Raghuram Rajan on health care in India

Hospitals in the United States could learn more from each other, as well as from hospitals elsewhere, including India, where costs have been brought down by bringing mass-production techniques perfected in manufacturing to health care.  Indian hospitals have found that error rate are reduced when their doctors specialize and perform many procedures of a similar kind.  The time for operations is also cut down, with no loss of safety.  A focus on eliminating unnecessary frills and on utilizing expensive resources like doctor time most effectively also helps even though good surgeons in India earn about as much as surgeons in the United States, the cost of operations is often an order of magnitude lower.  Regulations that force hospitals in the United States to be "full-service" hospitals rather than permitting specialization tend to drive up costs.  Greater competition between hospitals could also bring down costs; an easy way of encouraging cross-border competition is to authorize Medicare and Medicaid reimbursements for procedures performed by authorized hospitals in other countries, like Mexico and Thailand.

That is from Rajan's Fault Lines: How Hidden Fractures Still Threaten the World Economy.  Most of this book is on the financial crisis — and not health care — and it is one of the two or three best books on that topic.


Comments for this post are closed