Monday, December 15, 2008

Health Care Consumers - Choices?

By way of Mr. Harish Mamtani, an excellent article in WSJ "Outsourcing Health Care to India" here. This is a consumer service market place that has come to a head in deciding what direction it is going to take.

One of USA's leading companies in this sector is Indus Health (see here) founded by a good friend Mr. Rajesh Rao who currently is its CEO. Rajesh is a visionary entrepreneur with breakthrough successes to his name. While discussing Rajesh's proposition with folks in the USA in the last couple of years, I used to get the distinct impression that the health care service providers considered Rajesh to be ahead and early to market. Yet, I believe Rajesh has shown himself to be a true trail blazer... his perseverance and commitment has resulted in Indus Health perhaps defining the right path to successful implementation.

An article this month on Business World "In Sickness And Recession" here states:

"Rajesh Rao, CEO, of IndUShealth, a North Carolina-based company that facilitates medical travel of American patients to Indian hospitals, estimates that a company with 1,000 employees typically can hope to cut its healthcare costs by half a million dollars every year by outsourcing treatment options for its employees to India. Rao should know because even before the Serigraph announcement made headlines across the US, he has been helping American corporates send employees to India. Today, Rao, has at least 12 mid-sized employers availing his corporate programme (translating into 40,000-50,000 subscribers) and he says he has been tripling his volumes year on year since he started in 2005, when it was just a trickle."

Another article from Smart Money "As Health Costs Soar, More Find Care Overseas" provides an excellent overview of the "what" and "why" of outsourcing of health care, see here.

UPDATE: Upon reading my blog, Rajesh forwarded two excellent articles from the Economist weighing in on outsourcing Health Care.

In the article "Operating Profit" here, the Economist asks: "Why put up with expensive, run-of-the-mill health care at home when you can be treated just as well abroad?" A question every health care consumer is going to start asking if already not doing so. This article especially focuses on the costs associated with various medical procedures.

In any service model with a distributor going out to the end consumer, the consumers continuously strive for better value... just like WalMart did not run the mom and pop stores out of business necessarily - the small store did not have a competitive advantage or distinction that could compete with "Every Day Low Prices" equity and delivery on that equity of WalMart.

Similarly, the article concludes that:

"Medical tourism promises to be what Aetna’s Dr Cutler calls “a disruptive market force that improves cost and quality here in America.” Whether or not it turns out to be all its boosters wish for, it will be a force to be reckoned with."

The secret here is that the multi-nationals are not driven to become international, it is the consumer who will reach out if the corporation does not deliver on the need. It is true with products, it is true with services!

In the Economist article "Importing Competition" here, the Economist declares - "The coming boom in medical travel could help both rich and poor". This article highlights the issues with a health care system (i.e. US) which is not being repaired as the consumer is leaving it as they would a rusted out car for something new... and not improved, but a fundamental shift in how the service is organized and conducted, the anciliary opportunities for the distributor, the provider and finally the customer of it all. Hence, outsourcing health care to corporate while health tourism to the consumer.

In the end the consumer always wins! The one who delivers on the need successfully, is a bigger winner.

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