Low-Cost, High-Quality Health Care: Not Made in the USA?

Jun 13, 2013, 3:22 PM, Posted by

Imagine that you’re a heart patient. You go to the hospital for open heart surgery and recover successfully. As you leave for home, you’re handed a bill for the surgery and hospital stay—for $800.

In the high-priced world of U.S. health care, where charges for such procedures typically run into the six figures, that price is practically unthinkable. That’s why the idea of $800 heart surgery comes all the way from India—and why the largest nonprofit health and hospital system in the U.S., Ascension Health, wants to figure out how it might be replicated within its walls.

Americans are accustomed to thinking that the best ideas are hatched here and then exported abroad. But in health care, it’s clear that we have plenty to learn from other countries,  especially from efforts to provide care in low-resource settings, such as in much of Africa, Asia and Latin America. 

There’s no better assemblage of how to provide cost-effective care in such places than among the member organizations of the International Partnership for Innovative Healthcare Delivery (IPIHD), a Robert Wood Johnson Foundation grantee. Founded by the World Economic Forum, Duke Medicine, and the consulting firm McKinsey & Co., the not-for-profit partnership was created to identify global innovators in cost-effective health care delivery and determine how to scale up their innovations and make them sustainable. As such, RWJF’s grant to IPIHD is emblematic of the work customarily done through the Foundation’s Pioneer portfolio to support innovations leading to transformative change in health and health care.

Hosted by Duke University in Durham, N.C., the partnership counts nearly 30 organizations worldwide in its innovator network (see map below). They include Penda Health, a for-profit chain of low-cost clinics in East Africa; Medicall Home, another for-profit company that offers over-the-phone medical advice and triage to more than 4 million people in Mexico for $5 per month; and APROFE, a nonprofit network of health centers and mobile clinics offering community and reproductive health services in Ecuador.

Then there’s Narayana Hrudayalaya (NH), a 5,500-bed network of hospitals, clinics and health centers in 11 Indian cities and based in Bangalore. The Hindi name is variously translated as “God’s compassionate home” or “place of God’s heart;” the organization’s vision statement is “affordable quality healthcare for the masses worldwide.” That vision has led directly to the $800 bill for heart surgery—a goal that NH’s leadership says it’s getting close to meeting.

NH’s founder, cardiac surgeon Devi Shetty, MD, (photo below), was for a time the personal physician to the late Mother Theresa, and has said that his vision of affordable health care for the masses was inspired partly by her. But his spiritual and philosophical commitment has been reinforced by a strict focus on cutting costs.

Honored by the Economist magazine in 2011 for “reducing health-care costs using mass production techniques,” Shetty has drawn on process innovation and cost-effective staffing to boost efficiency and volume. Cardiac surgeons at his hospitals, for example, perform multiple surgeries up to six days per week, working longer hours and performing more operations than comparable US surgeons. Highly trained aides, some with less than a high school education, do much of the prep work. Yet as of 2008, mortality rates within 30 days of surgery for cardiac bypasses at NH were below the average of U.S. hospitals.

Now, NH is building a 140-bed tertiary care hospital on Grand Cayman Island—part of a planned $2 billion, 2,000-bed project that is ultimately to include a medical school, biotechnology park and assisted living community. NH’s partner in building the hospital, which is expected to open in early 2014, is Ascension Health Alliance, the parent holding company of the Ascension Health system. As a partner in developing the facility, Ascension will provide facilities planning, supply chain management and biomedical engineering services.

 But according to John D. Doyle, Ascension Alliance’s executive vice president, another major reason for the U.S. system’s involvement is to learn from NH and discover how to bring lower cost care back to the U.S.

Stateside, the $800 heart surgery may seem like a pipe dream.  But if the equivalent comes to the Cayman Islands, who knows what could happen if, for many Americans, it is only a short plane ride away? The U.S. consultancy Patients Beyond Borders estimates that some 750,000 Americans will travel overseas for medical treatments this year in search of lower-cost care, a practice sometimes called “medical tourism.” How much better would it be if such low-cost, high quality care could be obtained here at home?