Ask most Americans about obtaining their health care outside of the United States, and they respond with disdain and negativity……. Of course, that’s exactly what Yellow Cab thought about Uber, Kodak thought about digital photography, General Motors thought about Toyota and Borders thought about Amazon.
Perception Is Not Reality
Article contributed by Brian Klepper
U.S. health care needs a wakeup call from India
Robert Pearl7:03 a.m. ET Jan. 29, 2017
In Bangalore, India, heart surgeons perform daily state-of-the-art heart surgery on adults and children at an average cost of $1,800. For the record, that’s about 2% of the $90,000 that the average heart surgery costs in the United States. And when it comes to the quality of the heart surgery, the patient outcomes are among the best in the world.
I visited India during Thanksgiving week to meet with Dr. Devi Shetty. He’s the heart surgeon who served as personal physician to Mother Teresa and now runs Narayana Health, with 20 hospitals in India. I wanted see what the United States could learn from medical innovations undertaken halfway around the world, and how he achieves these impressive clinical results at such a low price.
The high quality and low cost represent the type of disruptive innovation that has impacted nearly all industries in the United States, and should serve as a wake-up call for American doctors and hospitals. Disruption is what we call it when lower-priced alternatives to current products and services are introduced. Each time, the incumbents in the field scoff at them and dismiss their long-term impact, only to be blindsided when after a decade these companies dominate.
Ask most Americans about obtaining their health care outside of the United States, and they respond with disdain and negativity. In their mind, the quality and medical expertise available elsewhere is second-rate. Of course, that’s exactly what Yellow Cab thought about Uber, Kodak thought about digital photography, General Motors thought about Toyota and Borders thought about Amazon.
To date, doctors and hospitals have been spared the pain of disruption. But that day is ending, and I predict that even people looking for it to happen are gazing in the wrong direction. They expect disruption to be led by companies like Google and Apple or maybe entrepreneurial start-ups. Based on my time in India, they should be looking globally.
Most families in India have no health insurance, and often need to borrow the money to pay for surgery. When it costs $1,800 for heart surgery, Shetty can offer it to only so many children. But if it costs less, he can save more lives. He and the people working in his hospitals are driven to transform health care to save lives.
The day I was there, the teams of surgeons performed 37 heart surgeries on adults and children, including one heart transplant. That translates into about 900 procedures a month, or about what most U.S. university hospitals do a year. His success results from a combination of high volume, advanced technology and a focus on people and performance.
In surgery, the experience of the surgeon and the team are the best predictors of superior clinical outcomes. As you might imagine, given the huge volume of procedures his team performs each day, his hospital’s results are exceptional. And contrary to what Americans may assume, the entire surgical experience is cutting edge, and beyond what is available almost anywhere in the United States.
For example, clinicians use a sophisticated electronic health record they developed, with the information stored on an iPad. Unlike nearly all U.S. EHR systems, the application is so intuitive that minimal physician or nurse training is required. The operating rooms themselves have huge windows leading to protected gardens designed to allow natural sunlight to enter and spur creativity.
The bedside monitoring equipment links with a central computer system, allowing clinical leaders like Devi to measure each day how long it took a physician to intervene for a potentially urgent medical problem. In the United States this often exceeds an hour at night and on the weekend. In India it was eight minutes. The disruptive innovation he has implemented isn’t just lower cost, it’s also higher quality.
The hospital’s focus on people was widely evident. Embroidered on the white coats of doctors, nurses and staff was the question, “How can I help you?”
Its research facility matched the best university hospitals, with tens of thousands of fully sequenced DNA specimens, and a place to store cancer tissue from today, to be tested against the discoveries of tomorrow. Unlike many in the U.S., it was fully integrated with clinical practice, focusing on the questions and opportunities raised by the treating physicians. Next door was the lab focused on nanotechnology, and down the hall, one working on a vaccine to prevent heart attacks.
Devi took me to Biocon, a drug manufacturing company with its visionary chairman and managing director, Dr. Kiran Mazumdar-Shaw. The manufacturing machines were identical to those used by companies in the U.S. and the cleanliness matched the best in the world. The company’s products were some of the most sophisticated in medicine, including biosimilar drugs for the treatment of cancer, inflammation and arthritis. But one stood out in particular, and that was insulin.
The medication had identical action to what’s sold in the U.S. And its preloaded syringes, with a sophisticated calibrating mechanism, were more accurate in dose than any I’ve seen. What was most remarkable was the price — less than 10% of what it costs Americans with diabetes today. The combination of massive scale and appropriate pricing accounted for the 10-fold difference.
The U.S. can continue for a few more years to provide inefficient medical care and tolerate exorbitantly priced drugs. But at some point, insurance companies will start offering patients and their families all-expense-paid trips around the globe, and maybe even $5,000 to use in the duty-free shop after their surgery and medical treatment are complete.
Most American doctors and hospitals see India as far away, and as a result, underestimate the dangers they face from global disruption. They assume that people won’t be willing to travel halfway around the world for surgery. And they may be right. But before they become too complacent, they should look to the Grand Cayman Island, with its seven-mile white sand beach and tourist culture. There Shetty is building a 2,000 bed hospital for a population of more than 50,000 citizens. Maybe it’s just a coincidence that by airplane Florida is less than an hour away.
Robert Pearl is CEO of The Permanente Medical Group and a clinical professor of surgery at Stanford University.