This past April, GM set a record for monthly sales… in China. It sold 151,084 vehicles, a 50% increase over its April 2008 results, and is planning to open a new factory within the next few years. Back in Detroit, GM is in bankruptcy and falling into a multi-billion dollar, government supported death spiral.
How can GM compete in China, but not in America?
Two reasons. In Asia, GM uses strategic partners and a global manufacturing platform to build light engine fuel efficient cars with South Korean technology, Japanese production techniques, and Chinese labor that competes head-to-head with Toyota. They also don’t have to build staggering health-care costs into their cars, which effectively add $1,500 to the cost of every vehicle they produce in the U.S.
So the question is this: Can the U.S. do in health care what GM has done in China? After all, what’s good for GM is good for America, right? Maybe the quickest way to reform U.S. health care is to (gulp) look at GM…in China.
What would happen if U.S. health care followed GM’s lead in China and developed a global health-care delivery platform using best practices, places, prices and people to deliver care? What if you allowed Americans to access lower cost medical treatment in places like Mexico, Thailand and India at U.S. accredited medical facilities and let them pocket the savings, which can be upwards of $50,000 for complex procedures like heart bypass surgery?
I think you would have a lot of takers.
A recently published Gallup Poll found that up to 29% of Americans would consider traveling abroad for medical procedures such as heart bypass surgery, hip or knee replacement, plastic surgery, cancer diagnosis and treatment, or alternative medical care, even though all are routinely done in the United States. We’re not just talking about the uninsured, but the insured as well.
Granted, you aren’t going to travel to India for a cough or cold, but if you need heart surgery Indian private hospitals are 70% cheaper than U.S. private care and offer some of the finest cardiac surgeons in the world. It’s hard for Americans, in general, to understand why anyone would travel to a developing country for health care, but the reasons are compelling and they are not just about cost, but access and service and facilities too.
GM broke out of its big engine, vertically integrated, U.S.-centric model and found that it actually had a viable business and a desirable brand in Toyota’s backyard. I think U.S. health care will discover the same thing if and when it eventually breaks out of its U.S.-centric, high cost defensive medical delivery model–or breaks apart from it.
In health care, like in autos, the U.S. can learn a lot from Asia. As I write this, I see GM has announced that it plans to export some of its fuel efficient Chinese made cars to the U.S. within two years. Strange but true.
Read more of Ruben Toral’s Medical Leave blog
Ruben Toral is Founder of Medeguide (www.medeguide.com) and President of the International Medical Travel Association (www.intlimta.org). He specializes in strategic consulting, branding, marketing and web platforms for the health-care and wellness industries, and is a recognized thought leader in medical tourism and health-care globalization. He is based in Bangkok, Thailand.