The spice of life
As the travel insurance industry enters a new decade, Saby Ganguly takes a closer look at India’s healthcare system and what it can offer both tourists and the indigenous population
First published in ITIJ 109, February 2010
As the travel insurance industry enters a new decade, Saby Ganguly takes a closer look at India’s healthcare system and what it can offer both tourists and the indigenous population
Despite possessing some of the world’s top medical practitioners and, perhaps, the world’s most economical supply of quality medical services, India has a rather ramshackle public healthcare system. On paper, the system looks second-to-none, but the pressure placed on it from the country’s billion-plus domestic population is causing it to burst at the seams – so much so that it is not rare to find in-patients lying on stretchers lining corridors of public hospitals due to a lack of vacant beds. Additionally, incidences of deceased patients’ relatives roughing up overworked doctors for perceived negligence are also reported from time to time. However, thanks to a sophisticated and better-managed private component, the bigger picture of healthcare for foreigners in India is not as horrific as scenes at public hospitals may portray. The country also boasts an alternative medicine system that was once ridiculed, but is now gaining respectability – although there is not a modicum of scientific corroboration of its efficacy.
Foreign visitors to the country rarely, if at all, use state-run facilities, especially if they have a travel insurance policy covering health problems. The same applies to India’s own middle classes, who number over 300 million. With rising incomes, greater exposure to global standards and an increasing spread of health insurance, the demand for private medical services is growing and the healthcare industry is responding positively, not only in terms of capacity, but also in the complexity of procedures – for example, a widely publicised successful operation by Indian surgeons on a Pakistani infant for a rare congenital heart disorder in New Delhi, in December 2008.
healthcare is one of the largest and fastest-growing sectors in India in terms of employment and financial turnover
For a long time, India has quite successfully been promoting itself as a medical destination to the less developed Asian and African countries, in addition to the less privileged citizens of oil-rich Arab countries. Since the late 1990s, Western areas, as well as the more affluent countries of Asia, are also being targeted. In fact, medical tourism promoters in India pride themselves that many British nationals have come to the country for medical procedures because of long waiting lists in Britain’s National Health Service (NHS). Moreover, beside the modern, or allopathic, medical system, India has flourishing alternative medical systems – such as ayurveda, homeopathy, unani, etc., – which continue to attract international medical tourists looking for alternative treatments.
Domestic scene
India has more than 16,000 healthcare centres (including 3,000 full-fledged hospitals), 70 per cent of which are state-run. Healthcare is one of the largest and fastest-growing sectors in India in terms of employment and financial turnover – estimated at US$35 billion and expected to exceed $40 billion by 2012. The private sector, although much smaller in terms of physical size compared to the state sector, accounts for over 80 per cent of healthcare spend in the country. This anomaly is easy to explain: state-run clinics and hospitals provide services for free, or nearly so, while private clinics and hospitals charge for their care.
Business for the private healthcare industry in India has been spurred by the rise of health insurance. Still a nascent practice, health insurance, or ‘mediclaim’ as it is popularly known in the country, has shown remarkable growth in the past 10 years or so, and is vigorously marketed by the private insurance companies, most of which are joint ventures between foreign insurers and domestic business houses. Most companies in the organised sector of the economy provide free medical insurance for employees and their dependents. Only around 12 per cent of the populace is covered by health insurance, of which just over one per cent is private insurance. Group insurance accounts for about 40 per cent of the total health insurance in India which, according to a study by the New Delhi-based PHD Chamber of Commerce and Industry, is projected to grow to $5.75 billion by 2010.
Speaking to ITIJ, Mr. Swapan De, an insurance consultant based in the eastern metropolis of Kolkata, said: “Individual purchasers of health insurance are mostly inhabitants of tier-I and tier-II cities.” Tier-I cities are the metropolitan cities of Mumbai, New Delhi, Kolkata and Chennai, together with the mini-metros like Bangalore and Hyderabad. Tier II cities are capitals of the 25 states that make up the Indian federation, and few prominent centres in those states. As prosperity increases in these places, people are taking to junk food, with increased incidence of lifestyle diseases such as hypertension and diabetes.
The rest of India is rural, comprising at least 65 per cent of the population: “Where medical insurance is practically non-existent,” said De, “the government has a health insurance scheme for people at the lower end of the economic ladder.” However, India is a country where an estimated 300 million people (same number as those in the middle classes) survive on a daily income of less than a dollar and are malnourished. “To sell health insurance to people living in abject poverty could be seen as an indecent proposal. Thus, as long as the deep economic divide in the social economy of India persists, the road to comprehensive health insurance for a majority of the populace will remain a long one,” De said.
