Aggregated US provider and payer healthcare ICT spending was close to $26 billion in 2004 and will grow to over $34 billion by 2008, with a CAGR of 7%. By 2008 payer spending will amount to $7.5 billion and provider spending will be at $26.7 billion. (based on forecast from Research & Reports)
To gear up for this emerging trend, CSC made a $375 million acquisition of First Consulting Group along with increasing the offshore capabilities in India.The healthcare provider market currently is cornered by CSC, IBM, Accenture,EDS and Perot systems with billion dollar deals in the bag,spread over several years.
Indian IT companies have not been strong in the US provider market primarily due to the lack of availability of HL7 certified professionals in India. However, this is changing fast. In 2007 India produced the most number of HL7 certified professionals worldwide, (120) followed by US with 60 professionals.
As the Financial services sector in US continues to reel under the mortgage crisis, the healthcare market comes as a relief to the major IT outsourcing companies.
According to analysts, Syntel and TCS can capitalize on the growing healthcare provider market in US, primarily because of their extensive experience in HL7. HL7 (Health Level Seven) standards is the primary standard for data interchange in the healthcare provider market. TCS has experience working with the NHS-UK healthcare project while Syntel has deep domain expertise built from working with Mc Kesson.
Sunday, November 25, 2007
Wednesday, June 20, 2007
Non profit Pharma in developing countries to combat AIDS?
I do not claim to be an expert on non profit organizations centered around AIDS prevention or on deployment of funds by various charities.
What I come across is a flurry of activity to raise funds for AIDS awareness/prevention and debates centered around drug patents .A typical NGO seems to raise cash from the developed World and purchases patented drugs from Big Pharma. However the very fact drugs are purchased from Big Pharma at big pharma prices (probably at discount) beats the purpose.
I was wondering if there was a model where better return on capital can be achieved.
Wouldn't one be able to procure more generics from from a low cost provider based out of a low cost location ?
What if we raised funds to create a non profit pharmaceutical company in Africa/China/India that manufactures generic ARVs ( anti retrovirals) and ships drugs to the AIDS victims....
I should probably be sending a note to the Gates Foundation !!!
Sunday, May 13, 2007
Is your health information up for sale?
The noise about HIPAA in the US and clamor for strict privacy laws in other parts of the world, is driven by the fact that healthcare information is being traded for big bucks. A series of national public opinion polls conducted by Louis Harris & Associates in US documents a rising level of public concern about privacy, growing from 64 percent in 1978 to 82 percent in 1995. Americans’ concern about the privacy of their health information is part of a broader anxiety about their lack of privacy in an array of areas.
HIPAA Privacy Regulations
HIPAA (Health Insurance Portability and Accountability Act) mainly addresses three areas, standardization of transactions and code stets used in claims processing, privacy and security of protected health information (PHI).
Under the provisions of privacy component of the regulations, a covered entity may use or disclose PHI only in the following ways:
· It may use or disclose PHI for its own treatment, payment or healthcare operations purposes.
· It may use or disclose PHI to another covered entity for that entity's treatment purposes.
· Disclosure between two covered entities for limited use for operations, such as quality assurance or peer review. Such disclosures may take place insofar as the covered entity receiving the disclosure has a treatment relationship with an individual and PHI may only be disclosed regarding treatment that occurred while the relationship existed.
Buyers of Healthcare information
The purchasers of healthcare data have been pharma companies, insurance companies, employers and strangely bankers. Pharmaceutical companies were in the hot set when consumers groups agitated against the direct marketing efforts of pharma companies, which send specific treatment intervention options to specific disease groups. Direct marketing to patients with the advent of direct to consumer marketing approach became a nuisance to privacy advocates. Other issues revolved use of use of patient information by insurers in underwriting applicants. Banks used health information in “due diligence” to ascertain if the borrower had any health reasons that would prevent his repayment capabilities.
The Indian Scenario
To date the Indian healthcare sector has relatively free from this concern, as most of the medical records in the country are still physical records, safely stored away in medical records room. However this is all set to change with the advent of companies focused on aggregating health care data on Indian population. Recently, several business groups in Indian metros were approached by a company that promised to maintain electronic health records of employees at a nominal fee in addition to other healthcare services that they would provide. For many human resources managers not sensitized to concerns around privacy of health information, this sounded like a good service offering. To me however, in a country like India, with lax privacy laws, letting a third party collate patient information is scary. You might soon be bombarded by requests from various pharmaceutical companies with mailing campaigns that would be focused on solutions for your heart or kidney disorder. Others would want you to be part of clinical trial for Drug A or B. How would the Indian patient/consumer respond? Are consumer groups aware of this emerging scenario? What are the grievance redressal mechanisms in place from a legal or regulatory standpoint?
As the healthcare sector in India moves towards an electronic medical records era, this is one of the questions healthcare managers/policy makers and the patient community have to address keeping in view the global trends in privacy of healthcare information.
HIPAA Privacy Regulations
HIPAA (Health Insurance Portability and Accountability Act) mainly addresses three areas, standardization of transactions and code stets used in claims processing, privacy and security of protected health information (PHI).
Under the provisions of privacy component of the regulations, a covered entity may use or disclose PHI only in the following ways:
· It may use or disclose PHI for its own treatment, payment or healthcare operations purposes.
· It may use or disclose PHI to another covered entity for that entity's treatment purposes.
· Disclosure between two covered entities for limited use for operations, such as quality assurance or peer review. Such disclosures may take place insofar as the covered entity receiving the disclosure has a treatment relationship with an individual and PHI may only be disclosed regarding treatment that occurred while the relationship existed.
Buyers of Healthcare information
The purchasers of healthcare data have been pharma companies, insurance companies, employers and strangely bankers. Pharmaceutical companies were in the hot set when consumers groups agitated against the direct marketing efforts of pharma companies, which send specific treatment intervention options to specific disease groups. Direct marketing to patients with the advent of direct to consumer marketing approach became a nuisance to privacy advocates. Other issues revolved use of use of patient information by insurers in underwriting applicants. Banks used health information in “due diligence” to ascertain if the borrower had any health reasons that would prevent his repayment capabilities.
The Indian Scenario
To date the Indian healthcare sector has relatively free from this concern, as most of the medical records in the country are still physical records, safely stored away in medical records room. However this is all set to change with the advent of companies focused on aggregating health care data on Indian population. Recently, several business groups in Indian metros were approached by a company that promised to maintain electronic health records of employees at a nominal fee in addition to other healthcare services that they would provide. For many human resources managers not sensitized to concerns around privacy of health information, this sounded like a good service offering. To me however, in a country like India, with lax privacy laws, letting a third party collate patient information is scary. You might soon be bombarded by requests from various pharmaceutical companies with mailing campaigns that would be focused on solutions for your heart or kidney disorder. Others would want you to be part of clinical trial for Drug A or B. How would the Indian patient/consumer respond? Are consumer groups aware of this emerging scenario? What are the grievance redressal mechanisms in place from a legal or regulatory standpoint?
As the healthcare sector in India moves towards an electronic medical records era, this is one of the questions healthcare managers/policy makers and the patient community have to address keeping in view the global trends in privacy of healthcare information.
