Heart Surgery in India for $1,583 Costs $106,385 in U.S. | Hacker News Reader

Heart Surgery in India for $1,583 Costs $106,385 in U.S.

bloomberg.com

391 pointsdanboarder265 comments

The first supposed fact thrown around in the medical costs argument like this is, "Well in India their cost of living is lower, so they charge considerably less, yadda yadda..." but it's obvious the price difference goes way beyond any cost of living gap. That's over $100,000 in price difference, while it is true the cost of living (salary, prices of every day items) in India is considerably less than that of the US, the gap certainly isn't 100k+

It's comparisons like these that really make you sick to your stomach. You don't see this kind of innovation in the American health system because it has been engineered with greed in mind right from the start. The lobbyist super groups, hospitals being paid kickbacks for using an exclusive medical equipment provider, the money hungry mentality of US medical corporations is more than obvious.

I think when your medical system becomes so expensive it's cheaper for people to fly out of the country, pay for accommodation and even some spending money to get the same level of care, if not higher than that of your own country, regardless of cost of living differences and other nation specific costs that's absolutely ridiculous. By the sounds of it, India is going to be the new global superpower if more and more people fly there to pay for medical treatment it benefits their economy in the end (given how a substantial chunk of the population is below the poverty line, this might not be such a bad thing).

A doctor trained in India is no less qualified than a doctor trained in the US. So expertise or training is no excuse either. In-fact I've found Indian trained specialists to be more thorough, careful, understanding and compassionate in comparison to that of Australian trained medical professionals (I'm from Australia). When was the last time you saw or heard of a poor American medical specialist or surgeon?

The question is: Will America ever change their ways? Or will quality medical care only be reserved for those who can afford decent medical insurance or have jobs that provide fair medical benefits?

One thing is for certain, this is submission is going to garner a lot of responses from both sides of the fence if past submissions along these lines are anything to go by.

>>You don't see this kind of innovation in the American health system because it has been engineered with greed in mind right from the start.

As an Indian, I can tell you people here think the same about our health care system. The Doctor in discussion here, Dr Devi Shetty is a sort of a local hero here in Bangalore. And who knows in some years he might as well be a national hero. Its basically because he seems to bring in advantages of doing things in volume + some health insurance based innovations into the whole equation. And I do agree that he is pragmatically altruistic. But such people are exceedingly rare. We are simply fortunate to have him.

I've never been to US, but I can tell you the Indian health care system is if not less is equally greedy compared to their US counterparts. Its just the same.

These days if you don't have health insurance you are more or less screwed. Its just like the US. I mean from whatever I've read about US so far its the very same. Nothing changes. You just feel its cheaper as $1 = 60 rupees. There you get a straight 60x value of your money. That is what it is at the end of the day.

Coming to our system. Forget greed, fraud in the system is so massively high nothing that I write here will explain it. It is extremely common for doctors to order lab tests wholesale even if they are dead sure the patient has no problems at all. Doctors get commissions from testing labs/pharmacies etc for ordering lab tests, medicines. Treatment is purposefully prolonged, patients made to eat all kinds of antibiotics, undergo all sorts of non sense tests because doctors get commissions for it.

The fees for completing your medical course is astronomically high. Capitation fee often runs in crores, the net fee by the time you finish your MD is so high no doubt most doctors have to practically turn into crooks to get something out of it. Add to this nearly more than a decade of studies sets a perfect stage for these sort of activities to happen.

Its just the same old game, as you see in US. Just served differently.

> You just feel its cheaper as $1 = 60 rupees. There you get a straight 60x value of your money. That is what it is at the end of the day.

I find the vast majority of people are tripped up by currency conversion, but I'm surprised to find this on HN. In Japan $1 = 100 yen, but certainly I don't feel I have 100x in buying power. A bowl of ramen will cost me $8 in SF; an equivalent bowl will cost me 800 JPY in tokyo.

Let's not even get started on the Korean Won...

I'm surprised that how many otherwise smart people gets tripped up by this. The only time you can deduce something from the exchange rate is if you compare the difference between the two rates over a longer period of time. Then it can roughly tell you things about difference in direction of inflation between the two countries, and the effect on wages and imports/exports. If the difference between the exchange rate between two countries doesn't change for a long time the prices of goods in both countries end up being roughly the same.

"If the difference between the exchange rate between two countries doesn't change for a long time the prices of goods in both countries end up being roughly the same."

Simply not true. Compare the cost of a beer in, say, Thailand and Norway. Are you suggesting if the exchange rate were fixed they would reach parity over time?

Compare the cost of anything in Norway, and well, anywhere else. Norway is one of the most expensive countries in the world for foreigners because of it's abnormally high average income.

Assuming no new disruptions, then yes, economic conditions in the two countries would eventually equalize and prices would differ by at most the shipping cost if one of the two countries happens to have much better natural conditions for producing beer than the other. It's because disruptions are now becoming (have become?) the norm that equilibrium never has time to come close to manifesting itself.

Alcohol is a poor example because of special taxation.

The Big Mac index is better for many reasons, one being Mcdonalds is large enough to mostly optimize everything wherever they operate:

http://en.wikipedia.org/wiki/Big_Mac_Index

I think it's a little more complicated than that. Culture plays a major factor, especially when it leads to niche markets. If a product has a niche demand in country A, and high demand in country B, then the cost in country A can easily remain much higher than the cost in country B. In addition to shipping cost being higher in that case (which is why that difference is hard to abstract away), you have to consider the opportunity cost of keeping it in inventory, the risk of spoilage if the product is perishable, the risk of depreciation if it's technology, etc.

"but certainly I don't feel I have 100x in buying power"

Sometimes the economics do conveniently work out this way, which is why some people might get confused. For example I lived in Poland for a few years, and at the time a dollar got you about three zloty, and for the majority of day-to-day stuff you did indeed have about 3x the buying power. Of course for things like computers you ironically had about 1/3 the buying power.

Purchasing Power Parity (PPP) is a better measure

Yen is the equivalent of cents, not dollars, thats why the confusion, yen doesnt have a concept of 100 cents=1 xxx. In Rupees case it is an equivalent of dollars, 100 paisas = 1 Rupee.

So in this case 60x is a reasonable assumption except not including the Purchasing Power Parity.

if the same logic were true, cars would cost 1/60 of labor + reduced price on parts locally made + same price and import duty on imported parts. However cars typically cost twice in India.

Cars cost twice in India for a totally different reason. Its basically because of high import duty and not because they are expensive to make in India.

It's like measuring your penis in millimeters instead of inches to make it longer.

Zimbabwe is printing trillion-dollar bills, so everybody there must be rich....

I got to hold one of these Zimbabwean bills the other day. One hundred trillion dollars, IIRC. Pretty cool.

I hope you'll think of me when you're spending your new-found wealth.

Is it Zimbabwe that prints expiry dates on their notes? I remember seeing one African banknote that did this.

How did you get it? I'd like one too!

There are plenty of them on ebay.

In Japan $1 = 100 yen Is the Yen equivalent to the dollar though?(are there fractional yen cents and that kind of thing) I guess since the exchange rate has been around that for as long as I have been alive, I have always thought of it as 1 Yen = 1 penny.

> In Japan $1 = 100 yen Is the Yen equivalent to the dollar though?(are there fractional yen cents and that kind of thing)

Why is this relevant?

It isn't, it is just that when the exchange rate comes up it is always expressed as yen vs dollars when it seems yen vs pennies seems more appropriate, same order of magnitude and what not.

In agricultural terminology you can either pay people 'by the day' or pay them 'by the hundred yards'.

I have worked in both types of systems and can see merits and pitfalls in both.

In the former system there can woeful output whilst in the latter there can be woeful quality.

Neither of these are inevitable.

In a salary system, if the lazy/incompetent can 'get away with it' and the industrious/competent aren't acknowledged it has a poisonous effect on the organisation.

In a fee per item system the lazy will earn less automatically but there needs to be careful monitoring of the quality of the output with particular attention paid to people at either tail of the output distribution. Also people with high output (because of poor quality) can drive down wages for everyone and create a treadmill where the quality of everyones' work suffers as they try to maintain their income.

Those aren't the only two options. If you want to incentivize outcomes and efficiency, fee-for-outcome is an obvious option.

When it comes to medical care, you have to be really careful about how you define "outcome" if you want to use that as an incentive. You can't just use patient recovery/survival, because then you'd have doctors avoiding patients that need their care the most. You'd also continue to get extraordinary measures taken to extend the life of patients that can't survive, even when letting them go is the more humane thing to do to ease their suffering.

I've thought about this a lot, and I don't think there is any objective way to provide outcome-based incentives. The best I could think of is peer-reviewed judgements of outcomes, but that could become pretty corrupt.

For rare conditions and the very sick, there are a lot of thorny issues, and fee-for-outcome may be hard to implement well. However, those don’t represent the bulk of medical procedures; the vast majority of what’s done in a hospital is utterly routine and predictable, and the outcomes are most definitely quantifiable.

But, in those routine cases, fee-per-service-rendered is pretty much exactly the same as fee-per-outcome, no? I mean, barring malpractice, which already has its own (litigious) path of remediation.

It brings the financial incentives inline with what everyone says the goal is. Fee-for-service incentivizes volume, even if it comes with the consequence of worse outcomes; we simply depend on doctor’s morals to not push it too far, with malpractice and licensing handling truly outrageous abuses. Fee-for-outcome explicitly incentivizes better quality control in a much more fine-grained manner.

More on point, fee-for-service incentivizes unnecessary and expensive diagnostic tests. Let’s say a patient presents with an uncomplicated broken arm. If there’s a set payment for an outcome (successful treatment of the break, with fully restored function), and diagnostic and treatments costs come out of that fee, the incentive is to order as many x-rays as are necessary to successfully treat the injury and no more. In fee-for-service, the orthopedist has no incentive not to order superfluous imaging because it doesn’t cost her anything, and may have incentive to order extra imaging (if, say, she also owns the imaging center that bills for it).

Medicine is littered with examples where there are two tests whose diagnostic power is statistically equivalent, and yet doctors common write for the more expensive test. Fee-for-service is either a neutral or perverse incentive in these cases. Fee-for-outcome aligns the incentive with what society seems to want (lower-cost healthcare with good outcomes).

I fail to see how fee-for-outcome helps any of this. They would still be free to order the more expensive test, and it would even encourage more testing. If they run the wrong test and miss the diagnosis, then they don't get paid at all...

The doctor/hospital gets a flat fee for the outcome regardless of how they achieve it. Unnecessary procedures and tests come out of their bottom line.

> If you want to incentivize outcomes and efficiency, fee-for-outcome is and obvious option.

When I write a contract, there are often two prices: a minimum which is stingy and a bonus which is far from it.

The point is to say that if you do the minimum for this contract, you get a certain amount; if you excel, you get paid for that excellence.

Translated to health care, I think I'd like to see doctors doing less paperwork and more doctoring. It's not perfect, but I trust competition to pay that excellence price to those who deserve it.

That in turn means that if I need some kind of crucial care, I know where it can be found. If the system is over-regulated, that is not so.

I know - anecdote!=data. But here's an anecdote:

We recently had a baby (in Aus). Our Indian neighbour (been in au for 7 years) was amazed at how little medical intervention we had. His comment was that in India there was much more incentive to recommend drugs, c-sections, etc.

Anecdata is the term I've heard for this situation.

I am in Bangalore and don't have medical insurance. Paid Rs 300 fee to General Physician for a consultation another 1500 Rs. for a bunch of tests. In my hometown in Bihar the same thing costs Rs 150+500 with excellent doctors. It's not all rosy but it's not that bad.

The only thing I can tell you is to go and get health insurance ASAP. Both for yourself and your dependents.

Get one and be safe, one serious illness can bankrupt you these days(actually it always has). But my point is even a week of hospitalization can be pretty expensive. And don't be under an impression you will be able to travel to Bihar or wherever when the need arises. During cases of emergency those are not practical solutions.

>The only thing I can tell you is to go and get health insurance ASAP. Both for yourself and your dependents.

I am not too sure about that. I think medical insurance hasn't yet become all pervasive in India, and thankfully so.

