Throughout history, diseases and individual providers have been crossing borders, primarily from developing to developed countries. Now, well-trained and experienced expatriate providers from these developing countries are returning home or staying home to work in newly developed corporate health care delivery systems that can compete quite favorably with less-than-perfect providers in Europe and North America. In turn, these corporate health care systems are attracting patients from around the world who are interested in exploring high-quality, lower-cost health care alternatives. Trailing nearly every other industry, health care is finally globalizing.
The Changing Global Health Landscape
Is the effect of these shifts truly global? One way of viewing the development of health care infrastructure is to take a revised view of how one might dissect the world health care landscape, which has, until recently, been roughly divided between the developed Organisation for Economic Co-Operation and Development (OECD) countries and the “developing world” (Figure 1). The former group comprises 30 countries that are home to 1.1 billion people. The latter includes just under a billion people living in the 50 least-developed countries in the world, most of which are in sub-Saharan Africa. The remaining 70% of the world’s population—4.5 billion people—live in the emerging economies of Asia, the Middle East, and Latin America. It is the advancement of health care in these countries that is, in effect, globalizing health care.
As the health care systems in this middle group of countries develop critical mass through enhancing quality and patient safety, they will increase their ability to attract and retain health care professional experts, originate new technologies, and develop new centers of excellence that will begin to draw patient flows and academic medicine away from the historic centers of excellence in OECD countries. What will be the impact of globalization on patients, providers, payers, and governments?
Patients: Demographics and demand
The single biggest driver for the development of regional centers of health care excellence is the demographic shift that is underway in many populous countries in Southeast Asia, South and Central America, and the Middle East. Here, life expectancy is increasing (and with it, the prevalence of chronic disease), as are the numbers of health consumers with the means and willingness to pay out-of-pocket for one-time, life-transforming interventions like cardiac surgery, joint replacement, cosmetic surgery, and bariatric surgery. These health consumers are better informed, less willing to wait for treatment, and beginning to demand that these interventions be available close to home. They have a better understanding of the value equation and will go where it’s necessary to get the kind of care they want. Most patient movement has been to centers of excellence within their region, particularly in Asia and the Pacific regions. However, increasing numbers of patients are leaving one region to seek care in another, and Western Europe and the United States are no longer the only health destinations considered by patients from the Middle East and elsewhere.
Providers: New players and new opportunities
In addition to patients, providers are also on the move. It’s important to recognize that the majority of medical professionals educated in developing countries receive their training from tax-supported schools. Those individuals have been willing and able to migrate to the West for better training than is available in their home countries and very often have remained there to pursue their careers. One of the major attractions of training and practicing in the West for these providers has been the wide availability of postgraduate training, which is often limited or nonexistent in their home countries. Although there is little question that the best training is still offered in the United States, opportunities are now arising in emerging countries, providing another reason—in addition to cultural or financial factors—for providers at least to evaluate the opportunity to remigrate home.
Another important development in the emerging economies is the rapid emergence of privately financed specialty hospitals. These hospitals are specialty-focused green-field developments that cater to international patients and citizens who are prepared to pay out-of-pocket for health care. They coexist with public hospitals (which provide care to those who cannot pay) and are able to “berry pick” patients to some degree to gain competitive advantage. Operationally, they are being designed from corporate models that prize efficiency and innovation, and their lower-cost labor force, compared with established market economies in Europe and North America, allows them to price services competitively.
Crucial to the success of these hospitals are their willingness and ability to institute a culture of quality. They are unhindered by legacy systems that are in place at older hospitals, so they can establish new practices and a new culture more easily. These entities are becoming extraordinarily successful regionally, they are competing globally, and their rise is the most important new phenomenon in the globalization of health care.
Their eagerness to compete globally with other health care systems is exemplified by their moves to gain international accreditation. Recognition by Joint Commission International (JCI), the international accrediting body of the Joint Commission on the Accreditation of Health Care Organizations, has become a significant tool to help these hospitals attract patients and staff. In 2000, JCI had certified three such hospitals; today, the number of JCI-accredited institutions is over 100 (Table 1).1 Even within the established market economies of Europe, JCI accreditation is becoming increasingly important to those seeking treatment or career opportunities at these types of hospitals.
At the same time that the number of privately financed specialty hospitals seeking JCI accreditation has increased, the process of qualifying for accreditation has become more rigorous. However, it is important to recognize that accreditation by JCI is the ground floor for quality benchmarks, rather than the ceiling. Although it is not a measure of actual health outcomes, accreditation is a positive indicator that the building blocks are in place, both structurally and from a process perspective, to be able to provide quality care.
