Harvard Business Review | by Vijay Govindarajan & Ravi Ramamurti – June 22 2018
There was a time when the American steel industry seemed invincible. The American automotive industry looked rock-solid. American consumer electronics industry seemed untouchable. In every one of these cases, global competition changed the game forever. Will the same happen to health care in the United States?
By almost any measure, American health care costs are out of control but the system refuses to change. What if you could provide excellent care at ultra-low prices at a location close to the U.S.? That’s what Narayana Health(NH) did in 2014 by opening a hospital in the Cayman Islands — Health City Cayman Islands (HCCI) — which was close to America but outside its regulatory ambit.
As we explain in Reverse Innovation in Health Care, Narayana Health’s founder, Dr. Devi Shetty, wanted to disrupt U.S. health care with this venture, set up in partnership with America’s largest not-for-profit hospital network, Ascension. “For the world to change, America has to change,” Shetty told us. “So it’s important that American policy makers and American think-tanks can look at a model that costs a fraction of what they pay and see that it has similarly good outcomes.”