Quality healthcare in the United States doesn’t have to cost as much as it does, according to Distinguished Professor of International Business and Strategy Ravi Ramamurti.
In an article published in the Harvard Business Review on Nov. 1, Ramamurti contends that three primary factors make it possible for elite hospitals in India to provide the same quality of healthcare as U.S. hospitals at a fraction of the cost. Even when salaries are adjusted to match U.S. levels, healthcare at India’s best hospitals costs one-fifth that of American hospitals, he says. And the outcomes at these nine internationally accredited hospitals are comparable to those at good U.S. hospitals, according to Ramamurti.
“It’s time to move beyond the myth that U.S. healthcare is costly because it is of exceptional quality,” he says. “Better outcomes at lower costs have been established in many other countries.”
The following Indian innovations were extolled by Ramamurti:
The concept is relatively simple: Locate the best hospitals, the most specialized doctors, and the most expensive equipment in cities; have smaller, less specialized hospitals in rural areas. Although this may seem logical, Ramamurti says the most prestigious U.S. hospitals are often located far from urban centers and duplicate both expertise and equipment, which compromises efficiency and drives up costs.
Simply put, this is the transfer of routine tasks to lower-skilled workers, leaving specialists to deal with more complex procedures. Ramamurti says that routine medical work can be performed effectively by workers with a few years of training after high school. In contrast, he says, U.S. hospitals often cut costs by laying off lower-level workers and transferring routine tasks, such as billing, to doctors.
Many U.S. hospitals look like five-star resorts, according to Ramamurti. One of the best ways to reduce the cost of healthcare is through old-fashioned frugality, he says. For instance, decrease construction costs, and sterilize and reuse equipment—such as heart clamps—that’s routinely thrown out after one use in the United States. Also, pay attention to the cost of medical procedures. Ramamurti notes that in America many doctors, and even hospital administrators, have no idea what a procedure costs.