We look at the future of medical tourism in 2012

 

The market

The global economic downturn and medical tourism
Forecasts for the global economy are not encouraging....recession in Europe, anaemic growth in the US and slow growth in the emerging market economies is anticipated for 2012 (Morgan Stanley: 2012 Outlook). If you are in the medical tourism sector, you need to understand some of the fundamental trends that affect businesses and markets in a recession.

  • In the mature, developed economies (e.g. USA, Europe) continued unemployment and pressure on disposable income will influence demand in 2012. Consumers will minimise or reduce spending on healthcare where they can. This does not mean that hard pressed consumers will be flocking abroad for their operations to save money. Many will delay treatment, or in the case of “optional surgery” such as cosmetic surgery, they may not be able to afford it at all. Domestic prices for surgery will be driven down as hospitals apply marginal costing and prices to fill empty beds. In areas of treatment, where the need for treatment is “income-inelastic”, demand for medical tourism services will remain strong.  Patients will continue to dig deep for services such as infertility treatment, stem cell treatment, and for surgery which is essential, life-saving or life changing.
  • In emerging markets (such as Russia, China), the growth in incomes (and freedom to spend) is outstripping the development of domestic healthcare services and this may drive demand for medical tourism and present new opportunities.

The big question is whether corporate or insurer paid medical travel will get off the ground in 2012. Will employers and insurers see medical travel as a realistic and credible option to reduce healthcare costs. And will their client and subscriber base actually “buy in” to the medical travel option if it is offered to them?

Medical tourism..... global healthcare or regional medicine?

In 2012, there’s a risk that we get distracted by the trumpeting of “global healthcare”. It’s a nice turn of phrase, but in the real world, medical tourism is about regional medicine and cross-border healthcare; this is not going to change in 2012. In fact, the boundaries of medical travel may be drawn in, as travel costs increase. As travel costs climb, the concept of long distance medical tourism becomes less attractive. The imposition of hefty departure taxes in countries such as the UK, Germany  and elsewhere will reduce the cost advantages of some destinations.

If you are in the medical tourism business, ALWAYS remember that, for most patients, going abroad for treatment is a decision of last resort. AND that the further a patient has to go... further from their own country....further from their own culture... the greater is the actual and perceived risk. The patient needing major surgery who takes a five hour flight to a country with a different language and a different culture is a comparative rarity.

So is it medical tourism boom.... or bust?

The honest answer to this one.... is probably neither.  In recent years, we’ve listened to the hype of industry associations and commentators, touting medical tourism as “the next big thing”, a “boom industry”, “experiencing exponential growth” and so on.  Much of the hype has emanated from the US and focuses on the potential for medical tourism to solve the problems within the US healthcare system. The latest published data on US medical tourism comes from the OECD in their late 2011 report, “Health at a Glance 2011”. According to the OECD report, Americans spent $600 million on medical care outside the U.S. in 2009. The amount grew 13% from 2004 to 2009..... a very different level of growth from that quoted by many pundits.

So, is medical tourism going bust? Well... the reality is that some people have indeed gone bust. In our Treatment Abroad business, our customer base consists of healthcare providers and agencies around the world that depend on medical tourism for their revenues. The churn in this sector continues. Agencies and facilitators enter the market and disappear 18 months later, disillusioned by the lack of demand and doomed to fail due to their own shortcomings.

In 2012, we need to see some realism about the potential for business and the opportunities in the medical tourism market. Nevertheless, we’ll still see people pursuing medical tourism gold, and persuading others to make major investments in development projects. The industry has been there before. (See “From a private medical tourism hospital to a UK public National Health Service hospital in eight easy years!”). The Cayman Islands medical tourism venture is probably the best current example of history repeating itself.  Local and overseas investors intend to invest $2 billion in a 2,000 bed hospital to target US medical tourists. According to Renee Stephano at the Medical Tourism Association, this is “the ideal approach to jumpstart a medical tourism industry”. She continues, “It’s not like the Fields of Dreams ‘if you build it, they will come’. The hospital first needs to build up a brand and a reputation, which it can do by treating local patients”.

