Wednesday, June 21, 2006

The Toyota Example

Some time ago, the Institute for Healthcare Improvement promoted a program called Going Lean in Health Care that encouraged hospitals to implement management approaches that had worked so well for Toyota, the Japanese car maker.

Toyota is one of the companies that has spread financial chaos among the previously secure and successful American automobile manufacturers by finding ways to make cars that are better and less expensive.

The U.S. health care establishment has thought itself immune from any such competition.

That may not be so. The Toronto Saturday Star of June 17, 2006 carried a front page article headlined India offers surgery in a hurry, featuring one Richard Johnson of Nova Scotia who went to India for heart surgery.

It seems that Johnson’s doctor was treating his chest pain “with cholesterol pills and a wait-and-see attitude.” Johnson had been on a “months-long waiting list for an angiography.” When his housekeeper’s husband, also being treated for chest pain, had a heart attack, Johnson decided not to wait any longer. He went to the Web and found Escorts Heart Institute and Research Center in New Delhi, India. Escorts is directed by Dr. Naresh Trehan, a New York University-trained cardiac surgeon.

Without bothering to make advance arrangements, Johnson hopped a plane to New Delhi, checked in at a hotel across the street from Escorts and presented himself to the hospital the next morning at 6:00 a.m. By 8:00 a.m. he’d had an echocardiogram and that afternoon had a stent inserted to open his blocked artery. He’s had a good recovery. Total cost for his 10-day stay in India, including a side trip to the Taj Mahal in a chauffeur-driven Mercedes was $6,000 U.S. The same procedures in the U.S. could easily run five times that.

The Confederation of Indian Industry reports that about 200,000 foreigners went to India for medical and dental treatment last year, and that the number is growing at some 15% per year. The New York office of McKinsey Consulting predicts that “medical tourism” in India will generate $2.28 billion in revenue by 2012.

It seems that U.S. health care may not be immune to foreign competition after all.

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