“We live in a moment of history where change is so speeded up that we begin to see the present only when it is already disappearing.”
-R. D. Laing
“The rapid development of technology and globalization,” author Taylor Pearson writes, “has changed the leverage points in accumulating wealth: money, meaning and freedom.”
You know the drill… it’s been the theme of the week.
Our new technologies, machines, and even globalization have been a boon for entrepreneurs. As Pearson notes in his book The End of Jobs:
“They’ve dropped startup costs, opened new markets, and created new distribution channels. It’s easier and cheaper than ever to make something and tell people about it.
“Today, a $40 Internet connection and a free Skype account gives anyone access to the greatest talent pool in history.”
It’s also, fortunately, easier to make crucial services cheaper… things like health care.
Unfortunately, though… the healthcare industry in America is fairly stubborn.
That’s why, as of last year, we began looking for alternatives.
First, we sought the counsel of Jud Anglin, founder of MedRetreat. And we liked what he had to say so much that we brought him on board.
Any regular reader of our premium content — the Laissez Faire Letter — will be familiar with his work.
With Jud’s help, we took a medical tourism trip to Thailand in January. We had some work done at Bangkok Hospital.
(Ahem… the work was done on our teeth. In case you were thinking otherwise.)
Since then, we’ve given much thought to how absurd our current healthcare system is.
Which is one reason why we’re heading to the Grand Cayman next week. (We’ll get to that in one moment.)
When’s the last time, for example, you went online to do a price and quality comparison for a major medical procedure?
If you’re like most Americans, the answer is never.
It seems quite silly that we can go online to compare quality and prices for a flat screen TV or even a car… but we have no way to do so for our health care.
In fact, says author David Houle, “the healthcare industry is really the only part of the GDP that does not let people know the cost of a product or procedure beforehand. How ludicrous is that? We often say that health is the most important thing we have, but when it comes to spending money on it, we do so blindly.”
Take, for example, one study conducted in 2012 by Dr. Peter Cram, a professor of medicine at the University of Iowa.
Dr. Cram called 100 hospitals and asked this question: “How much does it cost to have hip replacement surgery at your hospital?”
Half could not answer him. And the other half that did, told him everything from $11,000 to $125,798.
But Houle believes that all this hoopla is about to change. Thanks, of course, to human ingenuity and this new age we’ve been harping on about all week.
“We live in a transformational time in the history of medicine and health care,” Houle says in his book, The New Health Age: The Future of Healthcare in America.
“The twenty-first century will be a time of dramatic change, incredible breakthroughs, and totally altered thinking about health, medicine, and health care delivery.
“The years to 2020 will be filled with changes in how Americans think about health, how medicine is practiced, and how health care is delivered. These years will set the stage for a 50-year period that will be viewed as The New Health Age. Future generations will look back and thank those of us alive today for what we accomplished and initiated in this brilliant new age.”
Of course, there will be resistance. Whenever you put the words “health” and “care” in the same sentence, something strange happens…
Hair all across America instantly lights aflame, a few people spontaneously combust, and the masses run around in circles until politicos come stampeding in… to “help.”
In other words, says Houle, “The conversations around health care are filled with uncertainty, misinformations, and anxiety. In such a climate, it is hard to have intelligent, rational discussions. It is even harder to see the future because all the baggage of legacy thinking from the past and the heated emotions of the present completely cloud any clear view of the future.”
But to get a clear view, you have to do what many Americans simply won’t consider — you have to look outside the country…
While I was messing around in Thailand, for example, an even better option was only a few countries away in Bangalore, India.
It’s a hospital called Narayana Health. It was founded by Mother Teresa’s former physician, Dr. Devi Prasad Shetty.
And get this…
Every single day, the hospital performs open-heart surgeries for $1,900 a pop. On the other side of the world, at the best cardiac hospital in the country, the Cleveland Clinic, the same surgery costs $50,000.
