Why you should care

Because rising health care costs are a global concern.

Peter Ngari had mortgaged his house, sold his car and borrowed from a cousin for his mother’s breast cancer treatment in the southern Indian city of Chennai when a moment of defeat turned into a dose of hope.

By December 2016 the auto parts businessman had spent 500,000 Kenyan shillings ($4,860) shuttling between Nairobi and Chennai and another 300,000 Kenyan shillings ($2,880) on treatments. The 34-year-old decided he could not afford to continue. Then Ngari learned about a Nairobi chemotherapy center run by an Indian hospital group. The medical costs weren’t lower than in India, but the bulk of his expenses — traveling back and forth — would be saved. He turned to the Nairobi center for his mother.

East Africa in particular is keen on Indian health care. If India sets up treatment facilities here, it will earn dramatic goodwill.

Gerrishon Ikiara, economist, University of Nairobi

Medanta, the company that runs the Nairobi center, is one of many Indian groups that are reshaping India’s global health care profile. For years the country has been the world’s pharmacy — a supplier of cheap generic drugs. And the offer of quality health care at lower costs than those in the West has made India-based hospitals magnets for patients from developing nations in Africa and Central Asia, spawning a medical tourism industry that is expected to reach $8 billion by 2020.

But now Indian firms are also using their medical and managerial expertise to set up international empires — some through investments and others through partnerships with local hospitals. For patients like Ngari, the shift eases access to health care. For the Indian chains, the move opens up new markets, including patients who can’t afford to travel to India, and helps globalize their brands. “We are able to enlarge our patient base,” says Rajeev Dua, head of growth and business planning at Fortis, one of India’s largest hospital chains. It operates and manages facilities in Bangladesh, Nigeria, Ghana and Mauritius. “Our brand becomes a household name there.”

India’s association with health care in the developing world — even war zones — isn’t new. Indian physician Dwarkanath Kotnis is still revered in China for serving there during the war against Imperial Japan in the late 1930s. In that same decade Indian doctors volunteered to fight for Republican Spain against Francisco Franco. And, for more than a century, parts of East Africa, the Caribbean, Southeast Asia and the Pacific Islands have hosted Indian-origin communities, initially as indentured labor. “That historic association assists Indian hospitals seeking to expand to these regions,” says Biju Mohandas, head of the health and investment team for sub-Saharan Africa at the World Bank’s International Finance Corporation. “Early engagement with local doctors and strategic partners are key to long-term success.”

But there are also factors at play that simply did not exist earlier. Many East and West African nations, and countries like Bangladesh in South Asia, are witnessing rare political stability and economic growth. Expendable incomes have risen. Relatively closed economies in Central Asia and Iran are only now opening up. The Middle East, where wealthy patients have traditionally visited India for specialized surgeries, is ripe as a market.

And unlike the past, it is India’s private health care players — not individual doctors — that are stepping into new territories. India remains their biggest market: Its health care industry, worth $79 billion in 2013, is expected to explode to $280 billion by 2020. But appetites have grown, and they’re ready for expansion abroad. “They see a good opportunity to enter a growing market and get a foot in the door,” says Mohandas.

The hospitals have followed diverse approaches. In 2005 the Chennai-based Apollo group invested in a hospital in Dhaka, Bangladesh, and now plans to open a second one in Chittagong, in 2018. In 2012, it set up a clinic in Dar es Salaam, Tanzania. Fortis bought stakes in a Mauritius company that in turn bought two hospitals there. A second route involves joint ventures between Indian hospitals that provide technical assistance and investors with funding — that was Medanta’s strategy in setting up Medanta Africare in Nairobi, in May 2012.

A third model has emerged as the most popular. Local health care groups reach out to Indian chains, which devise a business plan and manage the hospitals for a fee. Fortis is running a hospital in Ghana and three in Nigeria using this approach. Apollo helped local health care firms plan and set up hospitals in Poland, Saudi Arabia, Nigeria, the Antilles and Yemen. “We don’t invest any money,” says Sukhmeet Sandhu, Fortis’ head of international operations. “That’s our preferred model.”

To be sure, India’s hospitals have had setbacks. Medanta Africare has faced allegations that it was referring patients to Indian hospitals in return for kickbacks. Anil Maini, Medanta Africare’s chief, denied the allegations before a Kenyan Parliamentary investigative team. He did not respond to an email request for an interview.

Still, both the demand for Indian health care and the desire to deliver it are spreading. “East Africa in particular is keen on Indian health care,” says Gerrishon Ikiara, economist at the University of Nairobi. “If India sets up treatment facilities here, it will earn dramatic goodwill.”

That diplomatic potential is something India now recognizes. Since 2015, Indian Prime Minister Narendra Modi has inaugurated a hospital in Sri Lanka, donated cancer treatment technology to Mongolia and Kenya and visited a hospital in Tajikistan and a biomedical research center in Kyrgyzstan — all built with Indian aid. In Nairobi last year, he also promised a cancer hospital.

Such is the optimism that even challenges are viewed as opportunities. Mauritius, for instance, does not allow organ transplants, but that has upsides for Indian hospitals with a presence there, point out executives. “Since we are present in those countries,” says Dua, “those patients will likely opt for the same provider in India when they come here.”

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