Insurance companies are there to make profit, and so will tend to exploit fear to maximize their profits. Leading to inflated costs, as it has happened in US.

So I am against insurance in this form, unless it works like a non-profit cooperative. In fact Dr. Devi Shetty has also innovated here, with a scheme which costs as little as Re. 5 per month (1/60 USD per month) and provides heart coverage to rural Indians. It works as a cooperative scheme of course.

I am surprised, Insurance companies, even exist. As they should be the first thing to be replaced by Software (as in 'Software eating the world' by Marc Andressen)... It should happen, will just take some time, I guess.

So, I think, India can still save itself from corporate medical insurance. As seen in some countries like Canada, a fully public health care system, works as good, if not better.

On a personal note, after having, earlier, taken medical insurance for me and family by paying some 9000/- Rs per annum and getting a cover of 300000/- Rs. I decided this year to not renew it.

But of course, I won't dare to prescribe it generally, each person must take his own decision.

Appendix: 1) http://arachnoid.com/wrong/index.html (ctrl-f 'Insurance is a wise investment')

Well I have a few doctors in my family so I know the intricacies. There are several hospitals/clinics in India which still provide affordable care. No one in my family has a medical insurance. We have had a few health emergencies,in metros too, but the cost was always managed. We only have Life Insurances.It doesnt make sense to pay someone else a hefty insurance premium every year, which may or may not pay back, when the best insurance you can have is a family who shares. You get sick, I pay and vice-versa. I think instead of an inflated health insurance plan we can have a friends or family plan where you get together put some money and use it whenever a situation arises. Hey! I have a startup idea.

Umm, most policies have caps of Rs500k per year (or is it incident). Am I mistaken? That's laughably low even by Indian standards for a serious illness.

I'm assuming the the HN-India audience can hustle Rs500k. My two cents is that you shouldn't sweat it in India if you don't have health insurance.

However, if you get something like cancer in India, not insurance policy will help: the cost of treatment is just too high. You will go bankrupt.

Agree. The last time I bought health insurance in India, it cost me Rs 2600 ~ $50 for a year for $10000 worth of coverage.

That cant be right/Probably has a thesis of prohibitive clauses where you dont get the monies

>>I've never been to US, but I can tell you the Indian health care system is if not less is equally greedy compared to their US counterparts. Its just the same.

Its NOT the same. High costs in the US are essentially a result of policy corruption - a systemic issue with results in the exorbitant prices. Greed amongst doctors is prevalent in India as well as the US - maybe more prevalent in India due to general poverty. But health care in India is more 'free-market' than in the US, which is why it is more efficient.

>>I've never been to US, but I can tell you the Indian health care system is if not less is equally greedy compared to their US counterparts. Its just the same.

I have been to the US and I have spent a huge time in India. I have witnessed the Indian health system in close quarters and have close family members undergone major surgeries. There is greed in India, no doubt about it. But the American system is completely EFFED up - there is no comparison. If you go to the US and spend some time understanding/experiencing the system, you will be thankful for what you have in India.

>>These days if you don't have health insurance you are more or less screwed. Its just like the US. I mean from whatever I've read about US so far its the very same. Nothing changes. You just feel its cheaper as $1 = 60 rupees. There you get a straight 60x value of your money. That is what it is at the end of the day.

You are completely wrong about this only because you don't know what happens in the US if you dont have insurance. My close family members have undergone major heart surgery at Narayanan Hrudyalaya. They had insurance, but even if the insurance did not cover it, it was not a big deal. I could have easily paid from my own pocket - it cost just over $2K USD - not a big amount for middle class Indians for life threatening surgery. All the prices are transparent - so if you dont want to pay as much you can choose cheaper options (shared post-op bedding etc.) which will reduce prices in half - with very little difference in medical care.

In the US if you dont have insurance for something like this - you will go bankrupt. The only reason you don't know about this is because most of your NRI friends work for bigger tech companies which provide good coverage.

Infact one of the reasons why health care is reasonable in India is because insurance coverage is limited and not mandated by law. The resulting free market delivers the economies quoted in this article.

>>Coming to our system. Forget greed, fraud in the system is so massively high nothing that I write here will explain it.

No it is NOT. There is a tendency in Indians to think that they are completely fucked up. Travel around the world - especially to the US and you will thank your stars - and please dont go with what NRI's say - they have a vested interest.

It is true that there is greed in the system and there is fraud - but there is a relatively freer market. You can 'choose' your doctors/hospitals. If you dont have a good experience with a hospital you can choose to write a review on Mouthshut.com and have them get less business. You can do your research and choose a better doctor/hospital over a worse one. This 'choice' and the enabling free market makes India health care deliver economies at scale which are impossible in the American system.

>>The fees for completing your medical course is astronomically high. Capitation fee often runs in crores, the net fee by the time you finish your MD is so high no doubt most doctors have to practically turn into crooks to get something out of it. Add to this nearly more than a decade of studies sets a perfect stage for these sort of activities to happen.

Assuming that this does turn them into 'crooks', they have an easy way to get their money 'out' - migrate to the US/UK after completing their residency. Some doctors are greedy, some are good. The greedy ones land up outside India as much if not less than inside.

>>I could have easily paid from my own pocket - it cost just over $2K USD - not a big amount for middle class Indians for life threatening surgery.

You could have, sure easily! Besides a person who has traveled to US doesn't fall under middle class category anymore. Sorry you don't. In a country where kids die of hunger and where parts of the country manage to barely eat two rotis a day with salt- traveling and working in the US is a rich man's luxury.

Sorry to be putting it this bluntly, but in India anybody apart from Mukesh Ambani thinks he belongs to the middle class.

Most people(The middle class- People who make around 10/15K rupees a month) can't pay for expensive medical treatments, medication, post-op follow ups etc and that's a fact.

>> If you dont have a good experience with a hospital you can choose to write a review on Mouthshut.com and have them get less business.

Yeah right. I find it hilarious when techies offer solutions like these to common people who don't even know how to turn on a computer.

My cook makes 15K per month. Life threatening procedures are relatively rare. Incase he has to go through a similar surgery he can go for a 'package' which will cost him 50K. There are no 'noticeable' differences between the health care that he will get to what my family member got. He can afford 50K for something as rare and life threatening like this.

Mouthshut.com was just an example to demonstrate what it means to have a free market. My cook obviously can't access it - but he will ask me and his relatives on which doctor/hospital is good/cheap. He faces greater infomation assymetry - but the fundamental advantages of a free'r market still accrue.

I agree. A large portion of the population barely makes between 5-15k per month that is not sufficient for 3 meals a day + housing + school education. Forget surgery, they can't afford routine doctor consultation, diagnostic tests and medication. And yes, diagnostic tests are almost always done whether needed or not.

You can't choose your doctors/hospitals in the U.S.?

The TV show Scam City had a field day with the Indian "doctors"

http://natgeotv.com/za/scam-city/videos/delhi-doctor-scam

> The first supposed fact thrown around in the medical costs argument like this is, "Well in India their cost of living is lower, so they charge considerably less, yadda yadda..." but it's obvious the price difference goes way beyond any cost of living gap. That's over $100,000 in price difference, while it is true the cost of living (salary, prices of every day items) in India is considerably less than that of the US, the gap certainly isn't 100k+

Well, the article says 2/3 of people live on $2/day, implying this surgery is $1600/$2/day = 800 days worth of work.

Taking the US median income of $45k (since I don't know the 2/3 number off the top of my head), that implies the equivalent price in the US would be ($45k/365) * 800 = $98,630. So, right about the same as at the Cleveland Clinic.

The $2 figure quoted for Indian is not the middle 2/3, but the lowest 2/3, so it would have very little to do with the median. Let's go by the figures we actually have (mean):

Per-capita income in India is $1492 Per-capita income in the USA is $49,922

So, it's around 1583/1492 = 1.06 years of work in India. And, 106385/49922 = 2.13 years of work in the USA.

And since the hospital price is actually 95k Indian rupees, exchange-rate fluctuations do not matter.

Here is what makes up the difference. In America, law mandates that hospitals treat anyone regardless of income, insurance possession or immigration status. Go to the hospital in India as an illegal alien and not only will you not get treatment, you will be jailed, then deported. Covering illegals and the uninsured is a HUGE cost that health care systems have to bear. Of course there are other things in America which drive up health costs, but treating illegals and chronically ill patients who have no insurance is the biggest. There are other major factors as well, but these laws alone bridge the gap in your calculations.

Umm, no one ever asks you about insurance unless you claim to have it? There are no checks for illegal immigrants.

Chronically ill patients can still seek treatment, they may or may not be able to afford it though.

> A doctor trained in India is no less qualified than a doctor trained in the US.

In general?

http://blogs.worldbank.org/developmenttalk/shocking-facts-ab...

> It’s also pretty staggering that hiring qualified staff doesn’t appear to increase this probability. Das and colleagues suggest that part of the issue might be the variation in the quality of instruction in Indian medical training institutions. So there may be some institutions from which a qualification does make a difference. But given the paper’s results, the effect of such institutions must be rather small. The fact that providers working in better equipped facilities don’t have a higher probability of prescribing the right treatment is also alarming.

Obviously, heart surgery isn't rocket science, and our medical training is a bit overpriced, but is it so easy to compare two disjoint systems?

That article doesn't actually compare India to the US. In fact, it says that "It’s also likely the results aren’t India-specific." It would be interesting to see the results of a similar study carried out in the US or UK, for example.

In any case, there is a difference between the general level of competency of doctors in a given country, and the level of competency available to wealthy foreigners travelling to the country for medical tourism.

It's not India-specific. This is definitely happening in Eastern European countries, too, and probably even some of the western ones (although a bit more) - just like with college tuitions.

There's something seriously wrong with both the healthcare system and the education system in US if the prices are 20x+ more than in any other country.

This is definitely happening in Eastern European countries, too, and probably even some of the western ones

Careful here. I live in London for several years now, and from my experience Eastern European doctors are much better qualified then Western European. I'm originally from Poland, and medical studies are really hard, and people spend whole 6 years cramming just to become an apprentice to the doctor (it's Bachelors and Masters degree combined). On the other hand in western countries you can do undergrad degree in anything and only then apply to med school.

Same reason why many people in the Netherlands got their eyes lasered in Turkey. Both cheaper (including the flight) and better qualifications (if anything by experience).

This was a few years ago though, from what I've seen the costs for eye lasering here seem to be catching up a little.

Frankly I'm a bit surprised by all the people in this thread saying "well that's a huge price difference, but how do you know Indian doctors are as good as US doctors"--as good? On what basis is the default assumption that US doctors would be better and the Indian ones need to prove themselves? All I know of the US healthcare system is that it's ridiculously overpriced, but just like that $8 bowl of ramen (wat) someone mentioned upthread, doesn't mean it's better, it might even be worse.

Because everyone born in a capitalist society has been taught from day one that "the more expensive the better." Just as you would assume a $200k car is a really good one.

If you do your bachelors in non-science field, you cannot get admitted without doing a post-baccalaureate, which can take 1-2 years additional. There are a lot of science requirements to even apply to medical school, that someone with a computer science degree, for instance, would not meet and would have to take those courses (i.e. biology, chemistry, biochemistry, organic chemistry etc.)

Well, to be fair, OP only said apply to medical school, not get in...

> On the other hand in western countries you can do undergrad degree in anything and only then apply to med school.

This isn't quite right. If you want access to anything but a fly-by-night medical school, they're wanting hard science and most likely a focus in biology.

For what it's worth, there's a huge range of private care in India. From expensive hospitals that cater primarily to the upper class to charlatans without a degree holed away in a slum.

The difference between these two ends is incredible. While I can imagine these results at the latter, I find them hard to believe at the former. I'm paywalled away from this for the next two weeks, so if you want the facts, that's where I'd look: what sort of private healthcare.

Edit: To illustrate, another commenter has a link to an news story that says mortality is lower after the Indian procedure - http://m.theaustralian.com.au/archive/business-old/the-henry...

I read about this clinic somewhere else, and there it was said this clinic actually outperforms western clinics in terms of complications, which seems to be achieved through staggering case numbers per doctor.

