ndia’s Hospital Exemplars
Two
years ago, we kicked off a project to understand how some Indian
hospitals are able to provide world-class health care at ultralow cost.
We identified more than 40 hospitals with innovative strategies and
selected nine of them for an in-depth study. Seven of the hospitals are
for-profit and two, not-for-profit. Four focus on a single specialty,
and the other five are multispecialty institutions. Seven of the
exemplars operate as academic centers and integrate education and
clinical research with health care delivery. We visited all the
hospitals, gathered data, and conducted more than 100 interviews with
the founding doctors, their leadership teams, physicians, staff,
patients, and industry experts over several months.
The
Indian hospitals we studied treat medical conditions that range from
problems of the eye, heart, and kidney to maternity care, orthopedics,
and cancer. Their charges for most procedures are as much as 95% lower
than those at U.S. hospitals. That isn’t because the Indian providers
offer low-quality services; five of the exemplars are accredited by
either Joint Commission International (JCI), the international arm of
the Joint Commission—an independent nonprofit that certifies the quality
of more than 20,000 health care organizations in the U.S.—or its Indian
equivalent, the National Accreditation Board for Hospitals &
Healthcare Providers, which uses standards similar to those of JCI. A
sixth is seeking accreditation and a seventh has chosen not to do so for
fear that the process could stifle experimentation and curtail
innovation. The other two are not big enough to seek accreditation yet.
Some of
these hospitals—for instance, the Apollo Hospitals Group’s flagship in
Hyderabad—have recorded equivalent or better outcomes than the
international standards for medical complications associated with knee,
coronary, and prostate surgery as well as for infections related to the
operating theater and catheters. NH’s 30-day postsurgery mortality rate
for coronary artery bypass procedures at its Bangalore hospital is below
the average rate recorded by a sample of 143 hospitals in Texas.
Similarly, the five-year survival rate for breast cancer patients at HCG
Oncology is comparable to U.S. benchmarks. Deccan’s five-year survival
rate for peritoneal dialysis patients is the same as that for patients
in the U.S. undergoing hemodialysis, the more expensive treatment
commonly used there. Rates of complications associated with eye surgery
at Aravind compare favorably with those of the best hospitals in the
UK’s National Health Service.
How
are some Indian hospitals able to provide such high-quality health care
at ultralow prices? The obvious answer—the differential in the cost of
labor—does play a role: Cardiothoracic surgeons, nephrologists,
ophthalmologists, and oncologists in India earn anywhere from 20% to 74%
of what their American counterparts do. For instance, Aravind’s
ophthalmologists earn $50,000 annually compared with the $253,000
average for U.S. ophthalmologists. NH’s cardiothoracic surgeons gross
between $150,000 and $300,000, whereas the median income for their U.S.
counterparts is $408,000. And the salaries of nurses, medical staff, and
administrators in India are dramatically lower; some earn only 2% to 5%
of what a U.S. hospital would pay.
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