Dr. Sanjiv Malik

In the past, patients from developing countries travelled to US and developed countries in Europe to seek high quality care and medical expertise that was not available in their home country.

However, in recent times, the reverse scenario has happened. Many patients from these developed nations started travelling great distances to emerging countries to obtain that much needed healthcare either because of the steep cost of treatments or the long waiting periods for insurance approval in their home countries.

Despite the lack of insurance portability in Asia, some patients book flights to Thailand, India, Philippines or other Southeast Asian countries to go under an Asian doctor’s knife because of the significant price differential between costs of medical services in a developed country like the US and a developing country like Thailand. This phenomenon is called Medical Travel or more popularly referred to as Medical Tourism.

Evolution of Medical Travel
The earliest reports of medical travel date to the late 19th century when Florence Nightingale became among the first to direct patients from the more expensive spas of Switzerland to the less expensive spas of Turkey. More recently, in the 1990s, Cuba began promoting medical travel and tourism as an industry, targeting countries such as Argentina, Chile, Mexico and Venezuela as its main markets. During the 1997–1999 period, export of health services earned Cuba upwards of USD30 million.

This Medical Travel / Medical Tourism nascent industry is now getting more organised. In 2007, an estimated 750,000 Americans travelled abroad for medical care. This number is estimated to increase to six million by 2010. According to the International Trade Commission in Geneva, medical travel billings are estimated to be in the range of USD46–60 billion and are expected to show an annual growth rate of 20%. Some observers estimate that by the year 2013, medical travel will be a business worth USD188 billion.

Key Drivers of Medical Tourism

1 First World Quality at the Best Price: The Deloitte Survey (2008) suggested that almost 39% of respondents in US say they would go abroad for an elective procedure if they could save half the cost and be assured quality was comparable. The standards of health care all over the world are becoming increasingly transparent to the patients through ISQUA-recognised accreditation and other certifications like ISO. Patients in this segment seek care in several different specialties, particularly cardiology and orthopaedics. 2 Lower Cost: Medical Tourism can save up to 90% of costs on elective procedures as compared to US costs. When extraordinary travel and insurance costs are added, the relative cost advantage for medical tourism is 28 to 88%, depending on the location and procedure (Deloitte report 2008). 3 Uninsured and Underinsured American Population: There are over 47 million uninsured Americans. Besides them, there is a large population of underinsured individuals in US. According to Deloitte report 2008, 18% of 250 million insured Americans are not qualified for certain procedures, which results in huge out-of-pocket expense. With the ongoing heated debate on US healthcare reform, not a week goes by without a story about an uninsured or underinsured American patient going to India or Thailand for heart surgery or hip replacement. 4 Long Waiting List: Increasing life expectancy, an ageing population, and heavily burdened government healthcare system have lead to long waiting lists in UK, Canada, Netherlands, Japan, etc. Unable to cope with the number of patients, the public health infrastructure is crumbling. In Canada, one province was reported to have a waiting time of 22 months for a simple diagnostic MRI. Many of the patients in this segment seek quicker access to medically necessary procedures that are cost-effective and have good quality care available in other countries. 5 Travelling Back Home: Many expatriates would prefer going to their home country to receive treatment taking greater confidence in their own culture of care. 6 Information Access and ICT: The abundance of information about medical facilities worldwide on the internet and the advent of ICT for the transmission of patient information (like patient records, teleradiology medicine) boost the medical tourism industry. 7 Alternative Medicine Options: A large population today is looking towards alternative medicine or Eastern medicine either for prevention or end-stage diseases like cancer or diabetes. Traditional treatments like Ayurveda and Chinese medicine have become more acceptable and people are willing to travel large distance to seek these treatments. 8 Growth of Aviation: Hospitality and telecommunication industry is fuelling the growth of medical travel with more air agreements being signed between countries.

Key Challenges

1 After-care or continuity of care is a major consideration for patients suffering from chronic disease. It should be clear how well the follow-up treatments would be delivered given this multinational approach. 2 Malpractice claims exposure to medical liability creates reluctance between the provider and patient. The lack of governing international laws concerning medical travel poses a barrier to its acceptability. 3 International uniform standardisation of healthcare facilities to become a robust industry. Establishing the standards and conducting regular voluntary inspection of providers by ISQUA-certified surveyors will make the patients more confident about the quality of services they will receive. 4 Lack of worldwide data and transparency on quality outcomes of healthcare providers such as infection rate, mortality rate, etc. 5 Luke warm acceptance of major insurers to include medical travel in their range of products. Payers and patients would not likely pursue overseas options in break-even or minimally profitable situations.

The Next Step

As medical travel continues to grow and overseas employers begin to offer their employees the option of getting a number of medical procedures abroad and as more or more uninsured Americans continue to travel to other countries for seeking medical care, health insurance providers will have to come up with products which will cover treatments done at overseas hospitals. Providers should be able to package to its focused market segment – the reputation of the destination, the credentials of their physicians, quality outcomes, and even infrastructure.

Medical tourism or medical travel has captured the world’s attention. The burgeoning industry, if able to hurdle the barriers of insurance portability, medical malpractice, continuity of care, quality standardisation and transparency in data, will stand to gain substantially for both the providers and patients. Providers should learn to develop strategies to counter each of the barriers limiting their penetration of opposing views from the patients’ host country.

Medical travel is indeed a promising industry. The high medical costs caused by insurance and regulatory fees in developed countries, the long waiting times in socialised healthcare systems, the rapidly improving technology, and the favourable foreign currency exchange rates in the global economy are some of the factors that provide the stimulus to this booming industry that creates a truly borderless healthcare economy.