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Indian Hospitals Lure Foreigners With $6,700 Heart Surgery

Jan. 27 (Bloomberg) -- In April, Ian Stuart Crombie, 64, couldn't finish his round of golf at the Bonny Island course in Rivers State, Nigeria, because of pain in his right hip. Doctors gave him two choices: live on painkillers or undergo surgery.

Crombie opted for a route that more Europeans and Americans are taking. He looked beyond a decrepit airport and teeming streets and chose India for medical care.

In September, the British citizen flew 5,159 miles (8,303 kilometers) from his home in Winchester to Apollo Hospital in Chennai. Doctors performed a hip resurfacing, which involved shaving his thighbone and fitting it with a metal head that was then anchored in his hip socket.

With the operation, Crombie joined the international clientele flocking to India for cut-rate services that include telephone call centers, software design and financial analysis.

``Indian hospitals are a very cheap option where patients get the same quality they're used to back home,'' says Sanjay Dongre, who manages the equivalent of $237 million of shares at UTI Asset Management Co. in Mumbai, which owns Apollo stock.

Foreign Influx

Investors hoping to benefit from the influx of foreigners are driving up shares of Chennai-based Apollo Hospitals Enterprise Ltd. Apollo, which runs 33 hospitals in India, including the one in Chennai, is the country's only publicly traded hospital chain.

On Jan. 25, Apollo traded at 243.6 rupees on the Mumbai Stock Exchange after rising 39 percent in 2004, triple the 12 percent gain for the benchmark Sensitive Index. Maxwell (Mauritius) Pte, a unit of Temasek Holdings Pte, the Singaporean government's investment company, bought a 5 percent stake in Apollo for $11.2 million in September.

For Crombie, who was working as a human resources manager in Africa, Apollo presented a low-cost option. He says his medical plan didn't cover the hip operation. He didn't bother with the U.K. National Health Service because of its waiting list and decided not to pursue treatment in Nigeria. A private hospital back home would charge 15,000 pounds ($27,965), he says.

Instead, Crombie paid a total of 5,000 pounds for his India trip, including the operation, airfare and a stay at the $130-a-night Park Hotel in Chennai.

100 Billion Rupees

Health care for foreign patients like Crombie will deliver 100 billion rupees ($2.3 billion) a year to Indian hospitals by 2012, according to a report by New York-based consulting firm McKinsey & Co. and the New Delhi-based Confederation of Indian Industry, the nation's biggest business group. The market in 2003 was $333 million according to the Gurgaon-based India Brand Equity Foundation, a partnership between the CII and India's Ministry of Commerce.

Heart surgeons such as Naresh Trehan, 58, who practiced at the New York University School of Medicine before starting a hospital in India, are moving the nation beyond the medical services it already sells to foreigners.

Wipro Healthcare IT Ltd. in Bangalore produces three- dimensional images from radiology scans for Massachusetts General Hospital in Boston. SRL Ranbaxy Ltd., a Mumbai-based laboratory certified by the Northfield, Illinois-based College of American Pathologists, tests blood, other body fluids and tissue samples for hospitals in Abu Dhabi and Dubai.

High Hurdles

Hurdles to India's medical ambitions abound. With 100,000 patients a year traveling to the country -- up from 10,000 five years ago -- hospitals are struggling to remedy first impressions that can turn people off.

Howard Staab, 53, a self-employed carpenter from Durham, North Carolina, chose India for surgery to repair a leaking mitral valve, a condition that can cause heart failure. Staab had toured Spain and New Zealand and spent 10 months at the South Pole building science research stations.

Even so, he says, he and companion Maggi Grace, 51, were startled in September 2004 by streets overflowing with people and bicycles and by neighborhoods where new offices butt up against tarpaulin-covered slums. They wondered whether the price of his operation -- $6,700 with Trehan at New Delhi-based Escorts Heart Institute and Research Centre compared with $200,000 at Durham Regional Hospital in the U.S. -- was worth the risk.

``For a minute I thought, `What have I done?''' recalls Staab, who says he's happy with his surgery and care at Escorts.

Image Improvement

Harpal Singh, chairman of Fortis Healthcare Ltd., a privately held New Delhi company with three specialty hospitals in northern India, says the medical industry is banding together to improve its image.

The Indian Healthcare Federation, a group of about 60 hospitals, is developing accreditation standards. In the U.S., organizations such as the Joint Commission on Accreditation of Healthcare Organizations, based in Oakbrook Terrace, Illinois, assess infection rates, the width of hospital corridors and the capacity of elevators.

