Medical Tourism:

Subsidising Corporate Health Care For Developed Countries

Nikhila.M.Vijay *

A status of high admire ranking to be one of the best in medical care ever
available round the globe and that too in the third world prices! When the
pre, post and due recommended rest is added an icing with the royal green
bliss of the ‘Incredible India’, the formula equates: “Medical Treatment in the
‘first world’ = A tour to India + Medical Treatment + Savings”. The feasibility
of the equation gradually defined the concept of Medical Tourism in India.
Medical tourism packages often include airport pickup, hospital bed care
services, in-room Internet access, multi-cuisine meals and a post-operative
vacation, which an average Indian cannot even daydream in his own country
or else where in the world.

Competence to do most complicated surgeries well trained, experienced

and highly specialized doctors, nurses and medical technicians, advanced
medical technologies, super specialty corporate hospitals with five star
facilities … India has set the stage for the show. All these facilitations are
not intended for the poor or weaker sections of the country. These
fabulous arrangements are meant for the foreign patients who come with
pouch full of dollars and the affluent Indian elites.

The country has equipped fully herself to ‘treat’ the ailing tourist and even
the medical visa processing and clearance had been simplified to the
possible extend. The India Tourism and industry is promoting medical
tourism as a novel hope for the Indian economy. More investments are
envisaged through this, considering the involvement of big corporate stuffs
and five star hospitals getting mushroomed all around the nation.

Health care service privatisation and corporatisation crafted Medical

tourism in which people from rich nations are traveling to third world
countries to obtain medical care, experiencing and enjoying the attractions
and the resources of the host country. At the same time for developing
countries perceiving Medical Tourism as a ‘magic lamp’ to attract overseas
patients and earn foreign exchange. A study by Confederation of Indian
Industry (CII) and McKinsey estimates that medical tourism alone could
bring $2.2 billion revenue for Indian hospitals by 2012.

Many developing countries are actively promoting Medical Tourism by its

official policy. For example India’s National Health policy 2002 says, "To
capitalize on the comparative cost advantage enjoyed by domestic health
facilities in the secondary and tertiary sector, the policy will encourage the
supply of services to patients of foreign origin on payment. The rendering
of such services on payment in foreign exchange will be treated as 'deemed
exports' and will be made eligible for all fiscal incentives extended to
export earnings”. This formulation draws from recommendations that the
corporate sector has been making in India and specifically from the "Policy
Framework for Reforms in Health Care", drafted by the prime minister's
Advisory Council on Trade and Industry, headed by the big Indian
corporates like Mukesh Ambani and Kumaramangalam Birla.

‘First rate medical care at third world prices’

Indian corporate hospitals are meeting the requirements of international
standards, but the cost of treatment is about one-eighth to one-fifth of
that in the US or the UK. Cost of a heart surgery in US is approximately
$50,000; at the same time cost at one of the super specialty hospital in
India is $10,000. This is one of the main reasons why Foreigners are
flocking to India for getting a suitable and quality health care.

An added advantage favoring the tourist is that currently there is no clear-

cut treatment cost disparity between foreigners and Indian residents in
India. So it is evident, the services are "cost effective" for those who can
pay and on more importantly the beneficiaries are of the countries where
medical care costs are exorbitant.

Untold facts!
Though the boons are being proclaimed loud nothing is being mentioned of
the banes. Many hidden facts and possible impacts are being given no
concern.

Multi-specialty hospitals are getting lump sum of tax exemptions like free
or very cheap land, tax holidays, rebates in customs tariffs, low interest
loans from public sector banks etc. taking into account of their key role in
government’s revenue generation.

For example, the Indraprastha Apollo Hospital, New Delhi is the fourth largest
corporate owned hospital in the world and one of the premier institution promoting
medical tourism constructed at a cost of $ 44 million which has handles about
200,000 patients annually, about 60,000 being indoor patients and of the latter
about 10,000 or 17% are from other countries. This hospital was built in 1996 on 15
acres prime land worth an estimated $2.5 million given by the Delhi government
free of cost (at a token lease rent of Re 1per annum). Apart from this the Delhi
government invested $3.4 million in construction of the hospital and contributed
$5.22 million as equity capital. Besides this tax and duty waivers on import of
equipment etc. were also given. The agreement was that treatment for one-third of
the beds would be made available free of cost to poor patients. The fact of the
matter is that the free treatment part was undermined by the Hospital, both a legal
and ethical violation, and the Delhi government was negligent in demanding
accountability to honor the terms of the agreement. When this fact came to public
notice public interest litigation was filed in the Delhi High Court and this led to the
appointment of the Justice Qureshi Committee, which exposed the huge scam of
misuse of public subsidies by private hospitals in Delhi, including the Apollo
Hospital case. The Report further indicated that only 2% of indoor cases in 1999-
2000 in Apollo Hospital were treated free and most of these were relatives of staff,
bureaucrats and politicians1.

Most of the private hospitals in the country are registered under the Public
Trust Act, hospitals registered under this act are obliged to provide free
care to up to 20 per cent of their services and for this, they are exempted
from the income tax2. How many of these hospitals are providing free of
cost treatment to the poor? And a genuine question is, if not this revenue
reverts and seep into the local population, is not this revenue boom a
myth?

Local people’s access to Health care

Demand on private hospitals due to medical tourism boom result in their
expansion, which in turn demands for an increase in human resource.
This drags in gem of the qualified medical professionals including doctors
from public sector as well as small towns or hospitals into these set ups
which are mostly, rather fully established in metropolitan cities. Even now
most of the professionals in the private institutes are migrated from
government institutions. And they will remain available only for the foreign
tourists and Indian elites.

