Medical Travel opens new doors of possibilities for patients internationally
Borderless Healthcare – the practice of traveling away from home for treatments and care – has created a new landscape of opportunity in today’s global marketplace. As an industry, medical tourism is flourishing and expanding on world-wide scale and creating new and significant revenue streams for companies, healthcare providers, and countries prepared to respond to the demand.
The number of consumers traveling abroad for treatment is soaring. Whether termed Healthcare Travel, Medical Tourism, Medical Travel, International or Global Healthcare, or Borderless Healthcare, the bottom line is that patients are traveling outside their home country more and more for health care and treatment.Estimates of worldwide medical tourism place total projected global revenue at $40 – $60 billion per year currently.1 Some sources project the growth of medical tourism will be 20% per year,2 while leading consultancy Deloitte & Touche predicts 35% or higher growth per year as the global economy recovers.3 While most Americans are new to this concept, the number of Americans taking advantage of medical tourism is expected to rise: an estimated 1.6 million Americans will seek medical care by traveling abroad this year. 4
Additionally, some seventy-six million baby boomers are now arriving at an age where their healthcare needs will be increasing; thus, the practice of medical tourism is likely to expand dramatically over the next few years.Patients are traveling to destinations around the world and are spending an increasing amount to access the superior healthcare they want or need. Millions are seeking elective procedures such as cosmetic surgery and cosmetic dentistry. U.S. Consumers spend $12.4 billion a year5 on elective cosmetic surgeries and treatments alone.
During the depressed global economic climate of 2008-2011, medical/health travel was the only significant sector of the travel and tourism industry that was experiencing growth, even as other sectors have declined.
In particular, there has been growth in upscale medical tourism in recreational locations, due to a number of factors and trends, including:
- Comparatively high wealth in U.S. and other Western nations combined with a desire for more health treatment options
- Comparatively low costs, offering saving of as much as 60% – 90% on treatment
- The appeal of being able to recuperate in a private, resort-like destination
- Shorter waiting times for treatments and surgeries
- Desire for a high level of service and personal attention
- The ability to combine treatment and recovery with a vacation with friends and family.
Significant drivers in the healthcare travel market include Cost/Affordability, and Accessibility.
Cost/affordability: The significant appeal of medical tourism is the opportunity to obtain high quality medical treatment at a significant saving over what it would cost in the patient’s home country. Healthcare costs in the U.S. are quite high. In fact, the World Health Organization ranks the U.S. as number one in healthcare expenditures and yet their healthcare system ranks 37th in the world for quality of care. Many consumers find that paying for care at home (even with insurance covering some of the cost) is more costly than seeking care abroad, even when factoring in the cost of the treatment, travel and accommodations.Locations that can offer outstanding value due to differences in economic markets have a distinct advantage for attracting patients. For example, a November 2007 study found that U.S. accredited hospitals in India typically charge just $10,000 for heart bypass surgery that would cost between $95,000 and $200,000 in the U.S. Hip-replacement surgery that would run between $31,000 and $75,000 in the U.S. can be had for as little as $12,000 at a JCI-accredited hospital in Singapore.5
Another study in 2008 found that hernia repair – which typically costs $4,500 in U.S. hospitals, is only $1,800 at foreign hospitals.6
Health plans such as Aetna and Blue Cross Blue Shield of South Carolina, as well as, self-funded corporations such as Kraft Foods and Hannaford Supermarkets are looking at medical tourism as a way for their companies and their insured patients to save money.
Accessibility: Healthcare is extremely expensive in the United States, and in Canada there are often long waiting periods to get non-emergency care. These factors lead patients to look for options abroad for care. For example, in the area of liver transplants, in the U.S. a patient must reach a certain MELD7 score to qualify to go on the waiting list for a donor organ, thus often leaving a patient in a very weakened state of health for a long period of time.
These reasons alone are enough to drive North American patients to look outside of their home countries for low-cost, high quality healthcare. The growth in medical tourism is also due to a number of additional contributing factors and trends, including:
- Lack of timely access to elective procedures due to cost, rationing, or other restrictions.
For example, in Canada, physicians cannot privately treat their fellow Canadians if those treatments are covered by the government health plan. In a number of countries, nationalized health systems sometimes deny treatment to particular patients (for example, because of age or physical condition), and some treatments may not be available to any patients (for example, because of cost).7
- Increasingly high expectations of consumers with respect to health care and growing “medical consumerism” (patients’ desire to have more control over decisions affecting their health and medical care).
North American consumers are increasingly willing to travel to obtain care that is both safe and less costly. In fact, two in five survey respondents said they would be interested in pursuing treatment abroad if quality was comparable and the savings were 50% or more.
Consumers aren’t the only ones interested in medical tourism; the practice is gaining acceptance with employers and insurance companies as well. In the past year, a number of big employers have promoted medical travel to the employees they insure to
offset soaring health costs. In 2008, the World Medical Tourism & Global Health Congress noted that more than 100 employers and insurance companies had already implemented medical tourism programs and had started sending employees overseas for healthcare.8
With the new United States instituting The Patient Protection and Affordable Care Act (aka “ObamaCare”) on January 14, 2014, American patients and insurers/payors will be looking for cost effective healthcare solutions. Those solutions will need to include state-of-the-art treatment that is equal to or better then that currently available in the United States. Traveling abroad is the one of the most cost effective and reasonable ways to find such solutions.
1 ITB World Travel Trends Report, ITB Berlin and IPK International, December 2012
2 As reported by Horowitz, Rosensweig and Jones, “Medical Tourism: Globalization of the Healthcare Marketplace.” NIHMedscape General Medicine, http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=2234298
3 Deloitte & Touche, Medical Tourism: Consumers in Search of Value, market research report issued in 2008 and updated in 2009
5 Modern Healthcare, May 2008
6 Deloitte & Touche, Medical Tourism: Consumers in Search of Value, market research report issued in 2008, updated 2009.
7 MELD = Model for End-stage Liver Disease, a numerical scale to rate how gravely ill a liver patient is and thus set priority for a transplant
8 Medical Tourism Association, June 2008. As a demonstration of the rapidly emerging nature of the medical tourism industry, 2008 was only the second year that the Medical Tourism Congress was held.
© Copyright 2013 Michael R. Brown & Michael Brown Communications/Healthcare- Proprietary