It is anticipated that soaring health costs in the US coupled with a reform in US healthcare policy will drive an increasing number of Americans to look outside the US for healthcare. The Cayman Islands, just an hour or so flight away from Miami, is perfectly poised geographically to embrace the concept of medical tourism. World renowned cardiologist Dr. Devi Shetty’s proposed Narayana Cayman University Medical Center is set to assist the Islands in developing medical tourism as a crucial third leg to its beleaguered economy. Business Editor Lindsey Turnbull reports.
 
Dr. Devi Shetty has set his sights firmly on the Cayman Islands as his next destination for the creation of a high quality medical facility, which charges considerably less than its counterpart US hospitals.
 
Last month an agreement was signed between the Cayman Islands government and the Narayana Cayman University Medical Center, which paved the way for a phased in approach to an eventually 2,000 bed hospital.
 
Premier McKeeva Bush hailed the agreement as the beginning of new opportunities for the Islands to broaden its economic base and create a sustainable revenue source.
 
The business model – economies of scale.
At the agreement signing Shetty said that basing the development of such a centre on the American system did not make sense, because the US has the most expensive healthcare system in the world. Instead, Shetty said his Centre will look at ways to reduce costs via the sourcing of pharmaceuticals and medical appliances outside the US, as well as increasing the volume of procedures carried out to far greater levels than that of counterpart.
 
US hospitals.
“For example, antibiotics from Canada are half of US prices,” he stated. “The quality is just the same but at a much cheaper cost. The price of procedures in the US is also unrealistic.”
 
Volume of procedures is a key factor in driving costs down. Surgeons and specialists in his Bangalore Centre perform considerably more procedures than in the US. For example the centre's 42 cardiac surgeons performed 3,174 cardiac bypass surgeries in 2008, more than double America’s Cleveland Clinic figure 1,367 in the same year.
 
“As with our Bangalore Centre, we will be employing the same level of expertise, the same medical machinery and the same trends of treatments received currently in the US but at a vastly reduced cost,” Shetty confirmed. “There will be no compromise on quality.”
 
Shetty’s medical centres in India are some of the biggest consumers of General Electric’s medical equipment and machinery in the world.
 
Although some might fear that an increase in volume of procedures over their US counterparts might not necessarily be a good thing for surgeons at the Narayana Cayman University Medical Center, Shetty refutes this argument by stating that his doctors actually perform better than those in the US because they become experts in the procedures that they undertake because of their widened experience.
 
“When cardiac surgeons retire in the US they may have undertaken between 2,000 and 3,000 procedures; whereas our surgeons have carried out over 3,000 by their mid 30s. I stopped counting how many cardiac procedures I have undertaken when the figure reached between 10,000 and 15,000,” he said.
 
The issue of med malpractice insurance.
Medical malpractice insurance is increasing rapidly in the US, to the point where some physicians, such as Ob/Gyn surgeons are refusing to undertake risky procedures because the cost if they are sued is just too high. This is one area of cost where the Cayman Islands government intends to position itself favourably in comparison to the US and this will therefore be a greater incentive to physicians at the Narayana Cayman University Medical Center.
 
“The government has been reviewing the possibility of reforming the law as it stands on medical malpractice insurance for some time, even before the Narayana Centre was contemplated here,” Health Minister Mark Scotland says. “Medical malpractice insurance has tripled or even quadrupled in recent years for local physicians, so we will be looking to limit the malpractice or negligence awards to plaintiffs in respect of non-economic losses.
 
This will not affect those who sue for loss of earnings and other economic costs when medical malpractice or negligence has taken place. Having reviewed this for some time we are proposing to follow the Texas model in this regard.” The State of Texas adopted a comprehensive tort reform bill in 2003. Many significant changes in the law, including a cap on non-economic damages, were instigated.
 
Although Scotland does not believe necessarily that this will significantly reduce the cost of insurance, he does believe it will have other benefits including giving physicians the confidence to operate in Cayman and insurers more confidence as well.
 
An aggressive build time-frame.
Construction for the Centre is set to break ground in January 2011 with the first phase due for completion around 18 months later. The first phase is scheduled to house around 200 beds, specifically for cancer, cardiac, orthopaedic and major general surgery patients. It is estimated that there will be around 600 to 800 staff, of whom it is anticipated that around 150 to 200 will be Caymanians. Total investment by Shetty and his investors is expected in the US$1 billion to $2 billion region.
 
Shetty anticipates that the entire project, which will include a university he expects will train Caymanians for jobs within the centre, will be completed in around 15 years through a multi-phased development. There is also discussion that links will in the meantime be forged between the University College of the Cayman Islands and the centre for the formation of some kind of medical faculty.
 
“The development will occur as the market dictates,” Scotland advises. “In this way Cayman will not be overwhelmed by development or individuals all at one time.”
 
David Legge, who is acting as Shetty’s on-island communications manager, says that larger infrastructure such as the airport and airlift, accommodation, roads etc., will not require any major alterations within the first five years or so of the project, but after that they will most likely need to be carefully reviewed.
 
Who will benefit?
Legge states that they anticipate that patients will come predominantly from the US but that they will also be targeting countries elsewhere for marketing purposes.
 
“We expect that around 50 per cent will be from the US, with the remainder coming from Canada, South America, the Caribbean, Europe and elsewhere,” he states.
 
Scotland says the top surgeons and specialists will initially be brought in from overseas to run the new centre and that no one country will have the monopoly on staffing to ensure a good social mix.
 
Legge adds: “Many of the key personnel heads of department will initially be coming from the US so North American patients will have a certain level of comfort interfacing with their American counterparts.”
 
There will also be tremendous opportunities for Caymanians to take advantage of jobs not only within the centre, but with the ancillary services that such a project will attract.
 
“The political will is there to ensure that Caymanians get their fair share of opportunities,” Scotland says. “The agreement signed with the Narayana Centre only permits for the development of the centre itself and not surrounding businesses, which will help facilitate the centre, such as restaurants, shops, hotels, convalescence homes, accommodation and so on,” he states.
 
Scotland says the government will help interested Caymanians retool to ensure that they are up to speed with the stringent requirements of the new centre while Legge says that all Caymanians working at the centre will be adequately trained to the skill levels needed.
 
In particular, there will be great opportunities for Cayman’s IT industry to flourish with the onset of the new centre.
 
“Dr. Shetty’s centres in India are on the cutting edge when it comes to technology,” Legge says. “And India is at the epicentre of the world’s IT programmers. Dr. Shetty’s institutions are experts at matchmaking the worlds of IT and medicine. They are pioneers in the science of telemedicine, developing communications with hospitals all around the world using instructional videos to perform highly sophisticated surgeries and techniques.”