Managing Hospitals Designed to Compete on Quality and Cost

Part Three/Fragmenting care to optimize reimbursement does not generally enhance the customer/patient experience

The growth of India's consumer market is worthy of careful study, such as can be found in McKinsey & Company's Bird of Gold report. In general the Indian middle class is currently about the size of the entire US population, and will grow to 583 million by 2025. Indian hospitals have targeted the healthcare needs and budget of this sector. They have focused on high-demand services, such as cardiovascular surgery, and built a large capacity to provide high quality service at an affordable cost. The organizational innovations that keep these costs competitive in India are also quite attractive to the US purchaser of healthcare services.

This is a much different approach than the US healthcare system, where the byzantine reimbursement schemes require hospitals to vacillate between mutually exclusive goals of healthcare being a right, or a privilege. Healthcare is sometimes a right when two heart lung transplants are performed on an illegal immigrant, and sometimes a privilege when hospitals begin to collect the charges for a procedure that a patient had no way of finding out what it was going to cost.

The Indian hospitals recruit managers with complementary experience in the hotel industry, so patient care can be managed in the context of the customer's experiences and expectations. In contrast, the US hospital is built around the financial models required to maximize reimbursement for services...which many times bear little resemblance to what is necessary for the practice of medicine.

The result of the customer approach is that when an IndUShealth patient visits an Indian hospital, they are completely surprised by the level of personalized care, in contrast to their previous US hospital experiences.