Medical Tourism: Turning a World Trend into a National Resource

By Prof. Shlomo Mor-Yosef ,  Amitai Rotem and Dr. Assaf Talker

Hadassah University Medical Center, Jerusalem, Israel

Medical tourism has been a growing and developing field around the world, and analysts predict that in the coming years, it will continue to grow at an even faster pace. It can be defined as "an active step that involves the patient travelling from his country of origin to another country to receive medical care". Major medical treatments such as surgery, organ transplants, dental care and plastic surgery are involved – unlike “Healing-therapy tourism” that offers complementary and quality-of-life treatment and recuperation.

Hadassah University Medical Center is the leading Medical Tourism Center in the Middle East, yet is open to expand its capacity and to develop this field.  

A number of causes contribute to the development of medical tourism:

1.     an inadequate level of medicine in developing countries that cannot offer complex treatments

2.     small countries’ lack of quantitative experience in providing special treatments or those lacking certain types of medical specialties

3.     unique specialization that can be found only in a handful of medical centers

4.     the lack of advanced and expensive medical equipment in developing countries

5.     high prices that patients have to pay for medical treatments in developed countries, especially those that have no medical insurance or insufficient insurance coverage

6.     state health policies that result in a long waiting period for surgery in many countries

7.     regulations that bar certain procedures (such as abortions and organ transplants) and forces patients to seek them in other countries where there is no supervision or enforcement by the authorities

8.     treatments that have not received permission in the country of origin but are permitted in others (such as a certain cancer treatment that has not yet received US Food and Drug Administration approval but was  approved in Israel

9.     insurance companies interested in reducing costs examine the possibility of dispatching patients abroad to save money [1]

10.  chronically ill patients who need ongoing care (such as kidney dialysis) and want to travel and visit for business needs or their families in other countries

The variety of medical services available to consumers is increasing, and hospitals in many countries are entering the field. Some countries, especially in Asia – such as India, Singapore, Thailand and China – understood the great potential and are now taking steps to advance medical tourism at a state level. Hadassah Medical Center has entered this field about 10 years ago, and the number of international patients who come to the hospital to seek cure doubles every year.

General background

Medical tourism constitutes a new industry created as the result of the rapid development of two leading industries – tourism and healthcare. These are relatively young and developed mainly during the 20^th century. They are the result of the advancement in transportation, communications, the growth in leisure time and the translation of knowledge and knowhow, especially medical, into accessible and available services. Each of these industries is vital for the supply of this highly desired “product.”  2

 

 

Tourism

Tourism is a young and developing industry. Three components – available transportation and widespread hotel services and accommodation – became available only at the beginning of the 20^th century. 3

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[1] K. Pallarito, "Insurers investigate medical tourism to save money on care", Business Insurance, 40(50), p.17.      2M.Z Bookman, K.R. Bookman, Medical Tourism in Developing Countries, New York, 2007, p. 21.                                   

3. A.M Morrison, Hospitality and Travel Marketing, New York, 1989, p.7.                                                                                        

The first transatlantic flight was carried out by Pan American Airlines in 1939. The Holiday Inn chain opened only in 1952. McDonalds broke into the market in 1955. Despite its young age, the tourism industry is the world’s third largest after automobiles and gasoline; it employs over 200 million people around the globe, with a turnover of $400 billion, and it handles 760 million “arrivals” annually.

The information revolution led by the Internet gave the field an additional push and made it even more accessible.

Health

Seriously ill patients always looked for relief and were ready to invest much effort to achieve treatments and cures. Many legends rose up about this subject, including the famous “Flower with a Golden Heart” in which a youth who overcomes many difficulties crosses seas and lands to find a cure for his sick mother, as well as other folk tales dealing with the search for the “Fountain of Youth.”

Healing-therapy tourism – unlike medical tourism – has been known since the Roman Empire. Natural mineral water spas that served ancient Roman Caesars and other prosperous people developed elaborate infrastructures. In the 19^th century, various spa sites, such as Brighton in England, were developed that attracted tourists to enjoy their “special treasures” of sea water and bathe in them.

Medical tourism, too, could not have reached the commercial dimensions that they did without such developments, and it is based on several elements:

1.     medical development, based on unique knowhow that develops in centers of excellence, expensive equipment that is not available everywhere and treatment processes that puts successful centers  a step ahead of the rest

2.     the information revolution, led by the Internet, that turns every medical innovation – real or imagined – into one accessible and available to all

3.     the transportation revolution, which makes it possible for patients to travel long distances quickly and at reasonable cost

4.     competition in the supply of medical services that causes price reductions and improvements in the level of services

5.     aggressive marketing that takes advantage of global platforms such as the Internet and other means of mass communication

 

Medical tourism is “niche” tourism like ecological, religious, “extreme” and other types of tourism. This type requires two elements, a “product” and an “audience.” 4 Niche tourism is not mass tourism; it depends on a small group of people with a strong and solid need that creates availability. Unlike ecological tourism, in which the traveler chooses a destination and only then selects the elements of the vacation, medical tourism begins with a defined medical need. To this is matched an appropriate destination in terms of medical specialization, cost, service (such as a suitable language and culture) and in certain cases cultural availability (such as a Saudi Arabian tourist who will want to include a visit to the Dome of the Rock mosque in Jerusalem). In this way, out of a desire to minimize costs and waiting time, the modern patient turns into a tourist, and tourism experts and health industry people supply the “merchandise.”