Payers: Insurance beyond borders
In general, although conditions vary nationally and regionally, emerging economies still have poorly developed mechanisms for spreading financial risk, and members of the middle class have limited insurance options available to them. But this is changing, as we have observed in multiple settings. New legislation in Dubai requires all employers to provide health insurance for their employees; Turkey currently has a public health care system and is encouraging private systems to develop; and in India, leaders have begun to advocate and develop new insurance systems. In addition, U.S. payers are now exploring an option that could dramatically change the landscape in American medicine: offering insurance that includes foreign travel and treatment for lower rates than the cost of comparable treatment in the United States. This could include sending uninsured and underinsured U.S. patients abroad for interventions that would be cost-prohibitive or out of reach in the United States, but which would be relatively inexpensive abroad. One of the first payers to develop such a plan is Blue Cross of South Carolina, which has made Bumrungrad International Hospital in Bangkok the first provider in its overseas network.2
Governments: Changing roles
Traditionally, governments have assumed the roles of both health care provider and payer, but this is shifting in the least-developed and emerging economies. The governments in emerging economies are increasingly focusing on paying for care and building intrasectoral reform—that is, they are getting out of the business of providing care and encouraging the development of public–private partnerships to fill that role. They are now looking to serve more as stewards and regulators of health care systems than as providers, and one of the governments’ most critical aims in this evolving role will be to develop comprehensive provider systems, to encourage the expansion of services for their own residents or others.
Perspectives from the Field
Three Harvard Medical International (HMI) collaborations highlight these health care trends in emerging economies and demonstrate the potential for new models of global health care: Dubai Healthcare City (DHCC) in the United Arab Emirates, Acibadem Healthcare Group in Turkey, and Wockhardt Hospitals Limited in India.
Dubai Healthcare City
The government of Dubai approached HMI in 2003 seeking assistance with the development of a health care provider system that would be based in a newly created economic “free zone.” This represented a unique opportunity in medicine: to create a new provider system based on best practices from around the world, in a zone where essentially all regulations and standards are created from scratch as the system develops. The result of this collaboration has been a system which is unburdened by existing systems and attitudes; which is governed by its own rules and regulations, planning processes, and system for adjudication of disputes; and in which continuous quality improvement is guided by a robust licensing and credentialing process.
The vision for DHCC since its conception has been to develop an integrated academic medical community that serves the greater Middle Eastern region, with comprehensive services, postgraduate medical training, and research programs. The government of Dubai has contributed land and funding to spur the development of DHCC, but, ultimately, the system will be financially self-supporting and will represent a new form of public–private partnership.
HMI’s role has been fourfold in this program. First, HMI teamed with the government of Dubai to create the Center for Health Care Planning and Quality, which is responsible for governance, licensing and credentialing, and rationalization of resources within the campus. Second, HMI has created the Harvard Medical School (HMS) Dubai Center Institute for Postgraduate Education & Research (HMSDC) to anchor the educational infrastructure of the campus. Third, HMI has developed the Dubai Harvard Foundation for Medical Research, based at HMS in Boston, Massachusetts, to support collaborative research between scientists and laboratories at HMS, DHCC, and other regional institutions. Finally, HMI has played a major role in the design and development of a 400-bed tertiary care teaching hospital that, when completed in 2009, will be the linchpin of the academic medical community at DHCC.
The building clusters in DHCC have been planned so that tertiary, secondary, and ambulatory clusters all have clinical education and clinical research embedded in them, around a core platform of services that emphasize quality with good clinical and administrative technology. Since opening at the end of 2005, the DHCC community has grown rapidly to include nearly 20 licensed clinical service providers in areas such as cardiology, vascular medicine, nephrology, ophthalmology, family medicine, plastic surgery, and dentistry, as well as a number of multispecialty clinics. As of July 2007, more than 400 health care professionals, including approximately 170 physicians, were practicing in DHCC, and the community had recorded more than 50,000 outpatient visits.
Although there are medical schools in the Persian Gulf region, there has been little or no postgraduate training there, and there have been limited opportunities for continuing medical education (CME). HMI (now through HMSDC) has been conducting CME programs in Dubai since 2003. The courses, which have run the gamut from primary and specialty care to health promotion and disease prevention, have drawn more than 6,000 local participants and have been taught by more than 140 faculty, largely drawn from HMS. The research programs are just getting underway. The Dubai Harvard Foundation is on a pace to raise $100 million targeted for the endowment that will fund clinical, basic science, and health services research.
The DHCC complex and its programs provide a model center of excellence for clinical care education and research in an integrated way, and they also create an environment with the potential to draw internationally trained professionals back to the region and encourage the public sector to improve to an equivalent standard. The Department of Health and Medical Services of Dubai has already requested that DHCC develop credentialing and licensing models for public facilities outside the campus.