Friday, May 4, 2007
Care from the air: Telemedicine in India
The Indian healthcare industry has been exposed to various flavors of “telemedicine”, from the healthcare portal suggesting that healthcare info provided on the website uses telecommunications to provide healthcare information to patients, thus delivering ‘tele health’, to video conferencing vendors who claim to be “telemedicine” providers . At the other end there are a few genuine healthcare providers who really use telemedicine effective to provide care, minus the hype, and organizations such as ISRO which are taking an innovative approach to facilitate healthcare delivery by way of launching an exclusive health satellite. To the mind of many healthcare stakeholders there is still confusion on what really comprises telemedicine.
What is Telemedicine?
According to a Japanese definition in 1996, “it the use of any electrical signal to transmit medical information”….
In a JAMA paper in 1995 Telemedicine has been defined “as the use of telecommunications to provide medical information and services. It may be as simple as two health professionals discussing a case over the telephone, or as sophisticated as using satellite technology to broadcast a consultation between providers at facilities in two countries, using videoconferencing equipment”.
A broader definition from University of Virginia is “the use of telecommunication technology to deliver healthcare services and health education to sites that are distant to the host site or educator”
The American College of Radiology has however defined the detailed ACR standard for Teleradiology, which includes definition of teleradiology, besides goals, qualifications, qualification of personnel, equipment guidelines, licensing, communication, quality control.
Applications
Clinical applications could be utilized in the following areas effectively, though one could argue that telemedicine could be used for any specialty.
Cardiology
Radiology
Homecare
Pathology
Endoscopy
Nephrology
Ophthalmology
Surgery
Emergency care
Many of these have specific applications and interfaces built around these specialties, which differentiate them from generic telemedicine applications.
Telemedicine worldwide
The history of telemedicine dates back to 1971, when the Alaska Biomedical Demonstration Project linked 26 sites using NASA satellite technologies. The Nebraska Psychiatric Institute is mentioned as the pioneer in some papers citing the use of closed circuit television in 1955 as “telemedicine”. In 1967, Mass Gen linked up to Logan airport using 2 way audiovisual microwave circuit. The developed world has made major strides in utilizing telemedicine for healthcare delivery.
Telemedicine in India: the drivers
The drivers for adoption of telemedicine could vary from country to country based on various factors. Some of the factors that would expedite the telemedicine revolution in India are:
Topography
Think of a patient in Tinsukiya, Assam or Aragonda, Andhra Pradesh who requires a consultation with a specialist at Bangalore or Mumbai. The cost of travel and the travel it self could be a deterrent to the poor patient in these rural settings. Even if a specialist is available at the nearest town, reaching the interiors of such a far flung village would be a challenge. This is where telemedicine could be utilized as an effective medium for healthcare delivery. India with a diverse collection of landscapes with mountains and valleys and high altitudes, telemedicine could well be a boon for the patients.
Travel Time /Cost
There is a shortage of specialist/ super specialist professionals in India, especially in rural areas. It might not be good time management on the part of the specialist to travel all the way to the rural areas without having enough patients to be attended to there. Travel time can be cut down dramatically while the expertise is made available in real time via technology. The specialist’s physical presence becomes necessary only when a surgical procedure is planned. In reality even surgical procedures are being conducted with guidance from the specialist who is at a remote location. For a patient cost of travel is a major worry especially if she has to fly in to a specialist care center in a city.
Pressure to reduce costs
Cost of healthcare and questions on who will bear the burden of care are issues across the world, developed countries included. The incidental expenses related to patient care, i.e. the cost associated with factors other than the actual medial care such as travel, accommodation for relatives, food etc also contribute substantially to the cost of treatment. In a country where health insurance is yet to catch up, cost of acre is borne by patients, in many cases by selling property and livestock. If hospitals can reduce these costs associated with treatment it would go a long way in reducing the burden of care on the patient. Telemedicine seems to the answer.
Availability of healthcare facility/ Transportation
It is no understatement if I say that healthcare delivery in rural India is not adequate. The government has limitations and so does private enterprise. Setting up a full fledged care facility at a remote location might not always be economically or operationally viable. Even if there is a healthcare facility with bare minimum resources, transportation might be a challenge. Various studies have documented the inverse relationship between distance and outcomes particularly in Acute MI and Ventricular Arrhythmias.
Training
Telemedicine is an effective medium to impart knowledge to professionals within a healthcare organization. This becomes relevant in corporate hospitals chains spread across the country wherein they could share and institutionalize best practices across the group. Telemedicine could also be utilized to provide public health education to the remote corners of India.
Telemedicine for Competitive Advantage
Telemedicine is a technology enabled marketing tool as well. It makes it possible for hospitals to address the needs of patients who might not have otherwise used their services. Slowly by steadily telemedicine is being utilized as a tool for competitive advantage, which would over a period of time, lead to a divide in the healthcare industry along the lines of “telemedicine haves and have nots”.
The players:
The two major players in the Telemedicine space in India are Apollo Hospitals and Asia Heart Foundation. Between the two, several remote villages have realized the benefits of technology enabled care. The organizations are now in a position to share the expertise available in in-house with neighboring countries too. The missionary zeal with which these hospitals operate will ensure that distance will not be a deterrent to patient care. The public sector too is taking steps in this direction. According to Dr. Alok Roy, Asia Heart Foundation, several lives were saved by telemedicine intervention in far flung villages, which might not have been otherwise possible.
Issues:
Beneath the glossy reports of telemedicine successes, there are many stories of hard work, dedication which happen behind the scenes to make this all happen. Making Telemedicine work is not as sweet as the reports. Some of the issues involved are outlined below:
Connectivity
Connectivity for Telemedicine is a major concern as many of the remotes villages do not have basic telephony. Thus an exclusive satellite from ISRO to service healthcare needs is revolutionary and will change the dynamics of telemedicine in India very soon. Satellites provide almost 100 percent uptime, making it the best medium for countries such as India with diversity in terrain. The bandwidth available with various connectivity options are provided below.
POTS – 20 kbps
ISDN – 128 Kbps
T1 - 1.54 Mbps
Cable modem – 1- 27 Mbps
T3 – 44 Mbps
ATM - 155 Mbps
Small Foot print Satellite Dish – 400 kbps
Low orbiting Satellite
Asynchronous: – 6 mbps
Synchronous: 14 kbps – 2 Mbps
Wireless Terrestrial: 1- 26 Mbps
Standards
As Telemedicine becomes ubiquitous, a challenge to be addressed is adherence to standards. A few years down the line, when corporate mergers and acquisitions become commonplace in the healthcare sector integrating to leverage investments made be a major roadblock to integrating services. Integrating disparate systems could be expensive in the long term, unless standards are followed from day one. HL7 and DICOM are two standards that are critical for the success of Telemedicine in India.
Security & Privacy
Security and Privacy are no serious concern in India at the moment as consumerism in healthcare is yet to take the proportions in the developed world. However this is set to change soon. As patients become more aware, thanks to the Net, these concerns will have to be addressed. European and US standards for Privacy and Security are being incorporated by vendors in those countries.
IHE
Integrating the Healthcare Enterprise initiative is a US initiative by leading trade organizations in the US. The role of IHE is the integration of healthcare information, promotion of existing standards ( eg HL7, DICOM, CORBA, XML) and implementation profiles for transactions used to communicate images and patient data within Hospital Information systems Radiology Information systems ( RIS) and Picture Archiving and communication systems ( PACS). These initiatives will make the move towards a Telemedicine enabled Electronic Health Record.
