6 7

Spending Levels Spending Trends Delivery System Quality Performance and Access
2. Hospital Operating Expenses

Hospitals in Massachusetts vary greatly in their level of operating efficiency, with some
capable of delivering high-quality care with lower operating expenses.
Hospitals face significant operating expenses in deliv- trates this variationii (see Technical Appendix B1: Data
ering care. Improving the operating efficiency of hospitals sources for discussion of the hospital cost reports data set).
enables them to deliver care more affordably. If hospitals Even after adjusting for the varying complexity of needs of
with higher expense structures could successfully imple- patients treated by each hospital and for different regional
ment strategies to reduce operating expenses, then the wage levels, hospitals with higher levels of operating ex-
overall health care system could maintain equal or better penses spent 23 percent more to provide the same services
quality of care while reducing total expenditures. than those with lower levels of operating expenses (Figure
To this point, our focus has been on payer and con- 2.1).iii This difference represented thousands of dollars in
sumer payments to providers for delivering health care additional expenses per hospitalization for those hospitals
services. In this chapter we shift to an examination of the with higher expense structures.
expenses of acute hospitalsi in providing those services, One oft-cited theory for the cause of this variation is
or operating expenses. We first compare hospital operat- that certain types of hospitals, such as those that teach
ing efficiency by examining differences in expenses and physician residents and fellows, must incur additional ex-
quality performance (see sidebar “What does operating penses to support their mission.iv However, the difference
efficiency mean for hospitals?”). We then examine the dif- in median expenses per discharge between teaching hospi-
ferent margins hospitals earn from public and commercial tals and all hospitals ($1,030) was less than the difference
payers and the variation of these margins across hospitals. between individual teaching hospitals ($3,107 between the
Finally, we examine the composition of hospital operating 75th percentile and 25th percentile teaching hospitals).v
expenses and discuss strategies that hospitals may use to Moreover, there were a number of teaching hospitals that
improve their efficiency. incurred fewer expenses per discharge than the statewide
all-hospital median of approximately $9,000 per discharge
(Figures 2.1, 2.2). A similar analysis for disproportionate
What does operating efficiency mean for
hospitals? share hospitals (DSH)vi found that these hospitals had a
median operating expense level comparable to the median
We use operating efficiency in this chapter to describe for all hospitals ($9,055 compared with $9,053), but that
how productively hospitals make use of their input re- there was broad variation between DSH hospitals ($2,060
sources – such as facilities, labor, and supplies – to deliver
between the 75th percentile and 25th percentile).
care. We describe a hospital that is able to deliver sim-
ilar services at equivalent quality while incurring fewer Evaluating efficiency also requires understanding the
expenses than another hospital as being relatively effi- impact of operating expense level on the quality of care
cient. There are many practices that hospitals may use to
ii
While hospital cost reports have known limitations and accounting
reduce operating expenses and improve efficiency (see
approaches differ from hospital to hospital, these data represent the best
sidebar “What types of strategies are hospitals pursuing information available at a statewide level for analysis of hospital operat-
to reduce their operating expenses?”). ing expenses. Analyses presented here describe general trends and are
not intended to characterize the performance of individual institutions.
iii
In describing the degree of variation, we used the 25th and 75th percen-
tile hospitals to exclude outliers.
2.1 Variation in hospital operating efficiency
iv
Medicare provides graduate medical education (GME) funding to
support resident training expenses.
Operating expenses vary greatly by hospital. Analysis
v
We define teaching hospitals based on the Medicare Payment Ad-
visory Commission (MedPAC) definition of major teaching hospital.
of cost reports submitted by Massachusetts hospitals illus- Major teaching hospitals are those that train at least 25 residents per 100
hospital beds.
vi
DSH refers to hospitals with 63% or more of patient charges attributed
i
Those hospitals licensed under MGL Chapter 111, section 51, for whom a to Medicare, Medicaid, and other government payers, including Com-
majority of beds are medical-surgical, pediatric, obstetric, or maternity. monwealth Care and Health Safety Net.
30 Health Policy Commission

Hospital
Figure 2.1: Inpatient Operating
operating Expenses
expenses per discharge Wasteful
* for all Massachusetts acute hospitals Spending High-Cost Patients Conclusion
Dollars per casemix- and wage-adjusted discharge, 2012
Figure 2.3: Quality performance relative to inpatient operating expenses per admission: excess readmission ratio
Excess readmissions ratio versus dollars per casemix-adjusted discharge*
Figure 2.1: Inpatient operating expenses per discharge for * Figure 2.3: Quality performance relative to inpatient operat-
all Massachusetts acute hospitals ing expenses per admission: excess readmission ratio
Dollars per case mix- and wage-adjusted discharge, 2012 Excess readmission ratio versus dollars per case mix-adjusted
discharge* Median
performance
60% above Lower U.S. average
Highest: Expense difference median efficiency performance
$19,127 between 25th and 75th
$20,000 percentiles
75th percentile: Inpatient

