3 lessons U.S. hospitals can learn from India

U.S. hospitals should follow Indian hospitals' example to cut costs without a decrease in quality, according to a Washington Post editorial.

India's healthcare system may have its own problems, but research has "uncovered nine private hospitals that provide quality healthcare at a fraction of U.S. prices," write Vijay Govindarajan, a professor of international business at Dartmouth College's Tuck School of Business, and Ravi Ramamurti, director of Northeastern University's Center for Emerging Markets.

For instance, a patient at one of the nine hospitals would pay $250 for a caesarean section, $2,000 for a knee or hip replacement, and $3,200 for open-heart surgery. At U.S. hospitals, patients would pay 10 to 20 times as much for these procedures, according to the editorial.

"These private hospitals deliver medical outcomes comparable to that of good U.S. hospitals, as measured by medical complication rates or post-treatment survival rates. Furthermore, they're profitable," Govindarajan and Ramamurti write.

Indian hospitals could pay healthcare staff U.S.-level salaries and still run efficiently enough to keep their prices at one-fifth those of U.S. hospitals, the editorial states, because of three key factors U.S. hospitals should consider:

  • A hub-and-spoke design, with major hospitals located in major cities and "spokes," smaller subsidiaries, in surrounding rural areas, which centralizes the best technology and knowledge while allowing hubs to communicate remotely with the spokes.

  • Task-shifting, in which lower-skilled workers are given responsibility for routine tasks, freeing up doctors to concentrate on more complex procedures. Some Indian hospitals, according to the editorial, have created a secondary "tier" of workers with two years of post-high school medical training who perform routine medical tasks. This has enabled surgeons to perform up to three times as many surgeries as those in the U.S., according to the editorial. It has been suggested physician assistants and nurse practitioners could serve a similar role in the U.S., but a recent study indicates that this will be insufficient to combat the physician shortage, FierceHealthcare previously reported.

  • Fiscally conservative policies, such as using locally-manufactured devices like imports whenever possible, sterilizing and reusing devices that are often discarded after one use (such as clamps for open-heart surgery), and a fixed salary for doctors rather than the fee-for-service model.

"The Indian experience shows that costs can be dramatically reduced and access can be expanded even as quality is improved," Govindarajan and Ramamurti write. "U.S. hospitals should prepare for this new world."

To learn more:
- read the editorial

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