Legal & regulatory
Who is liable is a Tele medicine assisted remote surgery ends in a disaster due to loss of connectivity? The surgeon? The Satellite provider? The software/hardware provider? What is the legal status of a telemedicine based diagnosis in a medico legal framework? Many of thee questions have not been raised in India as we are still in the honey moon phase of Telemedicine, when all news is good news.
Management Issues
Strange as it may sound the major areas of concern in Telemedicine implementation is not technology perse, but the organization’s preparedness to handle the management and human resources issues related to the same. Telemedicine is a labor intensive process which involves co ordination with sending and receiving stations and the staff technical, clinical and support staff at the centers. Management buy in is slow in most organizations. Training the doctors, nurses and technicians on a continuous basis is critical, more so as employees turn over is increasing in the healthcare setting. The success definitely depends on the management’s commitment to a long-term strategy to achieve competitive advantage utilizing telemedicine.
What is Telemedicine?
According to a Japanese definition in 1996, “it the use of any electrical signal to transmit medical information”….
In a JAMA paper in 1995 Telemedicine has been defined “as the use of telecommunications to provide medical information and services. It may be as simple as two health professionals discussing a case over the telephone, or as sophisticated as using satellite technology to broadcast a consultation between providers at facilities in two countries, using videoconferencing equipment”.
A broader definition from University of Virginia is “the use of telecommunication technology to deliver healthcare services and health education to sites that are distant to the host site or educator”
The American College of Radiology has however defined the detailed ACR standard for Teleradiology, which includes definition of teleradiology, besides goals, qualifications, qualification of personnel, equipment guidelines, licensing, communication, quality control.
Applications
Clinical applications could be utilized in the following areas effectively, though one could argue that telemedicine could be used for any specialty.
Cardiology
Radiology
Homecare
Pathology
Endoscopy
Nephrology
Ophthalmology
Surgery
Emergency care
Many of these have specific applications and interfaces built around these specialties, which differentiate them from generic telemedicine applications.
Telemedicine worldwide
The history of telemedicine dates back to 1971, when the Alaska Biomedical Demonstration Project linked 26 sites using NASA satellite technologies. The Nebraska Psychiatric Institute is mentioned as the pioneer in some papers citing the use of closed circuit television in 1955 as “telemedicine”. In 1967, Mass Gen linked up to Logan airport using 2 way audiovisual microwave circuit. The developed world has made major strides in utilizing telemedicine for healthcare delivery.
Telemedicine in India: the drivers
The drivers for adoption of telemedicine could vary from country to country based on various factors. Some of the factors that would expedite the telemedicine revolution in India are:
Topography
Think of a patient in Tinsukiya, Assam or Aragonda, Andhra Pradesh who requires a consultation with a specialist at Bangalore or Mumbai. The cost of travel and the travel it self could be a deterrent to the poor patient in these rural settings. Even if a specialist is available at the nearest town, reaching the interiors of such a far flung village would be a challenge. This is where telemedicine could be utilized as an effective medium for healthcare delivery. India with a diverse collection of landscapes with mountains and valleys and high altitudes, telemedicine could well be a boon for the patients.
Travel Time /Cost
There is a shortage of specialist/ super specialist professionals in India, especially in rural areas. It might not be good time management on the part of the specialist to travel all the way to the rural areas without having enough patients to be attended to there. Travel time can be cut down dramatically while the expertise is made available in real time via technology. The specialist’s physical presence becomes necessary only when a surgical procedure is planned. In reality even surgical procedures are being conducted with guidance from the specialist who is at a remote location. For a patient cost of travel is a major worry especially if she has to fly in to a specialist care center in a city.
Pressure to reduce costs
Cost of healthcare and questions on who will bear the burden of care are issues across the world, developed countries included. The incidental expenses related to patient care, i.e. the cost associated with factors other than the actual medial care such as travel, accommodation for relatives, food etc also contribute substantially to the cost of treatment. In a country where health insurance is yet to catch up, cost of acre is borne by patients, in many cases by selling property and livestock. If hospitals can reduce these costs associated with treatment it would go a long way in reducing the burden of care on the patient. Telemedicine seems to the answer.
Availability of healthcare facility/ Transportation
It is no understatement if I say that healthcare delivery in rural India is not adequate. The government has limitations and so does private enterprise. Setting up a full fledged care facility at a remote location might not always be economically or operationally viable. Even if there is a healthcare facility with bare minimum resources, transportation might be a challenge. Various studies have documented the inverse relationship between distance and outcomes particularly in Acute MI and Ventricular Arrhythmias.
Training
Telemedicine is an effective medium to impart knowledge to professionals within a healthcare organization. This becomes relevant in corporate hospitals chains spread across the country wherein they could share and institutionalize best practices across the group. Telemedicine could also be utilized to provide public health education to the remote corners of India.
Telemedicine for Competitive Advantage
Telemedicine is a technology enabled marketing tool as well. It makes it possible for hospitals to address the needs of patients who might not have otherwise used their services. Slowly by steadily telemedicine is being utilized as a tool for competitive advantage, which would over a period of time, lead to a divide in the healthcare industry along the lines of “telemedicine haves and have nots”.
The players:
The two major players in the Telemedicine space in India are Apollo Hospitals and Asia Heart Foundation. Between the two, several remote villages have realized the benefits of technology enabled care. The organizations are now in a position to share the expertise available in in-house with neighboring countries too. The missionary zeal with which these hospitals operate will ensure that distance will not be a deterrent to patient care. The public sector too is taking steps in this direction. According to Dr. Alok Roy, Asia Heart Foundation, several lives were saved by telemedicine intervention in far flung villages, which might not have been otherwise possible.
Issues:
Beneath the glossy reports of telemedicine successes, there are many stories of hard work, dedication which happen behind the scenes to make this all happen. Making Telemedicine work is not as sweet as the reports. Some of the issues involved are outlined below:
Connectivity
Connectivity for Telemedicine is a major concern as many of the remotes villages do not have basic telephony. Thus an exclusive satellite from ISRO to service healthcare needs is revolutionary and will change the dynamics of telemedicine in India very soon. Satellites provide almost 100 percent uptime, making it the best medium for countries such as India with diversity in terrain. The bandwidth available with various connectivity options are provided below.
POTS – 20 kbps
ISDN – 128 Kbps
T1 - 1.54 Mbps
Cable modem – 1- 27 Mbps
T3 – 44 Mbps
ATM - 155 Mbps
Small Foot print Satellite Dish – 400 kbps
Low orbiting Satellite
Asynchronous: – 6 mbps
Synchronous: 14 kbps – 2 Mbps
Wireless Terrestrial: 1- 26 Mbps
Standards
As Telemedicine becomes ubiquitous, a challenge to be addressed is adherence to standards. A few years down the line, when corporate mergers and acquisitions become commonplace in the healthcare sector integrating to leverage investments made be a major roadblock to integrating services. Integrating disparate systems could be expensive in the long term, unless standards are followed from day one. HL7 and DICOM are two standards that are critical for the success of Telemedicine in India.
Security & Privacy
Security and Privacy are no serious concern in India at the moment as consumerism in healthcare is yet to take the proportions in the developed world. However this is set to change soon. As patients become more aware, thanks to the Net, these concerns will have to be addressed. European and US standards for Privacy and Security are being incorporated by vendors in those countries.