In India, there's no accreditation, and hospitals aren't required to provide information on the outcomes of treatments. ``There is nothing as far as quality standards go,'' says Vishal Bali, 36, vice president of operations at Wockhardt Hospitals Ltd., which is owned by founders of Indian drugmaker Wockhardt Ltd. ``Hospitals keep data, but they don't need to share it.''

Sketchy Information

Escorts' Web site lists only the number of procedures it has performed. Trehan, Escorts' founder and executive director, says the hospital had a mortality rate of 0.8 percent and an infection rate of 0.3 percent in 2003.

That compares with an observed mortality rate, or the rate of actual deaths, of 4.77 percent for heart valve surgery or coronary artery bypass surgery that included heart valves at New York-Presbyterian Hospital from 2000 to 2002, according to a New York State Department of Health report.

India competes for foreign patients with Malaysia, Singapore and Thailand and offers less in some areas, says Guy Ellena, director of the health and education department at Washington-based International Finance Corp., the private lending unit of the World Bank.

Starbucks in Lobby

He says Thailand's airports and roads are in better shape than India's because Thailand is a major vacation destination. In 2003, 10 million tourists traveled there, according to the Tourism Authority of Thailand's Web site. That was more than triple the number for India that year.

Bumrungrad Hospital Pcl, which runs Bumrungrad Hospital in Bangkok, started courting overseas patients during the Asian economic crisis in 1997 as the devaluation of the baht drove down costs for visitors. That year, Bumrungrad treated 50,000 foreigners, says Curtis Schroeder, the hospital's CEO. It handled seven times as many in 2004, accounting for 35 percent of its patients, he says.

Last year, Bumrungrad hosted 150 Indian delegations, including one led by Wockhardt's Bali, showing them intensive care units, recovery rooms and the Starbucks cafe in the lobby.

International Focus

``The focus on international patients screams at you,'' Bali says. ``They have interpreters and instructions in multiple languages: Arabic, Bengali and Spanish. What it shows is that convenience offsets most other things for an international patient.''

Indian hospitals are countering with perks of their own. Escorts representatives met Staab and Grace at New Delhi's Indira Gandhi International Airport, helped them through immigration and drove them to the hospital in a Toyota van. Their room was stocked with fruit and drinks.

``They had a car waiting and all these people helping,'' Grace says. ``I felt like Princess Di.'' After surgery, Escorts loaned Staab and Grace a mobile phone so they could stay in touch once they left the hospital.

Foreign patients are still far from the norm. Operations on non-Indians accounted for 10 percent of the more than 4,000 surgeries at Escorts in 2003. Vijay Bose, who operated on Crombie, has performed about 300 hip resurfacings in India since 2000 -- 30 of them on foreigners.

``The care from Dr. Bose and his team, right down to the nurses, was very good,'' Crombie says.

More Foreigners

Foreign surgeries will pick up as rising health costs and long waiting lists provide incentives to travel to India and its low-priced rivals, Trehan predicts.

In the U.S., health-related spending climbed 7.6 percent to $1.68 trillion in 2003, consuming almost 15.3 percent of the $11 trillion gross domestic product. It was the fifth consecutive year that the cost of medical care expanded faster than the economy, the Baltimore-based Centers for Medicare and Medicaid Services said this month.

U.S. employer-paid health insurance premiums have soared 59 percent since 2000, according to the Henry J. Kaiser Family Foundation and the Health Research and Educational Trust, nonprofit groups that study medical care. In 2004, premiums averaged $9,950 for families and $3,695 for individuals, the groups found.

Accidental Patient

In the U.K., the waiting list for the government-funded National Health Service prompts some patients to look elsewhere. Last year, the lag averaged less than nine months for surgery, about half the 18 months in 1997.

Unlike Crombie, who chose India after deciding not to pursue an operation through the National Health Service, Ian Brown, 57, discovered India by accident. In July, Brown, a director at Harrogate, England-based electronics company Surevision Ltd., suffered chest pain and went to his local doctor.

The National Health Service told him he'd have to wait as long as four months for a test and then, if required, two years for an angioplasty to open blocked arteries, he says.

On vacation in India in September, Brown experienced chest pain again and was rushed to Wockhardt Hospital in Bangalore. Wockhardt performed an angioplasty the next day, inserting a wire mesh tube called a stent to prop open an artery.

``The hospital could have been in London,'' Brown recalls. ``It was immaculately clean and had good standards.'' Back in England, Brown says, he got a letter from the National Health Service in November asking him to come in for his initial test -- two months after he'd had the surgery in India.

India's Needs

Not everyone is enthusiastic about India's push to become a health care destination.

``I'm not sure Indian hospitals should start focusing and investing huge amounts of money on treating overseas patients,'' IFC's Ellena says. ``They should first, or in parallel, meet the needs of the country.''

