Medical Tourism:

An Overview

Katherine M. Sauer
University of Southern Indiana
kmsauer1@usi.edu

March 19th, 2009 MBAA – ABE Annual Conference Chicago, IL

 Headlines…

Hip surgery in India? Insurance may pay

MSNBC.com 6/30/2008

Americans look abroad to save on health care

AP 8/3/2008

South Korea seeks a place in a booming

medical tourism market
International Herald Tribune 11/13/2008
 Outline:

I. Introduction
II.Driving Forces
III.Effects
IV.Future Research
I. Introduction

From a US perspective, there are three general

types of medical tourism
patients traveling outside the US for care
patients traveling to the US for care
patients traveling within the US for care.

Today’s focus will be patients traveling abroad

for medical care.
The practice of traveling to obtain health care is
known by several different names…
medical tourism
medial travel
health tourism
health travel
global healthcare

Medical or health travel are probably the most

accurate terms.

Medical tourism seems to be the most widely

used term.
Google Trends search on
- medical tourism (blue, 1.00)
- medical travel (red)
- health tourism (orange)

retrieved on March 1, 2009

A. Common Procedures:
- heart bypass/valve replacement/pacemaker/defibrillator
- angioplasty with stent
- spinal fusion
- fertility treatments
- hip replacement / resurfacing
- knee replacement
- lap bands/gastric bypass
- laparoscopic surgeries (gall bladder, hysterectomy, etc.)
- neuro-surgery
- transplants
- cancer procedures
- cosmetic surgery
- dental surgery
B. Destination countries:
Country JCI PWOB Deloitte
Barbados x x
Bermuda x  
Brazil x x x
Chile x  
China x  
Costa Rica x x x
Czech Republic x x
Egypt x  
Ethiopia x  
Hong Kong x  
Hungary   x x
India x x x
Indonesia x  
Israel   x
Jordan x x
Country JCI PWOB Deloitte
Kingdom of Saudi Arabia x   x
Korea x x
Lebanon x  
Malaysia x x x
Mexico x x x
New Zealand   x
Pakistan x  
Panama   x
Philippines x x
Qatar x   x
Singapore x x x
South Africa   x x
Taiwan x  
Thailand x x x
Turkey x x
United Arab Emirates x x x
 C. Statistics
Sample Surgery Cost Comparison
USA India Thailand Singapore Costa Rica Korea

Heart Bypass $130,000 $6,651-$9,300 $11,000 $16,500 $24,000 $34,150

Heart Valve Replacement $160,000 $9,000 $10,000 $12,500 $15,000 $29,500

Angioplasty $57,000 $4,988-$7,500 $13,000 $11,200 $9,000 $19,600

Hip Replacement $43,000 $5,800-$7,100 $12,000 $9,200 $12,000 $11,400

Hysterectomy $20,000 $2,300-$6,000 $4,500 $6,000 $4,000 $12,700

Knee Replacement $40,000 $6,200-$8,500 $10,000 $11,100 $11,000 $24,100

Spinal Fusion $62,000 $4,500-$8,500 $7,000 $10,000 $25,000 $3,311

Medical Tourism Association website 7/8/2008

In 2007, an estimated 750,000 Americans traveled
abroad for medical care.

Deloitte 2008 Survey of US HealthCare

Consumers:
- 39% would go abroad for care if
they could save half the cost and be assured
of quality

- 3% have traveled outside the US for care

- 27% may travel outside the US for care

The world market is
- estimated at $60 billion in 2007
- estimated to grow to $100 billion by 2010.

35 countries serve around a million medical

tourists each year.
II. Driving forces

A. Four factors
1. Increasing economic importance of the health
services sector
- increased demand for healthcare
- shortage of healthcare professionals
- aging population
- increasing medical costs
- constrained public sector health budgets

2. International accrediting bodies

- JCI, CCHSA, TAS, ACHSI
3. General Agreement on Trade in Services
-Trade in health services takes many forms:
insurance
telemedicine
hospital services
medical tourism

4. Other factors
- information / communication technologies
- increased mobility
- consumerism
- access / wait times
B. International Accrediting Bodies:

- Joint Commission International (JCI) -- US

- Canadian Council on Health Services

Accreditation (CCHSA)