IHE
Integrating the Healthcare Enterprise initiative is a US initiative by leading trade organizations in the US. The role of IHE is the integration of healthcare information, promotion of existing standards ( eg HL7, DICOM, CORBA, XML) and implementation profiles for transactions used to communicate images and patient data within Hospital Information systems Radiology Information systems ( RIS) and Picture Archiving and communication systems ( PACS). These initiatives will make the move towards a Telemedicine enabled Electronic Health Record.
Legal & regulatory
Who is liable is a Tele medicine assisted remote surgery ends in a disaster due to loss of connectivity? The surgeon? The Satellite provider? The software/hardware provider? What is the legal status of a telemedicine based diagnosis in a medico legal framework? Many of thee questions have not been raised in India as we are still in the honey moon phase of Telemedicine, when all news is good news.
Management Issues
Strange as it may sound the major areas of concern in Telemedicine implementation is not technology perse, but the organization’s preparedness to handle the management and human resources issues related to the same. Telemedicine is a labor intensive process which involves co ordination with sending and receiving stations and the staff technical, clinical and support staff at the centers. Management buy in is slow in most organizations. Training the doctors, nurses and technicians on a continuous basis is critical, more so as employees turn over is increasing in the healthcare setting. The success definitely depends on the management’s commitment to a long-term strategy to achieve competitive advantage utilizing telemedicine.
Saturday, April 28, 2007
Healthcare IT Outsourcing to India
Outsourcing of IT services to India started to gain momentum during the Y2K crisis and has come a long way since then. Today, more than 300 of the Fortune 500 companies outsource some part of their technology and business processes to India. The healthcare industry, however, has been slow to adopt this trend.
According to a Gartner study, 60% of healthcare organizations will outsource more than half of their IT operations by 2007. Coupled with an increase in outsourcing of business processes, this creates a large opportunity for offshore providers tapping the healthcare market. In the healthcare industry, payers and product vendors have been early adopters of outsourcing to India, with most of the large players already leveraging the availability of a technical talent pool. Providers have been relatively slow in utilizing services of offshore service companies.
Some of the organizations active in offshore outsourcing are:
Cigna
Aetna
Several Blue Cross organizations
United Healthcare Group
Kaiser Permanente
Henry Ford Health System
McKesson
Cerner
Siemens
Misys
Isoft
There are 15 to 20 large and midsize vendors in India that provide IT services to the healthcare market in North America and Europe. About 8,000 professionals are involved in the healthcare informatics segment, primarily serving the needs of these markets. The services provided are mainly centered on application maintenance, system integration, application development, product re-engineering/maintenance, HIPAA consulting, and e-business initiatives. Recently, multinational players such as Accenture, EDS, CGEY, FCG, Keane, and IBM have established a presence in India and are hiring professionals, leading to an increase in wages that still average $8,000 per year for entry-level software engineers.
The segment growing faster than IT services is business process outsourcing (BPO), which includes insurance claims processing, adjudication, receivables management, medical transcription, and billing and coding services. Clinical process outsourcing such as radiology reporting is beginning to take off as well.
The healthcare industry's slow pace of offshore adoption is due in part to the fact that many IT service providers lack the necessary healthcare domain expertise. However, Indian companies are addressing this weakness by hiring professionals with healthcare domain knowledge. Moreover, vendors are investing in building knowledge of healthcare informatics standards such as HL7.
The HL7 affiliate in India has been active for the past five years and will generate more than two hundred HL7-certified professionals by the end of this year. Similarly, professionals in India are being trained in other standards and languages, such as Digital Imaging and Communications in Medicine (DICOM).
Contrary to popular belief, the major players in the offshore IT and BPO markets in India adhere to HIPAA-compliant security policies and procedures, which are audited by HIPAA consulting organizations, thereby ensuring privacy of medical records. In fact, the Indian government is considering a proposal to implement data protection laws in India, and HIPAA privacy and security regulations may be adopted with minor changes.
Strange as it may sound, one of the major concerns of IT services vendors in India is whether there will be enough qualified professionals to meet the outsourcing demand boom in the coming years. Several Indian vendors have already set up shop in China to mitigate this risk.
According to a Gartner study, 60% of healthcare organizations will outsource more than half of their IT operations by 2007. Coupled with an increase in outsourcing of business processes, this creates a large opportunity for offshore providers tapping the healthcare market. In the healthcare industry, payers and product vendors have been early adopters of outsourcing to India, with most of the large players already leveraging the availability of a technical talent pool. Providers have been relatively slow in utilizing services of offshore service companies.
Some of the organizations active in offshore outsourcing are:
Cigna
Aetna
Several Blue Cross organizations
United Healthcare Group
Kaiser Permanente
Henry Ford Health System
McKesson
Cerner
Siemens
Misys
Isoft
There are 15 to 20 large and midsize vendors in India that provide IT services to the healthcare market in North America and Europe. About 8,000 professionals are involved in the healthcare informatics segment, primarily serving the needs of these markets. The services provided are mainly centered on application maintenance, system integration, application development, product re-engineering/maintenance, HIPAA consulting, and e-business initiatives. Recently, multinational players such as Accenture, EDS, CGEY, FCG, Keane, and IBM have established a presence in India and are hiring professionals, leading to an increase in wages that still average $8,000 per year for entry-level software engineers.
The segment growing faster than IT services is business process outsourcing (BPO), which includes insurance claims processing, adjudication, receivables management, medical transcription, and billing and coding services. Clinical process outsourcing such as radiology reporting is beginning to take off as well.
The healthcare industry's slow pace of offshore adoption is due in part to the fact that many IT service providers lack the necessary healthcare domain expertise. However, Indian companies are addressing this weakness by hiring professionals with healthcare domain knowledge. Moreover, vendors are investing in building knowledge of healthcare informatics standards such as HL7.
The HL7 affiliate in India has been active for the past five years and will generate more than two hundred HL7-certified professionals by the end of this year. Similarly, professionals in India are being trained in other standards and languages, such as Digital Imaging and Communications in Medicine (DICOM).
Contrary to popular belief, the major players in the offshore IT and BPO markets in India adhere to HIPAA-compliant security policies and procedures, which are audited by HIPAA consulting organizations, thereby ensuring privacy of medical records. In fact, the Indian government is considering a proposal to implement data protection laws in India, and HIPAA privacy and security regulations may be adopted with minor changes.
Strange as it may sound, one of the major concerns of IT services vendors in India is whether there will be enough qualified professionals to meet the outsourcing demand boom in the coming years. Several Indian vendors have already set up shop in China to mitigate this risk.
Healthcare IT Outsourcing – Avoiding the booby traps
The fact that outsourcing, especially off-shoring can provide cost effective solution in a tight economy, has been long realized by CXOs of the early adopters of off-shoring in the financial services industry. Off shoring has started to gain traction with several health plans and product vendors taking the lead; providers are following as well. Though India has been the recognized leader in offshore outsourcing the relative strength from a healthcare perspective has to be evaluated thoroughly before making a buy decision. This article looks at some of the critical questions one should ask while evaluating an offshore healthcare vendor relationship.
1. How long has the vendor been in business?
There are several IT service organizations that have recently sprung up seeing the requirement in the healthcare market. Maintenance and support is necessary for the healthcare organization from a long-term perspective. It is therefore imperative that healthcare organizations choose vendors that have been in business for at least ten years and have the resources to stay afloat in a volatile IT market.
2. Can the vendor provide end-to-end solutions?
The vendor should be able to provide a reasonable range of services in the healthcare spectrum so that the healthcare organization does not have to spend time locating vendors for each separate requirement.
