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Knowledge Creates Demand

One of the unspoken benefits of globalisation is the use that professionals make of the new instruments and techniques that are publicised over the internet or through the wider dissemination of networks to newly emerging economies, such as India. However, as one example demonstrates, medical professionals in India read or learn about new developments from the West in their specialism but are unable to apply them because they are too expensive or the instruments cannot be imported or the patients are not rich enough to afford them. This is providing a spur to entrepreneurial and philanthropic activity.

Narayana Hrudayalaya is a medical foundation established in India by Mother Teresa’s cardiologist, Davi Prasad Shetty. Acknowledging the dilemma faced by all professionals in poorer countries, Shetty aimed to pioneer low-cost cardiac surgery that would prove affordable, with charitable supplements and insurance for even the Bengali peasantry and textile workers inhabiting the countryside around Kolkata.

In an interview with New Scientist, Shetty understood that governments and international bureaucracies were a hindrance, not a benefit.

If there is one organisation that can be squarely blamed it is the WHO. Headquartered in Geneva, separated from reality, it runs its global activities with help from government representatives who are mostly bureaucrats. In the countries I travel to, bureaucrats are a class of people who are experts in nothing but authorities on everything. They are not best-suited to guide planning at the WHO. One of the WHO declarations was “Health for all by 2000”. How can a global body make that kind of statement when a country like Zambia does not have an echo-Doppler, without which you cannot detect any heart problem, or when one cannot find a single functioning ECG machine in many African countries?

Apart from the WHO, I have stopped blaming the politicians and bureaucrats. We are better placed to bring about changes by being outsiders, not by being a part of the system. All that the government can do is to stop being an obstacle. If it decides to be a bystander, things will fall in place. My belief is that within ten years, the government healthcare systems in all Third World countries will fold up. The government will not be able to pay even salaries, never mind offering healthcare. In that situation, organisations like ours should come forward to take over and manage it in a professional manner.

Whilst Shetty describes himself as a social worker as a libertarian, he has recognised that governments cannot provide the resources to meet his objectives and that it is best if they stand aside or collapse. When the state is no longer a factor, the economics or healthcare starts to add up.

Yes, it’s very different. In Western hospitals, about 60 per cent of the revenue is spent on salaries, while in government hospitals in India, 90 per cent goes on salaries. By contrast, in our hospital only 12 to 13 per cent is spent on salaries. That doesn’t mean our doctors are being exploited. Since their output is ten times more, unit operating costs are very low. To earn a given salary in another hospital, a doctor would have to perform one operation a day. With us he might have to operate on five patients. We also work with zero inventory, so the burden lies with the supplier. And since we are the largest consumers of medical disposables, we procure them at a discount of 30 to 35 per cent.

Increasingly, for the pragmatists of the world, freedom provides the answers that the state is unable to.

3 comments to Knowledge Creates Demand

  • A fascinating interview. It’s heartening to hear about someone who is helping people by doing something useful, instead of lobbying for more state intervention. I think I might postpone the inevitable cancellation of my NS subscription (due in part to the endless global warming articles) for a little while longer.

    In the article, Shetty says, “With economic liberalisation, the world is increasingly becoming boundaryless. Very soon economic realities will prevail. With painfully long waiting lists and high costs of surgery, the days are not far away when poor patients from all over will come here for heart surgery.”

    I can just imagine the reaction if the British start travelling to India in droves to get their health care? Dangerous! Unregulated! Poor people in India are suffering because rich, imperialist Westerners are exploiting the system! What about the effect this has on the NHS?! Something must be done!

  • Della

    Indian govement medicine policy is pretty awful, when it comes to medicine.

    – They have a monopoly suppliers for all drugs with a market greater than $250,000.

    – They have price controls for medicine, judging by the sums in the document I linked to there seems to have an allowance for a 10-20% profit built in to the price, and hardly encourages increases in the efficieny of production.

    – They have a 16% tax on wholesalers.

    – In for example Delhi they have a 14% local sales tax (assuming that the Delhi Tax doesn’t tax the Utrapadesh sales tax).

    – This means that 50% of the price on delivery to the wholesaler (exluding wholesaler tax) is paid as tax.

    The amount of money they spend on healthcare is pitiful for somewhere with such big health problems, they spend 0.8% of (small) GDP compared to 6.5% in Japan and 12.4% for the US.

    It’s a mess.

  • Good piece. Thanks.