It's completely meaningless to compare mortality rates. It's also not clear that if a patient had a CABG in India, went home and dropped dead within 30 days, that this data would actually be captured rigorously.

Anyway, you're drawing the wrong conclusion - it's astounding how close the US mortality rate is to the Indian, which attests to how good the US system is at operating successfully on more complex, elderly patients. Of course, you could argue that the US has optimised the wrong thing, at great expense...

> Anyway, you're drawing the wrong conclusion - it's astounding how close the US mortality rate is to the Indian, which attests to how good the US system is at operating successfully on more complex, elderly patients. Of course, you could argue that the US has optimised the wrong thing, at great expense...

Is that connected to the extra funding that older people get?

What happens if we compare mortality in people under 65?

It's still going to be problematic. There is a hidden selection bias that you can't get around. Eg in India there are still a lot of people that can't afford the CABG no matter how much it costs. Are those people less or more likely to die after surgery than the people that do get operated on? The answer invariably would be yes.

Do centres that do more surgery have better outcomes? The answer to this is already a resounding yes. There isn't any doubt about that, it's been shown over and over again for multiple different surgeries within developed countries. Surgeons knows this, and so do health insurance companies. But of course this has to be asymptotic. Doing 1000000 CABGs doesn't make you 1000 times better than the surgeon that does 1000. So I doubt there is any real difference between the surgical skill in Shetty's centre and top institutions in the US. It's an untestable question in any case. The important point is that the care overall seems grossly non-inferior to the US, not that the US is inferior.

That makes sense: experience increases performance, which is why we have intensive residencies; there is a reason why until recently residents were working 80+ hours a week. Perhaps we should ship all our resident-ready medical students off to third world countries where the needs are great so they can become proficient very quickly. Perhaps our system has become too soft.

Perhaps we should ship all our resident-ready medical students off to third world countries where the needs are great so they can become proficient very quickly. Perhaps our system has become too soft.

The problem is they would become proficient at treating the wrong things. Medical conditions vary greatly by geography. Polio is still alive in the third world, Russia is fighting drug resistant TB, and up thread there is a mention of a surgery performed at a 1000x rate in India compared to the US(Once a decade vs once a day). All the while what affects Americans would be glossed over because it doesn't infect the rest of the world at the same rates.

Our residents do work 80+ hour weeks. Until recently, it was 100+ hours.

It's still ~100 hours a week: 6 days at up to 16 hours = 96 hours/week.

There’s a cumulative “in-hospital” time cap of 80 hours/week (88 for neurosurgical residents). In practice, however, this means that (a) the cap is regularly broken or (b) residents end up doing preparatory study, reading papers, doing research, etc outside of the hospital to remain under the cap. They are still working more or less the same hours.

Also, the 16 hour/day rule is only for interns, IIRC. Resident shifts can go up to 30(?) hours.

While the results of the studies are true in that study (that those fake patients were misdiagnosed), the assessment that why they were misdiagnosed is (may be?) not directly related to their competency.

As a Indian (who comes from relatively simple background), I don't need a study to tell me that general/govt. hospitals that provide PHC are overcrowded, lack necessary support staff, lack necessary equipment.

What the bloomberg article is talking about is, another class of hospitals and medical staff. Narayan Hridayala, Fortis etc employ pretty good doctors.

I doubt that, any general statement can be made about - "doctors trained in India are less qualified than US", because it depends on lot of factors.

EDIT: Added "may be?"

If their doctors are trained like the bulk of their it professionals -- those hired by the body shops, no thanks. At least from what I've seen, countries that make a business iut of pudging grad numbers hoping for expat acceptance, quality is inversely proportional to quantity.

Within the US, the cost of heart surgery is highly variable, but if I were to go international, i would go south/central America over India any dry.

The Doctors and Engineers from the best institutes of India are comparable to the best in the world. You will regularly meet them in American or European hospitals anyways doing consulting. It's a poor comparison. Some of the hospitals in India are comparable to any top-class hospitals in the world. In the end, you will be visiting such a hospital in India, not small time ones.

Such a crass generalization. If you think the bulk of India's IT professionals are bad - then you should at least consider if such poor skills are "good enough" for a vast majority of IT work.

thats quite a narrow minded comparison. Theres a significant difference between bodyshopping IT employees because western companies want to save money on IT and consider it commodity, & training surgeons. Having lived in both India and South America - I found the quality of healthcare in India significantly better. You need to think a bit before making comparisons! Besides - learn how to spell ;)

I've had heart surgery, costing very close to that six-figure the article gives. Every dollar was well spent. Tearing my chest open with a car jack, rendering me dead for most practical purposes, replacing body parts with cyborg components meant to last for decades, bringing me back to life, repairing the extensive damage caused, continuous monitoring for anything that could go wrong for a week, and sending me home in perfect condition save for a narrow scar, a daily pill and ticking like Captain Hook's crocodile - that's a heckuva process to go thru, it went spectacularly well, and I'm alive in great shape, heck yeah it was worth half the price of my house. They brought me back from the dead, how much is that worth?

You are succumbing to the common fallacy of associating cost with quality.

Last week, my dad (who is a doctor in Turkey) was telling me about a new study that compared the cost of healthcare services in various countries around the world and the satisfaction of patients. He said that the USA ranks close to the bottom of the index, meaning that considering how much American patients pay for healthcare, their level of satisfaction is incredibly low.

This is why "healthcare tourism" exists and is dominated by American patients.

You are succumbing to the common fallacy of disassociating cost from quality.

Yes, a good successful job can be done much cheaper - but, on the whole, the odds of success & quality degrade fast when less is spent. When it is YOUR life on the line, you may very well be willing to pay significantly more for those diminishing returns; they may be diminishing, but they are in fact greater returns. "Healthcare tourism" by Americans includes the ability to identify & access those pockets of excellence; those areas in general may not enjoy such inexpensive quality as the norm, nor have easy access to excellent outliers.

BTW: Americans (I speak as one) are a chronically dissatisfied bunch. Having remarkable access to excellence in all things, we bitch & moan about how it isn't oh so slightly better. Yeah we complain about the cost of healthcare, and at the same time demand the absolute very best, quick to sue the pants off any doctor whose work fails perfection standards by any statistically normal degree when something could have been done better regardless of extreme cost. I suggest caring little about opinion polls where objective statistics are available.

>>When it is YOUR life on the line, you may very well be willing to pay significantly more for those diminishing returns; they may be diminishing, but they are in fact greater returns.

There is no evidence that this is the case. Note that the vast majority of the cost is due to the massive complexity of the system: every party involved - and there are many - wants their cut, and they don't necessarily contribute to the well-being of the patient or the efficiency of the process.

You don't get payed for how smart you are or how hard you worked. You get paid for how big of a problem you fixed for somebody, and how much they are capable of paying you. That's why good doctors and lawyers get paid so well. Dying or going to jail are big problems, and people will spend a lot of their money to avoid them.

This is exactly what is wrong with health care in a free market.

if you had an operation with a 10% chance of failure for $5000, would you take it?

What if you could spend twice the money and cut your risk down to 5% if you quadrupled the expense? $20000, even I'd take that option for you, as an objective observer.

what if you could cut it down to 4% for $50000? Ok now it's getting a little silly, but it's still your life.

what if you could cut it down to 4.75% for $100000? Don't you deserve the best? I mean this is your LIFE. In anything else this would be a silly investment, but your life? You can't take chances. It's a bizzare choice, but really the only rational one in your situation, you have to survive.

So the thinking goes, we are incapable of negotiating for our own lives. To the point where it blinds us, by choosing that expense you doom the ones who can not afford it.

This is exactly what is wrong with health care in a free market.

What free market are you talking about? Medicare effectively controls the prices of medical procedures (since insurance companies reimburse non-Medicare recipients on the basis of tables the government puts out). It also controls the number of doctors (it does this by limiting the number of residency slots - see the Balanced Budget Act of 1997). The FDA regulates everything from the development and testing to packaging and marketing of drugs, medical devices and related products. Due to federal regulations, physicians are not permitted to discuss prices with one another. There are countless regulations that manipulate health insurance. And don't forget the 1943 IRS ruling that permanently established the link between health insurance and your employer.

And this is all stuff that's mostly decades before Obamacare. That just scratches the surface. For example, I didn't even mention HMOs, which were created under Nixon via another set of regulations intended to control costs for things Johnson had done.

A free market in health care? If there's one thing American health care has not had in the last 50 years, it's a free market. Sure, it has been slightly freer than in other countries, but that's not saying much.

choosing that expense you doom the ones who can not afford it.

Do I?

Elsewhere in this thread is a post about a surgeon greatly improving the lives of those who cannot afford it by buying a used laparoscopic tool and creatively applying it. I've had laparoscopic surgery; thanks to the high price I & others pay, the laparoscopic instruments used may have replaced the very same one that Indian doctor is using. Far from "dooming the ones who cannot afford it", the system which regularly replaces top-end tools makes entirely acceptable equipment very affordable to regions which can't pay top-end prices.

Disallow me from paying an extra $50,000 to get that extra 0.75% survival odds, and the surgeon very well may not buy that next-generation laparoscopic tool and, as a consequence, sell the still-perfectly-good used one at low cost ... making it possible for another doctor to increase the survival rate for his patients by 5%.

Are you sure that the constant push to the top-end lowers average prices? If we spend all our time making lamborghinis, that means that the old lamborghinis will be cheaper thus cars more affordable? I doubt this strategy. Make more laproscopic tools. Rather than tell your economic inferiors to live off your scraps.

The healthcare market cannot chose to capture deadweight losses. People would view health care professionals treating rich and poor with different medical standards as an abomination. There is no Healthcare basic edition, Home basic, Home premium, Professional, Ultimate. If you raise the general cost of a heart surgery from $50K to $55K, and lower the mortatilty rate from 5% to 4.5%. Does the amount of people you save with that 0.5% worth the amount of people who can't make it to 55K, but could make it to 50K?

Are you sure these numbers are in your favor? Well, I mean, yes of course they're in your favor, I mean everyone, as a whole.

This is exactly how economic reality works.

Yes, your very life is subject to the costs of diminishing returns. We can't guarantee everyone the very best because it costs too much, and we can't force people to spend less on their life than they can afford and choose to spend because it's not yours to distribute. Tough choices aren't easy.

The problem is that people want 0% risk and have someone else pay the infinite price tag.

They brought me back from the dead, how much is that worth?

I'm glad you're well. How much would it be worth if you'd had to sell your house and/or declare bankruptcy, while knowing that similar-quality treatment was available for 1/20th the price in India and elsewhere?

Not just being snarky. Since leaving corporate America (and the healthcare plan) to start my own thing, I think about healthcare costs a lot. For starters, the lack of transparency or price-competitive marketplace, for such an expensive purchase, is mind-blowing.

The For Sale sign would have been up before I went into the OR with nary a second thought. Worst case, negotiate arrangements for $50/day for the next 10 years.

Yes, health care costs a lot. Miracles are expensive.

It's not a miracle. It's impressive, but you're mischaracterising it.

"You don't see this kind of innovation in the American health system because it has been engineered with greed in mind right from the start."

Actually, it is not just the healthcare industry. All industries in capitalist societies are engineered with greed in mind, and that's OK. It works very well. The problem in the healthcare industry is not greed, but insurance. When someone else is paying for the care you don't care how much it costs. You don't shop around. This enables doctors and hospitals to charge more. American healthcare is very cost efficient where the care is not covered by insurance, for example plastic surgery, lasik etc.

It's true, but none of this matters. People prefer equally terrible health care for all as opposed to great health care for some and excellent health care for others. Soon enough, plastic surgery will be socialized to combat bullying because kids shouldn't have to suffer for being ugly. Then we'll see that efficiency disappear in the name of egalitarianism.

I kinda get your point, but your analysis as far as capitalism/greed etc seems more ideological than logically rational. The problem as you state it isn't insurance, its the inelasticity of health insurance. Simply put a significant amount of people will pay as much as they can get their hands on for even a marginally improved outcome if their life is on the line. Conversely very few people will refuse life saving treatment based on price, IF they can somehow get their hands on the necessary money, even if they feel it is a 'rip off'.

Your stated areas where american healthcare is efficient are optional, cosmetic surgey, lasik etc...