3. Does the vendor understand the healthcare business?
It is essential that the vendor understand the nuances of the healthcare industry. The knowledge accumulated over a period within the organization definitely helps in understanding the client’s requirements better.
4. What is the vendor’s policy on privacy, security and business continuity?
Most mature vendors understand implication of HIPAA and are compliant with the requirements, which may not be the case with lesser-known entities. However it makes sense to be safe than sorry and include a privacy clause in your contract.
5. Is the organization associated with trade bodies in the healthcare space?
Association with the concerned healthcare bodies ensures that the consultant is current on the developments in the healthcare space. (I have met with organizations that believe that HL7 is named after the seven founding fathers of the organization, if there were eight, HL7 would have been named HL8!!)
6. What is the size of the company in market capitalization and employee strength?
Since the days of dotcoms going bust, it makes sense to associate with accompany that has the staying power. Size DOES matter. Go with companies that are at least $200 million in revenue.
7. Does the vendor have the right mix of professionals?
Healthcare IT is an enterprise wide issue, which has regulatory, management, legal, technology and human resources components. A cross-functional team with the right mix of domain, business and technology is essential to address the various concerns raised by the healthcare organization.
8. Does the consultant have reference able clients?
Reference checking is a good practice in vendor evaluation, and will never be a bad idea. Watch out for vendors who have been only involved in staff augmentation.
9. Does the vendor have a structured onsite offshore relationship model?
When the project is on fire, you would want a vendor representative right way in your office to drive the mitigation plan. You would not want this to be just a voice some where in Bangalore or Shanghai. Insist on a having an onsite account manager who would report to you whenever required.
10. Does the organization have a quality certification?
Adherence to Quality processes and Quality Certification ensures that the vendor will provide a minimum necessary quality assurance and control. Look for organizations with SEI -CMM Level 5 certification.
11. How is the vendor organization geared to coping with uncertainty?
The organization should be mature enough to have risk mitigation plans for adverse events such as key professionals leaving the company, or other business concerns that could occur.
12. Does the pricing model provide value for money?
Finally price does matter too. Do not go for a vendor that is priced exorbitantly high or pathetically low.
1. How long has the vendor been in business?
There are several IT service organizations that have recently sprung up seeing the requirement in the healthcare market. Maintenance and support is necessary for the healthcare organization from a long-term perspective. It is therefore imperative that healthcare organizations choose vendors that have been in business for at least ten years and have the resources to stay afloat in a volatile IT market.
2. Can the vendor provide end-to-end solutions?
The vendor should be able to provide a reasonable range of services in the healthcare spectrum so that the healthcare organization does not have to spend time locating vendors for each separate requirement.
3. Does the vendor understand the healthcare business?
It is essential that the vendor understand the nuances of the healthcare industry. The knowledge accumulated over a period within the organization definitely helps in understanding the client’s requirements better.
4. What is the vendor’s policy on privacy, security and business continuity?
Most mature vendors understand implication of HIPAA and are compliant with the requirements, which may not be the case with lesser-known entities. However it makes sense to be safe than sorry and include a privacy clause in your contract.
5. Is the organization associated with trade bodies in the healthcare space?
Association with the concerned healthcare bodies ensures that the consultant is current on the developments in the healthcare space. (I have met with organizations that believe that HL7 is named after the seven founding fathers of the organization, if there were eight, HL7 would have been named HL8!!)
6. What is the size of the company in market capitalization and employee strength?
Since the days of dotcoms going bust, it makes sense to associate with accompany that has the staying power. Size DOES matter. Go with companies that are at least $200 million in revenue.
7. Does the vendor have the right mix of professionals?
Healthcare IT is an enterprise wide issue, which has regulatory, management, legal, technology and human resources components. A cross-functional team with the right mix of domain, business and technology is essential to address the various concerns raised by the healthcare organization.
8. Does the consultant have reference able clients?
Reference checking is a good practice in vendor evaluation, and will never be a bad idea. Watch out for vendors who have been only involved in staff augmentation.
9. Does the vendor have a structured onsite offshore relationship model?
When the project is on fire, you would want a vendor representative right way in your office to drive the mitigation plan. You would not want this to be just a voice some where in Bangalore or Shanghai. Insist on a having an onsite account manager who would report to you whenever required.
10. Does the organization have a quality certification?
Adherence to Quality processes and Quality Certification ensures that the vendor will provide a minimum necessary quality assurance and control. Look for organizations with SEI -CMM Level 5 certification.
11. How is the vendor organization geared to coping with uncertainty?
The organization should be mature enough to have risk mitigation plans for adverse events such as key professionals leaving the company, or other business concerns that could occur.
12. Does the pricing model provide value for money?
Finally price does matter too. Do not go for a vendor that is priced exorbitantly high or pathetically low.
Clinical Process Outsourcing
Business process outsourcing (BPO) is the use of external service providers to manage a business function or unit within an enterprise. Business process Outsourcing has been in the limelight for quite some time. The healthcare industry being labor intensive can benefit from the emerging trends among healthcare organizations (HCOs) to outsource business processes. The BPO space in healthcare is a highly fragmented market, with analysts currently engaged in defining and sizing the various niche segments involved. Clinical process outsourcing is one such segment, which involves the outsourcing of clinical processes offshore, to take care of some of the clinical work currently handled by physicians, nurses and paramedics.
Drivers
Some of the drivers for BPO in the US healthcare space are:
Shortage of nurses and Paramedical Professionals
According to a recent journal of American Medical Association Study, 20,000 patients die every year in US due to shortage of qualified nurses. HCOs are tying all routes to attract trained nurses to hospitals in US. Coupled with this is the shortage of paramedical professionals in this sector.
Greying Population
As per the 1999 census the US has 74 billion Americans 50 years and older, and by 2030, one in five Americans will be 65 years or older. This has implication for healthcare industry from both a care delivery and employment perspectives.
H1B visas
The socio political compulsions have forced the US government to reduce the H1B visas, which allow professionals from other countries to work in US. As employers would have to live with less HIB workers one option would be to look at alternatives such as outsourcing.
Though these scenarios provide opportunities for Indian companies, the challenges are many.
Challenges
Socio political landscape
On the political front the noise is being heard both from Europe and US to limit the loss of jobs to Asian countries, which they claim would affect the US /European economies adversely. There were some trade unions in UK, which negotiated with a major retailer to limit the outsourced call center facility in India to only 200 seats. A New Jersey senator recently presented a bill questioning some of the BPO initiatives of US government agencies.
Management Challenges
In a clinical process outsourcing to India the major challenge would be the current outlook and management of hospitals in India. Hospitals by themselves, barring a few are mostly inward focused and not quite proactive in gearing up for this emerging opportunity. Whether many hospitals in India want to diversify into this space is to be watched. The focus on BPO by HCOs in India would require considerable re orientation of work culture, including shift timings, reallocation of priorities etc.
Availability of resources
Though India has abundance of skill sets in the healthcare domain, there is a relative shortage of specialist skill sets. Moreover the need for relevant training to align existing resources to the US requirements calls for investment too. In some areas, for instance remote radiology report generation, it needs to be seen if India has the required critical mass of specialists to handle volumes that US healthcare would outsource to India.
