The ceremony marked more than met the eye.

When Health City Cayman Islands on May 13 celebrated its accreditation by Joint Commission International – the fastest approval in the organization’s history – it also marked “lift off,” the start of efforts to establish the “Shetty Hospital” as the premier medical-tourism healthcare facility in the Caribbean.

Health City’s grand opening with, from left, Dr. Chandy Abraham, Health City’s CEO, Head of Medical Services and Facilities Director, Premier Alden McLaughlin, and Mr. Samir Mitra, CEO of Health Innovate Inc.

Only a few medical tourism hospitals exist anywhere.

Bangkok, Thailand, boasts perhaps the most famous, Bumrungrad International. Founded in 1980, its 580 beds make it the largest private hospital in Asia, serving more than half-a-million international “medical tourists” annually. Its supporters have called it “the world’s first truly global hospital.”

Medical tourism is a $100 billion industry, and as technology improves and more countries look to cash in – and Western medical costs escalate – the business is growing apace.

Still, for all of that, the Caribbean has remained both obscure and underserved for medical tourism, with only three small operations, at least prior to May 13: The Bahamas boasts the 72-bed Doctors Hospital, accredited by JCI in 2010; Barbados offers the Barbados Fertility Center, accredited in 2007 for assisted reproductive technologies; and Antigua has the 36-bed Crossroads Center, founded in 1988 by rock guitarist Eric Clapton, to treat substance abuse and addiction. While not JCI accredited, Crossroads has always accepted international patients.

HCCI, however, has gained JCI accreditation for its entire operation, following the success of its India-based parent, Narayana Hrudayalaya, founded in 2000 – and JCI accredited in 2011 – as a 225-bed cardiac hospital by Bangalore-based heart surgeon Dr. Devi Shetty.

Rebranded as “Narayana Health” in 2013, the “NH Group” today comprises 32 multispeciality hospitals with almost 6,500 beds in 20 locations across India, offering comprehensive services, and particular emphases in cardiac surgery, cancer care, neurology and neurosurgery, orthopedics, nephrology and urology, gastroenterology, general surgery, solid organ transplant, and critical care.

Recognizing the unsustainable, constant escalation of healthcare costs, certainly among the teeming poor of India, and more specifically in the US, and the western hemisphere, Dr. Shetty developed a counter proposition.

By cutting inefficiencies, centralizing administration and creating economies of scale and vendor management, the NH Group delivers low-cost, high-volume healthcare similar, in a sense, to how early US discount chains made available good-quality affordable merchandise to retail consumers.

Dr. Shetty himself described the concept, lest consumers perceive it as a sort of “discount healthcare” scheme, as a way to address a profound problem: “There is a difference between how Narayana is perceived and what we truly are,” he writes.

“The world perceives us as a low-cost Indian healthcare-service provider; what we are engaged in is a passionate journey to establish ourselves as the lowest-cost, high-quality healthcare service provider in the world.

“At Narayana Health, we are convinced that ‘quality’ and ‘lowest cost’ are not mutually exclusive when it comes to healthcare delivery. In fact, we are well on our way to demonstrate that we are not running our institution as just another numbers-only business, but are attractively placed to create an affordable, globally benchmarked quality-driven healthcare-services model.”

HCCI – Dr. Shetty’s first overseas venture – is built on the same model, seeking to reverse the relentless escalation of healthcare costs: “If it’s not affordable, it’s not a solution,” Dr. Shetty has famously said.

“Dr. Shetty’s model is more about lean management and stripping unneeded costs out of highly specialized procedures and surgeries,” according to HCCI Marketing Director Shomari Scott. “High volume is a portion of the formula that helps to achieve this, however, finding efficiencies, keeping the highest levels of outcomes and low infection rates. [They] all … reduce the ultimate medical costs, whilst always keeping the patient at the center.

“That,” he says, “is more of the philosophy.”

Executing “that philosophy” is exactly where JCI becomes critical, benchmarking the NH Group’s – and HCCI’s – efforts, stamping its imprimatur on an entire hospital and its procedures. Founded in 1951, the Chicago-based nonprofit Joint Commission has surveyed, toured, tested – and certified – more than 20,000 healthcare organizations and programs across the US. Most US states require Joint Commission accreditation as a condition of licensure and the receipt of Medicaid reimbursement.