- Trent Accreditation Scheme (TAS) -- UK

- Australian Council on Healthcare Standards

International (ACHSI)
As of July 2008:
10 CCHSA
177 JCI
12 TAS
? ACHSI

Brazil – 13 JCI
Malaysia – 10 JCI
Singapore – 16 JCI
China – 3 JCI, 12 Trent
Saudi Arabia – 17 JCI, 4 CCHSA
C. General Agreement on Trade in Services
The WTO GATS specifies 4 modes of supply
with respect to services:
Mode 1 – Cross-Border Supply
Mode 2 – Consumption Abroad
Mode 3 – Commercial Presence
Mode 4 – Presence of Natural Persons

Mode 2 is relevant for studying people traveling

abroad for medical treatment.
GATS commitments for mode 2:
- very few limitations on market access or
national treatment have been placed on
health services

- commitments would pertain to whether

a WTO member is prepared to allow its
own nationals to go abroad for healthcare

GATS does not imply that foreign patients must

be treated the same as domestic patients.
Types of consumers abroad:
- tourists who incidentally need medical care
- retirees abroad
- temporary / migrant workers
- cross-border commuters
- residents of multinational areas
- travel specifically for medical care
- price / insurance
- access / wait times
- anonymity
- specialty services
III. Effects
A. Potential Impacts
- alleviate some health service issues in sending nation
(wait times, access)

- improved health infrastructure in receiving nation

- dual healthcare market in receiving nation

- crowd out local population

- source of foreign currency, investment funds, and

tax revenue for receiving nation
- developing nations harness comp. advantage

-brain drain vs improved human capital

- cost containment in sending nation

- government policies

- insurance
B. Interested parties:
- Ministries/Departments of Health/Tourism
- insurance providers
- tour operators
- tourism boards
- hospitals
- hotel chains
- spas
- investors
- accrediting bodies
C. Government Promotion

India’s Ministry of Tourism provides financial

assistance to attend global medical fairs to
promote India (accredited).

The Minister of Health and the Minister of

Tourism in Barbados hosted the “Caribbean
Health and Wellness Tourism” meeting in April
2008.

Malaysia’s Health Ministry is launching a special

medical tourism website.
South Korea has revised immigration policy and
regulations on joint ventures between local and foreign
hospitals.

The President of Tunisia has asked for an action plan

focused on encouraging foreign patients to visit the
country for medical treatment.

Philippines Department of Tourism held a summit to

lay the groundwork for making the nation a health and
wellness destination.

Yemen’s Ministry of Health pays for certain treatments

abroad.
D. US - International Partnerships:

Cleveland Clinic – Cleveland Clinic Abu Dhabi

(2010)

Columbia University Medical Center

- partnered with Ben-Gurion University of
the Negev: Medical School for
International Health
- affiliated
American Hospital, Paris
Florence Nightingale Hospital, Istanbul
St. Luke’s Medical Center, Philippines
Cornell Medical School
- opened medical school in Qatar
- research/advisory institute in Seoul

Duke Medicine
- partnered with NUS: Duke-NUS Medical
Graduate School, Singapore

Harvard Medicine
- 50 programs in 30 countries
- with Dubai Healthcare City is launching
University Hospital
Johns Hopkins Hospital
- ties in Japan, Singapore, India, UAE,
Canada, Lebanon, Turkey, Ireland, Portugal,
Chile, Panama

Memorial Sloan Kettering Cancer Center

- Hong Kong, Barcelona, Geneva, Athens,
Sao Paulo, Seoul, Istanbul, Singapore,
Philippines
University of Pittsburgh Medical Center
- partnered to develop hospital in Palermo,
Italy
- medical center in Qatar
- cancer center in Dublin
E. International Providers:

Costa Rica – CIMA Hospitals

India – Apollo Hospitals

Philippines – St. Luke’s Medical Center

Singapore – National Cancer Center

Thailand – Bumrungrad Hospital

UAE – American Hospital

IV. Future Research

- destination country characteristics

- local health care market effects
- cross-subsidization logistics
- insurance portability implications
- public-private partnerships
- government promotion efforts
 Comments? Questions?

Katherine M. Sauer
University of Southern Indiana
kmsauer1@usi.edu

March 19th, 2009 MBAA – ABE Annual Conference Chicago, IL