India’s low-cost patient care earns plaudits in US study

India’s low-cost patient care earns plaudits in US study

Bangalore: A new study from Duke University says Indian hospitals’ innovative practices could offer valuable lessons to US policymakers and hospitals in providing low-cost and high-quality patient care.

In the study, titled “Lessons from India in Organizational Innovation", published in the 10 September issue of Health Affairs, Duke University researchers say that while innovations are noticeable in areas such as customer service, labour practices and manufacturing in Indian hospitals, they all also reflect new organizational practices and market-oriented strategies.

The study comes in an election year in the US, when questions and issues related to health care reforms usually surface.

Duke University law professor Barak Richman asks why the “same innovation has not occurred in the US".

“Indian accomplishments thus offer lessons both on how to innovate and, more significantly, how to organize a marketplace that will foster valuable innovations," he says.

Apollo Hospitals Group chairman Prathap C. Reddy is happy that Indian hospitals’ achievements are “finally ringing in people’s ears". He says the achievements are a result of innovation in human efficiency, clinical care and quality management of large scale operations.

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Innovative Practices (Graphic)

It is significant that an Indian example is being cited for the required US health care reforms as the two nations are stark opposites on this front. The size of India’s entire health sector is estimated at $20 billion (Rs90,240 crore), while the US health care sector is worth $2.3 trillion; at least 80% of the Indian health sector hinges on private resources, whereas state resources dominate the US sector, according to the study.

And the quality of India’s government-provided health care, especially in rural areas, leaves a lot to be desired.

However, much of India’s success has come from its development, and constant improvement, of organizational structures.

This contrasts with the US health sector which, researchers say, “has been strikingly ossified" and has either excluded the new entrants or “crippled realistic challenges" posed by newcomers with innovative organizational forms.

“We are in a health care crisis in the US," said Kevin Schulman, professor of medicine and business administration at Duke University, in an email.

At very high costs, even with 16% of gross domestic product spent on health care, a large number of people in the US have limited access to health care.

“Our ability to sustain this rate of spending going forward is a point of major contention," Schulman added.

The authors closely studied two hospital groups in India—Hyderabad-based Care Hospitals and New Delhi-based Fortis Hospitals. They found that the application of management practices from the hotel industry helps Fortis and others tailor care according to patients’ expectations, resulting in a more focused approach than that at many US hospitals.

Commercialization of local technology and “self-manufacturing" (hospitals making their own equipment)—which the authors of the study found interesting in Relisys Medical Devices Ltd, part of the Care group—is also practised at other places in India, including Aravind Eye Care System in Madurai, Tamil Nadu.

While skilled labour is indeed at the centre of innovations such as lowering the cardiac surgery cost from $100,000 in the US to $2,000-6,000 in India, hospitals here are beginning to innovate on the technological front, says Vishal Bali, chief executive of the Wockhardt group of hospitals.

Conscious, or awake, heart surgeries, pioneered at Wockhardt in Bangalore, are now being promoted at other group hospitals. Conscious heart surgeries reduce the length of stay in the intensive care unit as the patient is not on any life-support system. This, while lowering the cost of hospital stay, also expedites post-operative recovery and now constitutes 25-30% of Wockhardt’s heart surgeries, adds Bali.

Apollo’s Dr Reddy says India can innovate further in providing medical evidence to oriental systems of medicine and integrating it with traditional hospital care.

He—along with M. Srinivasan, director of Aravind Eye Care, and Devi Shetty, founder of Narayana Hrudalaya Hospital in Bangalore—says that the US regulatory environment has discouraged health care innovation. Inflexibilities in the hours and nature of work that professionals can undertake, regulated pricing and high litigation have led to this crisis, they say.

Experts say the two nations differ in their approach to health care.

“In India, hospitals are mostly run by doctors and they hire the administrators. In the US, the administrators hire the doctors," says Dr Shetty. “I think in 10 years, Indian hospitals will manage the Western hospitals. The writing is on the wall."

It is a scenario which the authors of the study have already visualized. “The US health sector, however, may soon resemble other innovation-intensive industries in one important respect: it may find its industry leaders displaced by Indian offerings," the study says.