It is of course self-serving for the CEO of a manufacturing robotics company to suggest that to remain competitive in a globalized world, US manufacturers with higher labor, health care, and retirement costs than Third World competitors need to replace workers with robots (assuming they cannot fully succeed in inflicting Third World wages and disbenefits on American workers — though when one looks at Wal-Mart, the assumption seems a bit shaky.) But he happens to be right.

He is worth quoting at length, because in the face of medical tourism and telemedicine — two major trends driving and constituting the globalization of healthcare — his message will soon apply to healthcare and not just manufacturing. It is going to be more cost-effective to “produce” healthcare through automation than through people. I do not buy the old refrain that healthcare can never be without the human touch. It is as outdated and myopic as the late 19th century gaffe that no-one would use a telephone because it is too impersonal. Machines increasingly supply a surrogate human touch (what about massage chairs?) and where they don’t yet, the human mind readily creates its own internal surrogates. So when you read these excerpts from the “Save Your Factory” website, think “Save Your Hospital.”

Think it, too, as India continues to attract “medical tourists” from the West with its low-cost but high-quality surgeries, and an entrepreneur suggests that the trend should be encouraged by US policymakers as a solution to the healthcare cost crisis. Think, even, “Save Your Life Sciences Industry,” as Singapore continues to attract biomedical brains from the rest of the world by offering more money than they can earn at home (no pittance if home is the US) and — the clincher for some — freedom to follow science. And think upon it as you learn that China has become the first country to approve a virus vector-borne cancer therapy — an improved version of one originally developed in the US — and that Europe has moved ahead of the US in dealing with obesity through technology less complex and evidently safer than the gastric bypass favored by US doctors.

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“We have had manufacturers tell us that they are afraid that if they invest in automation they will displace workers. The bottom line is that if they do not innovate and make investments in productivity enhancing technology, they are at risk of losing their entire company; and if they move production offshore they risk currency fluctuations, longer lead-times, loss of control of the manufacturing intellectual property, and process control. There will be no North American jobs left to preserve if companies are not equipped to compete effectively in the world market.

The productivity enhancing technologies that we see today such as plant floor automation are having as much impact on the economy as the farming technology that was implemented in the last century. Agricultural workers constituted more than 38% of U.S. employment in 1900. Today they are about 2% of the work force, yet we produce more of the world’s food than we have ever produced.

A similar analogy can be drawn with the U.S. steel industry. Over the last 20 years, the number of U.S. workers employed by the U.S. steel industry dropped by 74% from 289,000 to 74,000. However, output increased by 36% from 75 million tons to 102 million tons during the same time frame. This was accomplished by technology innovations and productivity enhancing tools.

We are at a critical stage in our economy where productivity enhancing tools such as plant floor automation are having a significant impact. There seems to be an impression that manufacturing will move to the countries with the lowest labor rates. The facts show that manufacturing will go to the countries whose companies win the race to automate, which in turn, helps reduce production costs while improving quality. North America is in the best position to win the automation race given the infrastructure that currently exists for implementing automation. . . .

Did you know that within six years there will be a shortage of 10 million workers in the U.S. versus today? Within 15 years, there will be a gap of 30 million workers — 70 million baby boomers will retire and there are only 40 million new workers to enter the U.S. workforce.

There are really three options to fill this gap:

1. Immigration of workers into North American manufacturing
2. Export manufacturing out of North America
3. Keep the manufacturing in North America by investing in productivity enhancing tools”

Medical Tourism

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Indian medical entrepreneurs, writes Jim Landers in the Dallas Morning News, offer outpatient laser surgeries for corrective vision, psoriasis, and varicose veins for a quarter of the cost in the US and with the same state-of-the-art equipment. But that’s not all: A Texas restaurateur recently paid US$15,000 for a successful triple bypass at Escorts Heart Institute and Research Centre in India’s capital, New Delhi. That was $105,000 less than the quote he got from a US hospital. A Florida businessman who encountered complications when he went to India nevertheless said he was pleased with the outcome. “In the States, I would have ended up paying a considerable chunk of my financial estate to some hospital. It’s so far out of line, it’s unreasonable. As an American, I’m embarrassed by this situation.”

Un- or under-insured US small business owners are “leading the way” in medical tourism, but with insurance premiums approaching $10,000 a year per employee, even those Americans lucky enough to be covered by employer-paid health insurance may soon be looking to India, at least for elective procedures or ones that can be scheduled.

