Since the last several years medical tourism is fast evolving as one of the key growth drivers of the healthcare sector, especially, in the western world like, the United States of America (USA) and the United Kingdom.
Dr. Fred Hansen in his article titled, “A revolution in healthcare medicine meets the marketplace (January 2008)” highlighted that the increasing number of high-quality healthcare facilities in developing countries are catering to medical tourists from the developed countries. Among them there are many uninsured Americans. Medical services outside USA in the developing countries are much cheaper. On average it is around 80%. For example, a cardiac surgery, which will cost more than US$ 50,000 in the United States, can be availed for US$ 20,000 in Singapore, US$ 12,000 in Thailand and between US$ 3,000 and US$ 10,000 in India. For this reason, Dr. Hansen predicted that the number of Americans traveling abroad for healthcare is expected to increase from around 1.3 million in 2008 to 6 million by 2010.
It has been reported that about 500,000 foreign patients traveled to India for medical care in 2005 from an estimated 150,000 patients in 2002 mainly from USA, UK and the Gulf countries for low-priced high quality healthcare in various disease areas. More and more people from these countries are finding the prospect of quality and value added medical care in countries like India financially attractive.
The Global Market:
In 2006 the global market for medical tourism was around US$ 60 billion. According to McKinsey & Company, this market could expand to US$100 billion by 2012.
An evolving sector in India:
Thus, medical tourism is fast establishing itself as an evolving area of business in the global healthcare space. In that space, India is fast emerging as one of the most preferred medical tourism destinations in the world.
This healthcare sector in India, despite being smaller compared to the western world, is surging ahead both at the national and the regional levels with enormous potential for future growth, if explored appropriately with a carefully worked out strategic game plan from the very nascent stage of its evolution process.
Economic Times, in its January 6, 2009 edition reported, “Indian medical tourism to touch Rs 9,500 Crore (around US $ 2.1 billion) by 2015”. Another report titled “Booming Medical Tourism in India”, published in December 2010 estimated that the medical tourism industry will generate revenues of around US$ 3 billion by 2013, although with a market share of just around 3% the of global medical tourism industry. Thus, in medical tourism, India still remains a smaller player with enormous growth potential.
The key reason and influencers:
The most common reason for medical tourism globally is lack of (adequate) health insurance. The most common emerging destinations of medical tourism in the world are Thailand, Singapore, Costa Rica, Panama, Brazil, Mexico, Malaysia and India.
Other factors influencing Medical Tourism particularly in India are as follows:
- Significant cost advantages.
- High quality treatment and hospital stay with the world class medical technological support
- Rigid compliance with international treatment standards
- No language barrier with the western world
- Government taking active steps and interest in the medical tourism sector.
In all these five areas the significant advantages that India offers will need to be adequately encashed in a sustainable manner.
Significant cost advantage in India: The patients from other countries of the world who come to India for medical care not only get world class healthcare services, but also are offered to stay in high-end ‘luxury’ hospitals fully equipped with the latest television set, refrigerator and even in some cases a personal computer. All these are specially designed to cater to the needs of these groups of patients.
Moreover, according to John Lancaster of The Washington Post ( October 21, 2004) Indian private hospitals have a better mortality rate for heart surgery than American hospitals.
Cost Comparison: India vs UK:
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* These costs are an average and may not be the actual cost to be incurred.
(Source: Health Line)
Most popular treatment areas:
The most popular treatment areas are as follows:
- Alternative medicines
- IVF treatment
- Bone-marrow transplant
- Cardiac bypass
- Eye surgery
- Dental care
- Cosmetic surgery
- Other areas of advanced medicine
The key components:
The following four basic components constitute the medical tourism industry:
• Healthcare providers: Hospitals, mainly corporate hospitals and doctors • Payers: Medical/ Health insurance companies • Pharmaceutical Companies: for high quality affordable medicines • IT companies : operating in the healthcare space Key drivers and barriers to growth: Following are the key growth drivers:
- Government support through policies and initiatives
- High quality, yet low cost care
- Much less or no waiting time
- World class private healthcare infrastructure
- Rich source of natural and traditional medicines. Ministry of Tourism is also promoting the traditional systems of medicines, like, Ayurveda, Siddha, and Yoga to project India as a the destination of choice for even spiritual wellness and healing
In future, the world class and low cost private sector healthcare services are expected to drive the growth of the medical tourism in India. However, any shortages in the talent pool and inadequate other basic infrastructural support like, roads, airports and power could pose to be barriers to growth, if not addressed immediately.
The PPP model:
Currently the government has started adopting a Public Private Partnership (PPP) Model to provide world class healthcare services through medical tourism both at the national and the state levels. This PPP model has been designed in such a way that continuous improvement in healthcare infrastructure takes place through the private sector resources ably supported by the public sector in terms of policy, budgetary and fiscal support towards such initiatives.
US apprehension about growing Medical Tourism of India:
India Knowledge@Wharton in its June 2, 2011 issue reported as under:
- In the past, US President Barack Obama had singled out India for what he sees as the country usurping American jobs and business.
- In May 2009, he removed some tax incentives for US companies who allegedly preferred to outsource rather than create domestic jobs. “Buffalo before Bangalore” was his rallying call at the time.
- In April 2011, he told a town hall gathering in Virginia that Americans shouldn’t have to go to India or Mexico for “cheap” health care. “I would like you to get it right here in the U.S.,” he said.
Conclusion:
As we have noted above, due to global economic meltdown even many corporate business houses in the developed world are under a serious cost containment pressure, which includes the medical expenses for their employees. Such cost pressure prompts/ could prompt them to send their employees to low cost destinations for treatment, without compromising on the quality of their healthcare needs. This trend could offer an additional significant growth opportunity in the medical tourism sector in India.
India should keep in mind that other countries, in quite close proximity to ours, like, Thailand, Singapore and Malaysia will continue to offer quite tough competition in the medical tourism space of our country.
However, superior healthcare services with a significant cost advantage at world class and internationally accredited facilities, treated by foreign qualified doctors, supported by English speaking support staff and equipped with better healthcare related IT services will only accelerate this trend in favor of India.
Thus it is a time to say, ‘medical tourism in India – Ahoy!’
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.