Median
$15,000 operating expenses
$10,032 Median: per discharge*
expenses
25thpercentile:
$10,000 $9,053
$8,157
Lowest:
$5,000 $6,545 Higher
Figure 2.2: Inpatient operating expenses per discharge* for major teaching hospitals in Massachusetts 60% below
median efficiency
Dollars$0
per casemix- and wage-adjusted discharge, 2012
60% worse Excess 60% better
All acute hospitals than
readmission
Figure 2.4: Quality performance relative to inpatient
readmission ratio† than
ratioexpenses per admission: mortality rate
operating
median median
Composite mortality rate versus dollars per casemix-adjusted discharge*
Figure 2.2: Inpatient operating expenses per discharge* for
Figure 2.4: Quality performance relative to inpatient operat-
major teaching hospitals in Massachusetts
ing expenses per admission: mortality rate
Dollars per case mix- and wage-adjusted discharge, 2012
Composite mortality rate versus dollars per case mix-adjust-
*Inpatient patient service expenses divided by inpatient discharges. Adjusted for hospital casemix index (CHIA 2011) and area wage index (CMS 2012). * 2012 inpatient patient service expenses divided by inpatient discharges. Adjusted for hospital casemix index (CHIA 2011) and area wage index (CMS 2012).
Source: Center for Health Information and Analysis; Centers for Medicare & Medicaid Services; HPC analysis † Composite of risk-standardized 30-day Medicare excess readmission ratios for acute myocardial infarction, heart failure, and pneumonia (2009-2011). The composite rate is a weighted
average of the three condition-specific rates.
ed discharge*
Source: Center for Health Information and Analysis; Center for Medicare & Medicaid Services; HPC analysis
Median
performance
60% above
Expense difference median
Lower
efficiency
between 25th and 75th
percentiles
$20,000 Highest:
$14,395 75th percentile: Inpatient
Median
$15,000 $11,933 Median:
operating expenses
expenses
per discharge*
$10,083 25thpercentile:
$10,000 $8,826
Lowest: U.S. average
$5,000 $8,146 performance
Higher
60% below
median efficiency
$0 60% worse Composite 60% better

than mortality rate‡ than
Major teaching hospitals median median
Figure 2.5: Quality performance relative to inpatient operating expenses per admission: process-of-care measures
*
Inpatient patient service expenses divided by inpatient discharges. Adjusted for
Figure 2.5: Quality performance relative to inpatient operat-
Composite of process-of-care measures versus dollars per casemix-adjusted discharge *
hospital case mix index (CHIA 2011) and area wage index (CMS 2012).
Source: Center for Health Information and Analysis; Centers for Medicare & Med- ing expenses per admission: process-of-care measures
icaid Services; HPC analysis
*Inpatient patient service expenses divided by inpatient discharges. Adjusted for hospital casemix index (CHIA 2011) and area wage index (CMS 2012). Composite of process-of-care measures versus dollars per
* 2012 inpatient patient service expenses divided by inpatient discharges. Adjusted for hospital casemix index (CHIA 2011) and area wage index (CMS 2012).
‡ Composite of risk-standardized 30-day Medicare mortality rates for acute myocardial infarction, heart failure, and pneumonia (2009-2011). For each condition, mortality rates were
normalized so that the Massachusetts average was 1.0. The composite mortality rate is a weighted average of the three normalized, condition-specific mortality rates.
case mix-adjusted discharge*

Source:
Source: Center for Health Information and Analysis; Centers for Medicare & Medicaid Services; HPC analysis Source: Center for Health Information and Analysis; Center for Medicare & Medicaid Services; HPC analysis
delivery and patient safety. We examined performance by Median

performance
Massachusetts hospitals across select indicators of quality: 60% above

median
Lower 100% adherence
efficiency to process-of-
excess readmission ratio, mortality rate, and process-of- care measures
care measures. For each measure of hospital quality, certain

Inpatient
hospitals achieved better performance while maintaining operating expenses
Median
expenses
per discharge*
lower operating expenses (Figures 2.3, 2.4, 2.5). Opportu-
nities exist across all measures examined for hospitals to
achieve higher quality performance at their current oper- 60% below
median
Higher
efficiency
ating expense level or to reduce operating expenses while 60% worse Composite score 60% better
than on process-
process-of-
of-care than
sustaining quality performance. These results suggest that median measures§ median
2012 inpatient patient service expenses divided by inpatient discharges. Adjusted for
some hospitals may have structures or practices that allow
*
hospital case mix index (CHIA 2011) and area wage index (CMS 2012).
them to deliver care more efficiently. For example, stud- †
Composite of risk-standardized 30-day Medicare excess readmission ratios for acute
myocardial infarction, measuresheart
(CMS 2012): failure, and pneumonia
SCIP-Inf-9; SCIP-Inf-10;(2009-2011).
AMI 2; AMI 8-a; PN 6; HF 2; andThe
* 2012 inpatient patient service expenses divided by inpatient discharges. Adjusted for hospital casemix index (CHIA 2011) and area wage index (CMS 2012).
composite rate is
ies have demonstrated that hospitals practicing effective
§ Average across 10 process-of-care SCIP-Inf-1; SCIP-Inf-2; SCIP-Inf-3; HF 3. Detail on measures available in
technical appendix.
a weighted average
Source: Center for Health Information andof the
Analysis; three
Center for Medicarecondition-specific
& Medicaid Services; HPC analysis rates.
management techniques have lower mortality rates and ‡
Composite of risk-standardized 30-day Medicare mortality rates for acute myocardial
infarction, heart failure, and pneumonia (2009-2011). For each condition, mortality rates
stronger financial performance.1 Lower-efficiency hospi- were normalized so that the Massachusetts average was 1.0. The composite mortality
rate is a weighted average of the three normalized, condition-specific mortality rates.
tals could benefit from critical examination of their cost §
Average across 10 process-of-care measures (CMS 2012): SCIP-Inf-1; SCIP-Inf-2; SCIP-
structures and should consider adopting evidence-based Inf-3; SCIP-Inf-9; SCIP-Inf-10; AMI 2; AMI 8-a; PN 6; HF 2; and HF 3. Detail on measures
available in Technical Appendix A2: Hospital Operating Expenses.
practices to reduce their operating expenses while main- Source: Center for Health Information and Analysis; Centers for Medicare & Medicaid Ser-
taining or improving quality (see sidebar “What types of vices; HPC analysis
2013 Annual Cost Trends Report 31