“Of course,” Houle goes on, “your first thought is — well, you get what you pay for. But the reality is that Dr. Shetty had a lower mortality rate and therefore a better outcome.”
But it’s not just open heart surgery that Dr. Shetty has revolutionized. Many believe that the good doctor has created the go-to model for the hospitals of the future.
But, of course, most Americans aren’t going to pack their bags and hop on a plane to Bangalore for an open-heart surgery.
That’s why, fairly recently, Dr. Shetty opened up Health City in the Cayman Islands.
Health City was built for less than one-third the cost — per bed — of an average hospital in the U.S. And the cost of all surgical procedures is about 40% less than the average U.S. hospital.
Moreover, it’s just a one-hour flight out of Miami.
“It is modern but basic,” says Houle. “It has tropical landscaping with beautiful flowers. It has state-of-the-art monitoring technology. When a patient is checked in, they are given their own tablet computer on which every interaction with a nurse or doctor is noted. This tablet stays with them until they are released. This tablet is connected to a central monitoring station, constantly showing the state of the patient and the care being received.
“Most of Dr. Shetty’s doctors,” Houle goes on, “perform five to six surgeries a day, five days a week. Economic history tells us that scaling up a craft business always drives down prices and, in this case, with better-quality outcomes.”
And here’s what Dr. Shetty had to say…
“It is not acceptable that 90 percent of humanity that has a heart problem will simply die because they cannot afford treatment. Compassionate health care reform must include lowering the costs.”
Free market? #Winning.
And that, dear reader, is why we’re headed to the Grand Cayman next week.
That’s right, Jud Anglin and I are heading out Sunday morning to check out Health City for ourselves.
In the meantime, if you’re 65, or plan to live beyond 65, check this out…
We recently learned of another simple alternative that allows you to…
Claim a comprehensive healthcare plan with no restrictive networks… and no deductibles… for up to 72% off. All you have to do is just grab your cell phone, dial one number, and say five words.
How to do it is all inside one book is called Maximize Your Medicare.
If you’re a Laissez Faire Letter member, simply click here, log in and download it absolutely free.
If you’re not yet a member, click here to claim your copy today.
After you do that, come back.
Paul Horstmeier of healthcare analytics firm, Health Catalyst, joins us today to talk a little bit more about Health City — and ask one simple question…
Is Health City a blueprint for the future of U.S. healthcare?
A Blueprint For the Future of U.S. Healthcare?
Check out any national media outlet and there’s a good chance you’ll find politicians, providers and payers heatedly wrangling over the best way to approach healthcare transformation in the U.S. While all sides agree it is necessary, they have vastly differing views regarding how to make it happen.
Of course, the big losers are the patients who will continue to pay premium costs for an inefficient healthcare system until those issues can be resolved.
Perhaps instead of arguing, posturing and playing to the media, all sides should take a moment to look to the south – about 480 miles south of Miami to be exact.
That’s where an extraordinary transformation in healthcare delivery is taking place, the result of a unique partnership forged between government, private business, and an innovative physician.
The project is called Health City Cayman Islands. It’s a collaborative effort of the Cayman Islands, private business, and Dr. Devi Shetty, an Indian cardiac surgeon who first came to wide public notice when he operated on Mother Teresa after she experienced a heart attack. He went on to become her personal physician.
These Health Cities are changing the landscape in both quality and costs by applying industrial principles and advanced IT to healthcare. By servicing high volumes of patients across many locations, Health Cities can take advantage of the economies of scale.
They can charge less because they buy in bulk, preferably from the manufacturers rather than medical supply distributors – the same principle Wal-Mart uses to drive down its prices – and their teams become more efficient due to the high volume and specialization involved.
Essentially, they are doing the same thing for complex healthcare procedures that Henry Ford once did for building automobiles and Toyota later furthered with Lean Manufacturing – concepts that are only beginning to gain acceptance in U.S. healthcare.