In India, insurance plans cover 14 percent of the more than 1 billion people, leaving almost 900 million without protection, according to the McKinsey-CII report. As many as 350 million people live on less than $1 a day, according to the World Bank.

India spends 5.2 percent of its $580 billion GDP on health care and still lags behind Thailand, Brazil and South Korea in life expectancy. People live 61 years on average in India, less than 68.9 years for a developing country such as Brazil and 77.3 years for a developed country like the U.S., according to the World Health Organization. India has 91 infant deaths per 1,000 births compared with 38 deaths for Brazil and eight for the U.S.

$800 vs. $18

Charging foreigners more than Indians is one way hospitals can make money to treat the poor, says Gautam Kumra, a McKinsey & Co. partner in New Delhi. An echocardiogram machine, used to picture the heart, costs about $200,000 anywhere in the world. Doctors can charge $800 per scan in the U.S.; in India, they charge 800 rupees, or $18, Trehan says.

The difference makes it tough to recoup costs. ``Why are hospitals so excited about overseas patients?'' Kumra asks, pointing out that there are more than enough Indians to fill the nation's hospitals. ``It's not that they can't get volumes in India. What they can't get is pricing. They should charge for the value.''

Charging More

Fortis Healthcare plans to do just that. The company is setting up two hospitals on the outskirts of New Delhi. One will cater to overseas patients and charge them higher prices, says Harpal Singh, who adds the hospitals haven't set fees yet. Fortis is owned by brothers Malvinder and Shivinder Singh, who control India's largest drug company, Ranbaxy Laboratories Ltd. Harpal Singh is Malvinder Singh's father-in-law.

One imbalance that works in India's favor is its lower salaries. A top cardiac surgeon in India makes about $330,000 a year compared with $5 million in the U.S., says Anupam Sibal, director at Apollo Hospital New Delhi.

Cheaper pay and lower hospital fees make India hard to beat for health care costs, Trehan says. ``For countries with problems with their health care systems -- whether quality, cost, quantity -- India can fill the gap,'' he says.

Foreign patients started traveling to India in rising numbers five years ago, as word of hospitals such as Apollo and Escorts spread among the 20 million people of Indian origin who live outside the country. Others tried India because they felt comfortable with Indian doctors, Wockhardt's Bali says.

Angioplasty, Knee Replacement

Some Middle Eastern patients began choosing India after the Sept. 11, 2001, attacks on New York and Washington, says Suneeta Reddy, 45, director of finance at Apollo Hospitals and daughter of founder and Executive Chairman Prathap Reddy, 71.

In November, Waleed Khalid Al-Zadjali, 40, a doctor in Oman, picked Apollo for his father's angioplasty and his mother's knee replacement. Oman hospitals often refer patients to India for complicated procedures because the country is familiar, closer than the U.S. or Europe and cheap, he says. ``After 9/11, people were scared to go to the U.S.,'' he says.

Returning Home

Indian doctors are returning, too. Bose learned hip resurfacing at the University of Birmingham in the U.K. in the mid-1990s. He moved back to India in 2000 and is one of the first doctors to offer the procedure in his home country.

Trehan, who was educated in India, began his medical practice in the U.S. He got his bachelor's degree in medicine and surgery from King George's Medical College in Lucknow in northern India. After graduation in 1969, he left for the New York University School of Medicine. He finished his residency in 1977 and stayed on as part of the faculty and to perform heart surgery. In 1982, he began thinking about opening a heart institute in India.

`I used to get a lot of Indian patients in New York, and they asked me, `Why don't you do this in India?''' he says. He sent a proposal to six Indian business groups. The New Delhi-based Nanda family, which owns farm and construction equipment maker Escorts Ltd., helped with an initial investment of 170 million rupees in cash and loans, Trehan says.

Trehan's Mission

Trehan opened the heart hospital in 1988; today, it performs more than 4,000 operations a year. Trehan has trained 40 surgeons and serves as president of the International Society of Minimally Invasive Cardiothoracic Surgery, a Beverly, Massachusetts-based group with a thousand members worldwide.

Escorts' white, six-story building with its green-tile parapets stands out on the corner of an intersection where shoppers dodge bicycle rickshaws and taxis.

People jam the lobby, which has white-marble floors and black-granite counters. Seventeen patients are listed for operations on a December morning. In one operating room, doctors crowd around a man who has been in surgery for more than four hours. In another darkened theater, a surgeon sits four feet from the operating table. He bends over a console to view a three-dimensional image of the heart, working two joysticks that control robotic arms.