Figure 2.8: Illustrative examples of margin differences driven by price and margin differences driven by
operating expenses
strategies are hospitals pursuing to reduce their operat-

Figure 2.7: Illustrative examples of margin differences driven
ing expenses?”).
by prices and operating expenses
ILLUSTRATION: SAME OPERATING EXPENSES, DIFFERENT PRICES
2.2 Operating margins by payer and hospital 12
9
market position 8
4 8
1
Hospitals’ operating expenses and operating margins Prices Operating Margins Prices Operating Margins
are influenced by market dynamics and the level of pay- expenses expenses
ments
Figure they hospital
2.7: Aggregate receive from ratios
payment-to-cost public and payers,
for commercial commercial payers.
Medicare, and Medicaid* ILLUSTRATION: SAME PRICES, DIFFERENT OPERATING EXPENSES
Differences in the level of payments made to hospitals by 9 9

commercial payers compared with those paid by the pub- 12
8
1
lic payers (Medicare and Medicaid) have been well-docu-
Percent of costs, 2011 -3
mented. Nationally, hospitals have typically made money Prices Operating Margins Prices Operating Margins
expenses expenses
on their commercial business while losing money on their
Medicare and Medicaid business (Figure 2.6).
Hospital cost reports suggest that some Massachusetts
Figure 2.6: Aggregate U.S. hospital payment-to-cost ratios hospitals earn positive margins from public payers, while
for commercial payers, Medicare, and Medicaid* others lose more than 30 cents per dollar of revenue on the
Percent of total expenses, 2011
+135%
same payers.viii Similarly, some hospitals earn more than
140 +131%
130
Commercial 30 cents per dollar of revenue on commercial payers, while
120 +116% others earn just a fraction of that. In Massachusetts, when
110
+99%
grouped by expense levels, the groups of hospitals that
100 +95% Medicaid
+89% earn the largest margins on revenue from commercial pay-
90 Medicare
+95% +91% ers often report the largest losses on revenue from public
80 Figure 2.9: Operating margins by payer type for hospitals at different operating expense levels
70
+82% payers
Operating(Figure 2.8). of net patient service revenue*, 2012
income as proportion
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Figure 2.8: Operating margins by payer type for hospitals at
*
Medicaid and Medicare figures include disproportionate share payments. different operating expense levels
Source: Avalere Health analysis of American Hospital Association Annual Survey
data, 2011, for community hospitals Operating income as proportion of net patient service reve-
nue,* 2012
* Medicaid and Medicare figures include Disproportionate Share payments.
Massachusetts hospitals experience similar differenc-
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2011, for community hospitals
Medicare
27%
es, but operating margins vary materially by hospital for Commercial
19% 22% 19%
17%
both commercial and public payer business. Differences
7% 7% 5%
in the operating margins between hospitals can be driv-
en by differences in the revenues they receive for services, -1%
by differences in the expenses they incur to deliver those -8%
services, or by both factors (Figure 2.7). For public payers, Lowest 2nd 3rd 4th Highest
quintile quintile quintile quintile quintile
price levels are comparable across hospitals because Med- operating operating
icaid and Medicare set fee schedules based on established Operating
expenses expenses
formulas.vii As a result, differences in operating margins expenses per $7,559 $8,287 $9,011 $9,871 $12,090
discharge†
between hospitals for public payers are largely driven by
Operating income defined as total net patient service revenue less total patient
*
differences in expenses. service expenses. Payer-specific expenses are estimated by applying hospital-spe-
For commercial payers, the differences in margins include *cific cost-to-charge
Operating ratios
income defined as total net patient serviceto hospital’s
revenue less total patient charges
applying hospital-specific cost-to-charge ratios to hospital’s charges by payer.
service expenses.by payer.
Payer-specific expenses are estimated by
†
2012
Source:
Source
inpatient patient service expenses divided by inpatient discharges. Adjust-
Center for Health Information and Analysis; HPC analyss
large differences in prices paid. CHIA’s relative price reported for hospital case mix index (CHIA 2011) and area wage index (CMS 2012).
ing and analyses by the AGO have demonstrated a wide vari- Source: Center for Health Information and Analysis; HPC analyss
ation in commercial prices paid to Massachusetts hospitals.2,3

This is on a fully allocated expense basis determined by average
viii
These formulas account for factors like regional wages, costs asso-
vii
costs, factoring in indirect expenses and overhead. In some cases where
ciated with a teaching mission, and the case mix of patients using the negative margins are reported on a fully allocated expenses basis, Medi-
hospital. care and Medicaid payments may exceed direct care expenses.

