INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

BPO REDUX: LARGEST US UNION CAN'T SWALLOW MEDICAL TOURISM

  OPPOSITION to foreign companies outsourcing to India has now spilled over to medical tourism. The United Steel Workers' (USW) union — the biggest US industrial worker association — has aired its reservations on the issue, thereby attempting to pour cold water on India's aspirations to become a leading medical tourism destination.

   USW, which boasts of more than 850,000 members, has lodged a complaint with the Senate and House Committee — that oversees healthcare — to stop Americans from visiting India and other lowcost destinations for medical services.

   Though the government is yet to respond to the complaint against outsourcing, tourism ministry sources agree that reservations by foreign trade unions to medical tourism is part of the larger issue of their resentment towards outsourcing.

   USW's complaint is with respect to the issue of liability in case of medical negligence and quality standards in low-cost destinations.

   “No US citizen should be exposed to the risks involved in travelling internationally for healthcare services,” union president Leo Gerard said in a recent letter to the Senate and House Committee.

   Hospitals, such as Apollo, which attract nearly half of the total traffic of international patients in India, fear the backlash could lead to similar protests in other countries including the UK and Canada.

   “There is a need for the government to react to the issue as it may take political overtones in time to come. Brand India also needs to be promoted better so as to ensure that notions of poor quality of medical services are dispelled,” said Apollo Hospitals manager (international relations) Jithu Jose.

   Senior ministry officials, however, say any knee-jerk reaction to the issue would backfire. With the number of international patients growing at 30% annually and the industry estimated to be worth around $3 billion by 2011, India is already among the major players. Estimates put the total international patients on India shores for medical treatments at around 150,000 last year. This may increase to 500,000 over the next three years.

   Potential job losses in the health sector of the developed countries are also cited as one of the main concerns in the USW complaint. Experts say the rhetoric against outsourcing will not only get louder, but also spread to countries such as the UK and Canada. “The complaint is similar to the BPO outcry, where the phenomenon spread from the US to UK and other developed countries. But the effect should not be of the same magnitude as the waiting periods in these countries is very long and the union is unjustified,” said Max Healthcare director (sales and marketing) Sanjay Rai.

   Experts say though the issue may not lead to legislation, it could result in laying down of guidelines that most hospitals will have to comply with. “There is a high chance that guidelines will get notified which hospitals in India will have to comply with,” said E&Y India Health Sciences Industry leader Utkarsh Palnitkar.

   The health ministry, however, claims quality standards in India are already top-class. “There are strict parameters for hospitals to qualify for medical tourism. Currently, only 34 hospitals across India are being promoted in keeping with those standards,” said tourism ministry joint secretary Amitabh Kant.