American Health Insurers Offer India On A Platter

by Medindia Content Team on Sep 17 2007 4:09 PM

Americans touching Indian shores in order to heal themselves are no longer a new sight.

U.S healthcare being not exactly cost effective has resulted in the surge in people from there packing their bags and seeking out Indian doctors and hospitals to take care of their medical needs. In US, 71 million Americans in a population of roughly 350 million, are either uninsured or underinsured because they cannot afford it.

High insurance premiums of most U.S healthcare companies have caused a new trend altogether, which has the Indian healthcare companies all excited.

These firms offer their customers two options. Either you pay the regular premium and get admitted to a hospital in your country of residence. Or, you choose to go to India for treatment; in return for which you get a hefty 30-40% discount on the annual premium you pay. Some U.S companies even allow for a trip free for a companion.

Big Cats like Blue Cross, Blue Shield, Cigna Insurance and Aetna Insurance are not letting this opportunity pass them by. Not only do they plan to set liaison offices in the country, they would also like to tie up with Indian hospitals where their clients can be sent to for life saving procedures like coronary bypass surgeries and heart valve replacements.

One such is Germany-based DKV Group. The group has teamed up with Apollo group of hospitals, and is also eager to set up a stand-alone health insurance company in India to cater to this huge and growing overseas demand. The firm has applied for a license to the regulatory authorities.

A U.S healthcare firm Star Health has set up base in Chennai, with funds pouring in from insurance companies. It is believed to be in talks with leading hospitals across the country for tie-ups.

Says Vishal Bali, CEO of Wockhardt Hospitals. "People are getting desperate for good, cheap and reliable medical care.“Insurance companies are looking at their own viability and the need to save money. The trend of insurance companies latching on also illustrates the growing unaffordability of the US health care system," he added.

Hospitals in India usually charge around $6,000-8,000 for coronary bypass surgery, $6,500 for a joint replacement and $6,500 for a hip resurfacing, which represent a small fraction of the typical costs at US hospitals. "India is not just known for its outsourced back-office skills any more, like reading of X-rays, medical transcription or billing. It's the actual clinical care that is now being outsourced," says a proud Bali.

These pioneering initiatives are touted to open the floodgates for a new wave of medical tourism. Yet, this is all about money too. Blue Ridge Paper Products, a North Carolina-based manufacturing company which is considering the outsourcing option for its 2,000 employees, is looking to make a substantial saving since cost of treatment in India is 80-90% less than in the US.

The carrot waved before the patient includes full payment of travel, lodging, meals for the patient and his companion, plus a 25 percent of the savings.

The savings will be derived from an average cost of the procedure here in the US compared to what it costs in India, according to Darrell Douglas, vice-president of human resources.

Yet, before signing on the dotted line, a Blue Ridge team plans to visit hospitals in India later this month to assess their quality of care.

And it won't be the only one. IndUShealth, a medical tourism start-up, which has tie-ups with Apollo, Wockhardt and Escorts, has many more visits lined up.

Most Americans are unaware of India’s excellent healthcare space. ‘Inspection of the excellent hospital facilities here will take care of all doubts," assures Rajesh Rao, CEO and founder of IndUShealth.

"Costs of healthcare are rising in the US with the result that providers want to shift part of the burden to consumers. The concept of co-pay where the patient has to foot around 20 to 25% of the surgery bill is becoming common.

“In this context, the India option makes financial sense," Rao points out.