ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MICHELE NORRIS, host:
And I'm Michele Norris.
Medicine is changing around the world. A small number of Americans are starting to look overseas to find health care. Sometimes they are seeking different care, sometimes just a better price.
SIEGEL: And since 9/11, fewer people are coming to the U.S. for their medical needs. Big-name American companies and institutions are expanding overseas to meet a growing demand.
We'll hear what Harvard is doing in a few minutes, as we begin a month-long examination of the business of international medicine.
NORRIS: Joining me now to help us understand what's happening is Dr. Bob Kocher. He's an analyst with McKinsey & Company.
And thanks so much for being with us.
Dr. BOB KOCHER (Analyst, McKinsey & Company): It's great to be here.
NORRIS: Now, we used to think of Americans going to, say, Thailand for a cosmetic surgery or Costa Rica for a, perhaps, inexpensive dental work. But now U.S. companies are growing overseas to set up business. Help us understand what's happening here?
Dr. KOCHER: Well, there's a big opportunity for U.S. companies to actually serve patients in a bunch of different places around the world. And growing demand for these services in many countries' growing middle class, many people who said I'd like to have that type of care in my country. And so beyond cosmetic surgery and some alternative medicine, there's a bunch more things being done today.
NORRIS: I want to understand something. So U.S. companies are going to set up in foreign locations to serve a foreign population. Are U.S. patients following this trend? Are they heading overseas to get services they might otherwise find in the U.S.?
Dr. KOCHER: There are four segments of patients that we see that actually travel to get care. The first is actually the smallest segment, Western patients - patients from the U.S., Canada, Europe - a few actually will travel to a foreign country to get medical care. The larger segments of patients are actually people from - we call them, you know, geographic value seekers. So folks that are in Asia, maybe in a country that doesn't offer all the care that you might find in Thailand, traveling within the region to a hospital.
We also have leisure travelers. So, like you mentioned, folks that might go to Costa Rica or Mexico or - to seek plastic surgery in maybe a more private way and a more comfortable environment. And then, finally, patients who are seeking alternative types of care they can't get in their home country - so people going to China for Chinese medicine, people going to India for eye health care.
NORRIS: Now I'm sure many of our listeners are wondering how safe these operations are.
Dr. KOCHER: I think that's the absolute, largest concern that the U.S. hospitals have. Most of the facilities that the U.S. hospitals are working in have actually opted to join accreditation standards that are done by the Joint Commission, which is similar to what's done in the U.S. to assure that hospitals are safe.
NORRIS: Are there other countries that are doing the same thing?
Dr. KOCHER: Absolutely. Bumrungrad in Thailand, Apollo in India, Netcare for South Africa are interesting examples.
NORRIS: So I'm wondering if what we wind up with in these countries is an opportunity for the patient to determine what kind of medical care they want. Did they want an Indian system of medical care, an American system of medical care, or a Western European system of medical care?
Dr. KOCHER: Exactly. Imagine, within one hour in the Dubai, Doha and Bahrain regions, you can literally sample what Harvard offers, Cleveland Clinic, Johns Hopkins, Great Ormond Street, Apollo. They're all there. And so patients literally can shop and sort of sample the type of health care they want, the type of experience they seek. And it's a remarkable thing to, you know, imagine that here.
NORRIS: Bob Kocher, thanks so much.
Hold on just a second because now we're going to take a closer look at the American institutions that are leading some of this change.
Dr. TOBY COSGROVE (CEO, Cleveland Clinic): I'm honored to be here today to announce a historic partnership between the Cleveland Clinic and the government and people of Abu Dhabi.
NORRIS: That's Toby Cosgrove. He's CEO of the Cleveland Clinic and that was last year in Abu Dhabi.
Dr. COSGROVE: The Cleveland Clinic Abu Dhabi will contain our organization and cultural DNA. It will bear our name, our imprimatur of medical excellence.
NORRIS: Beside Cleveland Clinic, practically all of the big brands in U.S. medicine are out there propagating their institutional DNA. In Dubai, Singapore, Thailand, China and other booming economies, you'll see names like Johns Hopkins, Mayo, Duke and Cornell.