Medical tourism
As mentioned previously, India, since the late 1990s, has been projecting itself to Western and other affluent countries as a quality healthcare centre with some success. State-run hospitals are barely in the picture for foreign patients; the private sector is leading the charge, not only in terms of actual medical treatment and procedures, but also in support services such as air ambulance and terrestrial evacuation of patients in an emergency condition. All domestic and international travel insurers have tie-ups with one or more private hospitals in each major city and tourism destination.
The rationale behind the surge in international medical tourism in India is twofold: 1) low cost, and 2) no waiting periods. According to a report from the India Brand Foundation, cardiac surgery that would cost $50,000 in the US and $14,250 in Thailand, costs only US4,000 in India. The report compares costs of other procedures too: a bone marrow transplant would cost US$62,500 in the US and Thailand, but only $30,000 in India. Orthopaedic surgery costs $16,000 in the US, $6,900 in Thailand, but totals a mere $4,500 in India.
the private sector is leading the charge, not only in terms of actual medical treatment and procedures, but also in support services such as air ambulance and terrestrial evacuation of patients in an emergency condition
Low treatment costs can be explained by well-known reasons, i.e., low cost of living, hence wages. Besides which, the cost of medicines are very low – in fact, costs can be termed ‘ridiculously low’ by Western standards. This is because India for long had a patent regime that allowed only patenting of manufacturing processes, not products. Speaking to ITIJ from Mumbai, Dr S Shirodkar, a retired pharmacologist, said: “Indian pharmaceutical manufacturers simply studied new drugs churned out of research laboratories in Western countries, and invented a different process to make the same drug. That’s how we could avoid the huge costs that Western companies incurred in their R&D. We just took the result of their research and found a new process to manufacture the same generic product and give it a different brand name,” adding, “there was no question of paying anything to the product patent owner, whether in India or in a foreign country.”
According to Dr Shirodkar, the absence of product patents for several decades in India may seem an unethical practice by Western countries, “but look it from a higher level and you will realise that half of India would be dead if we had to pay Western companies for their product patent right.” He continued: “There was no way Indian companies during those times could afford to make such payments, nor could they make the kind of long-term investments required for genuine research and development.”
In 2005, under pressure from the World Trade Organisation, India’s patent law was amended to comply with international patent law, but the amendment does not apply to products that were already being manufactured under the old regime. There are, however, several instances of foreign patients demanding to be administered medicines manufactured in a Western country and not their Indian equivalents – such demands have usually been met.
The most recent statistics on medical tourism in India that ITIJ could obtain pertain to 2006, when the industry registered a turnover of $350 million (according to a study by McKinsey, and the Confederation of Indian Industry). The study predicted that the industry could grow to $2 billion by 2012. The number of foreign medical tourists burgeoned from just 10,000 in 1999 to 180,000 in 2004, and the number has been growing by between 25 per cent and 30 per cent annually. At this rate, we can estimate that over 425,000 foreign tourists visited in India for medical purposes in 2008.
Air rescue
Before the early 1990s, air ambulance services were virtually non-existent in India – save the military segment, which was accessible to the general public only during natural disasters such as earthquakes and floods. With the opening-up of the economy in the early 1990s, there has been an impressive growth in private sector air ambulance services. While an exhaustive coverage of air ambulance providers in India is beyond the scope of an article of this size, the growth thus far has been impressive.
In the context of air ambulances, the first name that comes to mind is Apollo. This healthcare group’s air ambulance services cover more than 400 airfields across the country, with many of the company’s aircraft equipped with night-landing facilities. The Apollo air ambulance fleet comprises of Cessna Citation, Beech, Pilatus and Dornier airplanes, as well as Bell helicopters. The service can provide transportation across a distance up to 2,000 km.
India’s largest medical assistance company is East West Rescue (EWR), which provides multiple services for evacuee patients in India and other south Asian countries, including Pakistan, Bangladesh, Sri Lanka, Nepal and the Maldives. It also provides air ambulances for evacuating patients from central Asian countries such as Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Afghanistan, as well as from the Middle East, Singapore, Iraq, Thailand.