Not to say insurance doesnt play a part, just saying you havent presented a solid logical arguement.

I think that the insurance companies are the real problem in the US. I pay the insurance company, who pays the doctor, who pays the insurance company. The costs go up in the opposite direction. Seems like a vicious cycle.

Good point.

It's also worth noting that healthcare costs in most of the developed world, while lower than the US system, continue to increase substantially.

However, what you are saying raises the question of how on earth a system can be constructed where people shop around for health care.

Any ideas?

At face value this appears to be a huge opportunity for innovators to take on the whole existing healthcare industry here in the USA.

In reality I think many healthcare entrepreneurs either get caught in the existing framework (and dependent on it), or find the regulatory and other hurdles too hard here.

That said, I still think there is a LOT of room to improve cost efficiency here, and the right entrepreneur could do it. It's been done in other stagnant segments of the economy... I would like to see an Elon Musk-type entrepreneur open efficient hospitals here like this guy is doing in India.

A huge problem in the US is all sorts of really really bad laws. For instance to open a new hospital you have to get permission from other hospitals in the area.

That's the opportunity. Eventually regulatory capture and corruption will become so great in the US that it really does become impossible to actually provide the care. Nothing will make it through the wall of parasites.

The opportunity is in helping Americans get real healthcare outside their borders. Take a glance Uber's way. You'll know you've got it right when there's serious talk about making it illegal to travel abroad to obtain medical care. For the safety of the people and the necessary good of the lowly American doctors, of course.

I think that it is already forbidden in some countries to get specific medical treatments abroad. It is so wrong, and I would not be surprise if it is going to happen in U.S.A. too.

impossible?

> For instance to open a new hospital you have to get permission from other hospitals in the area.

This sounds like a terrible law. Where can I look for more information on this?

http://en.wikipedia.org/wiki/Certificate_of_need

Thank you -- very interesting.

It sounds that way if you're a short-sighted conservative type or a hospital union rep, and makes sense until you realize that there is a glut of hospital beds in most places in the US. Care is shifting from institutions to outpatient environments, and has been for 40 years.

That excess capacity tends to be filled up with old and poor people on government health programs, and people needlessly hospitalized are likely to get more sick as a direct result of their unnecessary hospitalizations.

regulations forced my doctor of thirty years into selling his business. Talking to him it pushed a lot of single and dual doctor offices into selling. Electronic records keeping was the bogeyman that pushed a few over the edge, between the software costs and the manpower to get all the documents into that now required form they just didn't have the money.

Top it off with his worst payers were not the insurance companies but government based.

Government regulation, from deciding what insurance must cover for all people to not being able to shop across state lines was very much responsible for the rapid increase in healthcare. It didn't help much when we got sold out by Washington under the guise of Affordable Care to the drug, insurance, and hospital, companies. ACA was payoff for campaign contributions, that is why no one read the damn bill.

I think someone like Elon Musk is capable of doing such a thing. But the complexities of the law around the medical industry definitely don't make it easy and even after you're up and running, infiltrating a lobbyist dominated niche is the next hurdle.

I'm not sure if you've heard the story but there is an American inventor by the name of Thomas Shaw. He invented the first safe, retractable syringe that was more reliable than any existing solution. Companies tried copying his design and managed only to produce sub-par copies, it's an interesting read. http://www.washingtonmonthly.com/features/2010/1007.blake.ht...

"A doctor trained in India is no less qualified than a doctor trained in the US"

Perhaps you are correct, but I doubt this assertion. U.S. graduate schools are generally the best in the world, I am not sure why that should be any different for medical schools

Another question: why don't Indian doctors just import themselves to the US and earn much higher wages and profits by offering American customers something like the average of the Indian and American price?

That's what we should be asking IMO.

Because they would have to get student status and undertake a two year residency, and then take the US medical board exams, and then come over on a H1B and work in a regular hospital (once they'd found one to sponsor them) and then get a greencard so they could work on their own and by then, maybe 10 years after they left India, they would probably be perfectly happy to continue living at the same wages instead of massively cutting their prices.

"I think when your medical system becomes so expensive it's cheaper for people to fly out of the country, pay for accommodation and even some spending money to get the same level of care" - I wonder why this not happened on a large scale yet. It seems so simple - fly out stay for 10 days and get the surgery done, visit some exotic places such as the Taj Mahal and come back. Almost heart surgeries are planned, so planning is also not a concern. These days booking a flight in and out is a non-issue as is the issue of staying in a hotel. What's stopping people from adopting this on a large scale ?

Either it's illegal (the government's fault) or hospitals deal with insurers on a bundle basis and they aren't willing to cut out their most profitable procedures (the market's fault). Depends on who you ask, I'm sure :)

Liability might be a problem, but it only accounts for 2% of medical expenditures in the US, so I wouldn't expect it to be insurmountably difficult to insure the procedures to "US standards."

This is being done on a large scale, health tourism is a real thing. I think probably you dont realize how widespread this phenomenon is, and conversely I think more than a 'large scale' you are really asking, why isn't virtually everyone doing this?

>> A doctor trained in India is no less qualified than a doctor trained in the US.

This might be objectively true (which you could reasonably determine through some combination of standardize testing and surgery complications/outcomes), but if you ask 100 people on the street in US whether they would prefer to see a US MD or an Indian MD for their heart surgery, I bet 97 or higher would prefer the US MD. The tiny remainder would probably show no preference.

Their is a brand power of a US medical education, which is especially strong for US patients.

I think it's probably just racism. I bet you'd see similar outcomes if you let people choose between white doctors and Indian-American doctors, even if the white doctor was the foreign one.

Naw, not true, at least on the east coast indian doctors (with american MDs) are common and are not generally viewed as 'inferior' in any way to caucasian doctors.

There are so many Indian doctors that it's almost become a stereotype of Indians. I'm just saying that given a choice, the white doctor gets chosen, rather than the US-educated one.

In rural america often times the only doctors are Indian or Pakistani.

I agree but not sure if it's quite racism, more like prejudice. If it were a relatively poor or say (ex-) communist country with white doctors they'd be wary too.

Just to put it here, you can get these price differences between US hospitals as well. http://www.huffingtonpost.com/2013/05/08/hospital-prices-cos... in that Article, there's also a link to the Database of Medical Provider Charge data. https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...

I can't defend the US cost entirely. It certainly seems exorbitant. That said, I think there are some things baked into the US cost that most patients probably want. A certain degree of post-operative care that maximizes comfort under the circumstances, for example. Possibly also factors that affect the success of the surgery. Heart surgery isn't necessarily over once they close you up. It's great that surgery is being made so much more accessible, of course, but these procedures are probably not comparable.

"Well in India their cost of living is lower"

I am not sure it is true anymore. If you compare cost of living in a good infrastructure or similar lifestyle you will find India is expensive. I am sure many will disagree but just go ahead and look at cost of decent housing in any Indian metro. We too have crap doctors in India like anywhere else, may be they don't sound too expensive when you go by USD conversion.

I would observe, that all of the "low cost" equipment and techniques that are being described here were developed by "greedy" corporations and hospitals in the USA (or possibly Europe). It's easier to be cheap when you don't have to fund any original R&D.

Strong statements need to be backed up with strong data. You said "all of the equipment and techniques". Did you not read the Gawande section? Seems like the techniques are new and weren't invented by us.

> so expensive it's cheaper for people to fly out of the country, pay for accommodation and even some spending money

... and even a few years of college tuition or a small mortgage ...

As long as the majority of americans vote against their own self interest, nothing will change.

Hmmm. Why do you think it is that the costs of products and services produced by certain industries, like medical care and higher education, tend to rise much faster than inflation, while costs in other industries, like say, technology, fall over time? Could it have something to do with the fact that the industries where costs are increasing are those most heavily regulated and subsidized by multiple layers of government, while those where costs are falling (and quality is rising) are those that are least regulated and subsidized? Perish the thought! Much easier to just scream "greed!!!" and feel a bit morally superior than to actually try to understand what the problem is.

Let me fill in the gaps for you.

First off, this article is comparing the cheapest clinic in India, with the most expensive and most revered Heart center (Cleveland Clinic) in the world. NH is basically like getting your heart surgery done at a non air conditioned WalMart. There are no patient rooms. There is a patient room. A giant room with beds lined up civil war style. The food is akin to gruel, ETC... Of course there is going to be a significant cost difference. This is like comparing staying at a Hostile and getting dinner in the soup line with Staying a night at the Hilton and ordering a New York steak dinner for room service, of course there is going to be a significant cost difference. Leave it to a reporter to compare the cheapest abroad to the most expensive here (a bit of stretching to make the store line a bit more catchy).

Second, the reported cost is false. "NH maintains its costs low, savings that are then transferred to the patient. NH's cost of open heart surgery is USD $2,000. The hospital charges $2,400 to the patient, compared to $5,500 charged at an average private hospital in India." http://healthmarketinnovations.org/program/narayana-hrudayal...

Third, the per capita income in India is $1,000 nominal dollars, in the U.S., it's $50,000.

So the average adjusted open heart surgery in India is actually $275,000 when converting to USD and comparing using the average per capita income. (Narayana Hrudayalaya's "discounted hospitals" only charge $120,000)

I know that the average income does not fairly reflect the true cost differential because India has a disproportionately large population of people living in abject poverty. It does make the cost difference margin quite a bit less though.

If you are wondering just how places in countries like this can operate more cheaply though? I will tell you. US laws. In America the law states that hospitals have to care for anyone even non citizens. It also puts stringent regulations on hospitals. Regulations that do not exist in India. These Regulations are very expensive to comply with.

Narayana Hrudayalaya's establishments are not hospitals, they are not for emergency care. They do not treat non-paying clientele. In America, our medical costs balloon out of control for many reasons, one of the larger ones being the care of non-paying patients. Emergency rooms and therefore hospitals cannot turn away patients for any reason. They must admit illegals and uninsured (even for long term care). They cannot recoup money from these individuals so the paying customers get to flip the bill so the hospital can remain in business.

Just try going to an emergency room in India as an illegal alien. You will be promptly jailed and deported. Try going without insurance or means of payment... Good luck with that (same MO as all these countries where these "cheap procedures" can be had)

There are some countries where these procedures are still cheaper than in the US and they cannot legally turn away illegals and uninsured. They have a slightly different formula. The government flips the bill (subsidizes the hospitals) thus allowing them to compete cheaply (which keeps the costs low).

Probably not going to get seen in this morass of comments, but I went back and reviewed the CMS data that the article cites.

The article used the Diagnosis Related Group (DRG) 238 - Major Cardiovascular Procedures without Major Complications. This is the best guess at capturing the costs of "Open Heart Surgery". (CMS only releases data for the top 100 DRG codes). "Open Heart Surgery" is a term for a variety of surgical procedures done on the heart, including valve replacement, vascular repairs of the aorta/vena cava/pulmonary vessels, and coronary bypass. These span a wide variety of DRG codes, including 216-221 for valve replacement, 228 (other cardiothoracic procedures with major complications), and 231-236 for cardiac bypass. Assuming we are comparing the operation known as coronary bypass grafting, then 238 is a decent enough code to use, with the proviso that it's not the best source for data.

Looking at the numbers claimed: If you download the Excel file from CMS [1], you can sort by DRG and Provider Name. Yes, if you search by DRG 238 and filter by Cleveland Clinic you will get $106,385 charged to Medicare. However, what the article completely leaves out (and anyone in medical practice will assume) is that Medicare simply does not pay the amount covered. Average Total Payments by Medicare: $26,898. That's how much Cleveland Clinic gets reimbursed, on average, by Medicare for any procedure included in DRG 238.

It gets more interesting when you include all providers and sort by average total payments. The highest average Medicare reimbursement to anyone for DRG 238 is $54,682; the lowest $13,233. Another interesting example:

In Alabama, at Brookwood Medical Center, DRG 238 covers $111,008 and only reimburses $15,552.

These comparisons of the US system to outside countries really need to compare average US reimbursement to their stated cost, because they sure aren't funding an army of administrators to get the insurance companies to pay up.