Process /Technology Maturity
Managing the delivery process itself calls for technology intensive and human resources intensive practices, coupled with process maturity in handling similar work. Most HCOs in India have not evolved to global standards on this aspect. Hospitals may however align with BPO/IT companies to leverage the expertise by for such expertise. Managing the disparate organizational cultures is to be addressed in that case.
Quality
Quality is critical in any service-based industry. Adoption of world-class quality processes has been a key differentiator for the Indian IT industry. A culture of quality calls for financial investment and long-term commitment from the healthcare community. In fact the medical transcription Industry in India is a classic case where large-scale quality deterioration led to the near death experience faced by the sector.
Though analysts proclaim billion dollar markets, whether India Inc has the delivery bandwidth to address this is to be assessed.
Drivers
Some of the drivers for BPO in the US healthcare space are:
Shortage of nurses and Paramedical Professionals
According to a recent journal of American Medical Association Study, 20,000 patients die every year in US due to shortage of qualified nurses. HCOs are tying all routes to attract trained nurses to hospitals in US. Coupled with this is the shortage of paramedical professionals in this sector.
Greying Population
As per the 1999 census the US has 74 billion Americans 50 years and older, and by 2030, one in five Americans will be 65 years or older. This has implication for healthcare industry from both a care delivery and employment perspectives.
H1B visas
The socio political compulsions have forced the US government to reduce the H1B visas, which allow professionals from other countries to work in US. As employers would have to live with less HIB workers one option would be to look at alternatives such as outsourcing.
Though these scenarios provide opportunities for Indian companies, the challenges are many.
Challenges
Socio political landscape
On the political front the noise is being heard both from Europe and US to limit the loss of jobs to Asian countries, which they claim would affect the US /European economies adversely. There were some trade unions in UK, which negotiated with a major retailer to limit the outsourced call center facility in India to only 200 seats. A New Jersey senator recently presented a bill questioning some of the BPO initiatives of US government agencies.
Management Challenges
In a clinical process outsourcing to India the major challenge would be the current outlook and management of hospitals in India. Hospitals by themselves, barring a few are mostly inward focused and not quite proactive in gearing up for this emerging opportunity. Whether many hospitals in India want to diversify into this space is to be watched. The focus on BPO by HCOs in India would require considerable re orientation of work culture, including shift timings, reallocation of priorities etc.
Availability of resources
Though India has abundance of skill sets in the healthcare domain, there is a relative shortage of specialist skill sets. Moreover the need for relevant training to align existing resources to the US requirements calls for investment too. In some areas, for instance remote radiology report generation, it needs to be seen if India has the required critical mass of specialists to handle volumes that US healthcare would outsource to India.
Process /Technology Maturity
Managing the delivery process itself calls for technology intensive and human resources intensive practices, coupled with process maturity in handling similar work. Most HCOs in India have not evolved to global standards on this aspect. Hospitals may however align with BPO/IT companies to leverage the expertise by for such expertise. Managing the disparate organizational cultures is to be addressed in that case.
Quality
Quality is critical in any service-based industry. Adoption of world-class quality processes has been a key differentiator for the Indian IT industry. A culture of quality calls for financial investment and long-term commitment from the healthcare community. In fact the medical transcription Industry in India is a classic case where large-scale quality deterioration led to the near death experience faced by the sector.
Though analysts proclaim billion dollar markets, whether India Inc has the delivery bandwidth to address this is to be assessed.
Teleradiology in India : hype vs. reality
Teleradiology,i.e radiology services provided from a remote location has been doing the rounds in the media for quite a while. This post is an attempt at a reality check on the mass media hype.
The fact remains that the demand for radiology services in the US market is growing while the supply of radiologists is not growing enough to match the requirements. However we need to take a step back and examine this from a different perspective which some times is missing, when every other person wants to be running a healthcare BPO business these days. My intent is not to discourage the gold seekers, but to play the devil’s advocate.
Can India be a teleradiology hotspot?
Some of the teleradiology centers in Australia and Lebanon have several US board certified radiologists working from those locations. I guess we have a handful of US certified radiologists of Indian origin working from Bangalore, which is perfectly within the confines of US rules and regulations. However when a large Indian IT organization wanted to relocate more radiologists of Indian origin to Bangalore, there were no takers. Is there the right incentive for a radiologist in US to relocate to India today, for professional reasons?
US radiologist vs Indian Radiologist debate
Healthcare in US is built on stringent regulations, because healthcare is a politically sensitive issue in the country. The fact is that, though there is a shortage of healthcare professionals in the US, the country would NOT want to have less qualified professionals providing healthcare services. The reality is that though you and I are aware of the excellent clinical knowledge of Indian radiologists, the perception in US different. The common man is the US is really concerned about a radiologist in India whose credential are suspect by many of the folks here. To the average John Doe, despite all the hype that is created about outsourcing, India is still a developing country. My tax consultant is worried that US supermarkets are importing prescription drugs from India, which he feels may not be meeting FDA standards. Credibility being a key issue, the answer to successful teleradiology operation is to have one/several US board certified radiologists who can sign off on the radiology reports.
Medical Transcription vs Teleradiology
The layered review approach used in Medical transcription may not work very well in Teleradiology. The teleradiology equivalent of this (having some medical students run through the initial report and then reviewed by a senior radiologist and then finally by the US radiologist) kind of model may not work very well. Analyzing an image coming up with a report is a highly individualistic clinical centric affair and cannot be broken down into phases. At the bottom of the heart no US Board Certified radiologist (at least the ones I have talked to including one of the veteran US radiologists) is really confident of signing off on a report with his name, without actually having infinite confidence in the offshore radiologist, who comes up with the report.
Training & Scalability:
My understanding is that just about 50-100 radiologists graduate every year from the medical colleges in India. Many of them are very quickly absorbed into the labor pool. How many would want to moonlight after their regular work at hospitals/radiology centers? As the teleradiology facilities scale up one could expect shortage of radiologists in India accompanied by and attrition and wage inflation. So scaling up the operation to large numbers may be a concern. To create a reasonable supply of radiologists there needs to be collaborative policy decisions from the Indian Medical Council and the Government such as more medical seats and training facilities in the country.
Legal and Regulatory Aspects:
Apart from HIPAA there are other regulatory and political challenges as well. The American College of Radiology has come up with a stance that only US Board certified radiologist with malpractice insurance should be involved in teleradiology. A recent discussion in the radiology circles in the US centered around a limit on the number of radiology reports a radiologist could sign per day. So if a radiologist signs too many reports per day than humanly possible it might be considered that the radiologist did not actually review the records. Though tracking reports of each radiologist on a daily basis and building a legal case may be not practical, it also reflects the extreme reactions in the healthcare community to clinical process outsourcing.
Looking ahead..
I would think that more than the operational and business side of teleradiology, the real issue that slows adoption of offshore teleradiology services is to do with the regulatory framework surrounding the same in the US. We are seeing political initiatives to reign in healthcare costs that may limit medical malpractice lawsuits, rampant in the country today. Would there be a tipping point when the cost of radiology services becomes so expensive that the healthcare payer community would lobby to rationalize the cost of radiology services in the US? Would offshore teleradiology then be the norm for US hospitals? Would other countries follow suit?
The fact remains that the demand for radiology services in the US market is growing while the supply of radiologists is not growing enough to match the requirements. However we need to take a step back and examine this from a different perspective which some times is missing, when every other person wants to be running a healthcare BPO business these days. My intent is not to discourage the gold seekers, but to play the devil’s advocate.
Can India be a teleradiology hotspot?