Acibadem Health Care Group
Created less than a decade ago, the Istanbul-based Acibadem Health Care Group has grown rapidly into a network of six JCI-accredited general hospitals (two more are under development), together with six ambulatory care centers, centralized laboratory facilities, and satellite clinical facilities. There are outpatient care centers, and specialized centers for oncology, neurosurgery, ophthalmology, infertility, molecular biology, cardiovascular diseases, and orthopedics. The network has agreements with more than 1,000 physicians, has more than 1,500 beds, and currently treats more than 1.5 million patients. The network is beginning to extend into Central Asia, where there is the opportunity to develop private health care services for a growing middle class.
HMI has been working with Acibadem since 2004 to establish quality care models, particularly in the area of nursing. HMI and Acibadem are in the midst of a several-year collaboration to establish performance-based nursing methodologies and to build nursing leadership capabilities, with the goal of reducing nurse turnover. Eight nursing leaders and about 100 nurse managers across five hospitals have adopted quality methods. The results of the nursing leadership initiative have been impressive as well, as Acibadem has seen the turnover rate for nurses drop from over 30% three years ago to between 13% and 15% in 2006 (personal communication, E. Brown, MSN, Harvard Medical International, June 2007). Acibadem’s goal is to reduce turnover to less than 10% per year.
Wockhardt Hospitals, Ltd.
The private health care sector in India today is worth $16 billion, and it is projected to double in the next five years. At the same time, less than 1% of India’s gross domestic product is now spent on health care by the public sector, whereas 4% to 5% is spent by the private sector; in recent decades, the private system has eclipsed the public system in spending.3
Wockhardt, the second-largest hospital chain in India, is emblematic of the new wave of high-tech corporate health care networks that includes Apollo Hospitals Group, Max Healthcare, and Fortis Healthcare. Wockhardt has grown during the past decade into a 10-hospital network with more than 1,500 beds. The rate of growth can be attributed in large part to the cost-effectiveness of not only the network’s operations but also India’s lower facility-construction costs. Wockhardt and its competitors in the private sector have employed a corporate quality model that governs development from the first shovel in the ground to the day the first patient comes in the door. The corporate culture under development in these facilities has Wockhardt and providers like it using international benchmarks for quality to assert themselves in the competitive global health picture.
As with other new health care providers, another key to Wockhardt’s cost-effectiveness has been the lack of legacy systems to contend with; Wockhardt has been able to create new health information systems from the ground up that are aligned with their operational goals, rather than work with multimillion-dollar systems that have been patched together over the years, as is the case in a large number of U.S. hospitals.
Clinical services at Wockhardt have also been conceived along newer lines of thinking rather than inside departmental lines. Thus, patients with diabetes can be comprehensively cared for without worrying about several separate departmental systems. Patients with renal, cardiovascular, and neurovascular disease can similarly be treated by physicians with different specialties.
Finally, there are the financial advantages to the corporate hospital model. Wockhardt and other corporate hospitals have the luxury of focusing on the most remunerative procedures. They have, so far, little cost relative to research and education (by choice), and costs related to malpractice and liability are low in this less litigious society. The cost of labor is advantageous as well. A new nursing graduate in the Wockhardt system earns between $3,600 and $4,200 a year; a specialist nurse in the ICU with six to eight years of experience reaches $15,000. In both cases, the salaries are about 10% to 20% of comparable ones in the United States (personal communication, V. Bali, chief executive officer, Wockhardt Hospitals, June 2007).
Implications at Home and Abroad
Putting the picture together, it is clear that great change is coming. The rise of medicine in Asia and the Middle East is underway to such an extent as to pose a serious challenge to health care systems in Western nations.
Medical tourism, an industry worth an estimated $60 billion and growing,4 is another driver of change. High costs and long waiting lists have thousands of patients in the United States and Europe looking abroad for life-altering care at an affordable price. An estimated 500,000 patients will travel to India for care in 2007—a trendline that has some predicting that by 2012, medical tourism will infuse $2 billion into India’s economy.5 Thousands more patients will turn to hospitals in Thailand, Malaysia, and Singapore, which has been a globally recognized health care destination for years.