In summary, you can get "open heart surgery" in the US (Alabama) for "$15,552". I wonder what the Alabama price is if you walk in and offer to pay cash. If you can get it at the Medicare reimbursement rate, that compares decently to the Indian price.

[1] http://www.cms.gov/Research-Statistics-Data-and-Systems/Stat...

Nice catch! You are correct, it's the reimbursement that counts, not what the hospital claims are its expenses!

The differences in payment between the hospitals is due to the DRG payment adjustments for local cost of living, disproportionate share, etc.

Why does the clinic charge that much to Medicare, if Medicare doesn't pay that much (legally, I presume)? Is it an accounting trick or something?

The amount charged to Medicare does have an impact on how much they are reimbursed (to an extent).

For example, if the charges exceed the DRG payment by a specific amount, the hospital can get an "outlier" payment to help with the excess costs.

As for how the charges are calculated, hospitals have a lot flexibility in how costs are accounted for.

Also, keep in mind that hospitals that specialize in a specific procedure often have high volumes that drive down cost. If you're getting heart surgery at a hospital that specializes in it, it's often much cheaper than a hospital that rarely does heart surgery.

Well, probably a variety of reasons but certainly one key reason is... if you have to ask for 100K to get 25K, then if you ask for 25K your only going to get 8K?...

All prices are always negotiable, just that the individual consumer is so used to not having bargaining power that they forget this fact.

Medicare does not negotiate. The hospitals break down bills into CPT codes and get paid the published rate for the period for codes that are accepted (including geographic indexes and what not). It's a mess.

It really is such a shame your comment was almost halfway down the page while the top comments continue to be towing the "US healthcare is awful and greedy!" line.

Thanks for combing through that data for us.

I found it fascinating how this goes way beyond wage differences -- it's a serious focus on fiscal efficiency. The entrepreneur behind this has opened 21 new hospitals in India focused on bringing more affordable care:

"...he has cut the price of artery-clearing coronary bypass surgery to 95,000 rupees ($1,583), half of what it was 20 years ago, and wants to get the price down to $800 within a decade."

This leaves me wondering: Where is the innovation toward affordable care here in the USA?

Largely, on the lower end of the spectrum. Doc in the boxes for routine acute care, nurse practitioners substituting for doctors, pediatric medicine (+), etc.

+ One business model is "Pay a flat fee of $50, cash on the barrel. Your kid gets to see a doctor in under 15 minutes. You know and we know that 98% of the time it's just your child being sick with a routine illness. We'll write the prescription if required and rule out anything more serious. If it is anything more serious, we'll explain your escalation options."

As a parent of young children, I very much appreciate this option!

What incentive is there in the USA to reduce healthcare costs? The system is totally corrupt.

I don't know much about the American healthcare system, but wouldn't it be the same incentive when selling any product? If you sell the same quality product for cheaper, you will get more business than your competitors.

That's what competition in a free market is, no?

The US healthcare system is nothing close to a free market. Every step along the way is rigged: the schools that grant medical licenses is artificially gated, you require certifications you need political clout to obtain to open a medical facility, you need to have enough money to play ball with insurers so you get paid for operations, you need to comply with thousands of federal regulations surrounding your procedures, you need to get zoning permission from wherever you are trying to set up shop to even build a medical facility (note that local governments are easily bought out by the hospital chain in their area).

There is also an incredible amount of corruption surrounding drug prescription and diagnosis to get people buying way more drugs than they need to.

It isn't anything close to a free market. I could never open a health clinic out of my garage and put out a sign saying free anything related to medicine. By comparison, India has much more volatile healthcare (because they can't police everyone trying to play doctor) but get innovation as a result.

I have thought many times of moving to another country (India being high on my list) just so that I could learn and practice medicine outside of the US Money/Chemical game called "healthcare."

What free market? What prices? Free market from price shopping you say?

You got hit riding your bike and are bleeding profusely from your abdomen. The ambulance driver asks, "There's a hospital 6 minutes away but they don't post their prices publicly (who does?) and we've never brought anyone of your condition there before. We think it will probably cost between $500-$10,000. But there's a hospital 45 minutes away that we know for sure will cost $400-$800. What do you want us to do?"

Let's suppose the government mandates that all hospitals must post their prices publicly. But you're bleeding to death. Can you really go shopping now?

A large majority of medical care is not for people in imminent danger of dying. Even procedures for people with the time to shop around are vastly overpriced and do not have prices posted publicly.

The high barriers to entry in the field make it conducive to collusion. I'm not saying there is collusion, just saying that given that the supply isn't going away and that new upstarts cannot disrupt the market, you may make more money by not competing on price.

There are some people doing this, like this surgery center in Oklahoma http://kfor.com/2013/07/08/okc-hospital-posting-surgery-pric...

For most of the market, price competition does not occur because providers will not disclose the price of a service before selling it.

That's how it should work. Unfortunately, the U.S. healthcare system isn't really a free market. There are many laws and regulations (and insurance company imposed rules) that prevent healthy competition in the marketplace.

We have a command-economy model with market-features.

It's not a free market, because by law, the Federal government gets the best deal. And they define what that best deal is (ie. price floor). Just like other price-control measures implemented in the late 60's and early 70's (the 1973 oil crisis is another good example), the results are higher costs.

This is an interesting film to learn more about the healthcare industry in the US. http://www.imdb.com/title/tt0386032/

Please don't ever suggest a Michael Moore production as suitable for increasing one's knowledge on a subject. At best the man is an entertainer, nothing more. His works have about as much claim to the title "documentary" as does reality tv.

But facts are facts right?

Good thing there's no real free market in US, then.

Somewhere there is a forum of doctors saying "Pfft, the US firm wants $100k for the patient records system and the Indian firm wants $1,000. Those greedy bastards! They live in a toxic industry which acts as parasites on us noble public servants saving lives every day. It serves them right to deal with international competition finally.

Let's go with the Indian bidder. What could possibly go wrong."

Hi patio11,

Thanks to femto, we have some data. It seems that the 30 day mortality rate is lower than that in the US. Care to answer this other than with thinly veiled casual racism?

Dr Shetty's success rates appear to be as good as those of many hospitals abroad. Narayana Hrudayalaya reports a 1.4 per cent mortality rate within 30 days of coronary artery bypass graft surgery, one of the most common procedures, compared with an average of 1.9 per cent in the US in 2008, according to data gathered by the Chicago-based Society of Thoracic Surgeons.

Dr Lewin believes Dr Shetty's success rates would look even better if he adjusted for risk, because his patients often lack access to even basic health care and suffer from more advanced cardiac disease when they finally come in for surgery.

http://www.theaustralian.com.au/archive/business-old/the-hen...

I will say that you are comparing one doctor to the national average. This only shows he is better than average, but what is the Indian average mortality rate. Another issue that your article mentions is that he specializes on a select procedure and another doctor mentions that this option of specialization is not available to all surgeons.

Don't take this as part of any sides argument. All I want to point out is that the numbers you provide only paint part of the picture. Yes maybe flying to India for this one doctors procedure would be worthwhile but is it true across the board.

It looks like the mortality rates mentioned are for the entire chain of hospitals, not just Dr. Shetty.

the principal still stands don't compare one hospital or hospital chain, to another country.

If the US average is 1.9 then their is probability that a US hospital chain that is at 1.4 or less.

There will also be hospitals that have a higher rate. That said, the number is relevant as medical tourists tend to go to hospitals like this doctor's not the bad hospitals.

The main point is that you can get a better chance of living at a much cheaper rate.

Not sure what you're trying to say here. You seem to be trying to defend the cost of a $100,000 operation by making a snarky comparison with outsourcing an IT project.

Is that actually what you meant?

No, I'm suggesting that HN commenters here are likely far less competent to speculate about the cost structure of heart operations than believe themselves to be. In an analogous situation which they actually understand, the tenor of this comment thread would reverse in a hurry. (Which we could ascribe partly to self interest but in major degree to "Deliver X for the US market in America" and "Deliver X for the Indian market in India" being two very, very different propositions.)

Sorry Patrick. Normally I would agree with you, but there is a difference here.

The biggest difference here is if the cost of a heart operation in India would be too high, unlike the US- poor people will have absolutely no option but to die here. That is what it really comes down to. In US it leads to a person getting bankrupt, but in India poor people don't have the luxury of getting bankrupt. In my city(Bangalore) we have government hospitals- though they never acknowledge it officially, but they often administer euthanasia to poor patients. It happens with the poor in nearly all critical illness cases- Heart ailments, cancer, fire accident victims, mental illness. Often the relatives themselves request a euthanasia because the pain, price and duration of treatment is beyond their emotional and financial means.

So you can either make the treatment a little affordable so that people can benefit, while you make some profit out of it. Or they die anyway and you lose some profit.

Innovation in a situation like this is born out of necessity. Its a do or die situation.

"I'm suggesting that HN commenters here are likely far less competent to speculate about the cost structure of heart operations than believe themselves to be"

In my case: U.S. cost structures, sure, I don't know them, though I do speculate and guess, and asked if someone knows of a hospital with transparent enough data.

Uruguay cost structures are a different bag altogether, since they're mostly government-run and they have to make numbers somewhat public. Add to that one of my brothers working in a hospital (he's a few years from graduating as a doctor) and other sources, and I can get an estimate that I hope is correct to an order of magnitude. A relative has been a customer of the Cleveland clinic, so I know the exact number he paid. I also know the exact number another person paid for the exact same surgery here in Uruguay - it was close to one-tenth, and he chose to pay private rather to go through the public institutions (which have huge delays).

Below is a PDF in Spanish, on an investigative piece from a weekly that goes into great detail on the costs of surgery in Uruguay. I'll just quote some basic numbers:

- Fixed fee per major surgery (medical act) UY$ 27.500 / U$ 1300

- Monthly Head Heart Surgeon salary (per hospital) UY$ 263.000 / U$ 12500

- Other heart surgeons, between UY$ 162.500 and 243.000 depending on seniority and other factors - U$ 8.000 to 12.000 range, per month. Those are close to the best salaries anywhere in Uruguay, usually as well trained as any doctor in the U.S.

- Cost to the hospital per major operation (heart surgery), UY$ 206.000 / U$ 10.000

Smaller operations like angioplasty cost UY$ 60.000 / U$ 3.000

The most expensive surgery is heart transplant, which costs UY$ 684.000 / U$ 32000

All those are set by the government, so those ARE the actual costs (well, actually they were in 2008, I didn't adjust by inflation and exchange rate), no insurance or strange stuff involved. The patient is not billed a cent, but there is a huge delay (months usually), and doctors don't really schedule surgery unless it's critical for the person's health (almost no quality of life procedures through the public system).

http://www.semanario-alternativas.info/archivos/2008/5)mayo/...

PD: Surgeons and Anesthesists have tremendous power, and managed to get paid close to ten times the rate of other doctors.

patio11 has a long history of making snarky comments about how outsourcing to India should not be a concern to Western IT workers because the quality of Indian IT workers is much lower than that of Western IT workers and clients will ultimately recognize this and hire a Westerner instead. This is presumably something that is quite near and dear to him, as he is an American expat who lives in Gifu, a tiny, rural Japanese town. Since his primary income source (outside of Bingo Card Creator and Appointment Reminder) is doing consulting work for Western customers, it's very important to him that they pick him over Indian consultants based on how good he is, since hiring him presents all the same issues with respect to time zone, distance, etc. that hiring an Indian would.

He probably experienced a lot of difficulty initially in acquiring customers (who opted to go with the much cheaper, Indian consultants), which is why he has such an oversized Internet presence, including on Hacker News - it has helped build a brand for himself that isn't location-specific.

My long history of comments on the issue generally references my time at the old Japanese day job, where I was pressganged into dealing with our Indian subsidiary and asked to shepherd the five folks who came to work at our Nagoya location from it. This is what I was doing during three years of 100 hour weeks.

A more charitable read of my old comments would be "The project(s) were beset by communication issues, terribly managed by the Japanese company (which, in the fine tradition of Japanese companies, I'll take blame for since I was unable to resolve it despite trying), and additionally undermined by pervasive competence issues."

I'm not talking my book here. In the first place, I don't have a book, as I no longer consult. In the second case, Indian BPO firms are less competitive with me than Chinese take out restaurants: our target customers are different, our projects are different, our marketing methods are different, etc etc.

