National Nurses United

a rate of 5.25 percent, instead of 35 percent. The "holiday" is supposed to be temporary, but tax holidays have a habit of turn- ing into endless summers. Instead of creating jobs, the cash saved on taxes and reaped from price hikes allowed corporations to finance a major reorgan- ization of how they did business. They invested in technology and financed offshore production, from building factories to high-speed information networks. This is why the United States is presently in the unprecedent- ed situation of seeing its median household income fall 3.4 percent while, at the same time, productivity rises 12 percent. Part of this change comes from the acceleration of outsourcing good jobs with benefits, like healthcare coverage, to low-wage, non-union jobs. The soothing line from the medical industry is that medicine can't really be outsourced. At least, that's the line. "General practitioners and surgeons will have a job forever," assures T.K. Kurien, president of Wipro Health Sciences. John Challenger, CEO of Challenger, Gray & Christmas, a Chicago-based outplacement firm, adds, "You can't go overseas to see a doctor or a nurse or get physical therapy." People in the profession disagree. "We are very concerned about outsourcing to other countries," says CNA's Burger. "If we don't do something right now, patient care is going to be compromised. If we wait too long, corporations will control how the medical profession provides care." In part that is already underway. Dr. Roy D'Souza in Bangalore, who analyzed those kidney images for Wipro, is a case in point. He also downloads and studies CT scans and MRIs. So too is U.S.-trained physician Prathap C. Reddy, whose Apol- lo Hospital Group runs 37 hospitals in India, the largest for-profit hospital chain in that nation. Apollo offers cardiac surgery for $4,000, a saving of $26,000 over the same procedure in an Amer- ican hospital. One reason is that a U.S. cardiologist makes $300,000 on the average, while his counterpart in India earns $65,000. More than 5 percent of Apollo's patients are westerners and the numbers are growing. (See page 18.) PNHP's Todd doesn't see that outsourcing surgeries, like the man who spent $20,000 for an operation that would have cost $100,000 in the United States, will save money "because it is not an option for the vast majority of Americans." "Besides," she notes, "people who have serious medical proce- dures want to be close to their communities and family. They don't want to travel to some other country." When one factors in nurses, technicians, and support staff, medicine on the cheap does more than squeeze a few high-priced U.S. heart surgeons. Savings on hospitalization may be anywhere from 200 percent to 800 percent in places like India, according to Ames Gross and Rachel Weintraub, reporters for Medical De- vicelink, the industry's online publication. So is our loss India's gain? Not exactly. Saving Money, Not Health Medical transcription jobs—80 percent of which comes from the United States—have indeed poured into India, which just passed the Philippines as the No. 1 recipient of such outsourcing. But these jobs have little impact on the one-third of India's poor who live on less than $1 a day, or the two-thirds of the population that lives in rural areas. Indeed, offshoring can make things decided- ly worse for the locals. There are also safety and environmental concerns about out- sourcing. The Andhra Pradesh state government, for instance, is siphoning off desperately-needed water from farmers in order to provide it to the Vanenburg Information Technology (IT) Park's 20- acre campus. Much of the water is used for landscaping the Park's lush lawns and flora. The government has also raised electricity rates for hard-pressed consumers, while at the same time giving IT firms a 25 percent break on their bills. Increasingly, U.S. medical firms are moving major parts of their operations abroad. Respironics, Inc., of Murrysville, Pa., is shifting its research and development, manufacturing, drug discovery, and testing and healthcare services to China, the Philippines, and Hong Kong, according to Medical Devicelink. Labor and materials are cheaper abroad, but environmental laws are also much weaker. Waste management may be the local river, with all the consequences that implies for local residents. The combination of offshore savings, coupled with the Bush administration's massive corporate tax cuts, has allowed Health Maintenance Organizations (HMOs) to move from marginally lu- crative in 1998 to immensely profitable today. In the last nine months of 2003, HMO profits jumped 73.3 percent, and the in- dustry's net worth climbed 70 percent, from $23 billion to $39 bil- lion. Profits are projected to rise another 16 percent in 2004. The medical industry is flush with cash, and cash provides clout when it comes to influencing legislation and lobbying. Most peo- ple assume the big players in politics are economic giants like oil and gas, defense and agribusiness. But according to the Center for Responsive Politics, the medical industry poured $91.5 million into the 2004 elections. Only banks, lawyers, and real estate in- terests handed out more in an effort to influence legislation and tax policy. Almost two-thirds of those monies went to Republicans. The current trend suggest that medical outsourcing will accel- erate over the next decade, and CNA's Burger warns that while the medical industry may lag behind other industries in introducing new methods and technologies, there is growing concern among medical professionals about outsourcing. "We are not immune to the potential drain of jobs in our profession," she says. The huge drug multinational, GlaxoSmithKline, recently an- nounced it was moving one-third of its clinical trials offshore to countries like India and Poland as a cost-cutting measure. A C A L I F O R N I A N U R S E J A N U A R Y / F E B R U A R Y 2 0 0 6 17 T he acceleration of outsourcing to low-wage locations is daunting, but not nearly fast enough for many corpora- tions. In early October, the Business Roundtable hosted 150 corporate leaders at a $1,400-a-head conference on how to speed up the process of sending U.S. jobs abroad. The con- ference, according to the Asia Times, urged the Bush admin- istration "not to be swayed by the public furor over the loss of American jobs overseas and not to espouse policies that would prevent American firms from getting jobs done cost effectively, including outsourcing and subcontracting to coun- tries like India and Russia." The Roundtable's chair, Hank McKinnel, is CEO of Pfizer, the world's largest drug company. SPEED-UP IN OUTSOURCING

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