Indian hospital groups agree deals with American companies

India’s leading hospital chains Fortis, Apollo and Max Healthcare have each agreed health deals with American companies. All three companies decline to reveal the numbers or identities of the partners, citing confidentiality agreements. However, this does not necessarily mean that more Americans will be travelling to India from the USA for low cost surgery. The deals may well relate to the treatment of American expatriate workers who are based in India or other nearby countries, where India is an appropriate choice of healthcare provider for the expatriate American.
 
It raises the question of how any country defines a medical tourist. India is not alone in counting heads by nationality and claiming X number of medical tourists from Y. An American medical tourist does not have to come from the USA. Thousands of Americans work and live outside the USA. India is not alone in being faced with the question of how you classify medical tourists. For example, do you count an American working in say Pakistan who comes to India for treatment, as an American medical tourist or a Pakistan one? Do you count an American living in India as a medical tourist if they have elective treatment while in India?

The argument may sound pedantic, but is crucial to the debate as to whether or not US businesses will in future send people overseas for treatment, or only consider non US treatment for Americans who are already expatriates. The American tax definition of an expatriate is much tougher than most countries, as the main qualification is that they have to spend a minimum of 330 days a year outside the USA. Someone who is a tax expatriate will not have to buy insurance under US healthcare reform. The rules can also mean that if an expatriate has already been home during the year, they could face a tax bill if they have to then return for surgery and recuperation. The need for local care and the complex tax rules, are why US companies with American employees often have a mixture of insurance and deals with hospital groups overseas, and this is completely different from arranging medical tourism for American employees living in the USA.

Pervez Ahmed of Max Healthcare says,” India is still at a disadvantage when it comes to receiving patients from the West, largely due to the distance factor. So patients from the US are eying destinations closer to home such as Canada or even South America. Despite the direct deals with corporates, we expect most patients will come from their subsidiaries in Asia and other nearby locations.”

According to several Indian newspapers, Fortis says it has already treated 20 patients after entering into the partnerships. Half of its international patients are American, and in total it gets 2,000 international patients from developed countries. Vishal Bali of Fortis explains, “ We have been getting 2 to 3 such patients every month for six months now. The corporate healthcare market in the US is the largest contributor to healthcare spending there. If opportunities open up there, then it will significantly contribute to the entire phenomenon of medical tourism.” Apollo says its deals have triggered a near 100% growth in the flow of US patients, that a large percentage of its 4,000 overseas patients, including corporate executives, were Americans; while half of its international patient base comes from developed markets.

Indian hospitals say the tie-ups will build their credibility in the developed markets and ensure a bigger penetration in the lucrative US market. The deals may help India compete against other South-East Asian nations such as Singapore and Thailand.
Although the tourism ministry still insists that India’s medical tourism market will be worth $2 billion a year by 2012, Vishar Bali of Fortis argues that recession means that the target will not be reached before 2015.