Hospital Operating Expenses Wasteful Spending High-Cost Patients Conclusion
What types of strategies are hospitals pursuing to reduce their operating expenses?
Hospitals in Massachusetts and around the nation are implementing various efforts to improve their operational efficiency
with the goal of delivering high-quality care while incurring lower expenses. Below we discuss three examples of strategies
that have been successfully implemented at certain hospitals. For a particular hospital, opportunities may be different than
those described below, but these examples demonstrate the range of levers that are available to hospitals to improve their
operating efficiency.
Procurement and supply chain management

Hospitals purchase a large variety and volume of goods, materials, and equipment. Purchased items range from surgical
gloves to drugs, imaging machines, and major surgical implants. The procurement of these items is often encumbered by
various forms of inefficiency, including4:
▪▪ Lack of coordination across hospitals in a system, with duplicative purchasing and materials management departments
that fail to leverage system scale to negotiate lower prices,
▪▪ Lack of alignment across clinicians in a department, resulting in orders of similar products from different companies,
thereby missing opportunities to save through bulk-volume purchasing, and
▪▪ Ineffective inventory management, resulting in stock-outs or delays for some items and large inventory levels for others.
Reducing inefficiencies in procurement can substantially reduce the expenses of delivering care. Orthopedic and cardiac im-
plants, for instance, can represent 50 to 80 percent of the total expenses of an acute procedure.5 Through improved man-
agement, hospitals can potentially reduce the spending across their entire supply chains by an estimated five to 15 percent.6
Lean operations
“Lean” management principles are most widely associated with the Toyota Production System, which seeks to reduce waste
in the production process to increase value for the customer. Over the past decade, a number of organizations have translated
the same lean principles to the hospital setting. The benefits of lean processes – including fewer medication errors, a decrease
in health care-associated infections, less nursing time away from the bedside, faster operating room turnover, improved care-
team communication about patients, and faster response time for emergency cases – not only improve patient care but also
increase employee engagement, labor productivity, and operating margins.7 Successful implementations of lean programs in
hospital systems outside Massachusetts have shown significant improvements in efficiency, with one hospital system report-
ing savings equivalent to three to five percent of its annual revenue within three years and another achieving a 36 percent
improvement in labor productivity.8,9
Still, the literature contains many cases of (and explanations for) hospitals’ failures in implementing lean principles, and sta-
tistically rigorous evidence of the potential impact is limited.10,11 Some systems that have achieved great success in improving
efficiency in their core markets have encountered difficulties in trying to scale their approach to new markets.12 Although
efforts to adopt lean principles do not guarantee success, with careful implementation Massachusetts hospitals may realize
efficiencies through established successful lean programs.
Cost accounting
In their efforts to reduce operating expenses, hospitals are often limited by the information available from their established
cost accounting practices. Many Massachusetts hospitals have not implemented detailed cost accounting systems, and thus
the operating expenses associated with a particular procedure are often not measured directly.3 Rather, the hospitals calculate
a hospital- or department-wide ratio of total expenses to total charges and then multiply this ratio by the amount billed for
that procedure to obtain an expense value. Some hospitals attempt a more accurate allocation by using internally developed
relative value units based on the complexity of the procedure, but such allocation methods introduce other measurement er-
rors. Without direct measurement of expenses in delivering care, hospitals encounter difficulties in managing and improving
their expenses. To remedy these problems, several health systems have been pursuing more rigorous approaches to expense
measurement, using actual data on the time spent by clinicians and support personnel, and also of the space, equipment, and
supplies used to treat patients for a specific condition.13,14
In the future, improved accounting practices will become increasingly important as hospitals seek to reduce their per-pro-
cedure operating expenses to enable more affordable care delivery. Benchmarking data available through state reporting
programs or provider data consortiums can also support operational improvement efforts.

Some hospitals seek to negotiate greater payments the current structure, hospitals report similar expenses
from commercial payers to make up for these public payer differently. Moreover, available data on hospital capital
shortfalls. Previous analyses have shown that hospitals are expenses
Figure are
2.6: Breakdown limited.
of hospital Improved
operating expenses data are needed to further
not uniformly successful in realizing this shift in source analyze high-efficiency models and best practices, which
of revenue (often referred to as “cost-shifting”), as Mas- could support provider organization improvement efforts
sachusetts hospitals with high public payer mix on aver- through actionable benchmarks. In the future, we will
Percent of direct expenses by category, 2012
age receive lower relative commercial prices than hospitals continue to examine this area as improved data become
with low public payer mix.2 Whether a hospital is able to available through CHIA data collection efforts and other
negotiate higher commercial prices when it faces a decline programs.
in public payer revenue is most closely linked to the hospi-
tal’s relative market leverage, not its relative mix of public Figure 2.9: Breakdown of hospital operating expenses
payer reimbursement.15 Percent of direct expenses by category, 2012
This impacts operating expenses over time as hospitals 100

with stronger market leverage can earn higher revenues Depreciation 5
from commercial payers and therefore have less pressure and amortization
42
to constrain their expenses.16,17 Meanwhile, hospitals with Supplies
limited market leverage receive lower rates of commercial

payer reimbursement and, under greater financial pres- Labor* 53
sure, tend to be more aggressive at maintaining lower
operating expenses.ix Nationally, hospitals with lower ex-
pense structures fare better at Medicare and Medicaid lev- *
Labor expense category is composed of salaries and benefits, physician compen-
sation paid directly by hospitals, and purchased services.
els of reimbursement. Analysis of the hospital cost reports Source: Center for Health Information and Analysis; HPC analysis
in Massachusetts shows consistent results. These findings
* Labor expense category is composed of salaries & benefits, physician compensation paid directly by hospitals, and purchased services.
reinforce the importance of monitoring overall market Source: Center for Health Information and Analysis; HPC analysis
Source
performance and competitiveness.