Data at the Forefront of a Nation’s Health
The model for Health City Cayman Islands started at Narayana Health, where Dr. Shetty is both chairman and founder.
The organization has been focused on bringing quality healthcare to the poor in India, a mission that was accomplished through the establishment of a “Health City” — a 2000- to 5000-bed conglomeration of multiple specialty hospitals on a single campus that can take care of all healthcare needs or patients. The first Health City was established in 2001 on the outskirts of Bangalore; Narayana Health now operates 26 hospitals in 16 cities.
Data is a critical contributor to the changes Narayana Health is making and drives the success of Health City Cayman Islands, too. As Dr. Shetty told to CIO India, “We want to create a robust IT platform to control the finance department and quality of services. Post that, we want to get into patient care and outcome(s).
We are perhaps one of the few hospitals in the world where a balance sheet is created on a daily basis. A sophisticated ERP system on a cloud solution houses all the financial details about all the group hospitals.”
The driving force behind Health City is data and the knowledge that an organization can’t reduce the cost of healthcare – or any business for that matter – without the help of data and analytics.
Dr. Shetty notes that while IT can’t deliver the cure, it can help increase patient safety. As an example he points to problems with drug interactions. “No doctor in this world has the presence of mind, round the clock, to calculate drug interaction accurately every single time,” he told CIO India.
But if hospitals will put a policy in place that prescriptions can only be written using specialized software that checks for drug interactions automatically, many lives can be saved.
Health Catalyst senior vice president Dale Sanders also contributed to the project, working with the Cayman Islands Health Services Authority and Minister to get the Health City Cayman Islands project off the ground.
While in that role, Sanders drafted legislative changes and the strategic health plan for the Cayman Islands that included the Health City facility. He also wrote Elements of a National Health Strategy: Key Metrics and Performance Indicators, a plan that highlighted data as an integral element to Cayman Islands project.
Government and Corporation Partner for Healthcare
The construction of Health City Cayman Islands was the result of a “perfect storm” of events. Several years earlier the Caymans Health Services Authority (HAS) had instituted a “sister program” that allowed its hospitals to send patients with certain conditions to the U.S. for treatment.
Yet as they reviewed the program, they thought it would be better to keep the $25 million they were exporting in healthcare costs each year closer to home. They were determined to build a world-class hospital.
At the same time, Dr. Shetty was looking to expand the Health City concept past the borders of India. He particularly wanted to target the rapidly growing population of aging patients in the U.S., especially those who needed complex procedures such as heart surgery but couldn’t afford the high cost.
After reviewing his options he realized he couldn’t put his Health City inside the U.S. because the costs, taxes and the way healthcare is administered in the U.S. He looked instead for a location that was close enough to the U.S. to be easily reached but with a business-friendly government that encouraged innovation.
The Cayman Islands met the criteria. The unique Health City partnership developed by the Cayman Islands government, private business and Dr. Shetty was born.
Health City Cayman Islands opened in 2014 as tertiary care hospital with centers of excellence in cardiac surgery, cardiology and orthopedics.
Over the next decade it has plans to expand to a 2000-bed hospital and expects to be a Joint Commission International, USA (JCI)-accredited facility providing care in all the major specialties at half of what it would cost in the U.S. The real story, though, especially for those following the U.S. healthcare debate, is how the Cayman Islands is doing it.
Template for Healthcare in America
While the concepts put in place at Health City Cayman Islands may be revolutionary and the idea of government and private healthcare providers working together to improve care and reduce costs may seem downright heretical, it is clearly working.
The Health City Cayman Islands initiative is a powerful lesson in what works and how data holds the power to make healthcare affordable and effective for everyone. The real question to ask is whether it could be a blueprint for the future of American healthcare.
[Chris’ note: Stay tuned. The next time we talk, on Monday, we’ll be in the Grand Cayman. Until then, if you’re not yet a member of Laissez Faire Letter, click here to claim your Maximize Your Medicare book today.]
Talk to you monday.