I am being asked more and more about the opportunity in India in medical outsourcing. We have to look at two very different activities which are being clubbed under the medical outsourcing term
1. Healthcare outsourcing : This has been the traditional IT/BPO outsourcing model, wherein healthcare companies in the US - Providers & Payors have been outsourcing IT and BPO work like Medical Transcription, Insurance Billing, etc to Indian firms. Wipro made a big splash a few years ago when the announced the outsourcing by Mass General Hospital of their radiology reading to Bangalore.
2. Medical Tourism: Increasingly, there is talk of medical tourism to India, given the high cost of healthcare in the US, Japan and the long waits for treatment in more socialist healthcare countries like UK, Canada and others in mainland Europe. We are seeing two types of companies emerging from India to cater to this market. The packagers - in essence these companies tie-up with hospitals as well as leisure travel providers and can offer a patient, say a heart transplant in Mumbai followed by a 2 week recuperation period in Goa. The other type is the hospitals themselves which offer high quality medical and surgical services.
Will this trend catch on? Are a significant number of people going to travel to India to get these services? What is the entry barrier against similar activities propping up say, in the Caribbean? What is India's competitive advantage?
Let us explore this in some detail
In favor of India:
- For one, most of the developed world has experience with Indian doctors in their own countries and these doctors have on average, been of a very high quality
- Secondly, Indian hospital chains, especially Apollo, Fortis & Max are really stepping up their infrastructure, equipment and talent quality as well as their presence all around the country.
- There have been good experiences by patients from all over the world and the cost of surgical services could be as low as 1/10th of that in the US or Japan.
- The Indian government has created a Medical Visit Visa for one year duration, signaling that the bureaucracy will not be an obstacle in this business model
- Thailand has been attracting 1 million plus medical tourists per year, and has been in Medical Tourism for much longer than India.
- Healthcare is not always a price sensitive decision and patients don't always want to visit a beach after a heart bypass surgery.
- The reputation of India is not as a healthcare hub, in fact rich Indians have been traveling outside of India for healthcare for a long time
- Just improving hospitals is not enough, the public infrastructure needs to improve as well
- Patients could have anxiety of their doctor not performing their surgery or being involved in post operative care.
- Patients will not be governed by their country laws in case of problems with their procedures. And problems do happen
- India needs to go up against more established players like Thailand & Malaysia
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