2.4 Conclusion
Hospitals vary greatly in their level of operating effi-
2.3 Composition of hospital operating expenses
ciency, with some capable of delivering high-quality care
In 2012, spending on labor constituted more than half with lower expenses. These differences between higher-
of all operating expenses for Massachusetts hospitals (Fig- and lower-expense hospitals amount to several thousand
ure 2.9).x In some hospitals, the staff is directly paid for by dollars per discharge. There are multiple strategies to re-
the hospital in the form of salaries and benefits; in others, duce operating expenses that are being explored around
hospitals outsource certain roles to companies and pay for the country, which, if adopted, could enable Massachu-
the labor through a purchased services contract. setts hospitals to deliver high-quality care at more afford-
It is important to better understand the relationship of able prices.
labor expenses, supply expenses, and other operating ex-
penses with quality of care in order to assess how hospitals References
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is limited for conducting such an analysis. Available cost New York (NY): McKinsey & Company; 2011.
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ix
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Trends and Cost Drivers. Boston (MA): Office of the Attorney Gen-
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deferring investment in facilities and equipment, which could deepen eral; 2010 Mar 16.
competitive disadvantages over time.
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benefits, spending on purchased services, and spending on physician Supply Chain. New York (NY): Booz & Company; 2010.
compensation that is paid directly by the hospital, rather than a separate
physician organization.

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takes-of-hospitals-implementing-lean-management.html.
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Journal of Industrial Engineering and Management
JIEM, 2020 – 13(2): 246-265 – Online ISSN: 2013-0953 – Print ISSN: 2013-8423
https://doi.org/10.3926/jiem.3008
A Conceptual Model of Medical Tourism Service Supply Chain

Saliha Karadayi-Usta , Seyda SerdarAsan
Istanbul Technical University (Turkey)
salihakaradayiusta@gmail.com, serdars@itu.edu.tr
Received: September 2019

