US President Barack Obama on Tuesday said his aim was to change the US healthcare system to discourage Americans from seeking medical treatment in India and Mexico. His healthcare reforms - called Obamacare by critics - is being opposed by Republicans on the ground that it will add up to the country's expenses, thereby worsening the debt situation.
"My preference would be that you don't have to travel to Mexico or India for cheap healthcare," he said in response to a question about why US health insurance won't cover medical expenses incurred abroad.
"I'd like you to be able to get it right here in the United States of America that's high quality."
Obama also said that prices of prescription drugs must be brought down "so that you don't feel like you're getting cheated because you're paying 30% more or 20% more than prescription drugs in Canada or Mexico."
In the run up to the elections in November, Obama had repeatedly brought up off-shoring to India and how he intended to change rules to keep US jobs from going to India.
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Indian hospitals say Obama prescription won’t work
US president Barack Obama’s appeal to his Americans not to visit India for cheaper medical treatment is seen by the healthcare industry here as restrictive. But big hospital chains like Apollo, Fortis and Medanta are not perturbed.
The Obama prescription came on Tuesday in Virginia hours ahead of India’s commerce minister Ana-nd Sharma’s talks with a group of US Senators to explore ways to improve trade and investment ties between two countries.
Addressing students of Northen Virginia Community College, president Obama said, “My preference would be that you don't have to travel to Mexico or India to get cheap healthcare." He said so while trying to hardsell his administration’s new healthcare plan that had many critics.
Captains of the Indian healthcare industry, which does Rs 70,000 crore business a year, were expectedly critical but not unduly worried.
"For the president of a country to admit that healthcare is cheaper elsewhere shows the deficiency of that country. But India is not about cheap healthcare but affordable high quality healthcare. The success rate of heart surgeries in some top Indian hospitals is 99.8 per cent. Indian doctors are skilled," said Dr Naresh Trehan, chairman & MD of Medanta - The Medicity.
He gave examples of how Indian healthcare was much cheaper than in the US. For instance, a joint replacement costs $11,000 in India but $50,000 in the US. Similarly, a cardiac surgery costs about a seventh of US costs which range from $65,000 to $100,000. This is why private hospitals employ world-class doctors – a draw for American patients.
Assocham in 2009 estimated that over 1,80,000 foreigners visited Indian medical centres in the first eight months of 2008. Currently, only 5 to 10 per cent of all overseas patients treated in India are Americans. The numbers coming from West Asia and Africa are much more. What has come to be known as medical tourism is worth $330 million in India.
Gautam Mahajan, president of Indo-American Chamber of Commerce and Industry, played down the impact of Obama’s statement. “People who are well aware of the availability of high-class medical facilities in India at comparatively lower prices will certainly avail of the services despite all such advice,” Mahajan said.
Fortis hospitals which receive over 20,000 overseas patients every year, did not officially comment but a senior official said Obama would not dare impose any restriction on travel to India for medical treatment. "This will not earn him any goodwill," the official said.
Data with the US Centers for Disease Control and Prevention showed that 46.3 million Americans, or about 15.4 per cent of the country’s population, did not have health insurance in 2009. The new US healthcare reform bill is being marketed to cover more Americans under this new plan.
Rajeev Boudhankar, vice-president of Kohinoor Hospital, said, "The major issue during US presidential elections was healthcare reforms. Till Tuesday, all Americans were saying that healthcare was very expensive in the US."
Sangita Reddy, executive director of operations at Apollo Hospitals, said insurance agencies in the US themselves recommend some patients for treatment in India. "Healthcare costs have not come down in the US and Obama’s statement may not have much impact out here,” she said. Delhi’s Apollo Hospital alone treated over 10,000 foreigners in the past two years.
While India's medical tourism revenues are not heavily dependent on the US market, the biggest number of patients from Asia and Africa will be unaffected by Obama's protectionist moves, industry players maintained.
"Without doubt, India is more cost-effective and this has helped us cater mainly to patients from Asia, Africa and Latin America and a huge part of our medical services revenue is contributed by patients from these regions. The US is nowhere near the top revenue generator," Rajesh Sharma, director general of the Services Export Promotion Council, said. “India is at par with the European Union and the US in terms of medical facilities, but the costs are 40 per cent cheaper here,” he said.
Dr Ramakanta Panda of Mumbai’s Asian Heart Institute did not see a drop in the number of American patients coming to India following the Obama exhortions.
This is not an isolated instance of Obama administration pursuing protectionist trade agenda though it has been a signatory to G-20 Pittsburgh resolution rejecting such measures by member countries. Last year, US had proposed the Foreign Manufacturers Legal Accountability Act under which an Indian exporter would have to shell out anywhere between $15,000 and $20,000 to retain a legal agent in the US. Prior to this US had, under the Emergency Border Security Supplemental Appropriations Act, 2010 hiked the fee for certain categories of H-1B and L1 visas by at least $2,000 for five years — hitting Indian export-oriented sectors.
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