August 25, 2008

From Indian IT Tycoon, Health Care for the Poor

Dr. Abhijeet Dashetwar, head of the cardiac department at government-run Gandhi Hospital in Secunderabad, India, stands in the middle of a cardiac care center under construction and points to where cutting-edge monitoring systems will be installed. A new government health-care insurance program for the poor administered by private carrier Star Health and Allied Insurance made it possible for the hospital to pay for the $600,000 upgrade. The old cardiac center, with just eight beds, shared operating rooms with other departments; the new one will have 15 beds and three operating rooms. "Finally we can afford the equipment we need," Dashetwar says.

The insurance is part of a multi-faceted initiative in the state of Andhra Pradesh called Aarogyasri [which means wellness or health in several Indian languages] that government leaders claim is the most far-reaching program in the world providing health care for the poor. In partnership with private industry and foundations, the government of this state of 80 million people is offering a new emergency communication system, ambulance services, a call center for advising people on their health care, and more than 100 vans that will go into remote villages to educate people and provide testing and inoculations.

The initiative is ambitious. About 10 million people qualify for the program that provides health insurance, and the mobile health program will reach about 40 million. The entire Andhra Pradesh population of 80 million is eligible to be served by the emergency response system. "We're in the lead not only in India, but in the whole world in delivering health care for the poor," declares P.K. Agarwal, the health secretary for Andhra Pradesh.

Executives Pitch In The newest piece of the initiative, the mobile health vans, was officially launched on Aug. 22 in Hyderabad, the state capital, by Chief Minister Y.S.R. Reddy, and B. Ramalinga Raju, chairman of Satyam Computer Services, one of India's largest technology outsourcing firms. Two foundations that Raju set up are providing the management, staff, and facilities for all of the services except insurance.

For Raju, the announcement is an endorsement of his strategy [, 12/7/06] of bringing the skills of India's vaunted tech industry to bear on the country's deep social problems. He has recruited executives from Indian corporations and multinationals to set up and oversee operations that in developed nations are normally handled by the government. Raju believes that by combining business knowhow with government funds -- and making the funds go much further -- it's possible to deliver quality health care for the masses. "I have no doubt that this will be a model for the rest of the world," he says.

Not everybody is a fan. Jayaprakash Narayan, president of the Lok Satta Party, a new reform political party in India, approves of the emergency medical and health information services but finds fault with the insurance program. Similar to Medicaid in the U.S., it provides free hospital treatment for people under the poverty line for major diseases such as cancer and heart disease. Narayan believes that the insurance program is wrongly conceived because, he says, it provides expensive surgery for a relatively small number of patients and fails to address the more routine and preventive health-care needs of the masses.

"What India needs is a robust public-private partnership with a focus on preventive, primary, and secondary care," he says. "The accent should be on low-cost, high-impact interventions." Narayan says the two services backed by Raju, the emergency response service and the health-care advice service, add a lot of value and are cost effective but are not a substitute for a broader-based health-care delivery system.

Ramalinga Raju's Emergency Response Raju, 53, got involved in health care three years ago when he set up a foundation, the Emergency Management & Research Institute, to create an emergency response system. At the time, there was no 911 in India, and millions of people were dying each year who could have been saved with the proper intervention. EMRI launched trials on the outskirts of Hyderabad. Raju, who founded Satyam 21 years ago and has built it into a $2 billion company with clients such as General Electric (GE) and Caterpillar (CAT), decided to set up a system of his own -- with the hope that once his projects proved credible, the government would back them.

"In the past, governments took on socialistic models. Now people and governments are moving away from that and embracing the market economy, but that doesn't mean the needs of poor people have gone away," says Raju. "I believe the socialistic model can be replaced by the public-private partnership model. It can change the entire scenario drastically."

When the government saw how effective the operations were, it decided to help fund them. Today the government pays about 95% of the operating costs for emergency response services that span the state, and Raju's foundation pays the rest. The system runs 500 ambulances and handles more than 300,000 police, fire, and emergency calls per day. EMRI and state governments are launching parallel systems in two other Indian states, and more are on the drawing board.

All sorts of technology comes into play to make the systems efficient and effective. EMRI uses a GPS system to track the location of all the ambulances so they can route them the best way. Also, EMRI researchers track all of the data concerning operations and use data mining techniques to spot inefficiencies and order up changes. They use Six Sigma techniques to improve quality. Because the systems are built from the ground up with new technology and the capability for massive scale, the organization can deliver its services at a fraction of the cost of similar operations in the U.S. In fact, Raju says once the systems are in place, they should cost no more than $1 per citizen per day to operate.

Getting to Every Corner The idea behind Raju's other health-care foundation is to take quality care to the country's most remote villages. Today, government health-care centers are in larger villages, and about 40 million people in far-off places rely on self-appointed "doctors" or travel long distances, missing work, to get care. So Raju last year set up the Health Management & Research Institute to extend the reach of quality health care to every corner of the state. Most Indians have access to mobile phones, so the first step was setting up a call center to handle their inquiries. Operators route calls to information specialists or to doctors or paramedics who make recommendations on next steps over the phone.

The mobile health-care vans are being tested in 36 villages, and the government expects to have about 500 of them in the field within a year. HMRI is tapping into a network of 60,000 government health-education workers who live in the villages. It provides them with mobile phones that they use to register locals for appointments with the van using voice commands or SMS text messages. The organization is also giving paramedic training to the unlicensed doctors in the villages so they can do a better job of dealing with routine medical complaints. "We're looking at Andhra Pradesh as the laboratory. When we get it to work here, we'll roll it out to the rest of the country," says Balaji Utla, chief executive of HMRI.

For now, the programs are spreading rapidly across Andhra Pradesh. Village people and leaders with whom BusinessWeek spoke praised the programs -- including the health insurance. "The government is paying for people to go to private hospitals as well. That's a very good scheme," says Gudapati Tulasi Mohan, the government president [equivalent to mayor] in Gannavaram, a town of 30,000 about a day's train ride from Hyderabad. In the past, poor people could theoretically get free care at government hospitals, but the combination of inaccessibility, ignorance, and the high cost of buying their own medical supplies and medicines prevented them from doing so. The new health insurance program pays for those costs. "This is going excellently for us. We couldn't provide this kind of service before," says Dr. B. Balaraju, superintendent of Gandhi Hospital in Secunderabad.

Yet at the end of a tour of the hospital's new cardiac center, as we're going down the stairs, suddenly the lights go out -- one of India's frequent power blackouts. Dr. Deshetwar, the cardiologist, ignores the darkness and keeps walking down the stairs at a quick clip. Clearly he's used to this sort of thing. Until India gets its basic infrastructure built up, including electricity, roads, and medical equipment, it will be difficult to deliver world-class health care to the masses. Still, Raju and government leaders here have shown that a partnership of government and business can do more for the poor than many thought possible.