Market potential

The potential is huge. During the past year, residents of Asia and Africa spent over $20 billion on medical services outside their countries. Nigerians alone bought over $1 billion. India, which actively works to increase the number of medical tourists, expects a turnover of $2.2 billion in 2012. In 2005, over 1,000,000 people were treated outside their own countries in at least 28 countries that offered a variety of medical services. [6]

In 2004, over 150,000 foreign patients were treated in India. In Singapore that year, there were 250,000. Thailand treated about 300,000 who brought in $280 million. In Malaysia, there were 70,000 medical tourists. Some 250,000 Americans go to Canada each year to get cheaper medical care than that available in their own country. Even Costa Rica reports having 150,000 tourists arrive for medical care.[7]

Some 43 million Americans lack health insurance. Many others have partial insurance that does not cover many services. The “baby boomer” generation will in 2015 reach retirement age, needing more and more healthcare. The availability of services in the developing countries will increase, and they will offer advanced facilities and equipment, well-trained doctors and a high-level supporting hotel system.

All these will bring about a growing number of agreements between insurance companies and hospitals, and they will route patients looking for cheap but high-quality centers that will specialize in this. [8]

The search for medical information and names of experts and hospitals has made them easily available thanks to the Internet. Finding medical information is one of the most popular activities on the Internet. Thousands of Web sites and portals specialize in the field, and every worthy medical institution has its own Web site to promote its advantages. Many entrepreneurs run portals that coordinate a bevy of medical information. One site, MedicalTourism.com, which offers details on destinations around the world where treatment is available, reports having 100,000 visitors a month. Hadassah University Medical Centers in Jerusalem have an average of 60,000 virtual visitors per month.

The development of medical tourism brought, as expected, the flowering of a new genre of tourism literature aimed at medical tourists. For example, there is Patients Beyond Borders, [9] on whose cover appears the description: “A guide for everyone, for medical tourism at an international level affordable to all.”

Israeli medical tourism

In recent years, the field of medical tourism has started to develop in Israel as well. The country has a good regional reputation for a high level of healthcare, and in certain fields it is world renowned. Hadassah and other leading medical institutions have begun to promote the marketing of their services in the search for additional income while depending on existing infrastructures. The following data are based on estimates and data received from the surveyed institutions (2006).

 

Type of institution	Number of patients per year	Estimated financial turnover for 2006 in millions of Israeli shekels
Private hospitals	3,500	25
Public-private	2,500	40
Public hospitals	7,000	75
Others (institutes and medical centers	3,000	20
TOTAL in shekels	16,000	160

 

Total in $: 40 million

 

It should be remembered that profitability from foreign tourists is much greater than from Israeli residents. The Health Ministry’s rates for tourists are much higher than those for Israelis, and discounts for tourists given in Israel to the health maintenance organizations, insurance companies and even for private medical consumers are lower. Payment for service is even made in advance, unlike the local market that pays with credit over many months. Yet, prices are cheaper than in the US and many European countries.

Price as a factor that impels medical tourism from developing countries

Residents of the United States who need medical care are asked to pay giant sums for treatment in their country. Those who lack health insurance will have no choice but to search for treatment in other locations. Price has a critical role, but it is not the sole factor. Prices in Israel are higher than those in the East, but the medical reputation here is much better, and one can suppose that many will be willing to pay the additional amount in exchange for quality. In this table, rates of a sample of common types of operations are given:   

Sources: Subimo (U.S. rates, including at least one day of hospitalization); Planet Hospital (international rates)

 

It is clear that prices in India, Thailand and Singapore are very low, but the rates offered in Israel are much cheaper than those in the US.

 

Shortening waiting times

In many countries, the waiting period for elective operations is very long. A report broadcast on the BBC 9 presented a representative survey of 1,000 people in England. Those queried said they were willing to wait for hip replacement surgery for three months. They estimated that the actual time would be as long as five months. In the British reality, waiting time is about a year. The English will be forced to wait for a long time for other operations as well – eight months for cataract surgery, 11 months for a hip replacement, five months to repair a spinal disk and five months for a hernia repair. Of course, someone who can himself afford to pay for an operation or has a good insurance policy will look for other places to have the surgery and avoid the suffering and discomfort of waiting in the queue. In England, there are several companies that offer surgery abroad, build special packages and market them aggressively. Hadassah Medical Center  can offer these operations within a few weeks at excellent quality and a good price. England is only one example for social-welfare countries that create a queue for elective surgery that can be postponed.

Risks

Medical tourism, of course, also poses risks. [10]