NPR's Richard Knox went to India to look at this fast-growing phenomenon. He has this report from Bangalore, known as the Silicon Valley of India.
(Soundbite of passing vehicle)
RICHARD KNOX: I'm standing in the Bannerghatta Road in Bangalore. The road itself has been transformed in the last five years with all these new companies building buildings here and some of the new buildings are hospitals. There's one down the street affiliated with Johns Hopkins University, another one with Tufts University. This one I'm standing in front of is the Wockhardt Hospital, which has got a big sign that says Harvard Medical International.
Mr. VISHAL BALI (CEO, Wockhardt Hospitals Group): I'm Vishal Bali and I'm the CEO for the Wockhardt Hospitals Group in India.
KNOX: Wockhardt is one of a half dozen for-profit hospital chains competing furiously for the business of India's burgeoning middle class.
Mr. BALI: We have an association with Harvard Medical International, which is HMI, to create a network of hospitals and new avenues of medicine in India. So, you know, we are standing in front of this hospital which has just started about nine months back.
KNOX: Gleaming new hospitals like this one are something new in India. Most people here get their care in crowded under-equipped public institutions or in substandard doctor-owned dispensaries. Like its rivals, the Wockhardt chain is profitable. In the next two years, it plans to build another 28 hospitals around India. But Bali says Wockhardt needs help to realize its ambitions.
Mr. BALI: We felt that what we needed was a partner who would hand-hold us into getting us the best practices from the American heath care system.
KNOX: The chief hand-holder is 8,000 miles away in Boston.
Dr. Robert Crone of Harvard sits in a corner office in an anonymous building. Crone says he wants to lift medical care around the world to Harvard standards.
Dr. ROBERT CRONE (President and CEO, Harvard Medical International): We don't think twice about the fact that no matter where a 747 made in the United States flies anywhere in the world, the standards are the same. Why doesn't that happen in medicine? Well, it's beginning to happen. It's going to take another decade or more. But we have to stop thinking so provincially about health care.
KNOX: Crone says it's in Harvard's interest to go international.
Dr. CRONE: It's not good enough anymore to be the, you know, the greatest name in American medicine. If one is going to truly be a global leader, they have to figure out how to work globally.
Dr. LLOYD NAZARETH (Quality Control Chief, Wockhardt Hospital): Well, we're in the lobby of the Wockhardt Hospital at Bannerghatta Road in Bangalore.
KNOX: You can see what working globally means, says Wockhardt's quality control chief, Dr. Lloyd Nazareth, shows us around this new granite and marble hospital. Harvard consultants helped design it.
Dr. NAZARETH: We have the CT - computerized tomography. We have the MRI. We have the mammography. We have the ultrasound machine. We have the Dopplers there.
KNOX: The hospital is designed to appeal to middle-class consumers with choices. The rooms are really nice. They're large and clean and there are plenty of nurses. It's a world away from the crumbling public hospital across town, where 40 beds are squeezed into a ward served by a single nurse.
Nazareth says Wockhardt's maternity unit has five grades of rooms.
Dr. NAZARETH: The sign says it's not a spa, not a five-star hotel. It's an exclusive birthing suite. But this is the high-end state of room for birthing.
KNOX: Nearly everybody who comes in the door here can afford it. That's because India's economy is booming — nowhere faster than in bustling Bangalore. About one in 20 Wockhardt patients comes from America or the U.K. for care. Wockhardst's main market are the people in Bangalore's famous call centers. They're the ones who field customer service queries all night from America and those who write software in glass towers bearing names like Samsung, Motorola, and Global Edge.
Most of those new jobs come with health insurance, in a country where only 10 percent have it. At Wockhardt, patients who don't have total coverage have the cash to pay for their care, like Shankar Murthy, who came to Wockhardt for a heart bypass operation. A few days later, he sits on the edge of his bed in a sunny peach-colored hospital room.
KNOX: So how are you doing?
Mr. SHANKAR MURTHY (Patient, Wockhardt Hospital): Very fine.
KNOX: He says his surgery was a bargain.
Mr. MURTHY: Hundred eighty thousand Rupees.
KNOX: Four thousand five hundred.
