Overview of Medical Tourism

Medical tourism — traveling overseas to obtain lower cost medical care — has its origins in cosmetic surgery, but is quickly growing to cover the spectrum of medical procedures, including neurosurgery, hip and knee replacements, and heart surgery.

Common destinations for American patients include Argentina, Costa Rica, India, Thailand, and several European countries. The industry includes large general hospitals as well as specialists in areas such as dentistry, vision, fertility, hair restoration, cosmetic surgery – even gender reassignment.

As the industry evolves, medical tourism agencies are serving as intermediaries to plan a comprehensive trip. In addition to finding the appropriate medical provider for the patient’s circumstances, the agent can make arrangements for air travel, resort stay for recovery time, and details such as cell phone rental, concierge service, and ground transportation. Some agencies specialize in sending patients to a particular country, while others offer a broader array of options.

“Over the next two years, American patients will spend almost a billion dollars for procedures performed by doctors in overseas hospitals,” said Bryan Murphy, director of marketing with Boston-based Merit Global Health, which partners with surgeons and hospitals in Argentina. "We are finding that the majority of our patients initially seek our services because of the costs savings, which can total as much as 80% off U.S. prices."

Quality of Care

“The medical tourism industry suffers from a lack of standards, with price often undercutting the quality of the medical service on offer,” said Lorraine Melvill, founder of Surgeon and Safari, an agency in South Africa. She warns against choosing a provider based on price alone. “You will long forget the cost of your surgery but will live with the results forever.”

One way to address concerns about quality is to look for Joint Commission International (JCI) accreditation. Based in the Chicago suburb of Oak Brook, JCI has accredited over 100 hospitals in 23 countries. Its parent organization, The Joint Commission, evaluates and accredits hospitals in the United States.

Patient Experience

Given a shortage of nurses in the U.S. and pressure from insurance companies to shorten U.S. hospital stays, overseas hospitals can offer a much more comfortable experience than the typical U.S. hospital. Many medical tourism agencies can add value to overseas health care by looking after details to ensure a smooth experience.

“We find that patients choose to use our services based upon the level of personalization we offer,” said Murphy of Merit Global Health. “For example, we have partnered with apartment rental agencies that provide wireless Internet access as well as 24 hour concierge services. For those of our patients who will be traveling alone, we have a retired nurse who is fluent in English on-staff to accompany the patient for two hours a day while they are recovering in the hospital. We believe that attending to every single detail of the trip, from arrangement of the pre-surgical consultation to escorting patients to and from the airport in Argentina, is what makes a successful and memorable medical trip.”

Industry Growth

With over 45 million uninsured Americans, the U.S. market represents a large opportunity for the medical tourism industry. When faced with the need for surgery which they cannot afford at home, the uninsured and underinsured — people with limited coverage or high deductibles — will find overseas treatment a compelling alternative. As U.S. health care and health insurance costs rise faster than the rate of inflation, this trend is very likely to increase.

In countries with socialized medicine, such as Canada and the United Kingdom, there are often waiting lists for nonemergency procedures. "The long waiting periods for surgeries like knee replacement in the U.K. is a scenario the Indian hospitals are looking to exploit," said Vivek Shukla, a health care marketing consultant in India.

Industrialized nations are not the only source of patients for medical tourism. “There are some hospitals in India that are only looking at neighbors, like Nepal, Bhutan, and Bangladesh for their medical tourism prospects,” explained Shukla. “These countries have less developed medical facilities, and travel to India from Nepal and Bhutan is very easy.” Similarly, patients from Indonesia travel to neighboring Malaysia for advanced medical procedures.

Industry Risks

“One of the most notable risks for the industry is disease outbreak. For example, during the SARS outbreak in 2003, there was a decline in patients to the region," explained S. Shobana, a marketing representative with Sunway Medical Centre in Malaysia.

Political instability and perceived safety are additional factors that can hurt demand. For example, the recent military coup and the New Year’s bombings in Thailand could scare away visitors.

Price advantages vary depending on currency fluctuations. For example, a weaker U.S. Dollar would reduce the savings for American patients. Additionally, government regulation from the patients’ home countries is a potential risk factor.

Medical tourism raises many questions, and also offers numerous opportunities. These topics and many others will be covered in more depth in future editions of Medical Tourism Insight.