Now there are about 14 lakh practitioners (1 per 715 population)

registered with councils of various systems of medicine in the country. In
these only 1.6 lakh are in government service.Other12.4 lakh doctors are
in the private sector. The larger impact of this is that 55% of physician
positions in rural hospitals and 30% in Primary Health Centers are still
vacant. Thus the majority especially the 70% of the population that lives in
villages are away from excellent health care. Many patients choice to
quack or seek no medical care at all, since private practitioners are beyond
the means of most. In contrast, to provide a guarantee of service quality
for medical tourists, the Indian Ministry of Health has begun accrediting
hospitals and recommending prices for services.

The Medical tourism dictionaries only has large specialist corporate

hospitals and are in quest of opportunities that may take ahead of the
limited domestic "market" for elevated prize tag. In 1987 expense for the
single treatment in Kerala was Rupees.16.6 Which increased to 830.7 in
20043. This statistics is generally on health sector not specific for private
health sector and even before the medical tourism boom in India .It is very
clear that Indian Private health care cost will hike up as the number of
medical tourists increase. This again makes heath care beyond the reach
of common man.

1
Health System in India: Crisis & Alternatives :October 2006, National Coordination Committee,
Jan Swasthya Abhiyan
2
http://www.expresshealthcaremgmt.com/20030930/oped01.shtml
3
Prof TP kunjikkannan et al, ‘Kerala Padanam’-keralam engine jeevikkunnu? Keralam engine
chinthikkunnu? Kerala Sastra sahitya parishat, sept 2006,pp107
Migration of Indian medical professionals to other countries happened so
much so far. One argument is that due to medical tourism Indian
institutions will be capable of providing attractive salaries and which will
in turn fetch back the drained brains (reverse migration). But the new
manifestation in the form of medical tourism is just brain drain plus. This
requires the skilled person to stay back within the country, get wages
marginally higher, use infrastructure and other resources from own
country and contribute the whole energy to serve the foreigners. While
they acquired the expertise from government institutions liberally with the
taxes paid by the poor Indian taxpayers. This provides much higher
surplus to the developed country economy.

India as a dump yard

Tourists can enjoy the medical facilities in the big corporate hospitals and
enjoy the post-operative vacation, and pay some dollars (very much less as
compared to off the shore expenses) to the Corporate private institutions
and dump on the chunk of waste on the ‘ignorant’ citizens, three forth of
them cannot even daydream of such medical care and not even heard of
the medical waste hazards! Current medical system is infamous for the
medical waste management and still remain as a conundrum.

On an average, hospital bed in India generates 1 kg. of waste per day, out
of which 10-15 per cent is infectious, 5 per cent is hazardous and rest is
general waste. A big urban corporate hospital generates two million tons of
waste each year4. However many hospitals in developing countries dump
all the waste together, from reception-area trash to surgery room waste,
and burn them in incinerators or allow surge to rivers or sea. The hidden
charges of medical waste management are not included in the treatment
cost. Thus it is very cost effective!!!

No pain but gain!!!

The extreme of the story is still unsaid. A No pain but gain deal. One can
get his dream to have own child true by rending a cheap womb in India- It
is really cheap compared to the infertility treatments in a ‘developed ‘
country. The Tribune newspaper reported that campaigners in Britain
have questioned the ethics of this business. Their argument is based on
the emotional side of a mother develops, as the baby being a part of her
body or rather to say that the business even questions the very concept of
maternity5.
The worrying facts still go on that some of the Indians are ready to export
their organs. A study report published about sale kidneys in India and
found that 96 % out of the surveyed had sold their organ for an average of
$1,070 to pay off a debt6. It is estimated, or rather guesstimated, that

4
Ratna Singh, Alarming morass of medical waste, http://www.toxicslink.org/art-view.php?
id=8
5
The Tribune-Saturday, April8, 2006
6
http://www.medscape.com/viewarticle/538831
fewer than 3,000 transplants are performed in the country each year. This
represents a fraction of the total number of patients who require
transplants’7. This statistics shows that a huge unmet demand of organ
transplant already existing in India, which is most of the times cost wise,
far out of the reach of the Indian middle class and lower classes. Illegal
transactions are also not less on count. To stop illegal organ transplants,
the Government of India has come up with a law in 1994 that criminalizes
organ sales. The Human Organs Transplant Act, 1994 has laid down
certain rules and regulations that are to be followed while conducting
organ transplants 8.

But due to inefficient regulations and corruption in the healthcare system,

illegal trafficking of organs is high in India. The medical tourism boom may
increase this illegal trafficking.

Another crucial issue involved is concern of developed countries on the

quality, expertise, and health standards of developing countries. This will
force the government to encourage private or international accreditation
systems for hospitals In India!! It might cuase further hike in the
treatment costs.

Medical tourism sector is demanding more subsidies and incentives from

the Government on the basis of the argument that they earn high revenue
and foreign exchange for the country from medical tourism. But this is
disturbing because subsidizing the corporate sector will reduce the limited
resources existing for the health care of the poor. Should we collaborate in
promoting medical care for tourists when it cannot meet the basic
healthcare needs of the majority of its citizens? And why should the poor
Indian taxpayer pay the price for the treatment of the medical tourists?
India’s focus should be on assuring basic healthcare as a right to its
citizens.

(Nikhila.M.Vijay is an active member of KABANI, the other direction, a collective from

India working on tourism issues. She can be contacted at kabanitour@yahoo.com)

7
Frontline, Volume 19 - Issue 10, May 11-24, 2002
8
Further details of the law can be obtained from
http://www.indialawinfo.com/bareacts/transplant.html#_Toc498337703