What India can learn from the U.S. about health care delivery?

May 27, 2014

While Indian health care system is considered to be one of the best low-cost models, there are
some lessons India can learn from the U.S. health care system to take health care delivery in the
country to the next level
Indian healthcare system has been lauded time and again for its low-cost and efficient innovative
strategies in addressing basic healthcare issues particularly for its large population base. Over
time, many other developing as well as developed nations have looked to the Indian system to
adopt similar strategies. However, it would be interesting to know the differences in the two
health care systems and what lessons India can learn from the U.S. health care system.
To begin with, the resources available in the two countries are vastly different. The U.S. spends
more than 17 percent of GDP on health care, or more than USD 8,600 per person. The
corresponding rate in India is closer to 1.6 percent. If the recommendations of the High Level
Expert Group on Health Coverage are implemented, that figure will rise to 3 percent by 2022,
still less than the global median. In many rural Indian states, meeting basic public health needs
such as proper nutrition and sanitation is the highest priority for limited funds.
India and other developing nations are in many ways more inventive than the U.S. because costeffectiveness is perhaps even more imperative in these countries as well as because of the simple
principle that necessity breeds innovation.
Standardized operating procedures can raise the quality of care, facilitate the transfer of
knowledge, minimize waste and improve the utilization of labor and assets. In an often-cited
November 2013 Harvard Business Review article, two US-based Indian business professors
discussed three major strategies used by nine private hospitals in India to provide high quality
care with great efficiency. They are listed below:
1. A hub-and-spoke design that concentrates the best expertise and equipment at the hub
hospital and distributes care to patients in spoke facilities in surrounding areas through
telecommunications.
2. A staffing model that frees up physicians to perform the services that only they can
provide, and that transfers responsibility for routine tasks to lower-skilled workers.
3. The nine hospitals use and reuse equipment and supplies very conservatively, so as to
obtain the greatest value from their investments in material resources.
One segment that has assisted in optimizing health care service offerings in the United States is
telecommunications technology, which is enabling medical professionals and specialized
facilities to extend their reach beyond the four walls of a central hospital. Tele-ICU systems now
permit monitoring and overseeing remotely about 10 percent of intensive care unit patients
nationwide. American medicine has made great leaps in quality by identifying, measuring and
standardizing evidence-based best practices, protocols and procedures, and extrapolating the
results into algorithms in appropriate cases to cater to a wider section of the healthcare base.

On the other hand, while Indian health care systems are considered to be one of the best low-cost
models, it must be understood that out of the pocket payments account for 70 percent of health
care costs in India and this merits a strong work up on the financial instruments like medical
insurance. India lags in broader measures, too, most notably in health insurance. Over 450
million Indians do not have insurance coverage as it is not mandated by the government. This
can also be attributed to the lack of a proper micro-health-insurance system in place and as a
result, the insurance penetration is low. On the other hand in U.S. the out of pocket expenditure
stands at around 10-12 percent. The other issue that needs to be looked into is Indias understaffed, underfinanced government hospitals, which also provide affordable healthcare to all. The
result is counter-productive and this forces many people to visit private medical practitioners.
A recent article (S. Rice. Truvens 15 Top systems: Consistency boosts quality. Modern
Healthcare, April 19, 2014) noted that other Top health systems in the U.S. say a key lesson
they have learned is the importance of finding collaborative ways to work with doctors and
nurses to identify areas that need improvement. Several systems said they identified staff
members who were trusted by other staff and were seen as clinical practice leaders. These
individuals, they say, not only helped identify best practices, but also led the way in
implementing them. The importance of effective clinical leadership is another major theme in
any review of the strengths of the U.S. health care system.
Leadership alone, however, is not as effective as leadership with financial accountability in
enhancing health cares value proposition, i.e., improving quality while lowering costs a goal
that is as desirable in the U.S. as it is in India. One significant focus of the U.S. Affordable Care
Act, the far-reaching health care reform legislation adopted in 2010, was to establish incentives
for collaborative efforts seeking to deliver high-quality care with greater cost effectiveness and
seeks to have near-universal healthcare insurance coverage to legal residents. As part of
integrated healthcare system, U.S. adopted different strategies, including:
1. Bundled Payments: This aggregates the total amount paid to the various providers
involved in a single episode of care (.e.g., for an orthopedic procedure, the surgeon,
anesthesiologist, radiologist, physical therapist and the hospital) and leaves it to the
providers to determine their individual shares of the bundle. Bundled payments
encourage providers to work in teams, share information, and take collective
responsibility for a patient's health so as to achieve improved outcomes with greater
efficiency.
2. A more advanced model of integration and alignment of incentives is found in
accountable care organizations or ACOs. The care coordination offered by ACOs
includes integrated clinician workflow; agreement on practice standards and quality
metrics; proactive preventive, acute, chronic and end of life care and patient navigators
serving as care coordinators within participating hospitals and medical groups.
As newer and better models of care emerge, we hope that health care leaders, including within
the U.S., will use the knowledge in whatever ways might lead to better healthcare for people
everywhere across geographies.

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