Low-cost healthcare: US can take cue from India

Thursday, October 17, 2013

The United States may be good at innovations in medicines, procedures and equipment. But it should learn from India how to keep health care affordable, says a new study.

India’s private hospitals provided world-class health care at a fraction of US prices using innovative ways to manage costs, personnel, equipment and even real estate.

These hospitals, said the study published in the Harvard Business Review on Tuesday, should serve “as a wake-up call to hospitals in Europe and the United States.”

Authors Vijay Govindarajan, of Dartmouth, and Ravi Ramamurti, of Northeastern University, argued that for all the innovations in medicine the US has made “too little progress” in the field of health care delivery.

Health care became unaffordable without insurance, as a result.

US President Barack Obama tried to address it through a reform law, which is at the heart of the current fiscal crisis, extending insurance to all. But not by cutting costs.

The authors studied nine private hospitals in India, including Narayana Health, Apollo, HCG, Aravinda Eye Care, CARE Hospitals, LV Prasad Eye Institute and Vaatsalya.

Most of them were accredited either with a non-profit that certifies more than 20,000 hospitals in the US, or with its Indian equivalent. In short, they were all world-class. And affordable. The study discounted salaries as a factor. Even after adjusting salaries to match US levels, procedures at Narayana, for instance, cost 4% to 18% less than in any US hospital.

Source: Hindustan Times (link opens in a new window)

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