Growing numbers of these patients are from the United States. Many of them are going to Mexico for cosmetic and other kinds of relatively minor procedures, but travel to Asia is increasing. For U.S. patients, the lower cost of care abroad will continue to be strongly attractive. Care in India costs 15% to 20% of the same offered in the United States (Table 2). In Singapore and Istanbul, costs are closer to 30% of U.S. values, but those locations offer more Western-style environs.6
In each of these venues, patients are treated by highly technically skilled doctors, and sometimes with greater innovation than is available elsewhere. In fact, some of the most promising procedures being performed on a routine basis in India, such as hip resurfacing as an alternative to replacement, have not yet been adopted in the West. At Wockhardt, surgeons have performed awake, beating-heart coronary bypass procedures on more than 300 patients.7 They report that the morbidity and mortality associated with this alternative is much lower than with traditional procedures—patients are not intubated, anesthesia is epidural, and ICU time and hospital stays are shorter.8
The changing global landscape, however, presents a number of questions. How will patients choose the right facility and provider? How will we measure quality in outcomes? For example, should there be pretreatment screening for such medical travel? Does the patient actually need his or her hip replaced in the first place? How will one ensure adequate short- and long-term follow-up? Who is liable for mistakes? How is continuity of care provided across geographic boundaries? Overall, one critical issue will be to develop a service that will provide higher-end benchmarking, one which will truly compare quality and outcomes from institution to institution.
There have been and will be significant implications of the global changes for U.S. hospitals. First of all, there already has been a rapid decline in international self-pay patient referrals to U.S. hospitals since 9/11. For some American hospitals, as much as 50% of their profits came from the 5% of their patients who were international patients; many of those patients are now gone, seeking care elsewhere overseas (personal communication, J. Pieper, Partners Healthcare, June 2007). The highly remunerative, often invasive procedures are starting to trickle out of the country, with ramifications that extend beyond the bottom line. For example, the chief of plastic surgery at one Boston hospital recently noted that there are now so many fewer surgeries for cleft lip and palate that opportunities to train surgeons to perform them have been limited (personal communication, J. Meara, MD, Children’s Hospital, January 2007).
Another consequence of the rise in quality and competitiveness in emerging nations may be an exacerbation of the already-serious shortage of doctors and nurses in the United States. The American Association of Colleges of Nursing estimates that the United States will need one million new and replacement nurses by 2012.9 But consider that during the current nursing shortage in the United States, influxes of foreign-born nurses have represented a third of the increase in U.S. hospital nurse employment (with the hiring of older nurses making up the majority of the increase).10 The shortage will be increased if those nurses return home or don’t come in the first place.
The same holds for physicians. The U.S. population is growing faster than the physician population, resulting in an estimated shortage as high as 250,000 physicians by 2020.11 Take just one group of foreign-born providers: nonresident Indian physicians. There are about 60,000 working in the United States, United Kingdom, Canada, and Australia—that’s 10% of all physicians in India.12 What will be the result if changing conditions draw these physicians home, or keep them home in the first place?
As conditions change, another question that arises is whether U.S. health care institutions can compete outside the United States. It would be difficult simply to bring U.S.-style facilities to other nations. The cost base is unlikely to be reduced much if American institutions are simply rebuilt overseas, therefore making it impossible for such institutions to compete with the lower-cost foreign systems. Recruiting and staffing abroad would be difficult, and creating new American institutions abroad can put the home brand at risk.
Some of the alternate approaches being tried now include partnerships between American institutions and successful international regional players, the creation of consulting and management companies to work abroad, and franchised specialty services, such as cancer treatment or transplantation.
Any discussion of the rising health care systems of the Middle East, South and Southeast Asia, and other emerging economic regions inevitably raises the question of access for the poor and underserved. Certainly, the high-quality cardiac care offered at Wockhardt—although representing a cost-efficient alternative for many Americans—remains out of reach for the majority of India’s poorest. Yet, similarly, the doors of Massachusetts General Hospital or the Cleveland Clinic remain closed to millions of Americans who lack adequate health coverage even while living in the wealthiest country in the world.
The question of access is as relevant in Des Moines as it is in New Delhi because disparities continue to exist at all levels and in all locations. Globalization, though it has helped to foster much of the work to enhance the quality of care in developing and emerging economies, is not the cure-all solution for achieving universal access. For those living in emerging economies who are unable to pay out-of-pocket for health care or who are only able to do so at great personal sacrifice, the rise of providers like Wockhardt represents only the first step. The bigger hurdle is addressing the payer system in a comprehensive way that benefits as many people as possible. In the United States, this means untangling a web of competing agendas and powerful interest groups. In many other countries, this means creating an insurance system from scratch. Unfortunately, either approach will require more than money—it will take political will. Sustainable benefits in health care access will be attainable when governments and citizens alike—in Iowa, in India—commit themselves to the concept that access to health care is a right, not a privilege.
The author wishes to thank Chris Railey for help in preparing this manuscript.