Once again, an attempt to attribute someone's words to simple financial interests or other superficial biases makes a whole thread dumber. Has this kind of argument ever worked on HN, even once? This attempt at psychoanalyzing Patrick is so comically ineffective that it might have been improved with a few intimations that he was also in the best pockets of the NSA.

There's one problem with your argument: patio11 doesn't actually do consulting anymore.

http://www.kalzumeus.com/2013/07/17/kalzumeus-podcast-5-quit...

You are way out of line here.

Some times, things really are that way. It does help to know the supplier, of course.

But back to the article, there are some U.S. healthcare costs that don't make any sense, I've seen procedures with firsthand accounts of an equivalent service here in Uruguay vs the cost in the U.S., and the cost in the U.S. is an order of magnitude more (and service sometimes much worse, this is the hospital I go to, try to argue it's worse than an average U.S. hospital ! http://www.hospitalbritanico.org.uy/ ).

Similarly, the company I work for regularly gets better software for one-tenth the price of U.S. bidders, we've bought local (Uruguayan), Colombian, Ecuadorean... it does help a lot that we know the language and how to do business there. It's not a hundred-to-one comparison as you mention, but there are huge market inefficiencies (in this case, they should be arbitraged away by someone selling services in the U.S., with a focus on quality and not devolving into Infosys or something).

Lots of stuff. But the question isn't about which of those two systems will be better in the end. The question is what to do when you've only got $75k.

First, adjusted for PPP that is more like $3,000. Second, nearly all personal and professional services cost way more in the U.S. Try hiring a nanny in India versus the U.S. and compare the prices.

In any case, whenever you talk about prices, it's important to try and think about it in terms of supply and demand. Why might prices for similar services be lower in India? In both countries, the price for that heart surgery is roughly the same order of magnitude as the per-capita income. But the median Indian is living far closer to subsistence than the median American. India's population is 70%+ rural and slightly over 50% are dependent on agriculture. Heart surgery isn't really an option for the median Indian.[1] While it may be financially catastrophic for the median American, between insurance, Medicare, Medicaid, etc, it is an option for the median American. The net result is that demand for heart surgeries, relative to the population, is far lower in India.

At the same time, the supply of doctors is higher. Being a doctor is considered socially desirable in India, and as a result there is a good educational infrastructure in place and plenty of candidates.

Higher supply and lower relative demand = lower prices.

I bet you can explain a lot about the U.S. healthcare industry in terms of regulatory issues, etc, but the magnitude of the impact of that is probably the difference between the U.S. and the UK, not the U.S. and India.

[1] It should be noted that when people give anecdotal reports about what things are like in India, there is tremendous perspective distortion. People will often pretend like relatively well-off people living in the cities are the "typical Indian" when in reality they're probably in the top 10%. It's as if the vast majority of India, poor and rural, doesn't exist.

Another thing to analyze is what's called "diseconomies of scale" where costs and/or prices rise with scale. Also many countries subsidize the health sector.

> Higher supply and lower relative demand = lower prices.

For manufactured goods and services that's not true in the _long run_. Higher demand will eventually bring down prices, and goods in low general demand will not see the innovation that brings down costs.

Medical tourism has hurt most Indians. 1583 USD is almost 100k INR. The average per capita income in India is 1219 USD (72k INR). This figure too is very misleading, since poverty is a huge problem.

A very simple plotting with data from wikipedia and rudimentary extrapolation, shows that more than 1.1 billion Indian's annual income is less than the current cost of heart surgery. India's total population is 1.2 billion.

Medical tourism, though very fine for a lot of folks who want a cheaper alternative, is driving up the cost of medical treatments in India by leaps and bounds. This makes surgeries, that were already very expensive and out of the reach of most Indian's even more expensive and out of the reach of even more people.

Sources: http://en.wikipedia.org/wiki/Income_in_India http://en.wikipedia.org/wiki/Poverty_in_India Simpel graph of the poverty data : http://imgur.com/JngiK8W (I used this to find the number of people with an annual income less than 1583 USD)

> Medical tourism, though very fine for a lot of folks who want a cheaper alternative, is driving up the cost of medical treatments in India by leaps and bounds.

Any evidence to back this up? Your links and statistics are about how this specific cost is still out of reach of a lot of people. I don't think anyone is debating that.

> This makes surgeries, that were already very expensive and out of the reach of most Indian's even more expensive and out of the reach of even more people.

The article shows how the cost of surgery has dropped over time, and their goal being to drop it further.

> Medical tourism, though very fine for a lot of folks who want a cheaper alternative, is driving up the cost of medical treatments in India by leaps and bounds.

In the short term, maybe. In the long term surely it will reduce costs or at least stabilise them.

Millions of CPUs and RAM chips are sold every year, but the price of them doesn't keep going up, does it?

Ah, the medical version of the "fixed lump of labor" fallacy.

I've posted about this a LOT here on HN, because I live in a country (Uruguay) that has a good level of medicine and prices are way cheaper (heart surgery as described would be at least an order of magnitude cheaper than in the U.S.).

One possible explanation I came up with was:

U.S. hospitals have legions of well-paid administrators doing paperwork for insurance companies, which will have legions of people doing paperwork on their side, and government doing its bit, and lawyers doing their thing. All that money is obviously not going directly into healthcare, it's basically monstruous bureaucracy friction. I suspect "real" healthcare costs, even factoring expensive U.S. doctors, would be shockingly cheap.

There are also other "hidden" legal costs, such as the cost of malpractice insurance, and overcosts due to doctors being extremely worried about being sued over malpractice and ordering unnecessary tests.

Is there a "transparent" U.S. medical institution whose expense records could be examined to come up with where all the money is going?

That said, the article compares with Ohio's Cleveland Clinic, which is the most famous heart surgery clinic. Supply and demand alone will make heart surgery there an order of magnitude more expensive, regardless of actual costs. But I've heard most U.S. clinics arent that much cheaper.

https://news.ycombinator.com/item?id=6077593

https://news.ycombinator.com/item?id=6019464

https://news.ycombinator.com/item?id=5763001

(I was really surprised by that one, why ARE ambulances so expensive in the U.S.?)

Can't resist posting this anecdote from Atul Gawande's (best known for his New Yorker medical pieces, such as the one about checklists) book, Better: A Surgeon's Notes on Performance...at the end, he describes spending some time in India as a visiting surgeon to see how innovation was possible in comparatively squalid circumstances. The Nanded hospital he describes below serves 1,400 villages, about 2.3 million people, with just 9 surgeons (Gawande says that'd be comparable to the state of Kansas having 9 surgeons):

http://www.amazon.com/dp/0312427654

note: It's a little OT, but I guess it's an interesting anecdote because it talks about how absolutely significant surgical innovation (not just, "good for the India masses") can occur in desperate situations. I have no idea if that applies to the state of the art of heart surgery in India.

------------

Among the many distressing things I saw in Nanded, one was the incredible numbers of patients with perforated ulcers. In my eight years of surgical training, I had seen only one patient with an ulcer so severe that the stomach’s acid had eroded a hole in the intestine. But Nanded is in a part of the country where people eat intensely hot chili peppers, and patients arrived almost nightly with the condition, usually in severe pain and going into shock after the hours of delay involved in traveling from their villages.

The only treatment at that point is surgical. A surgeon must take the patient to the operating room urgently, make a slash down the middle of the abdomen, wash out all the bilious and infected fluid, find the hole in the duodenum, and repair it. This is a big and traumatic operation, and often these patients were in no condition to survive it. So Motewar did a remarkable thing. He invented a new operation: a laparoscopic repair of the ulcerous perforation, using quarter-inch incisions and taking an average of forty-five minutes.

When I later told colleagues at home about the operation, they were incredulous. It did not seem possible. Motewar, however, had mulled over the ulcer problem off and on for years and became convinced he could devise a better treatment. His department was able to obtain some older laparoscopic equipment inexpensively. An assistant was made personally responsible for keeping it clean and in working order. And over time, Motewar carefully worked out his technique.

I saw him do the operation, and it was elegant and swift. He even did a randomized trial, which he presented at a conference and which revealed the operation to have fewer complications and a far more rapid recovery than the standard procedure. In that remote, dust-covered town in Maharashtra, Motewar and his colleagues had become among the most proficient ulcer surgeons in the world.

The key:

His department was able to obtain some older laparoscopic equipment inexpensively.

Thanks to high-cost health care systems elsewhere spending enormous sums on the latest & best equipment on a regular basis, older equipment capable of facilitating very good (albeit not best possible) results becomes inexpensive.

In all the sneering at the high cost of healthcare in some areas, the consequential benefits to others gets overlooked. If you want the very best, yes it will cost a lot; if you're willing to settle for good instead of best, you can leverage what those buying the best paid for. If you cut the high cost options, the good low cost options may very well become infeasible.

Is your claim that the existence of excellent high-cost treatment options drive down the price of moderate good ones in the present, or that the moderate-cost good ones were at one point paid for by being the excellent high-cost ones? The two claims have very different policy implications.

Overall, though, we should be skeptical of device manufacturers' claims that dumping more money into expensive equipment leads to better health. Most money sloshing around in the healthcare system is wasted (see, for instance, the recent counterintuitive Medicaid study results: increased health care spending doesn't necessarily equate to improved outcomes). If we could spend 50% of the money for 80% of the results, that'd be an amazing improvement. And that money could be spent on other quality-of-life improvers, which very well might improve overall population health more than that last 20% coming from complicated medical treatments.

I think his claim is both those things. The R&D of the goods was paid for when they were originally sold as high-cost excellent equipment. Now, the existence of even better high-cost treatment options drives down the price of the older originally-high-cost equipment.

Is this the magical trickle-down healthcare plan? :-)

Sounds like the opposite of trickle-down. It's rich health care systems basically subsidizing equipment for poor ones.

How is this the key? All that thinking for years, mulling over the problem is off course rubbish and unimportant

> In my eight years of surgical training, I had seen only one patient with an ulcer so severe that the stomach’s acid had eroded a hole in the intestine.

> patients arrived almost nightly with the condition

It sounds to me like the limiting factor in innovation was a sufficient supply of patients FOR ONE SURGEON to practice on, in which case working in an underserved area is an advantage.

I think this is one of those cases where the proverb "necessity is the mother of invention" seems prescient.

It reminds me of physicians joining the military to work in battlefield condition because war creates the most interesting cases in terms of quantity and difficulty. Because you're in a triage situation, you can try out things where you normally wouldn't have a chance.

I'm curious what the innovation was here. Laproscopy is not new, and people are already pretty aware of its benefits. He applied it to a new operation, but is that innovation?

The only step that might have been innovative is, did he skip the washing out of the abdomen step without consequence? I'm inferring here, because it seems like that would be very difficult to do.

Its like saying there was no innovation in the iPhone. I mean email, messaging, games, apps etc they were all there before right?

The innovation here is to invent practical methods of treatment(even if its a process), when you are severely strapped for resources, money, equipment and helping hands. And then do it reliably for all the patients you see over and over with a high success rate for a very affordable price.

Its like saying there was no innovation in the iPhone.

The iPhone was not innovative for including email and messaging. The iPhone was (to my recollection) primarily innovative in the use of the touchscreen and some innovative UX design.

The innovation here is to invent practical methods of treatment

But was anything actually invented?

Reducing time of the surgery by modifying a process is indeed an innovation, maybe not so an invention.

The same innovation would result in a massive lawsuit in the US would it not (if the first few attempts failed)?

No. There is a process that occurs when piloting a new surgical technique. This often involves animal models initially, eg inducing duodenal perforation in pigs and trying the surgery there. Then it might be practiced on human cadavers to work out more of the technical aspects. Then a feasibility study is performed on a small number of patients using a trial protocol ie. patients have to opt in after giving informed consent. As you can imagine, for sick patients coming in during the middle of the night, this can be tricky. Then if it seems feasible and successful, and you think that there is reasonable doubt that the new procedure could be better than the old (equipoise), you do a randomised trial.