Mr. MURTHY: Dollars.
KNOX: You know how much that would be for this operation if you were in America?
Mr. MURTHY: I was told at least $50,000.
KNOX: I think so.
Mr. MURTHY: We are spending 10 percent what would have been done there, we have done here.
KNOX: That's important to Murthy. He's not super rich. He's a retired dairy consultant. Most of his surgery will be paid for by insurance through his son, a software engineer. For many high-tech workers here, insurance covers dependent parents as well as children. But Murthy will pay fifteen hundred dollars out of his own pocket. That's not peanuts in India, but for a middle-class Indian, it's not a fortune either.
Harvard is one reason Murthy came to Wockhardt. He's heard about Harvard University.
Mr. MURTHY: We have heard that Harvard University is the best university in the world. So we knew that.
KNOX: So that gives you more confidence?
Mr. MURTHY: More confidence, naturally.
KNOX: To keep those kinds of patients coming, Wockhardt manager Lloyd Nazareth says the company is pushing quality.
Dr. NAZARETH: Quality is a strategic business initiative. Quality never costs money. It actually brings more customers to you, right? So our philosophy in quality is that quality does not come at a cost. Quality is free.
KNOX: That doesn't mean it comes easy. Wockhardt works at things like preventing surgical mistakes and drug-resistant infections with help from its partners in Boston.
Dr. NAZARETH: Hello?
SHARON(ph): Hi, Lloyd.
Dr. NAZARETH: Hi, who's that? Sharon and Betsy(ph)?
SHARON: It's Sharon. We have John.
Dr. NAZARETH: Okay. And on this side, we have Dr. Malti(ph)…
KNOX: Once a week, the Wockhardt leadership team huddles around a speakerphone and dials up Harvard to go over the nuts and bolts of running a hospital.
Unidentified Woman: Or if a patient is having a multidrug-resistant organism, then do we call the patient and the family? And do we need to give a handout on some such kind of a thing?
Unidentified Man: Let me try to tackle this one.
KNOX: It's obvious what Wockhardt gets out of Harvard. It's less obvious what Harvard gets out of the deal. So far, the money isn't fabulous. Harvard Medical International generates a bit more than $20 million out of all its partnerships in a dozen countries. After expenses, it turns over a couple of million dollars to Harvard Medical School. Other U.S. hospitals and medical schools reportedly command up to $20 million for licensing their names to foreign affiliates. The potential value of these foreign ventures is more uncertain.
Here's how Vishal Bali, the Wockhardt CEO, puts it.
Mr. BALI: You know, Richard, I think it is important for Harvard Medical International to be there in countries like India, in China, in Southeast Asia, because the world is a much smaller entity. So this is truly about globalization of medicine and health care that all the leading players of the world are now looking at being physically present in various parts of the world and being a part of the evolution of the global health care system.
KNOX: Ultimately, that'll improve care to millions of people around the world, at least those who can afford Western-style care. But that's in the future. For now it seems that Harvard's out there partly for the same reason its peers are - the fear it'll be left behind if it doesn't go international.
Richard Knox, NPR News.
NORRIS: And we're joined in the studio again by Dr. Bob Kocher. He's an analyst with McKinsey & Company.
Just one question about something we heard in Dick Knox's piece. Ten percent of the population covered by health insurance - will the other 90 percent be able to take advantage of this trend?
Dr. KOCHER: Well, there's a rapidly growing health care market in India. They've just regulated that the tariffs, the prices for health care in India. And there's an equal number of U.S. companies actually seeking to offer insurance in India to help support the millions of people in India that potentially are consumers of health insurance, too.
NORRIS: And as we close out here, I want you to look into your crystal ball and tell us what the future might look like.
Dr. KOCHER: I think there'll be a lot more hospitals exploring these opportunities around the world. I think there'll also be many missteps along the way as hospitals figure out how they can be effective partners, which partnerships make sense, and which ones really support their mission back at home.
NORRIS: Thank you, Bob.
Dr. KOCHER: Thank you.
NORRIS: That was Dr. Bob Kocher. He's an analyst with McKinsey & Company.
SIEGEL: Next week, a status report on Americans seeking health care overseas.