Much attention this year has focused on India's emergence as a major destination for healthcare. A flood of news reports have shown Americans being treated at newly built "super-speciality" hospitals in India, equipped with the latest high-tech equipment and staffed with surgeons who trained or spent years working in top medical facilities in the United States or Europe.

Widely watched TV programs 60 Minutes, the weekday morning Today show and Oprah Winfrey, and newspapers including the Wall Street Journal and Washington Post, have all run stories focusing on Americans travelling to India for medical care. Invariably, these Americans were doing so because they no longer could afford health insurance or their employers no longer provided it. In all these reports the subjects were heard enthusiastically endorsing the experience, and marvelling at the quality of care they received at bargain prices.

Nonetheless, the reports portrayed medical tourism as something appealing really to only the most adverturesome -- or desperate -- of U.S. patients requiring expensive medical care. The Americans profiled were themselves paying the entire tab to be treated abroad -- all travel, all medical, all incidental costs. And as long as that remained the case, the message was medical tourism would have scant impact on the U.S. healthcare industry.

Yet that could soon change. Some companies with self-insured employee health plans, some insurance companies, even one state government (West Virginia) are now studying ways to reduce the cost of medical insurance by sending members abroad for treatment.

Typically these plans would pay for primary and emergency care provided in the United States, but offer big discounts to members willing to have elective surgery performed in low-cost facilities abroad. Given the skyrocketing costs of U.S. medical care, the impact on U.S. corporations and economic competitiveness, and the alarming increase in Americans without health insurance, interest in radical approaches to cost containment is growing.
Some healthcare experts in fact believe such insurance plans could become all-too-common within a decade. "This has the potential of doing to the U.S. healthcare system what the Japanese auto industry did to American automakers," Princeton University healthcare economist Uwe Reinhardt has warned. (1)
A niche market for medical tourism is already giving way to the vastly greater potential for medical value travel.

This new market is global, and encompasses a much wider range of medical services, treatments and procedures. The sort of Americans seeking treatment abroad is changing; the health problems being treated are more serious and varied; and more countries are competing to attract patients from abroad. David Hancock, who wrote The Complete Medical Tourist, predicts medical value travel will become a $40-billion-a-year industry by 2010.
Until recently the term "medical tourism" sufficed to describe the market for Americans receiving medical care abroad. It referred to well-healed types or retirees who paused during holidays abroad to see a dentist or have a tummy tuck. Snowbirds in southern border states who crossed into Mexico to received cut-rate dental care or health exams accounted for most spending.
Today, tough, the term "medical value travel" is being used to describe an altogether different patient. These people can be any age, and head overseas -- often for the first time in their lives -- to receive more complicated, sophisticated treatment in a wider variety of locales. Typically the one thing they have in common is the fact they're among the one in five Americans with no or inadequate health insurance.

These are reluctant globe trotters. Tourism is often the last thing on their minds while boarding flights to places like Costa Rica, India or Thailand to receive medical treatment. Instead they're drawn by the offer of medical care costing 50, 70, even 90 percent less than in the United States, yet possibly provided by doctors of similar training and experience, working in world-class medical facilities.

India has quickly emerged as a major competitor in this rapidly developing market. And to appreciate this market's growth potential, it helps to know why India has suddenly attracted so much attention.

Duplicating Its IT Success

More than any other nation, India has set it sights on dominating this emerging market. It aims to duplicate in medical care the success it's achieved in information technology. India expects the same strengths that enabled it to become a global IT power -- low operating costs and service charges, legions of well-trained technologists and scientists -- to help it prevail in the global healthcare market.

"India ought to begin promoting its healthcare industry abroad like Singapore has done, or like NASSCOM (2) has done for IT, as a sub-brand of India Inc," says Ashok Anantram, president for business development at Apollo Hospitals, the nation's largest private hospital group. Repeating what's become a mantra in India, Anantram says the healthcare industry and government need to join forces to promote India as a mecca for high-quality, sophisticated medical care at a fraction of the cost in high-wage countries like the United States.
Some 320,000 foreigners traveled to Singapore last year for medical care. Nearby Thailand attracted more than one million foreign patients. India by comparison is just getting started. Just over 150,000 foreigners travelled to India last year for medical care, up 15 percent from the 2004 figure. Most came from neighboring South Asian countries (Nepal, Bangladesh and Sri Lanka), or from Gulf and African countries. Those patients typically arrived to receive sophisticated care not readily available at home: open heart surgery, angioplasty, pediatric cardiac surgery, rotablation or coronary artery stenting.

