Billion-Dollar Potential of Nursing

OCED countries, by 2020, could generate anything upto 60 million jobs in looking after the disabled alone, says Swaminathan S A Aiyar.

In my last column I said the future of business and exports lies more in services than manufacturing. Which services have the greatest scope for exports?

A recent report for the Indian Institute of Foreign Trade by H A C Prasad and Vijaya Katti identified super-speciality hospitals (like Escorts Heart Hospital) as having great dollar-earning potential. They are right about the potential of health care but wrong about the high-tech end. The truly mind-boggling potential lies in the low-tech field of nursing.

Speciality hospitals can no doubt attract overseas clients, especially from neighbouring states. But a super-speciality hospital costs almost as much to build (and charges almost as much) as a five-star hotel. This greatly limits the potential. Nepalese and Bangladeshis may see India as a high-skill centre, but people in the big western markets are reluctant to trust Indian skills.

The cost of flying people from abroad to India will usually offset the cheaper cost of medical care. Foreign insurance companies do not reimburse clients for medical services purchased in India, and this is an enormous hurdle. Finally, speciality surgery provides only a few man-days of work per patient, and will create relatively few new jobs, even taking into account indirect employment through canteens and such.

An infinitely larger market exists for hi-tech nursing. The population in all countries, but especially OECD ones, is ageing rapidly, and life expectancy may soon touch 85. People above 60 may by 2020 account for almost half the population in Germany and Japan. Unlike in the past, the aged now have money, thanks to social security. The aged now constitute the biggest chunk of tourists (including those undertaking religious tourism to Buddhist centres like Bodh Gaya). That is a low-tech industry of immense potential that we have barely tapped.

But above all, the aged constitute a market for health care. In the US health care accounts for 14 per cent of GDP, not far short of 18 per cent for manufacturing. The longer Americans live, the more they spend on health, since illness grows with age. According to some studies, 90 per cent of the lifetime health expenses of Western citizens is spent in the last decade of their lives.

So in all OECD countries, longevity and health spending are chasing each other upwards, making health care one of the fastest-growing segments of these economies. Indeed, health-care costs are now squeezing budgets in all OECD countries and are a major issue of political debate.

Layfolk think doctors and hospitals constitute the bulk of health care. In fact nursing yields the biggest bills. Old people visit doctors in crises. But in between they need nursing, some permanently.

Joshua Wiener of the Brookings Institute estimated in a paper in the mid-1980s that fully half of people above 65 need some nursing, and most at least two years of nursing. The disabled will require much more. In the mid-1980s the US had 4.5 million disabled elderly, of whom two million were serious disabled. Alzheimer’s Disease is growing rapidly. So is osteoporosis which leads to frequent bone fractures, which take long to heal among the aged. As medicine conquers more killer diseases, the survivors will increasingly become the helpless old.

Mr Wiener estimates that the US would have 8 million elderly disabled by the year 2040. Add those from Europe and Japan, and the number in the OECD will approach 20 million. Once upon a time families look after the disabled aged in these countries. But with the emergence of the nuclear family, old folk use insurance to pay commercial bills.

The elderly disabled will generate an enormous number of person-years of work. Even with some mechanisation, a disabled person will generate up to 1000 person-days of work per year. Those needing permanent nursing round the clock require three nurses per day in eight-hour shifts.

OECD countries by 2020 could generate anything up to 60 million jobs in looking after the disabled alone. This colossal figure means that nursing will become a far bigger employer than all the car factories, maybe all industries put together in the OECD. That is the phenomenal scope of nursing.

The Medicaid programme in the US, aimed at poor people, was initially intended to help finance medicines and hospital fees. But by the mid-1980s no less than 43 per cent of Medicaid was swallowed up by nursing. Mr Wiener estimated that the proportion of Medicaid recipients using nursing was only 5 per cent, yet they spent almost as much money as the other 95 per cent who only needed medicines and hospitalisation. Nothing demonstrates more vividly the income and jobs that nursing generates.

India needs to cash in on this. One way would be rotating nursing contracts, where a nursing contractor rotates nurses every year to ensure migration is temporary. OECD countries will resist this, but India needs to point out that their nursing needs will spiral in coming years, and if it is not met by fixed-term contracts it will be met by illegal immigration.

The best way to push India’s case is to not talk to foreign diplomats but medical insurance companies in OECD countries. These companies want desperately to reduce their liabilities. Cheap nursing from India and other developing countries will certainly do that. Getting a few American insurance companies on India’s side of the argument will do far more for changing the WTO system on services than anything Indian negotiators can do.

A second way out is to set up old-people’s home in India for those needing long-term nursing care. It is not economic for medical insurance companies to fly Europeans or Americans to India for an operation, but it will be economic to fly them for long-term nursing that could run into years. This will, however, require a sea change in attitudes in both India and the OECD.

There will be initial resistance in the OECD to the idea of sending their old Folks to the Third World. Indians too are not attuned to providing the overall environment that OECD folk expect. Most foreigners fall ill if they drink our polluted urban water. Escorts Hospital may be spick and span, but the surrounding area is filthy and crawling with germs. We will need to create special townships with international quality services. And the staff will have to be trained in western norms of sanitation and cleanliness.

Only then will India be able to persuade foreign insurance companies and governments that it is worth using India is a global nursing centre. Maybe these aid-age care centres will have to be run by Foreign investors to begin with to provide foreign patients with the feeling that they will be looked after in the manner they are used to.

All this adds up to a formidable agenda. Yet the task must be undertaken, given the huge potential that nursing holds.

Note that nursing does not imply female employment alone. Male nurses now constitute a significant part of the US market, and Indian males need to shed their traditional notion that nursing is just female work. We have spent lots of time trying to open up traditional men’s work to women: the reverse process needs to start too. The big bucks involved will ease the transition. It is a comforting thought that the globalisation of nursing will improve gender justice in India.

What do you think?