Three islands with a local population of 51,000 currently supported by a 120 bed hospital isn’t exactly the foundation of an international healthcare brand. The planned facility will need to attract over 100,000 medical tourists a year to make any financial sense.  Where will the patients come from?  And why?

The patient

The patient (and customer) service must come first

In the Treatment Abroad Medical Tourism Survey 2011 (awaiting publication), 85% of medical tourists were satisfied with their experience of going to another country for treatment. BUT...15% were dissatisfied. The standard of care, the quality of treatment, the level of customer service and patient communication all come under fire from patients who have participated in the research.

According to Rudy Rupak at PlanetHospital, his business success is based on “disciple marketing” -  “former patients are what drive clients to us”. Within the industry as a whole, the message that excellent customer service and outstanding treatment quality brings more customers is yet to be widely adopted. The sector continues to be plagued by the bad news medical tourism stories that appear in the press and media. I see little change in 2012. It’s going to be a very long haul for the industry to establish credibility and trust within the media and ultimately broaden its potential customer base.

The patient’s voice will get stronger
As patients evolve into healthcare consumers, they are considering the purchase of healthcare in much the same way that they consider the purchase of any consumer good or service. And medical tourists are no different. They take a holiday and they write a review of the hotel or destination on TripAdvisor. They opt for surgery in another country, and they want to tell people what it was like...by word of mouth and increasingly online. Take a look at the Fertility Treatment Abroad section of the FertilityZone web site, and some of the discussions that take place around the services provided by various IVF and infertility clinics abroad. Take a look at the Medical Tourism Ratings and Reviews site.

In 2012, there will be more healthcare providers who see the benefit of encouraging patients to rate and review their services. They want the patient’s voice to be heard. They want to hear what went right AND what went wrong. Comparisons of healthcare quality are difficult on a national basis, and virtually impossible for a patient to make on an international basis.  And this will not change next year or in the next decade. The “patient’s voice” is probably the best comparator that people currently have in choosing healthcare providers. It just needs the providers to buy into the concept.

The industry

Market concentration
We are likely to see fewer players with greater focus on customer needs in 2012.

  • Fewer players because as the recession bites the weak will either go to the wall or will withdraw from the sector. We may finally see the appearance of some bigger players in what is a highly fragmented market in terms of providers and facilitators. If medical tourism is big business, there should be facilitators out there handling several hundred patients every month. But so far....., there’s little evidence of this.
  • Greater focus because successful medical tourism is about delivering services to niche market segments that have specific needs and requirements. And one of the biggest shortcomings in medical tourism marketing is lack of understanding of customer needs and  failure to deliver to these needs

Joined up healthcare
Criticism of medical tourism is often targeted at the lack of “joined up healthcare”. There are very few operators offering a truly coordinated approach to surgery and treatment abroad. Ask the average facilitator to define the clinical/care pathway for their patients and you will probably be met with a blank stare. If such pathways do exist, then they may be in place within the destination hospital, but the pathway starts on admission to the hospital and stops on discharge. The industry still hasn’t overcome the problem of how to handle pre-admission and post-operative care at a distance. From the patient’s perspective, they are on their own when they return home. When complications or problems arise, many providers will make the standard “fly back and we’ll fix it” offer, but this is probably the last thing that the patient wants to consider.

Some of the participants in the dental tourism sector are probably furthest ahead in providing pre- treatment assessment and post-treatment care within their “package”. Let’s hope the rest of the industry will follow.

Conclusion...

So...2012... will it be a great year for the medical tourism industry? Probably not. But it will be no different in many business sectors. And there are plenty of opportunities for the astute business to thrive. Individuals and corporate healthcare buyers don’t stop buying in a recession. They may buy less and they may buy cheaper. But they will buy more wisely.