Accepted: March 2020
Abstract:
Purpose: Medical tourism service requires involvement of multiple parties from the service network,
however medical tourism is not well studied from a supply chain management perspective. This study
suggests a conceptual model of medical tourism service supply chain (MTSSC) to provide a clearer
understanding of its nature, and defines its business processes.
Design/methodology/approach: Triangulation which makes use of literature review, in-depth
interviews, and expert evaluations was applied to develop and validate the suggested model. The proposed
model is initialized based on the relevant literature. In-depth interviews were used to refine and finalize the
model. Expert evaluations ensure the trustworthiness of the model and the business process definitions.
Findings: The proposed model uses a nested process structure rather than a one-dimensional supply
chain model, where the assistance company maintains an intermediary role between the patient and all the
service providers (e.g. medical institutions, transportation, accommodation). Additionally, the conceptual
model identifies seven business processes: service design, service recovery management, customer
relationship management, supplier relationship management, demand management, capacity and resource
management, and service delivery management.
Practical implications: The results provide a better understanding of the MTSSC structure and
processes, and a recognition of the MTSSC members. The process definitions give the members an idea
about their roles in the service design and delivery in practice. Additionally, a better understanding of the
system as a whole leads to better process development and control. MTSSC members may shape their
organizations internally and supply chain-wide by considering this conceptual model. Moreover, the model
acts as a basis for supply chain collaboration decisions.
Originality/value: The conceptual model is built upon the theories and practice of medical tourism
services, supply chain management, and service operations management. This study contributes to the
theory of medical tourism services management by explaining the MTSSC concepts and business
processes, and extends existing knowledge.
Keywords: medical tourism, medical tourism service supply chain, supply chain business processes, triangulation,
conceptual model
To cite this article:
Karadayi-Usta, S., & SerdarAsan, S. (2020). A Conceptual Model of Medical Tourism Service Supply Chain.
Journal of Industrial Engineering and Management, 13(2), 246-265. https://doi.org/10.3926/jiem.3008
-246-
Journal of Industrial Engineering and Management – https://doi.org/10.3926/jiem.3008
1. Introduction
Medical tourism is emerging both as a business and as an academic research area (Lee & Fernando, 2015). Medical
tourism refers to the type of healthcare tourism where patients have access to medical institutions for
treatment/rehabilitation outside their country of residence. Although the terms medical tourism and healthcare
tourism are often used interchangeably, healthcare tourism is an umbrella term that encompasses thermal health
tourism, spa-wellness tourism, and elderly/disabled tourism along with medical tourism. Examples of medical
tourism treatments include cardiovascular surgery, radiotherapy, organ transplantation, infertility and IVF
procedures, aesthetic/plastic surgery, dialysis treatment and dental and eye care. Medical tourism is especially
preferred by patients those seek to combine treatment with a vacation. It presents several advantages such as access
to high quality and reliable medical services, immediate access to medical treatment without any queues or long
waiting-periods, access to medical institutions equipped with cutting-edge technology and skilled healthcare
professionals, travel to foreign cities and countries, and affordable prices (Connell, 2006; Glinos, Baeten & Boffin,
2006; Kumar, Breuing & Chahal 2012). Medical tourism is also considered an opportunity for healthcare innovation
and a new area of investment (Connell, 2006) especially for developed countries like Turkey (Healthcare Travel
Coordination Council, 2012).
Medical tourism treatment types can be categorized as elective and urgent/semi-urgent with a low-to-high-risk scale
(Mason & Spencer, 2017). This study focuses on elective treatments such as dental treatment and smile design, laser
eye surgery, and hair transplantation.
The most popular destinations in the medical tourism market are Thailand, India, Costa Rica, Mexico, Malaysia,
Singapore, Brazil, Colombia, Turkey, Taiwan, South Korea, Czech Republic, and Spain (Grand View Research,
2019; Mordor Intelligence Report, 2020). For example, Europe dental tourism market is led by Hungary, Poland,
Spain, Turkey and Bulgaria, while in the Asia Pacific market, the major clinics/hospitals offering dental treatments
are located in India, Thailand, Malaysia, South Korea, Philippines. Additionally, Central & South America market’s
well-known hosting countries are Mexico, Brazil, Colombia and Costa Rica (Adroit Market Research, 2018). Turkey
offers opportunities for medical treatments, and having a strong position in terms of health services and facilities to
compete globally (Tenth Development Plan of Turkey, 2018). The medical tourism market reports indicate that
Turkey is among the most preferred medical tourism destinations.
Medical tourism service offering requires the involvement of multiple parties from the service network. The
medical tourism service supply chain (MTSSC) is a network of multiple businesses and people that plan medical
services, supply necessary resources, deliver medical tourism services and manage information and financial flows
between the service providers and the patients (Ferrer & Medhekar, 2012). MTSSC is also a special subcategory of
tourism supply chains that includes transportation, insurance, and accommodation providers, medicine and medical
suppliers, and medical institutions (Lee & Fernando, 2015). We define MTSSC as a network of service providers
rendering services to medical tourists under the direction and control of an assistance company. Accordingly,
MTSSC members include assistance companies, medical service providers, accommodation providers, tour services
providers, flight ticket providers, transportation/transfer service providers, translation service providers, insurance
companies and visa providers. A well-functioning MTSSC enables medical tourists to take advantage of faster, cost-
efficient, high quality medical treatment opportunities with the benefits of traveling abroad and discovering new
countries and locations.
A review of the current research on medical tourism via Scopus database reveals that most of the studies have
focused on creating demand for medical healthcare (Ferrer & Medhekar, 2012, Tang & Abdullah, 2018), and only a
few studies have explored the medical tourism supply chain as a whole (Lee & Fernando, 2015). The fact that there
are only a few studies with recent publication dates suggests that the research area is in emergence stage, where the
focus of research efforts is on concept and theory building (Kuhn 1962; Sterman 1982). Accordingly, this study
seeks to develop a conceptual model of MTSSC, the need for which has been emphasized in recent studies by
Fernando and Lee (2015) and Lee and Fernando (2015) and define its business processes. In this study,
triangulation (Denzin, 1978; Flick, 2004) was applied to develop and validate the suggested model and process
definitions. It makes use of literature review, in-depth interviews, and expert evaluations. The theoretical framework
of the proposed model is developed based on the relevant literature. During the in-depth interviews, the company
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representatives reviewed and discussed the initial model, and provided practical information about their operations
and collaborations in terms of supply chain management. The experts’ feedback was used to refine and finalize the
model. Subsequently, the proposed model was presented at the 8th International Health Tourism Congress to
healthcare management academicians and business authorities, and their opinions were collected regarding the
trustworthiness of the model and process definitions. The feedback from experts revealed that although the
proposed model has the desired MTSSC structure, there is a second version of the model used in practice, where
assistance companies deal with the medical services, and travel agencies with the tourism-related services.
In the following sections of the paper, the methodology followed in the paper is explained. Accordingly, the
MTSSC members are identified, and the medical tourism service flow is presented. Then, the proposed MTSSC
conceptual model and the definitions of MTSSC business processes are provided. Next, the evaluations of experts
on the concept and content of the proposed model and definitions are discussed. Finally, research findings,
managerial implications, limitations, and future research directions are presented in the conclusion section.
2. Methodology
This study uses triangulation (Flick, 1992; Flick, 2004) to gain a deeper understanding of the MTSSC concept and
to develop a conceptual model of MTSSC. Triangulation means examining a research topic using at least two
different methodologies or from at least two different perspectives (Denzin, 1978; Flick, 2004). Reliance on
mixed-methods allows the weakness of any single method to be canceled out by the strengths of the others
(Bryman & Bell, 2011). Triangulation is used to ensure research quality, to generalize discoveries and to extend
domain knowledge (Flick, 2004). The four ways that triangulation can be used in the validation of qualitative
research are data triangulation, investigator triangulation, theory triangulation, and methodological triangulation
(Denzin, 1978). In this study, we employed multiple methods of investigation and multiple sources of data to refine
and corroborate our model. Figure 1 illustrates the triangulation process used in this study.
Figure 1. The triangulation process used in this study
2.1. Literature Review