Some of the teleradiology centers in Australia and Lebanon have several US board certified radiologists working from those locations. I guess we have a handful of US certified radiologists of Indian origin working from Bangalore, which is perfectly within the confines of US rules and regulations. However when a large Indian IT organization wanted to relocate more radiologists of Indian origin to Bangalore, there were no takers. Is there the right incentive for a radiologist in US to relocate to India today, for professional reasons?
US radiologist vs Indian Radiologist debate
Healthcare in US is built on stringent regulations, because healthcare is a politically sensitive issue in the country. The fact is that, though there is a shortage of healthcare professionals in the US, the country would NOT want to have less qualified professionals providing healthcare services. The reality is that though you and I are aware of the excellent clinical knowledge of Indian radiologists, the perception in US different. The common man is the US is really concerned about a radiologist in India whose credential are suspect by many of the folks here. To the average John Doe, despite all the hype that is created about outsourcing, India is still a developing country. My tax consultant is worried that US supermarkets are importing prescription drugs from India, which he feels may not be meeting FDA standards. Credibility being a key issue, the answer to successful teleradiology operation is to have one/several US board certified radiologists who can sign off on the radiology reports.
Medical Transcription vs Teleradiology
The layered review approach used in Medical transcription may not work very well in Teleradiology. The teleradiology equivalent of this (having some medical students run through the initial report and then reviewed by a senior radiologist and then finally by the US radiologist) kind of model may not work very well. Analyzing an image coming up with a report is a highly individualistic clinical centric affair and cannot be broken down into phases. At the bottom of the heart no US Board Certified radiologist (at least the ones I have talked to including one of the veteran US radiologists) is really confident of signing off on a report with his name, without actually having infinite confidence in the offshore radiologist, who comes up with the report.
Training & Scalability:
My understanding is that just about 50-100 radiologists graduate every year from the medical colleges in India. Many of them are very quickly absorbed into the labor pool. How many would want to moonlight after their regular work at hospitals/radiology centers? As the teleradiology facilities scale up one could expect shortage of radiologists in India accompanied by and attrition and wage inflation. So scaling up the operation to large numbers may be a concern. To create a reasonable supply of radiologists there needs to be collaborative policy decisions from the Indian Medical Council and the Government such as more medical seats and training facilities in the country.
Legal and Regulatory Aspects:
Apart from HIPAA there are other regulatory and political challenges as well. The American College of Radiology has come up with a stance that only US Board certified radiologist with malpractice insurance should be involved in teleradiology. A recent discussion in the radiology circles in the US centered around a limit on the number of radiology reports a radiologist could sign per day. So if a radiologist signs too many reports per day than humanly possible it might be considered that the radiologist did not actually review the records. Though tracking reports of each radiologist on a daily basis and building a legal case may be not practical, it also reflects the extreme reactions in the healthcare community to clinical process outsourcing.
Looking ahead..
I would think that more than the operational and business side of teleradiology, the real issue that slows adoption of offshore teleradiology services is to do with the regulatory framework surrounding the same in the US. We are seeing political initiatives to reign in healthcare costs that may limit medical malpractice lawsuits, rampant in the country today. Would there be a tipping point when the cost of radiology services becomes so expensive that the healthcare payer community would lobby to rationalize the cost of radiology services in the US? Would offshore teleradiology then be the norm for US hospitals? Would other countries follow suit?
Friday, April 27, 2007
Outsourcing your heart surgery?
Medical tourism in India is picking up momentum, as more patients from neighbouring countries travel to India for cost effective procedures provided by experienced medical professionals. However, to address the emerging market segment of patients from Europe driven by long wait times for procedures and patients from the US struggling with high cost of care, the Indian healthcare sector needs a makeover. Outsourcing one’s heart surgery to India is a far more complicated decision than shipping software development to India.
A look at the numbers
There have been recent reports in the media that have quoted various experts projecting revenue ranging from $ 2 billion to $ 20 billion for India from medical tourism by the year 2020.Let’s look at some numbers to put this in perspective. One of the best managed healthcare groups in India with about 6000 beds has revenue of about $ 125 million. However going with these numbers, it would require about 60,000 beds, to reach $1.25 billion revenue and 12, 00,000 beds to obtain a revenue of $25 billion exclusively from healthcare services.
Let us look at some of the actual numbers from the tourism industry as well. The numbers may be a little dated but this is what it looks like. In 2003, about 2,726,000 tourists visited India and the revenue from the same was $3.5 billion .Well, if that many relatives of patients (about 3 million) travel to India that would be another $3.5 billion from tourism services. Despite questionable projections, the fact remains that medical tourism in India is a growing trend.
Segmentation of the patient population
Currently the bulk of the patients come to India from neighboring countries such as Bangladesh, Pakistan, other Asian countries, Africa and the Middle East. In many cases the driver for cross border care is a question of quality of care than cost it self. The high quality of care that is provided in India is simply not available in some of the neighboring countries.
The second segment is the segment of patients sponsored by the governments for treatment abroad by countries such as Middle East and Africa. For those governments, India is relatively cost effective option compared to Europe or the US. Private patients (not sponsored) from these countries looks at India as value for money option vis a vis Europe and US. Moreover post 9/11 there has been a dramatic drop in patients from Middle East to the US.
The market segment that the Indian healthcare industry is now targeting is the patient population from Europe and the US. There are several patients of Indian origin residing in UK and US, who are already using the services of hospitals in India, when they are on vacation etc. Apart from this there have been the widely publicized cases of patients from the US and Australia.
True, these countries do have an increasing senior population and the healthcare systems are facing challenges. Even though it is economically viable for some of these governments to officially bless shipping of patients abroad, it is the political viability of such a decision that may need to be worked on. Would a political party in power in Europe/US would want to face the next election as the pioneer of shipping patients to “third world countries”?
Healthcare management executives may want to recognize that a strategy that works for attracting patients from Bangladesh may not work for patients from Britain, since the expectations and drivers are different. The industry think tank may want to devise niche strategies to tap into each of these segments.
Competition
What is a good reason for an average senior citizen in the US to fly 18 -20 hours to get his hip replaced/resurfaced? Obviously if he/she is not covered by insurance and cannot afford the same in US he has to look at options. What if this can be done in Mexico or Costa Rica at comparable rate and a shorter flight?
A look at the numbers
There have been recent reports in the media that have quoted various experts projecting revenue ranging from $ 2 billion to $ 20 billion for India from medical tourism by the year 2020.Let’s look at some numbers to put this in perspective. One of the best managed healthcare groups in India with about 6000 beds has revenue of about $ 125 million. However going with these numbers, it would require about 60,000 beds, to reach $1.25 billion revenue and 12, 00,000 beds to obtain a revenue of $25 billion exclusively from healthcare services.
Let us look at some of the actual numbers from the tourism industry as well. The numbers may be a little dated but this is what it looks like. In 2003, about 2,726,000 tourists visited India and the revenue from the same was $3.5 billion .Well, if that many relatives of patients (about 3 million) travel to India that would be another $3.5 billion from tourism services. Despite questionable projections, the fact remains that medical tourism in India is a growing trend.
Segmentation of the patient population
Currently the bulk of the patients come to India from neighboring countries such as Bangladesh, Pakistan, other Asian countries, Africa and the Middle East. In many cases the driver for cross border care is a question of quality of care than cost it self. The high quality of care that is provided in India is simply not available in some of the neighboring countries.