Understand your customers, get your service offering right, and focus your marketing, and 2012 could be your opportunity to grow your market share and your business.

FURTHER CONTENT PUBLISHED BY THIS AUTHOR

UK infertility tourism

Articles, 11 July, 2017

NHS shortcomings driving fertility treatment abroad

Vetting the realities of global medical travel

Resources, 01 May, 2017

Keith Pollard, Destination Health: The Medical Travel Summit USA

How to create a unique value proposition in medical tourism

Resources, 26 April, 2017

Keith Pollard, IMTJ, IMTJ Medical Travel Summit 2017

Targeting the UK medical tourist

Resources, 26 April, 2017

Keith Pollard, IMTJ, IMTJ Medical Travel Summit 2017

Prepare for the future of medical tourism

Resources, 25 April, 2017

Keith Pollard, IMTJ, IMTJ Medical Travel Summit 2017

Foolish foray

Articles, 01 April, 2017

IMTJ launches medical tourism fake news service

Medical tourism market growth?

Articles, 21 March, 2017

Is the medical tourism market growing?

Target UK medical tourists?

Articles, 09 March, 2017

Should I target the UK for medical tourism?

Medical tourism market size

Articles, 06 March, 2017

How big is the medical tourism market?

5 key medical tourism questions

Articles, 23 February, 2017

Medical tourism... market size, growth, opportunities

The role of "online" medical tourism

Resources, 21 October, 2016

Keith Pollard: 7th Global Healthcare & Medical Tourism Conference

Delivering an outstanding international patient experience

Resources, 09 October, 2016

Keith Pollard, Intuition Communication Ltd: IMTJ Masterclass 2016

When will medical tourism reach the tipping point?

Resources, 26 May, 2016

Keith Pollard, Intuition Communication: IMTJ Summit 2016

Marketing health tourism on the web

Resources, 16 March, 2016

Keith Pollard: The 2nd Bursa Medical & Thermal Tourism Forum

What makes a destination attractive?

Resources, 16 March, 2016

Keith Pollard: The 2nd Bursa Medical & Thermal Tourism Forum

Does your online presence reflect the quality of your care?

Resources, 16 October, 2015

Keith Pollard: IMTEC 2015

Third age healthcare

Articles, 25 August, 2015

Opportunities in health tourism for the "third age"

What do we know about medical tourists?

Resources, 15 April, 2015

Keith Pollard: IMTJ Summit 2015

The EU Directive Getting the Message Across

Resources, 15 April, 2015

Keith Pollard: IMTJ Summit 2015

Best of 2014

Articles, 06 January, 2015

The top ten most popular medical tourism articles in 2014

Lessons from Passport2Health

Articles, 22 April, 2014

What can be learned from Passport2Health's failure?

Flying blind

Articles, 10 February, 2014

The risks of medical tourism are hard to find

Top ten of 2013

Articles, 06 January, 2014

The most popular medical tourism articles of 2013

The Kreativ solution

Articles, 20 November, 2013

The secret of Budapest's success in dental tourism.

Report from MIHTE 2013

Articles, 22 October, 2013

Government and providers must work together to drive a destination

Cyprus at a crossroads

Articles, 09 August, 2013

The future plans for Cyprus as a medical tourism centre

Cross Border Healthcare

Articles, 29 July, 2013

What is it all about?

PriceWatch 2013

Articles, 23 July, 2013

Participate in IMJT's price transparency survey

Survey of medical tourism sector

Articles, 02 April, 2013

Survey highlights the fragmented nature of medical tourism

New councils launched

Articles, 02 April, 2013

Two new bodies are trying to bring together medical travel

Malaysia, the best kept secret

Articles, 03 December, 2012

How Malaysia is developing as a medical tourism destination

Hungary ....Europe's no 1 destination for dental tourists

Resources, 14 June, 2012

Keith Pollard

PIP implants

Articles, 04 May, 2012

The PIP scandal could provide a landmark case for medical tourism

How to turn the web "window shopper"? into a paying patient

Resources, 27 April, 2012

Keith Pollard: EMTC 2012

Ten things you need to know about medical tourism

Resources, 27 April, 2012

Keith Pollard: EMTC 2012

All that glisters

Articles, 10 April, 2012

San Serriffe made an impact on the medical travel world, but never existed

What's in a brand name?

