Af­ford­able health care

The Progress-Index - - OPINION -

Among the most cost-ef­fec­tive, high­per­form­ing hos­pi­tals in the world are the 20 or so owned by In­dia’s Narayana Health. Narayana, a for-profit in­sti­tu­tion, is also vir­tu­ally un­ri­valed in hu­man­i­tar­ian ac­com­plish­ment. The chain’s vi­sion­ary CEO, Dr. Devi Shetty, was Mother Teresa’s physi­cian for five years, and she pleaded with him to bring life­sav­ing care within reach of In­dia’s poor­est.

In Amer­ica, heart-by­pass surgery costs more than $100,000. At Narayana’s hos­pi­tals in In­dia, the cost is in the $1,000 to $2,000 range. Narayana’s first Western Hemi­sphere fa­cil­ity, Health City Cay­man Is­lands (HCCI), charges around $32,000. HCCI, a 90-minute flight from Mi­ami, is jointly op­er­ated with As­cen­sion, the largest Amer­i­can non-profit sys­tem and the world’s largest Catholic sys­tem.

In 2016, a Gu­atemalan child, Kael Jimenez Souza, lay near death with aor­tic valve steno­sis. U.S. hos­pi­tals of­fered treat­ment for up­ward of $400,000. HCCI of­fered treat­ment for around 10 per­cent of that amount. Baby Kael was air­lifted to HCCI, with suc­cess­ful surgery per­formed within a day.

De­spite low costs, Narayana hos­pi­tals gen­er­ally have low rates of mor­tal­ity, hos­pi­tal-ac­quired in­fec­tion and read­mis­sions — com­pa­ra­ble to or bet­ter than their North Amer­i­can or Western Euro­pean peers. Qual­ity is ac­cred­ited by Joint Com­mis­sion In­ter­na­tional, the same or­ga­ni­za­tion that ac­cred­its most U.S. hos­pi­tals. In ad­di­tion to car­diac surgery, HCCI also pro­vides care in other realms, in­clud­ing or­tho­pe­dics, pul­monology, on­col­ogy, bariatrics and neu­ro­surgery.

For Amer­i­cans, the HCCI ex­pe­ri­ence is rad­i­cally dif­fer­ent from that at U.S. hos­pi­tals. The pa­tient re­ceives one bill with one price, known in ad­vance, cov­er­ing hos­pi­tal stay (room and board), physi­cian fees (in­clud­ing pre-visit con­sul­ta­tions), anes­the­sia and med­i­ca­tion. HCCI even books pa­tients’ air­line flights.

How does Narayana pro­vide such high qual­ity at such low costs? Dif­fer­en­tial la­bor and equip­ment costs don’t ex­plain it. The fun­da­men­tal dif­fer­ence is that Narayana em­ploys state-of-the-art busi­ness prac­tices — un­like the bu­reau­cratic hos­pi­tal man­age­ment in North Amer­ica and Western Europe.

HCCI ex­cels at lean man­age­ment tech­niques. Th­ese “Toy­ota meth­ods” in­volve con­stant im­prove­ments in pro­ce­dures — thou­sands of sep­a­rate acts of cost cut­ting and qual­ity im­prove­ment, de­vised by teams of dis­sim­i­lar in­di­vid­u­als — physi­cians work­ing with tech­ni­cians, ac­coun­tants and jan­i­tors.

In the United States, item-by-item billing re­quires an enor­mous in­fra­struc­ture to man­age Cur­rent Pro­ce­dural Ter­mi­nol­ogy codes that make prices im­pen­e­tra­ble to pa­tients and providers. The prime cul­prit is Medi­care’s Soviet-style pric­ing and pri­vate in­sur­ers’ ad­her­ence to that de­sign in non-Medi­care poli­cies. With sin­gle-line billing, Narayana hos­pi­tals re­quire no such in­fra­struc­ture.

Narayana em­pha­sizes ra­tio­nal divi­sion of la­bor. Ser­vices are sub­di­vided into ba­sic com­po­nents, with each com­po­nent pushed down to its least costly provider. Why pay a se­nior sur­geon to per­form a task a ju­nior sur­geon can per­form? Or a ju­nior sur­geon to do some­thing a nurse can do? Or a nurse to do some­thing an or­derly can do?

In car­diac surgery at HCCI, se­nior sur­geons don’t enter the op­er­at­ing room un­til oth­ers have prepped the pa­tient and ju­nior sur­geons have opened the chest cav­ity. The se­nior sur­geon thus fo­cuses only on the most sen­si­tive tasks and has time to do far more pro­ce­dures than their Amer­i­can or Euro­pean coun­ter­parts.

Ac­cord­ing to HCCI, the av­er­age Amer­i­can car­diac sur­geon per­forms 2,500 pro­ce­dures over a ca­reer. Shetty’s sur­geons av­er­age closer to 20,000 pro­ce­dures per sur­geon, mean­ing they are es­pe­cially fa­mil­iar with sur­gi­cal con­tin­gen­cies. Narayana also in­vests heav­ily in tech­nol­ogy, in­clud­ing re­mote teleme­try and telemedicine to pro­vide more de­cen­tral­ized care for pa­tients.

The case of Narayana and specif­i­cally HCCI should raise ques­tions for Amer­i­cans in­ter­ested in health care pol­icy. Among them: Why does prej­u­dice against “medicine as a busi­ness” linger among re­form­ers when a for-profit in­sti­tu­tion like Narayana demon­stra­bly does more to cut costs and help the poor than vir­tu­ally any other in­sti­tu­tion on earth? Why must a hos­pi­tal like HCCI be, as Dr. Shetty said, parked out­side of U.S. ter­ri­to­rial wa­ters? Why won’t Medi­care or many pri­vate in­sur­ers pay for care at an in­sti­tu­tion like HCCI with bet­ter care at lower cost than many U.S. in­sti­tu­tions? Given an ex­am­ple like Narayana, why look so much to Canada or Western Europe for ideas?

We’ll close with Dr. Shetty’s mantra: “A so­lu­tion that isn’t af­ford­able isn’t a so­lu­tion.”

Robert Graboyes Teacher of health eco­nomics Vir­ginia Com­mon­wealth Univer­sity Rich­mond

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