In broad terms, the commission assesses a hospital’s infrastructure for quality and safety, seeking to assure patient outcomes, reduce morbidity and mortality, looking at processes for infection control and medication management.

The group evaluates services to patients and identifies areas for improvement and areas of risk while doing triennial “intra-cycle monitoring,” employing a checklist similar to that of airlines and the nuclear power industry, according to Ann Scott Blouin, commission executive vice president of customer relations with a doctorate in nursing sciences.

“These are long-term relationships,” she explains. Commission certification is good for three years, then must be renewed. During that time, the group ensures its members are “sharing policies, procedures and protocols,” she says, as they confront healthcare issues.

In 1994, the Joint Commission created the Joint Commission International, essentially applying US standards globally – including efforts to reduce costs. The international commission has certified 759 healthcare organizations in 64 countries.

“JCI is the gold seal, the stamp of approval that is the benchmark that patients, employers, or insurance companies across the globe can look at and feel confident in the hospital’s quality of outcomes and service,” Mr. Scott says.

“JCI gives confidence to institutions, companies and/or potential patients that Health City is an institution that they can trust for quality outcomes. When you are dealing with such serious surgery as cardiac procedures, there is much anxiety, so this accreditation helps to alleviate some concerns and gets us further down the decision-making tunnel.”

Dr. Shetty predicated his initial October 2009 approach to the Cayman Islands government on the introduction to Western healthcare of his already certified Bangalore model – and JCI approval.

While the Cayman community was unfamiliar with the concept of “medical tourism,” officials nonetheless recognized an opportunity to boost employment, invigorating a depressed economy, even creating a “third pillar” – and expanded tax base – in a system long built on sun ‘n’ surf tourism and financial services.

Health City planners announced a wildly ambitious, 15-year, billion-dollar, multiphase project for a 2,000-bed hospital, assisted-living quarters, two hotels, a medical college and nursing school, and a research center on the 200-acre site.

Groundbreaking came in August 2012, construction started in February 2013 and the four-building, 14-acre, 104-bed first phase opened exactly 12 months later.

HCCI opened its doors in March and JCI made its award on 24 April. That, of course, made the May 13 accreditation celebration three weeks late, but it was the moment HCCI had been anticipating, the final piece of the puzzle.

“The accreditation is an important criteria for several market channels – especially in North America,” said John Doyle, CEO of HCCI partner Ascension Holdings.

One of Health City’s five operating theaters.

The St. Louis-based Ascension, founded in 1999, is among the world’s leading hospital administrators, operating 131 hospitals and 30 senior care facilities in 23 states and 1,900 “sites of care,” according to the company website. In 2014 the group provided $1.8 billion in subsidized care to “persons living in poverty,” and earned $20 billion in operating revenues.

Ascension also provides management services such as physician practice, clinical care, financial control, risk assessment, venture capital investing, biomedical engineering, information services and group purchasing, enabling a measure of cost control.

All Ascension facilities in the US are JCI accredited, and when company executives, on a routine visit to Cayman to meet a longstanding “captive” insurer, met Dr. Shetty, the synergies were clear.

“Ascension was looking to serve the underserved Caribbean market for tertiary care and … was interested in learning from Narayana’s high-quality/low-cost model by determining what from the model could improve US healthcare,” Mr. Doyle said.

In April 2012, just prior to the August groundbreaking, and deciding they “shared similar visions,” Ascension and Narayana formalized a partnership.

According to Gene Thompson, Cayman project manager, overseer, adviser, government liaison and moving force behind HCCI, the partnership means “Ascension are investors and shareholders. They give logistical support – supply chain and biomedical, for example – when necessary, while they evaluate our model.

“They have someone here almost full time, in and out of meetings, taking notes. Their view is that change [in US healthcare] has to come from outside the US system,” Mr. Thompson said.

As the operation gains its feet, and starts earnestly pursuing medical tourism, Mr. Scott says, HCCI is reaching out not so much to private insurers like Blue Cross/Blue Shield, Canada’s Generali or even Britain’s BUPA, but to “third parties and facilitators,” who help companies, often manufacturers, especially in North America, who insure themselves.

“Facilitators” are organizations that help those companies lower their medical costs by linking them to overseas sources of affordable, high-quality healthcare.