Trehan says the machine lets surgeons make small cuts, reducing infection rates and recovery time. ``Heart surgery was not even known in this part of the world when I started,'' he says.

Lifetime Achievement

Trehan, in light-blue surgeon's clothes, sits at a desk cluttered with papers. Five computer monitors on a shelf behind him display patients' vital signs. A lifetime achievement plaque from the Geriatric Society of India lies on a coffee table. Surgeons line up to ask advice, charts in hand. He barks orders, and they turn around, stooping their shoulders as they go.

Having accomplished what he set out to do with Escorts, Trehan is planning a multispecialty hospital in Gurgaon, on the outskirts of New Delhi, that's patterned on the Cleveland Clinic in Ohio and the Mayo Clinic in Rochester, Minnesota.

He wants to meld western medicine with homeopathy and the practice of ayurveda, a holistic approach that balances a person's physical and emotional states. He expects the hospital to be ready in 2007 at a cost of $250 million. He says he's wrapping up funding and declined to provide more details.

Tough Decision

Staab, the North Carolinian, says Trehan's early work in the U.S. convinced him to choose Escorts. Even so, it wasn't an easy decision. Staab's initial thought when he heard about India was that calls to his local phone company were answered there. Apart from that, he and Grace liked Indian food. ``We kept trying to build confidence in our decision,'' Grace says.

They looked into a package deal for about $40,000, including surgery, fees and the hospital stay, at the McAllen, Texas-based McAllen Medical Center. They considered Argentina.

Grace's son, Brian Maxwell, 23, a second-year student at Stanford University School of Medicine in Stanford, California, proposed India, where he'd spent eight weeks working in hospitals. His professor, Sakti Srivastava, director of anatomy and surgery applications, recommended Escorts.


Staab was rolled into Escorts' operating room on Sept. 28. Grace, who'd picked up a smattering of Hindi, wrote ``dhanyavaad,'' for ``thank you,'' on his bare chest with purple marker.

The surgeons first decided to repair Staab's mitral valve. A day later, the valve walls thickened and obstructed blood flow. Staab went in for a second operation on Sept. 30, and doctors replaced the valve. He was ready to leave on Oct. 8 when blurry vision from suspected blood clots kept him for another two days to thin his blood. Staab and Grace returned to the U.S. on Oct. 24.

Grace says finding out about India was the tough part. If not for Srivastava, she and Staab never would have figured out where to look, let alone gather the courage to make the trip.


``I was worried I couldn't get clean or I would have to eat something rotten,'' Grace says. ``There has to be more done to get someone to India in comfort. You can't just get up and go.'' She says better access to information about India and its hospitals would have helped.

Crombie was familiar with India, where his job had taken him to recruit workers in Cochin, Mumbai and New Delhi. He found Bose on the Internet and checked his credentials with doctors Bose had worked with in the U.K. He decided on India after e-mail exchanges persuaded him that hip resurfacing rather than hip replacement would give him a better shot at playing golf again.

``I can imagine someone who's not been to India before may find it intimidating,'' Crombie says.

Easy Transition

Indian hospitals are working to make the transition easier. Trehan wants to build a hospital in the Bahamas staffed by Indian doctors so travel would be shorter and the surroundings more familiar for U.S. patients. So far, there are no backers, he says. Apollo is setting up a London clinic to attract people seeking alternatives to the National Health Service.

``A doctor would look at them, find the problem and make all arrangements to get them to India,'' Suneeta Reddy says.

Back in North Carolina, Staab had an opportunity to compare health care in the U.S. with his treatment in India. An early November checkup found that his blood was still too thick, and he entered Durham Regional Hospital.

Grace says she had to ask for sheets to make Staab's bed and get him water herself. The bathroom wasn't cleaned, and they had to ask twice for the intravenous bag containing blood-thinning heparin to be changed when it became empty, she says. Carol Clayton, senior public relations specialist at Durham Regional, says the hospital addresses patient concerns as soon as they are brought to the staff's attention.

Do It Again

``The care at Escorts was exceptional,'' Staab says. ``I would do it again.''

Crombie echoes Staab's assessment. He says his colleagues were skeptical about India. Now, they're asking about Bose and the hospital.

Just as Indian software companies started with small programming jobs and expanded to become a $16 billion global industry, India's international health care initiative is in its early stages. For patients and profits to increase, India must remedy negative first impressions and persuade doubters that millions of the country's poor and ailing won't be left behind.

To contact the reporters on this story:
Abhay Singh in New Delhi at and Mrinalini Datta in New Delhi at

To contact the editor responsible for this story:
Ronald Henkoff
Last Updated: January 26, 2005 16:50 EST

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