The next phase, going from validated new procedure/approach to broader adoption, has its own ethical issues. During my medical training I scrubbed into three surgeries that should have been routine, but where an experienced surgeon decided to try a new approach that he had heard about. All three cases went wrong, and one was near-fatal. Fortunately, there were no long term consequences.

Learning new techniques in a field that requires hands on training with real patients who are entrusting their lives to the experience of the surgeon is a constant balancing act. It's the same with training new surgical residents -- which Atul Gawande also discusses in one of his earlier books, Complications.

This careful, protective process is one reason that health care innovation costs so much more in the U.S. than it does in developing nations.

Depends on how effective the legal department was on their medical consent forms. Also if the other surgery had a proven record of being very deadly there might be some wiggle room with less deadly alternatives. It would be a very precarious position for the hospital/surgeon though.

> But Nanded is in a part of the country where people eat intensely hot chili peppers

Isn't current consensus that chili peppers have nothing to do with causing ulcers, and may actually prevent them?

It's not greed, it's a consequence of health insurance. Get rid of health insurance and prices would drop 10x.

Would they? Or would the poor middle class people not being able to afford cancer-treatment/heard surgery just have a considerably lower life-expectancy?

I am not sure, so I really would love to see the numbers/facts supporting your statement. Would love to learn of this magic fact. [cynicism end]

[Edit]: Typo

[Edit 2:] In Germany, with full health-insurance the cost for a Cardiopulmonary bypass are round about 30k €. So a lot cheaper, than in the US, despite health insurance.

Just wanted to present a fact, not let my comment stand as cynicism only.

First of all, I am sure the 106K figure is a phony 'list price' figure and not reflective of how much is actually paid.

Second of all, you ignore the incredible sums of money taken from the 'poor middle class' and handed over to the health industrial complex.

For most of this country's history [the USA], there was no such thing as health insurance. The poor got charity care and the middle class were able to pay.

Why do you think cancer treatment has to be expensive?

I am not stating, that it might drive prices down. As I would not be stating, that it might drive prices up.

I wouldn't do this, because I do not have the necessary facts to make such a claim.

If a health-insurance system would work right, the health insurance agency might have a lot of more leverage in this highly regulated market, then any individual paying for its own. But that is just an assumption.

Well your next statement regarding my ironic "poor middle class" is just that: a statement, without any facts to support it.

I was asking for facts to support your statements. I even did some preliminary research into the costs of comparable healthcare in Germany (where I am from).

I just wanted to learn, if a "no health care" system might work better and be cheaper, but I will not just believe your statements, as that would just go against everything, I value.

So I really beg you, to show me verifiable facts substantiating your statements. Please?

You are correct, look at the post by riahi.

The hospital may charge $106K, but Medicare only reimburses them for $15-25K.

Your suspicion is correct. It is the price charged to Medicare. Medicare only reimburses $26,898.

Another way to say this: Decouple catastrophic health insurance, what we use to cover actual medical emergencies, and routine health care costs. This is roughly the model in use in Singapore and similar to what people in the US with high deductible plans live with.

I work in the medical products field and it's amazing how much distortion is introduced into the system when "insurance" is used to pay for everyday consumables. Products that go from RX to OTC drop 80-90% overnight.

That's a convenient fiction. Care to back that up with some evidence?

In particular, how do you account for the fact that more health insurance (Europe, Japan) is less constly than the abomination known as the US healthcare system?

"Get rid of health insurance"

... and people would start up health insurance again because it's absolutely needed. Silliest thing read on HN in weeks.

The concept of health insurance is a bit fucked up in the U.S., since everybody needs healthcare.

My country has a system that, while bad, sounds absolutely awesome compared to the U.S. . It's a socialist system that is called Mutualism.

The best explanation I could come up with after some Googling is: http://www.hmg.gov.uk/media/60217/mutuals.pdf "Mutual organisations do not have external shareholders - they are controlled by their members. Members may be users of the mutual, employees, other stakeholders or a combination of these Mutual organisations are either owned by and run in the interests of existing members, as is the case in building societies, cooperatives and friendly societies, or, as in many public services, owned on behalf of the wider community and run in the interests of the wider community"

http://en.wikipedia.org/wiki/Mutualism_(economic_theory)

It does have several downsides - mutual healthcare institutions are strongly discouraged from doing any healthcare on non life-threatening situations, waiting lists for surgeries are way too long, there's corruption and doctor bribing and queue-jumping and strikes... but it "works", most people have good healthcare and don't get bankrupt if they need surgery, for just about U$ 100 per month, and their families have coverage too.

If everyone had health insurance, and charity care that the hospitals currently eat the costs for now went away, then health insurance prices will drop.

That is the whole point of the mandate.

I think you don't understand the purpose of insurance.

You would think more Americans would fly to India to get expensive medical procedures done. Or are there other issues that need to be overcome to do this?

A few things:

1. People don't know about it.

2. Are the outcomes comparable?

3. Legal protection - you will have hard time suing Indian specialist in India and there won't be much damages to extract anyway.

4. Age? A good chunk of people that need that types of surgeries are well covered by Medicare.

5. You also need plane tickets, recovery time and at least one companion - so you may look at a lot higher total cost.

6. Plain old fear/ racism.

And the moment it becomes common there will be the full media smear campaign, scaremongering etc

Besides, Cuba is closer. Canada is also a bargain compared to the US and you don't even have to violate state department rules.

However, ironically enough, the USA has a booming medical tourism industry also. At about 60-80k, it is only half as small as India (150,000), though nowhere near Thailand (1.42 million).

http://en.wikipedia.org/wiki/Medical_tourism#India

Some insurance companies even throw in a cash incentive.

"Need a heart bypass? We'll give you $10k and waive the co-pay if you do it in India"

Another case: I live in Poland and needed a knee surgery (arthroscopy). Costs: -visit to a doctor and diagnosis (30$ per visit) -MRI of a knee (135$) -surgery + one day stay in private clinic (1k$)

So now I wanted to pay for everything without help of our health care system because that would mean waiting. When I tell people in US MRI costs 135$ in Poland they just can't believe it and this is in commercial clinic so they make money here, it has nothing to do with national health care system as I didn't use any refunds.

Do you mind if I ask where you went for such a cheap arthroscopy? I'm possibly in the market for this procedure myself, trying to weigh all the options.

I can assure you that the doctors doing 1-2 CABGs per day are not making $30M-$70M/year.

Alas I don't know how much the hospital takes, but I know that there are ~500,000 CABGs per year. I suspect that we as a nation are not spending $50 billion annually on CABGs, but I could be off.

- The hospital industry is a monopolized cartel - you usually need the approval of existing hospitals in an area before you can open your own. - The insurance industry is a cartel - there are extreme compliance costs that only a few big players can take care of. - Employer provided insurance is subsidized. - Most 'reform' of health care in the US has punished individual insurance holders while strengthening the employment-based insurance system further strengthening third-party payment systems including increasing lists of 'must-cover' mandates for health insurance. - McCarran-Ferguson act exempted health insurance from a competitive national market. - The culture and institutional incentives in US healthcare push towards extreme capital-intensive expenditures and cut down on labor-intensive expenditures even when its not cost effective for the procedures that the patients require. Hospital beds get more expensive per day while extremely unlikely to succeed procedures like proton therapy expand further.

This paper is very illuminating and comprehensive: http://c4ss.org/content/2088. Please have a look even if you disagree with the solutions and the ideology of the author. I assure you it will be worth your time.

Let me also add licensing regulations that require MDs for routine procedures. Though nurse practitioners are becoming more involved and this is a good development. Another issue which HN commenters are aware of is the AMA's cartel monopoly on medical school seats to control the supply of doctors.

"greed" is generally a code word for "incentives are too complex for me to bother to try to understand."

Jayadeva Institute of Cardiovascular Sciences and Research, a popular hospital in Bangalore, publish procedure charges (in Rupees) on their website. Might be interesting for comparison.

http://www.jayadevacardiology.com/procedure_charges.html

Maybe it would make more sense to compare it to prices in Europe or other places with similar medical standards.

My guess would be $100k in the US is about $50k in other places. At least my travel health insurence charges twice the rate if I travel to the US compared to "rest of the world".

This is over 94,000 Rupees. That is a huge amount of money in India. I'm not sure most people realize the cost of living difference between the two countries.

Case in point: I was in India (Chennai) for a week on business a couple of months ago. During that time (M-F), I had a driver who was dedicated to me. He took me to the office and back, and took me anywhere else I wanted to go. This wasn't a taxi service, he had nobody else to shuttle around. When I was working, he just waited around for me to call. The cost for all of this? US $25, for the entire week. That's what I paid the car service, so he's getting some amount less than that.

All this to say: These sorts of comparisons are not as dramatic as they seem.

That seems absurdly low. I stay in Chennai and typical taxi rates run upwards of 18Rs per KM (approx 0.48US$ per mile). I agree there is a considerable difference in the cost of living, but what you likely paid the guy was a tip for the entire week. Even assuming the car, gas etc. was paid by your company, the amount still seems low for a driver's fee for a week. My dad's driver makes 11,000INR a month.

94,000 Rupees is a lot of money in India but it is not so huge either. A small local doctor in a city will make around that money in a month.

(ps: If you actually had a guy driving you for 25$ in Chennai, do pass me his number. I will happily use him.)

All I know is what was on the hotel bill (Westin). It's possible that they had negotiated a rate with the service. I did tip, based on the guideline I was told, about 50 rupees per day.

Yes, $25 per week is too low. Heck, I recently paid that amount for a 60km trip in Chennai ( 2 hours of travel )

94,000 Rs. - for comparison sake, my motor bike costed me Rs.99,000.

It is definitely a high amount for many Indians, but the average middle class person might be able to pay it in India.

$25 (approx. 1500 Rs by today's exchange rates) for car and driver for a week is implausibly low in a major Indian city. Depending on the particulars of the car etc, you could get this deal for a day or two, definitely not five.

As an American. this makes me sad. Just sick to my stomach. It's just greed.

But its not just greed. Greed is also whats driving the Indian entrepreneurs to try to offer the surgeries cheaply and en-mass. Its more than that. Its unfair exploitation, regulatory capture, raw corruption and senseless parasitism. Its greed mutated and run amok. Its what happens when you get greed wet and then feed it after midnight.

Actually, in this case it is not greed in India. The guy running the show is a `real hero'. But the US has plenty of self-less people, too.

What is the survival rate in India after that procedure, comparing to the US?

My colleague _visited_ India and returned with a stomach flu, spent a week in a hospital.

30 day mortality rate is 1.4% vs. 1.9% in the US in 2008 [1]. The claim is that due to the high volume and single service, the surgeons get an awful lot of practice at the procedure and become very good at it.

[1] http://www.theaustralian.com.au/archive/business-old/the-hen...

So because your friend ate some bad food, that country's hospitals must be unhygenic? Yup, I totally see the correlation there.

I'm Australian, visited the US and got severe Salmonella poisoning in Vegas... the US must have really shocking road safety laws.

Same here, got salmonella in Los Angeles eating at a subway. Point being, you can get sick anywhere, other factors include your body getting used to new organisms.

My Indian friend who spent ten years in US went to visit his parents, he said he was going to buy bottled water while there and boil it before drinking. He was genuinely anxious about catching something.

So yes, the low mortality rate after surgeries is actually a surprise for me.

The reason for your colleague's stomach flu might be because of some unsafe food. Most hospitals and clinics are infact quite clean and well maintained.

Just had heart surgery. It's closer to $170,000 here in the states. :-/

Just curious - How much was it covered by health insurance?

I believe that the high medical costs are exactly the result of Free market in the long run. Entities will always unite to get stronger, control the market and to do so they will support little by little laws that allow this. Just my 2c, but if you don't keep your laws and democratic institutions distant from the big money... the free market will transform in a legal monopoly.

This is classic disruption at work. There are many procedures e.g. cataract surgery costs have come down but they are such cash cows that the prices were held high. India is doing this because skills can scale if there is a system of training. It wasn't too long ago when I read the Russians invented a factory-line method of doing eye-surgery.

Five years back,my father got both his eyes operated upon for cataract removal at Coimbatore,India as part of some free Eye camp program.This year, my mom had cataract in both eyes surgically corrected in a private hospital in North Kerala.They charged only Rs.9500/- per eye,and the treatment was quite good.Now my Mom has 6/6 vision in both eyes.

