Passage to India?
“In India we want first-world technology at third-world prices.” So says Sujay Shetty, head of accounting giant PricewaterhouseCoopers’ Indian pharmaceuticals practice. Healthcare economist John Goodman reports that entrepreneurs in India, where 80 percent of the healthcare market is private-pay, have ample incentive to develop technologies that improve outcomes while reducing healthcare costs. Contrast India with the US situation:
There has been an enormous amount of innovation in the medical marketplace regarding the organization and financing of care. And wherever health insurers are paying the bills (almost 90 percent of the market) it has been of two forms: (1) helping the supply side of the market maximize against third-party reimbursement formulas, or (2) helping the third-party payers minimize what they pay out. Of course, these developments have only a tangential relationship to the quality of care patients receive or its efficient delivery.
The 10 percent or so of our healthcare market that works like India – consumers paying directly for value – shows that we can also get more for less. Goodman points out that LASIK eye surgery and other unreimbursed cosmetic procedures are getting cheaper, not more expensive. Walk-in clinics and cut-rate prescription drug offers from giant retailers also demonstrate that low-cost medical progress is possible.
But ObamaCare takes us in exactly the wrong direction. How can we create alternatives so that Americans don’t have to visit Chennai for access to low-cost high-quality medical care?
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Jun '10
Re: Passage to India?
As John Stossel pointed out, there is a form of health care in Canada that's excellent, high-tech, reasonably priced, and has very short waiting times--veterinary care.
Re: Passage to India?
Oh, I forgot to mention that "medical tourism" is big business in India -- about $2 billion and growing at 30 percent annually. Seems like a lot of people are fleeing "free" healthcare at home.
Anyone know how I can invest in this area? I expect a lot of Americans may be getting knees and heart valves replaced in India after 2014.
May '10
Re: Passage to India?
The most aggressive generic drug companies are Indian (e.g.., Dr. Reddy's. etc.) And, because of FDA restrictions, many new compounds are given their initial clinical or pre-clinical trials in India.
Of course, George, you know what they pay doctors there.....
Jun '10
Re: Passage to India?
Whereas here, low salaries are supplied by the Medicare system and insurance premiums.
Re: Passage to India?
Duane, I doubt the Indians would accept me into practice at any price. They must have well-qualified medical staff to generate this much demand from abroad. And just imagine finding this sort of prix fixe menu for heart surgery at home.
Given ObamaCare and the aging of the US population, I sense a burgeoning medical travel agency market niche.
Re: Passage to India?
Great point. Personal motivation is more sensitive to trends than absolutes. Most US physicians are relatively well-off, but miserable as their situation gets marginally worse year by year, with little opportunity to affect the decline. Meanwhile, the mood is India, as far as I can tell, is upbeat. The pay isn't great right now, but it's improving. I bet that it's more fun to go to work each day in a free market growing 30 percent per year than worrying about the extent of the next Medicare cut.
May '10
Re: Passage to India?
This reminds me of a short passage in Dr. Gene Callahan's book Economics for Real People:
"Historical examples of nominally socialist states, such as the Soviet Union, operated within a worldwide market order. They mimicked the more market-oriented countries’ methods of production, their products, and their technologies. Soviet
planners even copied commodity prices out of The Wall Street Journal to use in their calculations. Lew Rockwell told a wonderful story about Gorbachev’s press secretary. When asked about his dream for mankind, the secretary replied that he
hoped to see all of the world embrace socialism, except for New Zealand. 'But why not New Zealand?' a reporter wondered. 'Well,' the secretary responded, 'we will need someone to get the prices from.'"
May '10
Re: Passage to India?
I was in Chennai just last week. I can tell you that you can hardly travel a block in the city without seeing fairly modern-looking medical facilities that are emblazoned with the medical specialties they house. I wondered aloud to my traveling companions about medical tourism. It is not an easy or inexpensive trip. But I can readily imagine that, net net, the costs of many procedures would look quite attractive compared to American prices....if they are even available under Obamacare.