Offshoring American Health Care: Higher Quality At Lower Costs?

Is  the future of American health care 430 miles offshore? American health care providers are watching closely and anxiously.

MAR 27, 2014 @ 01:00 PM 20,325 VIEWS

Offshoring American Health Care: Higher Quality At Lower Costs?

Robert Pearl, M.D. ,  

 CONTRIBUTOR

I cover the business and culture of health care every other Thursday.  

Opinions expressed by Forbes Contributors are their own.

The Cayman Islands are nestled in the Caribbean Sea some 430 miles south of Miami. The three-island cluster is known for its inviting coral-sand beaches, laid-back island culture and tax-free status.

While it lures many tourists and big banks, it’s not the first place you’d expect to find the future of American health care. That may change soon.

Last month, I flew to the Caymans to moderate an afternoon-long panel on delivering high-quality, affordable health care. Earlier in the day, more than 2,000 attendees from around the world gathered under a large tent to celebrate the opening of a new 104-bed hospital.

Why all the fuss? Because this new facility is the work of Narayana Health chairman and India’s most renowned heart surgeon, Dr. Devi Shetty.

As featured in the Wall Street Journal and the widely cited Harvard Business School case study, Narayana is internationally regarded as a low-cost, high-quality health care provider. Its newest hospital, Health City Cayman Islands, is the organization’s first development outside of India.

It has American health care providers watching closely and anxiously.

Rendering of Health City Cayman Islands, a 104-bed hospital that opened in February 2014 and just might represent the future of American health care. (Photo courtesy of Narayana Health)

Narayana Health Positioned To Deliver Quality Care To Americans

At the end of 2013, Narayana Health was operating 18 hospitals across 14 cities in India. With a laser focus on efficiency and quality, the average Narayana cardiac hospital performs 40 heart surgeries a day for less than $1,600 a case.

That’s about 2 percent of the average heart surgery cost in the U.S. withoutcomes that rival the best American facilities.

With the first phase of the Cayman Island hospital completed in February, Dr. Shetty plans to expand Health City Cayman Islands to 2,000 beds over the next decade. And both his vision and strategy extend well beyond this Caribbean destination.

In the United States, there is about 1 hospital bed per 333 people. The Grand Cayman Island has about 50,000 residents. When Dr. Shetty completes his expansion plans, his newest hospital will feature 1 bed per 25 Grand Cayman residents. It doesn’t take a heart surgeon to see Dr. Shetty is thinking way beyond the Caymans.

Given the hospital’s close proximity to Miami, Dr. Shetty must be planning to attract patients from the United States. That would certainly explain the 5-star hotel he built next door with a foot bridge connecting the two world-class structures.

Today, Health City Cayman Islands focuses on cardiac and total joint surgery. It will add cancer care and transplant services in the near future. Plans are already underway to construct an international medical school and a variety of high-quality residency training programs. He expects this facility to become a global academic medical center and a destination for the best medical school graduates.

Some American health systems may scoff at the idea that Americans will travel to Health City. But if Dr. Shetty can match the performance of his hospitals in India, his vision is likely to be a reality sooner than they imagine. Already, the Cayman Island’s business-friendly government has allowed Dr. Shetty to move ahead with development much more rapidly than he ever could in the U.S.

Dr. Shetty’s Strategy: Charge Less, Treat More  

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From: Ralph Weber <Ralph@medibid.com