitals in Mumbai and Bangalore, with most of them having checked in for specialized procedures such as joint replacement and cardiac surgery.
The annual influx of overseas patients crossed 2,00,000 in 2006 and earned hospitals more than $400 million in revenue. These numbers could increase if health-care companies manage to strike deals with insurers and companies.
A study by the Confederation of Indian Industry, an industry lobby, consulting firm McKinsey and Co., and RNCOS, a research firm, projects that the Indian health-care industry’s revenue from foreign patients will rise to $2 billion by 2012. “India can vie with some of the best hospitals and treatment centres in the world,” says the study. The $2-billion number is five times current revenue. Executives in the health-care industry believe they can reach that target by tapping the insured population.
Comment E-mail Print Share
First Published: Thu, Feb 22 2007. 12 27 AM IST
More Topics: Marketing and Media | Advertising |