A literature review is a survey and summary of the complete and current state of knowledge on a certain research
topic from any collection of materials. There are a number of methods to conduct a literature review, which can be
broadly categorized as the traditional narrative review, systematic quantitative review, and meta-analysis (Yang,
Khoo-Lattimore & Arcodia, 2017). This study conducts a traditional narrative review, where findings from prior
studies are discussed, synthesized and quantified to demonstrate patterns, in a less rigid way, due to the small
number of academic papers on the MTSSC. Also, this kind of literature review allows researchers to create
conceptual models by synthesizing prior studies.
In order to make a broad search of the studies on MTSSC, the Scopus database that covers the well-known
publishers such as Elsevier, Emerald, IEEE, Springer, Sage, Taylor & Francis, Wiley-Blackwell was used. A Scopus
search with the search words “medical tourism” in title-abstract-keywords, and “supply chain” in all text (Search
term: (TITLE-ABS-KEY ( "medical tourism" ) AND ALL ( "supply chain" ))) resulted in 54 studies published
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between 2012 and 2020, after eliminating the irrelevant studies 51 of them remained. The papers published both in
a proceedings book of a conference and in a journal with the same title were counted a single publication in the
elimination process. Moreover, because of the defined keywords, the results involved medical-incentive papers
having no or very minor tourism side, and they were eliminated as well. The current studies are mainly about the
factors affecting medical tourism demand (Lin, Lee & Huang. 2009; Ferrer & Medhekar, 2012, Johnson & Garman,
2015; Loh, 2015; Vetitnev, Kopyirin & Kiseleva, 2016; Tang & Lau, 2017; Tang & Abdullah, 2018; Loh & Triplett,
2019; Nilashi, Samad, Manaf, Ahmadi, Rashid, Munshi et al., 2019; Arulmozhi, Praveenkumar, Vinayagamoorthi,
2019; Al-Talabani, Kilic, Ozturen & Qasim, 2019; Sedianingsih, Ratnasari, Prasetyo & Hendarjatno, 2019), MTSSC
management principles such as coordination, collaboration, information exchange and integration (Fernando &
Lee, 2015; Lee & Fernando, 2015; Perkumiene, Vienažindiene & Švagždiene, 2019; Cho & Lee, 2019; Karadayi-
Usta & Serdarasan, 2019), perceived MTSSC quality (Debata, Patnaik & Mahapatra, 2012; Rahman 2019; Mohd Isa,
Lim & Chin, 2019; Sadeh & Garkaz, 2019), benefits and risks of medical travel (Kumar et al., 2012), partnership
quality between health institutions and travel agencies (Lin, 2014), and supply chain network modelling
(Ahmadimanesh, Paydar & Asadi-Gangraj, 2019).
Other than peer reviewed literature, we have reviewed a wide variety of data sources, including other academic
sources such as books, working papers and conference papers, as well as reports and documents published by
medical service providers’, Turkish Ministry of Health and Turkish Healthcare Travel Council, in order to gain a
deeper understanding of the MTSSC concept, its members, their processes and their relationships. The output of
this phase was the initial version of the conceptual model with definitions of supply chain processes.
2.2. In-Depth Interviews

An interview aims to gather descriptions of the interviewee’s worldview with respect to the interpretation of the
meaning of the described phenomena (Kvale, 1983). In-depth interviews are described as a form of conversation
with a purpose (Legard, Keegan & Ward, 2003). It is a qualitative research technique that allows the interviewee to
express his/her ideas on specific issues and requires only a small group of interviewees (Boyce & Neale, 2006). It is
important that the in-depth interviewer is well-trained for both providing detailed information and for making the
interviewee comfortable. Body language, curiosity, ability to introduce subjects for evaluation, communication
competence are the other essential features of an interviewer (Legard et al., 2003; Boyce & Neale, 2006).
We have conducted in-depth interviews with the operation manager of an assistance company and with the
international marketing manager of a hospital chain both headquartered in Turkey to gather detailed information
on the current supply chain practices regarding medical tourism services and discuss the initial version of the
model. The assistant company and the hospital chain are highly recognized global facilitators representing Turkey in
the international medical tourism market by attracting medical tourists and by arranging agreements that ensure
continuous cooperation with other countries’ facilitators. The interviewed parties represent the must-have service
providers and key enablers for a medical tourism service. The interviewed representatives are able to provide the
points of view of the other supply chain members due the scope of their operations, thus, we have found
consulting them enough to discuss the initial version of our model.
The first author acted as the interviewer and was able to manage the interview process effectively and obtain all the
necessary information. Semi-structured open-ended questions were asked to the interviewees. As experienced
sector practitioners, the experts provided information about their collaborations, suppliers, customers and business
processes, as well as insights into the suggested model, which helped us to refine and finalize the proposed model.
2.3. Expert Evaluations

Operating in a dynamic and uncertain environment, MTSSC is a complex network of businesses, with a high
number and variety of processes, and interdependencies between these. Thus, understanding and examining it in its
entirety is not straightforward, and empirical support to do so is not often available. Expert evaluation is a possible
way of dealing with this problem, where a panel of experts is used to elicit judgments on issues that are complex
and subjective (Garrod & Fyall, 2005).
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The proposed conceptual model was presented to healthcare management academicians and business authorities at
the 8th International Health Tourism Congress. The experts were selected on the basis of their knowledge and
expertise, which put them in a privileged epistemic position with regard to understanding the MTSSC. During the
presentation, the participants were free to comment or ask questions, which contributed to a better understanding
of the topic and allowed the participants to make their evaluations on the basis of informed reflection. After the
presentation, an expert evaluation form consisting of evaluative statements and open-ended questions on the
definitions, benefits, and limitations of the MTSSC model and its processes were distributed to the participants.
This was followed by an interactive discussion guided by the first author. 10 academicians, 4 government
representatives, 8 assistance company authorities and 8 healthcare service provider executives were evaluated the
study during the presentation (see Table 1).
Expert title Institution