It's the presence in India of many elite medical facilities offering sophisticated medical care at ultra-low prices that positions the country to begin attracting lots of U.S. patients if health plans here ever begin offering steep price discounts for having expensive surgery or medical procedures performed abroad. Consider its competitive appeal.

In general, surgery in India costs one-fifth what it does in the West, says Sushil Jiwarajka, the Western regional chairman of the Federation of Indian Chambers of Commerce and Industry (FICCI). "You can receive treatment, spend a week at a resort in Goa, and still save money" over the cost of having surgery in the United States, Jiwarajka told a recent seminar on medical tourism in Mumbai. Speaking later Joe Curian, who heads FICCI's National Health Committee, said Jiwarajka in fact was understating the savings. "The cost of care is not just one-fifth. In some cases it's one-tenth," Curian said.

At the seminar Indtours Medical Tourism, a Delhi-based care arranger, distributed a factsheet showing the difference in charges between the United States and India for various sorts of complex surgeries and medical procedures. Heart surgery -- $60,000 to $100,000 in the U.S., versus $6,000 to $8,000 in India. Hip replacement surgery -- $40,000 versus $5,800. Bone marrow transplants -- $250,000 against $26,000 in India. An MRI scan -- $60 in India, $700 in New York. Most dental work costs seven to eight times less.

Anupam Verma from the Medical Tourism Council of Maharashtra, the state where Mumbai (formerly Bombay) is located, produced figures showing the cost advantage India enjoys over the United States and its two nearest regional rivals -- Singapore and Thailand -- in attracting foreign patients. Compared to every $10 charged in the U.S., medical care costs $5 in Singapore, $4 in Thailand and $2 in India, Verma claimed.

Still, many Indian surgeons believe the top hospitals would be wiser to focus more on touting their quality of care, rather than low prices. "We don't want to promote India as low-cost healthcare provider, but as a quality healthcare provider," says Dr. Narasinha Reddy, the marketing manager at Bombay Hospital in Mumbai.

Dr. Mohan Thomas, a plastic surgeon, CEO of the Cosmetic Surgery Institute and advisor to the Indian government on medical tourism, is even more emphatic. "We render world-class treatment at a reasonable cost. Don't use the term cheap. We are not cheap," he says.

Primary Advertising Message

Increasingly, the quality of treatment is the primary focus of Indian advertising aimed at international patients. Glossy brochures picture Indian doctors, gowned and masked, performing surgery in operating theaters crammed with high-tech monitoring devices. Both pictures and text convey an image of the medical care provided by India's best private hospitals as being equal to the best anywhere, only for a fraction of the cost. "India offers world-class healthcare that costs substantially less than in developed countries, using the same technology delivered by competent specialists attaining similar success rates," says a typical ad produced by Indtours Medical Tourism.

The intent is to counter the notion that cheaper means inferior. In fact, Indians claim that when it comes to cardiac surgery and other complex procedures, India's top hospitals are the equal of the best anywhere.

At Apollo Hospital, Chennai, recently ranked by one poll as the third best in India for cardiac care, the heart bypass surgery mortality rate is less than 1 percent, "on par with the Mayo Clinic," says Anantham. Dr. S.A. Merchant, a cardiac surgeon at Lilavati Hospital in Mumbai, says "the kind of experience (found in India's best cardiac care hospitals) in treating long-calcified coronary arteries (using rotablation) is beyond what you'd find anywhere else in the world." And still others claim Indian scientists and government-funded research organizations are at the forefront of cloning and stem cell research. At the All-India Institute of Medical Sciences (AIIMS) in Delhi, stem cell therapy is used to heal bone fractures and spinal injuries and to treat avascular necrosis. AIIMS (pronounced "aims") perenially tops the rankings of India's best hospitals, as rated by healthcare professionals in an annual survey conducted by The Week, a domestic news magazine.

India's leading private hospitals claim high standards are maintained in other crucial aspects of patient care. "Our infection rate is just 0.0045%, one patient in very 2,000," boasts Dr. Nandu Laud, the orthopedic surgeon who performed knee surgery on then Prime Minister Atal Vajpayee at Breach Candy Hospital in Mumbai in 2002.

Dr. Sajan K. Hedge, a spine surgeon in Chennai, believes the standard of medicine in India's top hospitals is on par with the best in France and Germany, where he trained. Neurosurgeon Dr. Suryanarayan P., a colleague at Apollo Hospital, Chennai, asserts the "medical part is not (even) an issue. It's the cultural part that we are trying to fine tune."