Articles, 06 March, 2012

What part of a brand does a customer remember the logo, the name, or their treatment?

Everyone's a critic

Articles, 18 November, 2011

Medical tourism has a bad reputation, but what can we do about that?

Turkey, bucking the trend

Articles, 04 November, 2011

In a difficult market Turkey is still making progress, but why?

Medical tourism: Past Present and Future

Resources, 02 November, 2011

Keith Pollard: International Health Tourism Congress in Istanbul

Misspell Bumrungrad? Visit the MTA

Articles, 27 October, 2011

MTA's domain registration activities steal away Bumrungrad's visitors

Gamete shortage

Articles, 27 October, 2011

Will changes to donation payment help solve the lack of UK sperm and eggs donations

Do we need an EU Health Tourism Certificate?

Resources, 12 October, 2011

Keith Pollard: EU Symposium, "Health tourism - Establishing a new culture in Europe"

Can Europe lead the way?

Articles, 07 October, 2011

Can Cross Border Healthcare help develop medical tourism in Europe

An introduction to medical travel

Resources, 06 October, 2011

Keith Pollard: Latvian Health Tourism seminar

Marketing medical tourism online

Resources, 06 October, 2011

Keith Pollard: Latvian Health Tourism seminar

The future of spa tourism

Articles, 01 August, 2011

Dr László Puczkó presents a report on the future of spa tourism.

The Slumbering Giant of Medical Travel: the UK in the medical tourism market

Resources, 25 May, 2011

Keith Pollard: EMTC 2011

Medical tourism: International Patient Streams Past , present, and future

Resources, 04 May, 2011

Keith Pollard: EMTC 2011

Medical Tourism: After the Goldrush

Resources, 04 May, 2011

Keith Pollard: EMTC 2011

Thousands, not millions

Articles, 05 January, 2011

A new study reveals the real numbers of American medical tourism

Opportunities in health tourism: World Travel Market 2010

Resources, 12 November, 2010

Keith Pollard: World Travel Market 2010

Where are we now?

Articles, 17 September, 2010

An update on the EU directive on Cross Border Healthcare

Abandon ship!

Articles, 06 August, 2010

Keith Pollard explains why we should abandon medical tourism

Recession proof?

Articles, 02 July, 2010

Keith Pollard talks on why infertility tourism could be recession proof

The Do's and Don'ts of Medical Tourism

Resources, 30 June, 2010

Chris Fearne: Malta Medical Tourism Summit 2009

Future of Medical tourism: Presentation

Resources, 30 June, 2010

Keith Pollard: Destination Health, London Olympia 2010

Climate Survey 2010 results

Articles, 10 May, 2010

Keith Pollard reports on the IMTJ Medical Tourism climate survey

What is a medical tourist?

Articles, 12 March, 2010

Medical tourism statistics: Comparing apples with apples ....

The outlook for 2010

Articles, 14 January, 2010

Reality bites in the market, what can we expect for 2010?

Patients judging quality

Articles, 27 November, 2009

How can patients make an informed choice?

Marketing medical tourism: Malta Conference

Resources, 20 July, 2009

Keith Pollard: Malta Medical Tourism Summit 2009

Past experience and patient choice

Articles, 09 July, 2009

Keith Pollard talks on how patient choice is affecting the market?

Winners and losers in medical travel: International Medical Travel presentations

Resources, 19 November, 2008

Keith Pollard: IMTC 2008

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