India is considered the leading country promoting medical tourism-and now it is moving into a new area of medical outsourcing,” where subcontractors provide services to the overburdened medical care systems in western countries.
India’s National Health Policy declares that treatment of foreign patients is legally an “export” and deemed “eligible for all fiscal incentives extended to export earnings.” Government and private sector studies in India estimate that medical tourism could bring between $1 billion and $2 billion US into the country by 2012. The reports estimate that medical tourism to India is growing by 30 per cent a year. India’s top-rated education system is not only churning out computer programmers and engineers, but an estimated 20,000 to 30,000 doctors and nurses each year.
The largest of the estimated half-dozen medical corporations in India serving medical tourists is Apollo Hospital Enterprises, which treated an estimated 60,000 patients between 2001 and spring 2004. It is Apollo that is aggressively moving into medical outsourcing. Apollo already provides overnight computer services for U.S. insurance companies and hospitals as well as working with big pharmaceutical corporations with drug trials. Dr. Prathap C. Reddy, the chairman of the company, began negotiations in the spring of 2004 with Britain’s National Health Service to work as a subcontractor, to do operations and medical tests for patients at a fraction of the cost in Britain for either government or private care.

Apollo’s business began to grow in the 1990s, with the deregulation of the Indian economy, which drastically cut the bureaucratic barriers to expansion and made it easier to import the most modern medical equipment. The first patients were Indian expatriates who returned home for treatment; major investment houses followed with money and then patients from Europe, the Middle East and Canada began to arrive. Apollo now has 37 hospitals, with about 7,000 beds. The company is in partnership in hospitals in Kuwait, Sri Lanka and Nigeria. Western patients usually get a package deal that includes flights, transfers, hotels, treatment and often a post-operative vacation. Apollo has also reacted to criticism by Indian politicians by expanding its services to India’s millions of poor. It has set aside free beds for those who can’t afford care, has set up a trust fund and is pioneering remote, satellite-linked telemedicine across India.

If administered properly, healthcare insurance sector has a huge potential in India and it can be leveraged to realize the dream to provide ‘health for all’. I wonder if the government can create a corpus to fund the insurance premium to be paid on behalf of the lower income groups and those below poverty line. The state governments have to do this and each state government can initiate a fund with a nominal contribution of some Rs. 50 crores and invite the industrial units and big traders in the State to add to it generously against assured tax deduction. I am sure many big industrial houses running their own social schemes as part of corporate social responsibility are doing so only because they perceive the state-sponsored schemes as the biggest sieves on the earth. A public-private partnership trust can administer the corpus and the lure of premium paying public will in its wake spawn private hospitals in every nook and corner. It is certainly not a rosy picture that I am trying to paint against ground reality. Mark my words, healthcare insurance is going to be the next big revolution in India after Sam Pitroda’s telecom revolution in the eighties and the nineties.

Health Insurance is a huge opportunity to raise resources for creating healthcare infrastructure. There is no denying that IRDA comes up with some directives sporadically, especially for the senior citizens. But there has to be urgent, concerted action in this direction. There is a time for everything. With the economy growing at close to 9% with hopes of it reaching the magical double digit in a few years, now is the time to act positively. Maybe, the Planning Commission can goad IRDA to move quickly.