just completed the mammoth task of updating and adding to his 2010 report to
produce ‘Medical Tourism Facts and Figures 2012’ Ian Youngman reflects on how much the
world of medical tourism has changed in the last two years.
recession had a massive effect in slowing down all forms of tourism and people
paying for non-essential treatment such as cosmetic and dental surgery, but the
underlying demand remains and will grow as we live longer. 2012 will see world
tourism numbers hit one billion a year. By the end of 2012, one seventh of the
world’s population will have crossed international borders as tourists in a
single year. 72% of EU citizens travelled in 2011, and more than 80% will do so
Sadness and happiness
saddens me is that some people are still hyping the figures and their version
of what medical tourism is; Western Europeans and Americans flying across
continents for surgery at a tenth of the price, and soon to be supported by
makes me happy is the growing number who realise that:
tourism is regional not global.
is about surgery for the poor and the well off who have inadequate facilities
is about non-essential cosmetic, dental and fertility treatment for the better
will remain a self-pay industry, as insurers are not really interested.
the exception of a few small schemes, cross–border cover in Mexico and Europe
or US domestic tourism, major health insurers are not prepared to pay for
medical tourism. The downsides seem too many and their buying power means they
are paying between a third and a half of the retail price for healthcare in the
USA and Europe, so they cannot make the huge savings claimed by some. Also,
they work with global networks of hospitals, so they do not need the help of small
intermediaries.The two big domestic medical tourism deals done in the US were
done by an international insurance broker, not medical tourism agents.
million or 27 million Americans going abroad for treatment, as promised by one
‘expert” has not happened and will never happen.
after country, when promoting its latest hospital, conference or exhibition,
STILL quote ancient Deloitte predictions on medical travel. In February 2012,
an article in ‘US News’, quoted Paul Keckley of the Deloitte Center for Health
Solutions, “We had estimated that employers would drive the medical tourism
market. We thought they would approach the medical insurance companies and tell
them that they needed to add medical tourism benefits. But the major employers
are not clamouring for medical tourism. Healthcare inflation has been under 4
percent each of the past two years, so employers are under less pressure to
trim healthcare expenses. And while such savings are still a major priority,
medical tourism doesn't show up as a top-tier issue."
every Western European country has state healthcare, or compulsory or voluntary
health insurance in some form. This means that they do not need to travel
anywhere for major or minor essential surgery, and some countries even include
Europeans will travel, normally within Europe, for cosmetic surgery, fertility
treatment; cosmetic dentistry and specialist treatment where they can compare
private costs at home with private costs overseas.
business to African and Asian destinations is poor people from Asia and Africa
seeking cut-price surgery. They are not after the extras or great service. But
when hospitals and clinics targeting better-off customers still offer this
basic service and think price will seal the deal, they are surprised that
business does not come in quantity. People paying out of their own pocket for
non-essential treatment want to be nurtured, cosseted and treated as if they
were in a top hotel.
The new customers
biggest growth areas are well-off people from China, Russia, and the Gulf. They
look for value for money but top of the range care. The problem for
destinations is that the competition is cut-throat.
The hungry countries
some of the so-called leaders struggle, newer hungrier countries with
government support, consistent and targeted marketing, and treating medical
tourism just as another tourism niche are taking their business and finding new
markets. These include South Korea, Turkey, and Taiwan – and eventually will
alleged market-leader, India, gave itself an almighty kick where it hurts when
official research put the number of medical tourists at just over 150,000, not
the millions prevously claimed. Singapore is the sixth wealthiest country in
the world but price rises mean it is having to fight hard to retain business.
Countries in the Middle East/Gulf region may be peaceful, but with more than
half a dozen countries at war or with serious political unrest, Europeans and
Americans avoid the region unless they are among the millions of expat workers
are scores of small countries and islands claiming to want to be top medical
tourism destinations, with conferences, campaigns and new hospitals. They may
pick up a few crumbs, but the chance of investors making money is remote.
The top destinations by numbers
top global destination: Malaysia
top European destination: Hungary
The “old guard”
USA, Germany, Switzerland, Belgium and the UK are all sitting comfortably in
the top 20.
Poland, South Korea and Costa Rica.
The top supplier of medical tourists
large numbers of poor Africans and Asians are the bulk, low-cost, low service
level market, many countries do not want to offer factory production line
buying on excellent service and very high quality, the coming nations are China
and Russia and woe betide you if you do not employ people who speak their
tourism does have a future. It will be about self-pay, niche markets, different
marketing strategies for the various customer sectors and segments, and involve
want to fail, market to everyone the same way with every treatment and
concentrate on price.
want to succeed, select niches and specific markets within individual countries
and find what their buying triggers are.
final message, is do not be defensive. Admit your mistakes, respond properly to
customer reviews, and keep tweaking the service based on honest feedback.
do it right, you will have a business. If
you do it wrong, you will join the agencies, clinics, hospitals and countries
who found out that medical tourism is a much more complicated and tougher
business than they were led to believe.
Keith Pollard’s gold mining analogy, the gold rush days are over, if they ever
existed. Most mine owners around the world made their money from coal, tin,
stone, slate and copper, while the gold prospectors ended up broke and those
who serviced them moved on to the next easy mark. You can make money in medical
tourism by sheer hard graft, but it will not make you rich.
Ian Youngman is a writer and researcher specialising in insurance and health. He writes regularly for a variety of magazines, newsletters, and on-line services. He also publishes a range of insurance reports and undertakes research for companies. An ACII, with an honours degree in Economics from the University of Liverpool, Ian was a co-founder of The General Insurance Market Research Association. He also has widespread experience within the insurance industry at management level, working for brokers, a bank and an insurance company.