Wednesday, March 10, 2010Marketing our Healthcare Services

Benito WheatleyMeeting the Challenges of An Evolving Economy

In the midst of a sluggish global economic recovery, opportunities are emerging in the United States (US) healthcare market from which the British Virgin Islands (BVI) can benefit tremendously. At present the US is experiencing a healthcare crisis of epic proportions, fueled by burgeoning healthcare costs. The escalating costs are being driven by high insurance premiums, medical malpractice insurance, defensive medicine, high operating costs, and inflation, all of which have left millions of Americans with limited or no access to the US healthcare system. This untenable situation is forcing patients, healthcare professionals (doctors, nurses etc.), and healthcare institutions (clinics, hospitals etc.) to seek cheaper alternatives. In effect, the US healthcare crisis has opened up the healthcare market for those providers who can deliver quality healthcare and services at a lower cost.

Enter BVI
Incidentally, the US healthcare crisis is occurring at a time when the BVI is aggressively upgrading its healthcare infrastructure with the construction of a new state of the art hospital. The new hospital’s design and specifications give it vast infrastructural capacity, which presents the government with the enormous challenge of putting the facility to optimal use. A public-private partnership can harness its full operating potential and position the territory to capitalize on high US demand for medical care. Likewise, the US health care crisis is taking place at a time when excess human resource capacity may be building-up in the BVI’s financial services sector as demand for financial services remains below pre-financial crisis levels. The surplus of accounting, finance, and administrative talent in the labor pool positions the BVI to supply back-office services to the US healthcare services industry.

Public/Private Partnership
A public-private partnership has the potential to maximize use of the new hospital’s infrastructure and to greatly improve the quality of care available in the territory. Moreover, it would help to offset the administrative and financial cost of operating the new facility. In a partnership of this type, the government would invite a recognized US healthcare provider to open a branch of its medical institution in the new hospital, where it would provide medical care to US patients and other individuals seeking medical attention. A select number of floors would be reserved for exclusive use and operation by the branch, which would in turn pay rental fees under a negotiated lease agreement. The branch would operate independent of government, but share information and expertise with local hospital administrators and medical staff.

An arrangement of this type would benefit the territory in a number of ways. First, a public-private partnership would help alleviate the administrative and financial burden on the government to fund, operate, and staff the facility entirely. Allowing a privately operated medical institution to ramp up its own operations would alleviate some of this burden. Second, a public-private partnership would ensure that desperately needed advanced medical care is available in the territory. BVI residents would largely support the option to receive specialized medical care on-island, as opposed to traveling abroad to seek medical attention in Puerto Rico, St. Thomas, the US, or Europe. The argument is even more compelling in the case of medical emergencies.

Third, the demand for services of different sorts and consumption generated by the operational needs of the private medical institution and the personal needs of its staff would stimulate the local housing, transportation, and retail markets and go a long way toward raising incomes and creating employment.

Fourth and last, the draw of a ‘brand’ medical institution and medical care in the sunshine could open up the market for medical tourism in the BVI. The addition of a ‘medical’ attraction to the territory would be a great compliment to the BVI’s tourism product.

Health care back-office services
A significant portion of US healthcare providers’ costs are administrative and non-medical in nature, which are costly to perform in-house. Off-shoring functions such as billing and collections, claims processing, accounting, payroll, and other activities would greatly reduce operating expenses and increase the provider’s ability to deliver frontline care. The BVI is well positioned to provide US healthcare providers with healthcare back-office services with its well established financial services infrastructure; its workforce’s ability to perform the required support functions; and its potentially lower labor costs.

Offer incentives and they will come
In order to attract a medical institution of the caliber of the Cleveland Clinic in Cleveland, Ohio or Johns Hopkins Hospital in Baltimore, Maryland, the government would have to offer the healthcare provider a package of incentives which would help to reduce its costs and make it advantageous to operate in the territory. These incentives could include the introduction of legislation that creates a friendly legal environment for medical professionals to practice. Such legislation could contain provisions which limit legal liability in medical malpractice suits and caps fines. A legal environment of this type would be attractive to medical professionals in the US who are forced to increase medical fees to cover the cost of medical malpractice insurance and defensive medicine. An additional piece of legislation could be drafted to create a non-prohibitive regulatory environment in which to provide unconventional medical treatments and conduct non-traditional medical procedures that could be potentially life-saving. Other measures such as limited tax breaks and exemptions on duty on medical equipment, technology, and supplies, can be thrown in to sweeten the deal. In return, the people of the territory would receive access to advanced medical care on-island and the BVI’s own hospital will benefit from the sharing of medical expertise, knowledge, and experience in hospital administration and management.

Grasping the opportunities
The economic opportunities in healthcare lie in capitalizing on demand in the US market for a reduction in the cost of quality healthcare and services. This can be achieved through a public-private partnership that puts the new hospital’s infrastructure to optimal use for both the US and local markets, and in the process reduces the administrative and financial burden on the government to deliver healthcare to the public. In addition, providing healthcare back-office services to the US market would boost the private sector and positively impact employment and income. If these efforts are successfully undertaken, the BVI will be well on its way to developing a bon a fide healthcare industry and healthcare back-office services sector that will offer great social and economic benefits for the society as a whole.

Oyster Publications Inc, PO box 3369, Road Town Tortola, British Virgin Islands, VG1110