This possibility is being actively encouraged by at least one Indian entrepreneur, who has even proposed to New York Sen. Hillary Clinton and US Chamber of Commerce president Tom Donohue, among others, that American employers “Tell employees they can get their emergency care at home. But for elective procedures or ones that can be scheduled, offer a menu of approved hospitals around the world and let them choose where they want their surgery performed. The insurance company will take the airfare. And the policy will cost $5,000 a year.”

He proposes to build a “Medcity” teaching hospital and research institute complex in the Bahamas, so US patients would not need to go all the way to India where a Medcity with 1,800 beds is already under construction. “We’d staff it with the best people in the world outside the United States,” he told Landers. “Let’s see if we can deliver better medical care than America at half the price and half an hour away.” He sees his hospitals as sharing the patient load rather than draining work from Western health care providers.

Medibrain Drain

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The Singapore government is spending billions of dollars to develop its biomedical industry, write Sara Webb and Mia Shanley in Yahoo! News. With Singapore offering large financial rewards and scientific freedom, it is having little trouble recruiting top US and other international scientists who face “restrictions on government funding for stem cell research, shriveling grants, and curbs on commercial spin-offs from their work such as consulting and other fees,” according to two of them.

Singapore’s catch of scientific superstars includes:

• Husband-and-wife cancer research team Neal Copeland and Nancy Jenkins, who bring with them 50 to 100 different strains of mice bred for research into common cancers;
• Alan Colman, a British scientist whose team cloned Dolly, the sheep;
• Sydney Brenner, co-winner of the 2002 Nobel prize in Physiology or Medicine for work on the genetic regulation of organ development;
• Breast cancer researcher Edison Liu, born in Hong Kong but emigrated to the United States, where he worked at the National Cancer Institute; and
• Japan’s Yoshiaki Ito, who also worked at the US National Cancer Institute and helped persuade Copeland and Jenkins to move to Singapore.

Drug Development Shifting to China

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In November, China became the first country in the world to approve a cancer therapy (for late stage refractory nasopharyngeal cancer) using a virus that attacks tumor cells but not healthy ones. Essentially the same drug was first developed by an American company, but abandoned in the face of US regulatory hurdles.

The therapy, known in China as H101, is a form of cold virus genetically engineered to attack only cells with a particular genetic defect typical of cancer cells. It was approved by China’s State Food and Drug Administration (SFDA) following a multi-center, randomized parallel-group study comparing 5-fluorouracil and cisplatin-based chemotherapy with and without H101. The H101 study group demonstrated a 27% increase in the number of patients who had complete or partial tumor size reduction compared to the control group.

The Chinese company that developed H101 said it will conduct clinical trials to test the therapy’s effectiveness against non-small cell lung cancer.

Europeans Ahead in Obesity Tech

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In Europe, reports Elisabeth Rosenthal in the New York Times, surgical procedures designed to cure obesity are now thought simple and safe enough for people who are merely overweight. The number of procedures carried out there has doubled in the last three years, most of them involving the adjustable “lap band,” a band tightened around the stomach to reduce its size. A more recent innovation involves inserting a balloon through a tube in the mouth and inflating it inside the stomach. It takes 15 minutes. Medical, psychological, and physiological criteria for weight-loss surgery are being eroded by the safety, availability, and ease of use of the balloons, and by patient demand. Patients who don’t qualify for surgery but have failed diets and are gaining weight are better treated now, rather than waiting until they get morbidly obese.

But many American doctors apparently don’t agree, perhaps because early trials of banding and balloons were not as successful in the United States as in Europe. The lap band is only now starting to catch on in the United States, writes Rosenthal, while balloons are not even up for US Food and Drug Administration approval, although a trial of ten patients was recently started in Kentucky. Eighty percent of weight-loss surgery in the United States involves the far more arduous, technically demanding, and complication-prone bariatric bypass operation in which the stomach is cut and made smaller with staples, then reconnected far down in the intestine.

In Italy, where both new procedures are widely accepted, they are paid for by the national health insurance plan. France covers the lap band but not the balloon, which costs patients almost US$6,000 out of pocket.

The balloon procedure is not totally safe. Rosenthal reports that “In a recently completed clinical trial involving more than 2,500 patients in Italy, serious complications occurred in 5 patients when pressure from the balloon eroded the stomach wall and caused it to burst. Two of the five patients died. On the other hand, almost 90 percent of people with obesity-related illnesses like diabetes and high blood pressure were cured or showed improvement after six months of the balloon.”