The lengths some Indian hospital groups go to in catering to foreign patients gives new meaning to the term "fine tune." Apollo, Wockhardt and other hospital groups have set up international patient divisions, which provide highly personalized, "rock star-like" service to each patient arriving from abroad.
They're met at airport, and chauffered to a swank hotel not by bus or van but by luxury auto.

Once checked in, the patient receives a one-hour massage to relieve travel stress. And throughout their stay, patients are free to use the many services provided through the hospitals' wellness centers, sort of New Age health spas. Offerings typically include ayurvedic massage and training in yoga or meditation. Patients are also provided with cellphones preloaded with the numbers of the hospital, their surgeon and other key contacts.

World-class hospitals, impressive staffs

Indian physicians who trained or worked abroad constitute much of the staff at hospitals most active in treating foreign patients. And new facilities are constantly being established by Indian doctors who've grown wealthy by working abroad. "Many Indian doctors in the U.S. and U.K. have expressed interest in coming back to India to start a hospital or diagnostic center," says Neela Lad, the assistant director of the "Incredible India" advertising campaign. Lad told a recent seminar on medical tourism that a third of the doctors working in United States are of Indian origin.

Renowned specialists are able to use their reputations and connections to arrange the mega-financing needed to build lavish facilities catering to India's booming upper class and patients from high-income Western countries. For example Dr. Naresh Trehan, an international expert on robotic cardiac surgery while at the New York University, heads the effort to build a $250 million hospital complex near New Delhi. "We will be the Mayo Clinic of the East," Trehan told Time magazine of a complex that will include a luxury hotel for patients and their families.

India's major private hospital groups too have the resources to fund mega-projects internally. Wockhardt and Max Healthcare are two of the fastest growing hospital groups in India, their expansion plans funded in both cases by earnings from group ownership stakes in major Indian pharmaceutical companies. Max currently owns only three hospitals, and Wockhardt operates six, but both groups plan to have 25 hospitals by 2008.

Those groups would still be smaller than Apollo Hospitals. It's the largest private hosital group in Asia, with 6,400 beds in 32 hospitals in India, a string of nursing and hospital management colleges, pharmacies and diagnostic clinics. The Apollo group invested $10 million last year on buying new medical technology, including some of the only 64-slice CT scanners in use in South and Southeast Asia.
Some large publicly funded Indian hospitals also are eyeing the international patient market. Bombay Hospital, for example, has 150 staff doctors plus another 100 physicians with admission rights. It employs 800 nurses, giving the 830-bed hospital (including 140 intensive-care beds) a nearly one-to-one ratio of nurses to patients, plus another 3,000 personnel -- administrative, technical and clerical staff, ward boys and "ayabai" (female attendants). "The income that is generated from this (treating international patients) could be utilized to subsidize treatment for poor patients," says Dr. Reddy, the hospital's marketing director.

Within India, confidence runs high that the country is poised to begin reaping substantial profits from treating foreign patients. India's top hospitals believe they are only seeing the start of a strong, steady rise in American patients. So far that increase is driven solely by the rise in the number of uninsured Americans. But Indian hospitals are gearing up for a real bonanza if U.S. companies and insurers begin encouraging Americans to head abroad for treatment.

And there is some evidence that is already happening.

So far 40 companies have introduced the MidiMedPlan developed by Boca Raton, Florida-based United Group Programs. The plan enables corporations with self-financed health plans to slash costs by encouraging employees to have elective surgeries performed at Bumrungrad Hospital in Bangkok, Thailand. In California, Health New and Blue Shield also offer cut-rate coverage tied to receiving treatment in Mexico. Calabasas, California-based PlanetHospital offers low-cost health insurance with a choice of treatment in seven countries -- Argentina, Belgium, Brazil, Costa Rica, India, Mexico and Singapore.

Even some state governments are considering such action. This year a bill was introduced in the West Virginia legislature which would offer incentives to state employees willing to travel abroad for surgery.

Given the tremendous pressures building within U.S. industry and society to roll back exorbitant healthcare costs, interest is building in medical value travel insurance plans. U.S. medical service providers would be wise to understand the market changes they confront.

1.) Quoted in "Outsourcing Your Heart: Elective surgery in India? Medical tourism is booming, and U.S. companies trying to contain health-care costs are starting to take notice," by Unmesh Kher; Time magazine, May, 29, 20062.) NASSCOM is the acronym for the National Association of Software Service Companies, an organization created to represent the interests of India's information technology (IT) industry. NASSCOM has played an extremely important role in marketing India internationally as a high-tech powerhouse.