“Companies that are self-insured … make up a sizable portion of the US-insured marketplace,” Mr. Scott says, “and we are seeing a lot of movement in those areas … These companies tend to be more willing in the early phases to find creative ways to garner the best quality of services at advantageous cost-effective levels in order to give their employee base the best outcomes whilst helping to deal with their spiraling medical costs.”

Estimates peg the self-insured market at 70 million employees, and Mr. Thompson says HCCI has contracted with 18 facilitators, each with a roster of clients. While he is reluctant to name them, citing proprietary constraints, he says they are both regional and national. At least one is not even located in North America, but helps with Central and South American references.

Mr. Scott said that “in certain instances, such companies in the manufacturing industry have employees based all around the country and in certain instances may be situated outside of a major city center and need to travel a sizable distance for the higher-level tertiary services we offer.

“We, as the Cayman Islands and Health City, can then get into the considerations set and with our physical assets for recovery we are positioned well.”

One facilitator HCCI was willing to name was IndUShealth, based in Raleigh, North Carolina. Cofounder and CEO Rajesh Rao described the company as a “medical travel program administrator.” Founded in 2005, IndUShealth provides programs to approximately 55,000 employees and 70-plus employers of various sizes. He connects them to nine JCI-accredited hospitals – three in the Fortis group and four in the Apollo group in India, and Costa Rica’s CIMA and Clinica Biblica hospitals. HCCI and Cayman, Mr. Rao says, “will be our third location.”

The savings available to medical tourists are vast: A gastric bypass costing between US$300,000 and $400,000 in the US runs US$17,800 in India and $20,700 in San Jose.

A unilateral hip replacement in the US is priced between $40,000 and $55,000. In India, it costs less than half: $17,000; and $22,300 in Costa Rica. A single heart valve replacement, between $150,000 and $200,000 in America, runs $21,000 in India.

The heart valve procedure is illustrative. Costa Rica does not perform them at all, meaning IndUShealth’s options are restricted to Indian hospitals. Every international hospital has its specialties, and Mr. Rao sends patients where the procedures are reliable, even routine, and affordable.

HCCI advertises its strengths in orthopedics, tertiary cardiac care, oncology and endocrine problems. A unilateral hip replacement is pegged by HCCI between $15,500 and $18,000; a single heart valve replacement runs between $30,500 and $33,000. On average, a $109,000 US-hospital bill costs only $26,000 at Health City.

“I met with them a couple of times, first in February [2014] and then in December,” Mr. Rao says. “We have already sent two patients to them and they had some unique [medical] considerations.”

The two were from North Carolina’s HSM, previously Hickory Springs Manufacturing, a family-owned company producing items from furniture to bedding to “transportation solutions.” Among the state’s largest employers, HSM boasts 2,500 workers in more than 50 plants in 17 states – and China.

In his experience, Mr. Rao says, half his US patients have never traveled by air and 95 percent of them have never left the country.

In the end, however, the HCCI pair “were very pleased” with their outcomes, placing Cayman permanently on IndUShealth’s register.

“One of the keys is how many procedures we can effectively get in the Cayman Islands,” Mr. Rao said, anticipating not only the range of operations, but their volume, which, like any economy of scale, decreases costs as more are completed.

“We may send weight-loss cases,” to HCCI, he said, “and that is nutritionally sensitive, calling for special diets, and so resources must be carefully coordinated to administer services.”

IndUShealth looks at a couple of factors, Mr. Rao says, as a hospital seeks to join his network: Costs are primary – procedures and treatments, and the logistics of commuting to the destination, then staying for at least one week, possibly two.

“It has to be within the benefits [of the company’s health plan],” Mr. Rao says, “and that is based on what local employers pay at local hospitals.”

A second factor, Mr. Rao says, is outcomes: “What will the hospital deliver? Do they have JCI accreditation? We look at the experience levels of doctors and other personnel. How does the hospital manage other patients coming from overseas?”

Mr. Rao says IndUShealth’s programs have generated overall savings of approximately $400,000 per 1,000 employees in employer health plans, while patients themselves have reported high levels of satisfaction, rivaling or exceeding satisfaction indices reported by leading US hospitals.

HCCI has already treated more than 4,000 international patients, and 10 percent of all surgical procedures have been on US “medical tourists.”

Full realization of HCCI’s potential as top-choice medical-tourism facility, “will take a little while,” he said, but “they are a class act.”