A Jump in Healthcare Outsourcing

Unions can agitate against offshoring of expensive procedures--as they did earlier one year when an employee of a Canton, NC paper plant employee agreed to go there for shoulder surgery--but they're not going to hold this trend off very long. Right now few workers may have the chance to go overseas for care, and pick up a big financial bounty as part of the bundle, but rest assured these programs will proliferate in '07.

Why is this such a no-brainer? Simply, employers get much-lower costs and high quality results. Given that procedures at Indian hospitals have comparable outcomes to U.S. surgery--at a dramatically lower cost--it just makes too much sense not to move ahead. Companies will start to develop corporate communications programs explaining the benefits of IndiaCare, emphasizing the safety of the procedures and the opportunity to split the difference in cost between U.S. and Indian treatments. And intermediaries like IndUShealth will help get employees registered and channeled through offshore systems.

A tougher nut to crack will be the unions, who--not unreasonably--fear that someday everyone who needs a high-cost procedure will be forced overseas for care. However, I'd argue that this problem can be solved as the overseas care phenomenon matures, perhaps reassuring unions by specifying in the contracts that nobody can be forced to offshore their procedures.

Regardless, large-scale offshoring of high-cost procedures will jump next year-- count on it. Like the off-shore call center explosion of prior years, it just works too well to be avoided.