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Mass Customization meets Health Care

November 30, 2009

Editor: This is a guest post by Max Marty, who conducts business research for TSI.

Henry Ford didn’t invent the car, and he didn’t make fabulous advances in automotive engineering. Where Ford did make breakthroughs was in the process of building a car, and it was these breakthroughs that drove costs down to create a value proposition that consumers (and Ford’s competitors) couldn’t ignore.

Today, the same innovations might finally be happening in Health Care, as we can read in the WSJ article The Henry Ford of Heart Surgery: In India, a Factory Model for Hospitals Is Cutting Costs and Yielding Profits. Dr. Devy Shetty has managed to successfully implement inexpensive, mass produced, individually tailored cardiac surgery at his specialty hospital in Bangalore, India. His facilities perform twice as many surgeries per year as the biggest cardiac hospitals in the U.S. while maintaining lower estimated risk-adjusted mortality rates and charging a tenth to a fiftieth the cost of comparable procedures in the states. And best of all, Dr. Shetty won’t stop there, he is already looking to establish a hospital in the Cayman Islands, bringing Americans one step closer to affordable high quality health care.

So what would U.S. healthcare look like given that sort of competition? What sort of process innovations could U.S. companies and individuals develop to give customers an even better deal than Dr. Shetty can provide?  Robin Hanson has proposed municipalizing medicine as one way of getting a more competitive market.  Unfortunately, politics has prevented such competition from fueling process innovation as of yet, but perhaps Dr. Shetty, and others like him, will soon look to the sea to expand their market reach and provide us with the sort of price and quality package which only a functional market can provide.

One Comment
  1. Contemplationist permalink
    December 3, 2009 1:09 am

    Great article Patri!
    I just hope that the socialist Indian government does not try to “help” and screw things up. I suppose even though India is still pretty socialist, the TREND is towards more liberalization, regardless of the speed of reform, so we might be lucky to see that Cayman Islands hospital and a fantastic, competitive health care market in India.

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