Meera Rescue is another air ambulance provider for emergency patients. The firm is equipped to evacuate people from anywhere in India to hospitals in the major cities, as well as overseas if necessary and permitted by the evacuee’s health condition. The firm is based in the capital city of New Delhi with branches in Mumbai, the country’s commercial capital and Goa, a popular international tourism centre. The company’s network covers all of India and has a rescue team complete with a full range of life-saving equipment – the firm has evacuated injured trekkers from the Himalayas as well as remotely located corporate executives.
Air Charters India is another air ambulance service provider in India. Part of the domestically well-known STIC Travel Group, its fleet ranges from helicopters and business jets to commercial-sized airliners for corporate houses, group travellers and individuals, flying to any destination in the world. It has access to a fleet of nearly 100 aircraft in India, all equipped for transporting patients under treatment, as well as for general travel, and more for international destinations. The company has offices in more than 40 locations in India, including Kolkata (in east India), Mumbai and Goa (in the west), New Delhi, Jaipur, Jallandhar, Chandigarh and Amritsar (in the north), and Chennai, Bangalore, Hyderabad, Cochin, and Trivandrum (in the south).
Telemedicine
For a country that has established itself as a global centre for information technology-enabled services (ITES), development of telemedicine should be expected. While some private hospitals have independently set up such facilities (with others following suit), many hospitals are collaborating with the Indian government to provide telemedicine services as a way to bridge the gaping healthcare divide between rural and urban India. Approximately 130 telemedicine centres are already operating in the country, some of the better-known ones being Apollo, All-India Institute of Medical Sciences (AIIMS), Narayan Hridalay (cardiac specialists) and Sankar Netralaya (eye specialists).
Alternative medicine
Coverage of medical treatment in India would be incomplete without looking at the country’s alternative treatment facilities. The southern state of Kerala has particularly distinguished itself as the most prominent centre for such services. An estimated 15,000 foreign medical tourists visited Kerala for alternative treatment in 2006, and this number has grown rapidly since – to fuel an expectation that it would touch the 100,000-mark by 2010. Foreigners visiting India for alternative medicine usually stay in the country longer, since such treatments take a longer time to show results.
an estimated 15,000 foreign medical tourists visited Kerala for alternative treatment in 2006, and this number has grown rapidly since
Unlike the past, when alternative medicine was considered ‘hocus-pocus’ by many foreigners as well as Indians with a scientific temper, the system commands much more respect today. According to Rashed Ahmed, a citizen of Kuwait, his son had a chronic watering in his eyes and had tried all avenues for modern medical treatment in the Middle East as well as in Europe, but without success. “A friend told me to visit an ayurvedic doctor in Kerala, where I took my son,” explained Ahmed. “The doctor there prescribed a black concoction that smelt of honey and spices as eye drops, and advised my son to stop using hair shampoo of any kind. It worked, and I paid less than 15 Kuwaiti dinars for the complete treatment.”
Aside from alternative medicine, the ancient system of yoga (mainly breathing techniques) has suddenly become popular with the younger generation of Indians, as well as a few foreigners who live in ashrams (hermitages) of holy men. One such holy man is Ramdev Baba who has proclaimed on television that cancer can be prevented or, in the case of people who already have it, reduced or even cured if one drinks a little cow urine every morning and follows this up with a breathing exercise known as pranayam. Ten years ago, this would sound nonsensical, but not today. Clearly a controversial man, the bearded Ramdev Baba nevertheless has a huge following in India. Some foreigners living in ashrams in India are also known to be trying such prescriptions. Reports of success of such prescriptions appear occasionally in the mass media though, significantly, medical journals shun them.*
In conclusion, India for the Westerner is an unbelievably diverse country, with its healthcare system standing out as a stark example. Most sophisticated procedures such as separation of Siamese twins and open heart surgery coexist with prescriptions as bizarre as cow urine therapy and breath control. From transporting patients by bullock carts in rural regions to zipping them across the country in air ambulances, India has everything for both the domestic and international markets. The modern healthcare sector spells more profit for hospitals since procedures are relatively expensive, but the alternative medicine sector means more profit for travel insurers since their clients for such treatments are required to stay in India for longer periods, which may run into months. With low costs and excellent assistance facilities in the private healthcare sector, coupled with long waiting periods at public healthcare systems in some Western countries, India is poised to consolidate its position as a healthcare destination for the world. In the process, one can only hope that the country’s currently ramshackle public health system, too, will take on a hue that not only serves a majority of its own citizens in need of medical assistance, but serves them in a way that retains their dignity.
*ITIJ does not recommend Ramdev Baba’s type of prescriptions, but is referring to it for information purposes only.