Medical Tourism

A multi-billion dollar global industry
Over the past 20 years, medical tourism has grown rapidly to become a global market of some US$60 billion with an annual growth rate of about 20%. Today, over 50 countries identify medical tourism as a national industry.
 
It is different to international medical travel, where wealthy patients travel to exclusive private clinics in search of the latest technology and the highest quality service. Medical tourism is when patients  from wealthy countries travel to hospitals in emerging countries, such India and Thailand, for medical treatment at a lower cost.
 
Medanta is such a hospital in Gurgaon, a garden suburb of New Delhi, India, just 10 minutes from the Indira Gandhi International Airport. It has 1,250 beds, 350 critical care beds and 45 operating rooms, which work 24-7, 365 days a year. The hospital is spread over 45 acres and its high standards of care and competitive prices draw medical tourists from all over the world.  
 
Joint Commission International, the private accreditation agency, now lists more than 500 hospitals worldwide that have earned its approval. Patients visiting these hospitals can expect to pay one-third to one-tenth the cost of the same treatment in a US hospital, enabling them to afford lifesaving and life-enhancing procedures, performed by excellent doctors, in well-equipped hospitals, without long waiting periods.
 
Value seeking patients
Medical tourism has become the most visible part of a generalised growth in the international trade in health services. Services typically sought include elective procedures as well as complex specialised surgeries. Virtually every type of health care, including psychiatry, alternative treatments, convalescent care and even burial services are available to medical tourists.
 
Often, it makes more sense for a patient to receive healthcare abroad especially when certain specialisms or state-of-the-art treatments are not available at home, or subject to a long waiting list. Legal and ethical obstacles, such as stem cell or donor-related treatments are drivers behind the increase in health tourism. However, cost plays an important role and many health tourists merely seek equivalent treatment in countries that are able to provide it more cheaply.
 
A typical liver transplant in the US can exceed $250,000; the same surgery in India at an accredited hospital is $40,000. Knee replacement in the US can cost $50,000, or you can travel to India and pay $7,000. Many US health insurers are happy to pay for out-of-country care and thereby decrease their costs. Some US employers providing healthcare coverage are encouraging medical tourism by offering to share their savings with employees.

Where to go
India's advantage is that it is the cheapest of any of the world's medical tourist destinations, while being the equal to other major destinations in terms of quality of staff, equipment and health procedures. With many new state-of-the-art hospitals and western trained doctors, it is easy to see why India is the leader in medical tourism accounting for about 25% of the Asian market. In 2009, however, India introduced a cosmetic surgery tax, which disadvantaged it compared to its Asian neighbours.
 
Southeast Asia is now a prime market for medical tourism. Industry experts expect the number of medical tourist visiting Asia to grow by 20% annually, creating a regional market of some US$10 billion by 2014. India, Malaysia, Singapore and Thailand account for about 90% of the total medical tourism in Asia.
 
Thailand is the most popular destination, treating the highest number of patients compared with other Asian countries and accounts for 40% of medical tourists in Southeast Asia. Thailand's prices are slightly higher than India's, with its main advantage being a better overall tourist experience and offering greater bundling of services. However, Thailand's medical tourist arrivals and market are beginning to slow.
 
Malaysia on the rise
For the past three years, Singapore's medical tourism has been growing at 12% annually and is projected to continue to grow at this rate for the next few years. Malaysia is the fastest growing medical tourism market in the region with 33% growth in the last three years. Around 40 of Malaysia's 113 private hospitals now serve medical tourist.
 
More than 80% of Malaysia's medical tourists visit from Indonesia, where the healthcare lag has yet to catch up with the rising middle class. Patients visit from China: 30% of Malaysia's citizenry is of Chinese descent. Patients also visit from the Middle East. As a moderate Muslim country, Malaysia offers cultural compatibility to the Islamic patient. Australians fleeing rising healthcare costs seek comfort in Malaysia's universal command of the English language.
 
Malaysia now competes with India for the value-seeking patient, as well as the affluent patient seeking access to specialties in the region. Global healthcare consumers from Europe and North America are also beginning to locate Malaysia on the medical travel map. 

Everyone's a medical tourist
Medical tourism has become a collaboration between local, state and national governments, marketers, medical institutions, trade associations, insurance companies, travel agencies and hoteliers. South Korea for instance has dedicated one of its islands to medical tourism, which is just a two hour flight from five mega Asian cities. Most countries offer a comprehensive medical service, but as the industry matures expect to see market segmentation.
 
Significant economic advantages for host countries
Medical tourism offers significant economic advantages for host countries. Besides increasing economic activity and tax revenues, medical tourism draws tourists to destinations, which they may otherwise not have visited and potentially strengthens a destination's brand. It helps to reverse brain drains and improve local education by attracting skilled and experienced professionals and keeping local trained doctors and graduates from leaving to seek employment elsewhere.
 
The industry also helps to reduce the seasonal nature of some tourist markets. Elective surgery has more flexible scheduling and therefore can be used to soak up excess capacity for tourism providers during the off-peak season.
 
Some significant challenges
By far the biggest challenge for the industry is associated with transplant surgery and the unethical harvesting or organs, which is more apparent in some countries. Also, implanted organs are sometimes invaded with viruses, which recipients discover only after returning home and then require corrective therapy.
 
The Future
Medical tourism will increase as healthcare costs continue to rise and consumerism spreads.  However, medium term capacity constraints are expected to slow the industry's growth. In the longer term, health insurers and patients are expected to leverage cost and performance data in order to take advantage of regional differences in pricing, quality, customer satisfaction and waiting time.
 
Western centres of medical excellence, which have developed partnerships with medical establishments in emerging countries, are well positioned to play an important role in the future of the industry.