The second segment is the segment of patients sponsored by the governments for treatment abroad by countries such as Middle East and Africa. For those governments, India is relatively cost effective option compared to Europe or the US. Private patients (not sponsored) from these countries looks at India as value for money option vis a vis Europe and US. Moreover post 9/11 there has been a dramatic drop in patients from Middle East to the US.
The market segment that the Indian healthcare industry is now targeting is the patient population from Europe and the US. There are several patients of Indian origin residing in UK and US, who are already using the services of hospitals in India, when they are on vacation etc. Apart from this there have been the widely publicized cases of patients from the US and Australia.
True, these countries do have an increasing senior population and the healthcare systems are facing challenges. Even though it is economically viable for some of these governments to officially bless shipping of patients abroad, it is the political viability of such a decision that may need to be worked on. Would a political party in power in Europe/US would want to face the next election as the pioneer of shipping patients to “third world countries”?
Healthcare management executives may want to recognize that a strategy that works for attracting patients from Bangladesh may not work for patients from Britain, since the expectations and drivers are different. The industry think tank may want to devise niche strategies to tap into each of these segments.
Competition
What is a good reason for an average senior citizen in the US to fly 18 -20 hours to get his hip replaced/resurfaced? Obviously if he/she is not covered by insurance and cannot afford the same in US he has to look at options. What if this can be done in Mexico or Costa Rica at comparable rate and a shorter flight?
I am not an expert of the patient flow patterns to competitor locations such as Hong Kong, Singapore, SouthAfrica, Costa Rica, Mexico, the Caribbean and emerging destinations such as Dubai. According to studies, there has been differentiation in the services provided at these destinations..
South Africa draws several cosmetic surgery patients, especially from Europe, and several South African clinics offer packages that include personal assistants, visits with trained therapists, trips to top beauty salons, post-operative care in luxury hotels and safaris or other vacation incentives. Because the South African rand has such a long-standing low rate on the foreign-exchange market, medical tourism packages there tend to be perpetual bargains as well. Bangkok Phuket Hospital is the premier place to go for sex-change surgery. In fact, that is one of the top 10 procedures for which patients visit Thailand.
Argentina ranks high for plastic surgery, and Hungary draws large numbers of patients from Western Europe and the U.S. for high-quality cosmetic and dental procedures that cost half of what they would in Germany and America. Dubai--a destination already known as a luxury vacation paradise--is scheduled to open the Dubai Healthcare City by 2010. Situated on the Red Sea, this clinic will be the largest international medical center between Europe and Southeast Asia.
The Indian healthcare industry needs to examine the factors that have made these medical tourism destinations popular.
Challenges
There are definitely areas for improvement as the Indian healthcare industry starts marketing services to newer patient segments. A key difference in healthcare services in India, unlike the IT sector is the critical role the government has to play to utilize medical tourism opportunity to its best. Some of the areas for improvement, to make India a global healthcare destination are:
Image makeover
Despite the success of India in the IT market, perception of India in the eyes of the target audience has to change dramatically. The predominant image of India the average senior citizen in Europe (who is a target customer) has in his mind is picture of pre Independence India. To transform those images and present an image of India where he can trust Indian surgeons with his heart, face, and hip joints is a challenge. (outsourcing your heart surgery is a lot different from outsourcing software code!!) To the average senior citizen in the US, it is more of a challenge, since to many, India is still a land of snake charmers, and cows in traffic, “in a land far far away”… The predominant barrier to attracting patients from the developed world is transforming this perception.
Perception of Quality of Care
Though one may argue against this, an average patient half a world away perceives the quality of care based on the perception of the country’s image as a whole. The patients may have a hard time comprehending that the quality of care in India can be comparable to the US. One way to get over this is for hospitals to follow international healthcare accreditation standards. Would a patient be willing to trust his heart, kidneys, and hips and face if there is an iota of doubt regarding quality of care? (this segment of high yielding procedures is where the Indian medical tourism market is looking forward to for better profits) In fact, there have been cases of plastic surgery gone bad, particularly from Mexican clinics in the days before anyone figured out what a gold mine cheap, high-quality care could be for the developing countries.
Scalability of Healthcare Infrastructure –several questions
The first question that comes to my mind is whether India can scale up to address the increasing patient mass. Does India have enough specialists and super specialists? What is the reality on the ground with regard to paramedical staff? How is the attrition among nurses due to demand abroad? The other question is the sheer number of beds and physical healthcare infrastructure and the support network required. On a different note, from a social perspective, would there be enough doctors and infrastructure left to treat the not so “profitable” Indian patient? What is the mechanism for international patients who seek legal redressal for service gone bad? How long would it take for resolving the same in India? Is the Indian legal infrastructure geared up to handle healthcare specific issues in a speedy manner? I am sure these questions are being asked.
Role of the government
To make the model scalable the government of India will have to work in tandem with the private sector in several critical areas. Some of the areas where government needs to act are:
Medical Education
A key factor for providing competitive care in India revolves around adequate supply of medical manpower. Though there is an oversupply of medical graduates in the country, the supply of specialists with post graduate education may be a concern as more hospitals start to address medical tourism. Moreover a nursing shortage is imminent in India as overseas recruiting for nurses increases as a result of the nursing shortages in US and Europe. It is high time that the government really looked hard at the demand supply situation of human resources in the healthcare sector and recalibrated the supply of specialists and paramedicals in the country. This would mean changes to policies on post graduate medical education, nursing education etc.
Infrastructure
Unlike the IT sector that is not heavily dependent on surface transport, quality of healthcare service can be limited by traffic and hartals. The last thing the fledgling medical tourism industry in India wants is bad press on a couple of foreign patients in ambulances that were stuck in traffic for several hours due to a political party’s rally.
From airports, and high ways, hassle free environments for patients’ relatives, efficient law and order and judiciary reforms, there is quite a bit where improvements can and needs to be made on the support infrastructure to make medical tourism work well in India.
Privacy of Patient Information
One area that is understated in discussions around healthcare services in India is confidentiality of patient data and regulations related to privacy and security of patient data in India. A good start would be to adopt HIPAA and other privacy standards in India.
Role of IT standards
Finally, adopting and adapting of Information technology systems and standards that are in vogue in the developed world would be required to ease the administrative processes involved in cross border care and integration with the medical records in the country of origin.
Consolidation in the Indian provider market gaining momentum
Consolidation in the provider sector in India will continue as larger provider groups try to expand their presence across the country. We would see several large to medium standalone hospitals losing out in the highly competitive market,unable to leverage the economies of scale that the provider chains can achieve.
There is potential for increase in mergers and acquisitions as provider chains go on a shopping spree flush with cash raised from the market.
However the debt service burden of distressed hospitals may make them less attractive for acquisitions.
In the coming years hospitals would attempt to supplement falling margins by going after medical tourism revenues. Once again, undifferentiated stand alone hospitals may not able to exploit this to the fullest as they would be way behind the provider chains in brand management, operational efficiency and customer service.
There is potential for increase in mergers and acquisitions as provider chains go on a shopping spree flush with cash raised from the market.
However the debt service burden of distressed hospitals may make them less attractive for acquisitions.
In the coming years hospitals would attempt to supplement falling margins by going after medical tourism revenues. Once again, undifferentiated stand alone hospitals may not able to exploit this to the fullest as they would be way behind the provider chains in brand management, operational efficiency and customer service.
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