People have mentioned the cost of MRI scans in the US.

How much would it cost to buy a bunch of scanners (full body, and bucket-type for arms and legs) and employ technicians to do the scanning and offer this as a service to hospitals?

You could have technicians working on shifts to have out-of-hours scanning.

The scans are provided in electronic format to the patient and to the doctors specified by the patient. The centre encrypts all the scans and stores them for X years to cover regulation and litigation.

There's a big capital investment cost, but you're not doing any actual medicine there (no interpretation of scans, for example) and so litigation risk is reduced. You can concentrate on churning people through the machines, you don't have to give way to emergency cases that need immediate scans.

And the price of a scan can be listed up front.

Is this a stupid idea? (Or is it already being done?)

You've framed it as consumer friendly but basically your hypothetical shop, on top of being another middleman, has gained a weak local monopoly on MRI's. That sounds like it's going to be bad for both consumers and hospitals which is why it would never happen.

As a sidenote the problem with MRI's isn't a lack of supply. A popular factoid a few years ago was that Pittsburgh had more MRI machines than Canada. Even if that was only half accurate it tells part of the story about high MRI costs.

Just a heads up, MRI machines cost 10s of millions of dollars and come with $1M+/yr service contracts. They have pretty substantial power costs as well. They are sufficiently expensive that some big institutions lease them from the manufacturer.

I won't delve into the other parts of your idea, which likely have merit, but just realize that the costs of running such an operation would not be small.

That's not too far from the way things worked when I got my MRI. Type "medical imaging" and your town's name to find local storefront MRI shops.

The interpretation of the scan is still the cost bottleneck. It's a specialized skill, and is not something your doctor wants to do own their own.

When government enters any equation and starts over-regulating in the name of "poor" the poor must be actually worried. Indian healthcare system is no less greedy than that of United states, I know several examples where Doctors would perform needless surgeries, will recommend expensive surgeries for terminally ill patients (which makes death more painful) and so on.

Indian government is a big believer in state interference into everything but when it comes to healthcare Indian government's approach is different. Instead of telling private hospitals who they should be run, Indian government builds its own hospitals. Thus private hospitals are left on their own with very little government interference. Thus those doctors can experiment while being very open about their experiments.

From the article it's not clear what the major drivers are in bringing down the costs. What I've gathered from the piece and another link posted in the comments:

* No air conditioning

* Buying used scrubs

* Buying in bulk, directly from manufacturers [1]

* Surgeons that work "typically work 60 to 70 hours a week" [1]

The additional link [1] seems to indicate that the innovation is simply volume. The highly-trained surgeons perform more surgeries, the expensive equipment is utilized more hours of the day, etc.

[1] http://m.theaustralian.com.au/archive/business-old/the-henry...

I'm not gonna go on the conspiracy road but the world is functioning on the wrong parameters. Instead of being a united civilization and help each other in order to advance to a higher level, we are fighting each other like lions for supremacy in every domain possible.

Our whole system is based on superficial needs and wants rather than focusing on what we really need as species/civilization.

How can we expect innovation and progress when we can't even cross the damn ocean without selling our souls...we can't even cross our own borders without special rules. Not to mention that racism is high in many countries. We are divided as hell. If an advanced race would watch us right now they would probably laugh hard and leave.

In my country I know of a hepatologist who claims to have seen higher than normal rates of hepatitis B amongst people who have travelled to lower cost countries for dental treatment.

One country was mentioned in particular (not India as it happens).

Your comment left out the single most important piece of information: the country in which the treatment took place. I have no plans, and thankfully no need, to go abroad for low-cost treatment of any sort, but someone reading your comment might, and the key fact you omitted might stop them making a horrible mistake.

I was tempted to mention it. But what I am writing is hearsay until such time as this doctor goes public with it, if he ever does that. If it's true it would cause a major controversy in the EU.

heart surgery in China: $237.95 heart surgery in Mexico: $199 on Saturdays

WTF is the point of talking about is, such BS. Who here is willing to have their baby girl's heart surgery done in India vs best of the US here?

I'd like to point out that the price difference is most likely to do with the marked conditions of the health care in general, and has nothing to do with the quality of the operation itself.

There is a big problem with health care in most countries that I've been living into for extended periods of time (France, Italy and to a lesser extent Germany).

Anything sorrounding "medical" and/or "health care" has a 10x-100x price blowup, for absolutely no reason. I'm not even speaking about surgery, I can start by phisiotherapy consumables, such as elastic bands. Elastic bands are used in phisical rehab. They are dirt cheap, usually, if you buy them inside a child play store. But behold, if you buy the same stuff from "Thera Band", which is officially sold to hospitals and clinics, a couple of meters of the stuff will cost you 20-30 times more. I worked as an assistant in a phisical rehab clinic for several years, and this kind of bullshit is amazing, because it goes for everything (air balls, plastic rods for balancing excercises, and so on). The price inflation goes even higher with actual machines.

There is a machine which is called "Rehab 3xxxx" (produced by a clinic around here which I helped develop, so I won't disclose the details), which is just a linear actuator which moves back and forth. Literally, nothing more. There is an embedded controller which allows to tune the extension limits, and a couple of ABS plastic accessories that hold to the knee, wrist, etc.

The idea is just to move the articulation, and/or rotate it, over and over. You would think that there is something "fancy" about it, to name a few details which I wished this machine had:

* force feedback to stop the motion (right now the machine will just twist your arm as configured, no matter the force) * speed regulation (who needs it? just one speed is good enough) * some sort of patient-id so that you don't need to reconfigure it each time

But not really. Like I said, this is just a dumb linear actuator, with incredibly cheap ABS plastic accessories and a fancy name. Price? 30k euros in the basic kit.

The funny part: for anything medical, you have to demonstrate that this machine is effective somehow. So we had a trial in an hospital, wrote an article about the effectiveness (or lack thereof) and did some paperwork. The idea is that you just have to demonstrate that it doesn't hurt. Of course, a physiotherapist will be twice as effective, but it's more expensive on an hourly basis, so that's why clinics love to buy the machine and just let patients sit on it.

I'm literally disgusted, but I can see everything around "medical" equipment having the same issues. All the economy surrounding hospitals, doctors and equipment is essentially broken, because there's essentially no competition, assured money (by the state in this case) and a lot of corruption going on within the clinics and medical companies (unfortunately).

edit: english.

What you describe sounds a lot like the problems the developed when supplying to government in general, whether it be IT, military, transport, etc. That said to me the US system sounds like it's so rigged that it has developed many of the same problems you encounter with government inflicted monopolies.

I wonder how many medical offices with a staff of 3 have a Cisco 3950 in the closet...

Medical equipment has to meet more rigorous standards. This reminds me of the news story where breast implants were being sold with low grade silicone in Europe:

http://www.bbc.co.uk/news/health-16391522

I realise that suppliers are probably taking advantage due to limited competition, but at the same time, I hope the regulation helps to protect us from sub-standard products.

Are you sure you're looking at the whole picture? I imagine liability, lawyers, and a much greater interaction with customers will be driving up costs very substantially when selling widgets as medical devices.

Absolutely, but unfortunately all of this only aggravates the problem.

For instance, we needed lawyers and the "study" just to be able to sell the machine at all. But then again, lawyers and the testing itself contributed absolutely nothing really, while being incredibly expensive (both in terms of money, and time). Yes, medical devices need to be tested, but all the testing/layers and related processes only inflate the cost without actually contributing to the product.

The problem is that the process/testing/lawyers for a "medical" device are essentially the same as the testing you would do for something non-medical but that has regulated safety features (such as a children toy at least in EU), yet the "medical" testing is simply more expensive.

We can speak about the rubber in those "Thera Bands" strips. We used bands made for children (which, by definition in EU should be toxic-free and bla bla), and we found absolutely no difference compared to TheraBand (even material wise). Sure, TheraBand had to pay for "testing" indeed, which again contributed nothing to the real product, inflated the cost, and still doesn't justify the 20x price inflation for a piece of elastic rubber.

But still, that's not really it.

By working closely with hospitals, I also know several people in the loop. I had second-hand knowledge (from people that I consider reliable) that offers and prices from big MRI machines from Siemens and similar companies are rigged. And that happens because there's very little competition and no real market (only hospitals will buy such machines).

When all the market is inflated, you can justify high prices for almost every product in it. And that's exactly what's happening.

Plus people need medical assistance, which means that in emergency situations will simply pay for it at any price.

Given that surgery costs are dominated by labor costs (surgeon plus support staff) and labor costs 20x more in the US than in India (see: http://www.economicpopulist.org/content/china-and-india-real...) is it any wonder that surgery is 10x more expensive in the US? If the only cost were labor it would be 20x!

The situation in other Asian countries like India, Taiwan, or South Korea is nearly the same. There are still some obstables. A different environment and unknown results may be the major ones. People should try to calculate the overall outcome and costs and maybe come up with some good international insurance packages.

One of the prerequisites for markets to work is that, both the parties should get into a transaction willingly. That premise somehow gets violated when it comes to healthcare. That is why there are too many market inefficiencies which are skewed towards hospitals and insurance companies.

For anyone interested, I'll perform heart surgery for you in India for only $1200.

I'm just curious to know the situation in countries like Russia and China, because many of my friends took their medical degree from those Countries. Is is just the education is cheaper or entire industry?

I am from India. I think one major cost factor is price of medicine. In India, you can get medicine at very low cost compared to the west. Salary and dollar conversion/PPP are also major cost factors. For instance, a urine test costs $1-$1.5 in India, urine culture is about $6, a USG scan is about $14. In USA, urine routine is $30, culture is $70 and USG is $750

>Is is just the education is cheaper

In Russia medical and other uni education free if you can pass entrance tests.

India is just cheap and best :> I wonder it would be great if the medical facilities in india be improved considering the huge mass of population.

Anything you can do, we can do cheaper, and better.

Bloomberg is comparing apples and oranges, to the point of caricaturization. They are also link baiting with false statements.

First, the link bait: "The same procedure costs $106,385 at Ohio’s Cleveland Clinic, according to data from the U.S. Centers for Medicare & Medicaid Services." Funny thing is they actually cite their data source, so I downloaded the Excel sheet and looked for myself. The $106,385 is the "Average Covered Charges" for "238 - MAJOR CARDIOVASC PROCEDURES W/O MCC" at Cleveland Clinic. If you read the definition of "Average Covered Charges", it is not the cost of the procedure. The cost, aka "Average Total Payments" was actually $26,898. That's what medicare pays, including co-pays, deductibles.

I spent a few minutes browsing http://my.clevelandclinic.org/ - the Ohio Cleveland Clinic has over 3,000 physicians and scientists, 1,700 residents and fellows in training, with 47 buildings on 167 acres. They helped develop coronary bypass surgery in 1967.

Shetty (the "Henry Ford of heart surgery") is standing on the shoulders of giants, and as well he should. The Cleveland Clinic and Narayana Hrudayalaya coexist symbiotically, and I'm happy we have both in the world. Coronary bypass surgery has to be invented first at Cleveland Clinic before Shetty can put it on the assembly line.

If you have the time, read the Cleveland Clinic's 2012 Annual Report (http://viewer.zmags.com/publication/71bd62a6#/71bd62a6/1) and you can see what they think they are doing differently to provide the best service, continue driving innovative research, support their local community, and reduce costs. Take a minute to appreciate the breadth of research that goes on in their facilities, in areas including high-performance computing, robotics, 3D printing...

Cleveland Clinic had $228m in Operating Income on $6.2b in Revenue in 2012. Their $6b in expenses are dominated by $3.5 billion in "salaries, wages, and benefits" which unfortunately is not broken down much further that I could find in the report. "Functionally" their expenses are $4.7b healthcare services, $450m on education and research, and $663m on G&A. I was disappointed to see their education and research expenses are less than their G&A, but it's hard to draw conclusions from such high-level data. It was interesting to note they have $1.6b of accumulated pension benefits, which are 68% funded.

Unfortunately there doesn't appear to be anything resembling a financial statement on http://www.narayanahospitals.com/.

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