Faculty Member, Healthcare Management AA University
Faculty Member, Tourism Management BB University
Faculty Member, Public Health Department CC University
Faculty Member, Healthcare Management DD University
Faculty Member, Healthcare Management EE University
Faculty Member, Business Administration FF University
Faculty Member, Business Administration GG University
Faculty Member, Healthcare Management HH University
Faculty Member, Healthcare Management JJ University
Faculty Member, Health Sciences KK University
Internal Control Unit Representative LL City Board of Health
Health Tourism Coordinator Ministry of Family and Social Policies
Health Tourism Specialist Ministry of Family and Social Policies
Health Tourism Specialist Ministry of Family and Social Policies
Project Manager Medical Tourism Consultancy Co.
Finance Director MM Health and Welfare Foundation
General manager NN Medical Tourism Co.
Sales and business development manager PP Travel – Health Tourism Agency
Owner QQ Healthcare Services
Founder RR Healthcare Services
Managing partner SS Healthcare Services
General manager TT Assistance Co.
Int. business development ass. manager VV Eye Care hospital
Marketing manager YY Hospital Group
Assistant director YY Hospital Group
Int. marketing & business dev. Manager ZZ Hospital Group
Business development coordinator AZ Healthcare Group
International marketing manager BZ Private Hospital
International relationship director CZ University Hospital
Managerial coordinator DZ Medical Center
Table 1. Expert profiles
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The feedback and responses were used to test and confirm the conceptual model. The expert evaluation served
more as a refinement and justification for the proposed model. Additionally, based on the expert feedback a second
version of the model, which is more common in practice was revealed.
As a result, triangulation enabled us to gain a better insight into the MTSSC and generate the conceptual model,
where literature review, in-depth interview, and expert evaluation were used to gather data from academic literature
and practice. Furthermore, triangulation helped us define the medical tourism experience and medical tourism
service supply chain members, as described in the following section.
3. A Conceptual Model of Medical Tourism Service Supply Chain

The conceptual model of MTSSC suggested in this paper uses ideas from the medical tourism supply chain
literature (Lee & Fernando, 2015; Connell, 2006; Glinos et al., 2006; Ferrer & Medhekar, 2012; Fernando & Lee,
2015; Debata, Patnaik & Mahapatra, 2012; Kumar et al., 2012; Lin, 2014), service supply chain models suggested by
Baltacioglu, Ada Kaplan and Yurt (2007) and Ellram, Tate and Billington (2004), supply chain business processes
literature (Lambert & Enz, 2017; Lambert & Cooper, 2000; Lambert, 2009; Bolumole, Knemeyer & Lambert, 2003;
Croxton, García‐Dastugue, Lambert & Rogers, 2001; Croxton, Lambert, García‐Dastugue & Rogers, 2002;
Croxton, 2003; Goldsby & Garcia-Dastugue, 2003; Lambert & Schwieterman, 2012; Rogers, Lambert, Croxton,
García‐Dastugue, 2002; Rogers, Lambert & Knemeyer, 2004), a nd service operations management research and
practice (Fitzsimmons & Fitzsimmons, 2011; Johnston, Clark & Shulver, 2012; Haksever & Render, 2013). The
model was then refined and elaborated upon based on the in-depth interviews with executives of an assistance
company and a hospital chain. In line with our definition of the MTSSC - as a network of service providers
rendering services to medical tourists under the direction and control of an assistance company-, the proposed
model demonstrates the assistance company as the governor of all service processes (see Figure 2). The proposed
model uses a nested process structure rather than a one-dimensional supply chain model to emphasize the need for
intense coordination and collaboration. In the model, there are no strict borders or limits between supply chain
member activities, instead, members are expected to conduct joint business activities collaboratively.
The MTSSC members are identified based on the literature review and the interviews with the executives of the
assistance company and the hospital chain. Furthermore, the congress participants were asked to confirm these
supply chain members. The medical tourism service supply chain members and their responsibilities are listed as
follows:
• Patient: makes a request to receive treatment, fills in forms, gives informed consent, provides required tests
and reports, acts in compliance with the treatment plans, makes payment.
• Assistance company: examines patient applications, offers medical advisory, asks patients for tests, analyses,
and examination reports, translates these reports into the official language of the host country, informs the
patients about costs and treatment processes, offers healthcare institution options, plans appointments at
pre-operation medical evaluations, collects payments, provides medical escorts, keeps in touch with
patients through the 24/7 alert center service, coordinates with other service providers.
• Medical service provider: arranges the pre-operation medical evaluation, informs the patient, takes patients’
consent, provides treatment, provides reports, prescriptions, and fit-to-fly documentation, and produces
insurance-related documents.
• Ambulance/transfer/transportation services provider: picks up medical tourists from the airport and
transfers them to a hotel or a hospital, and offers ambulance services.
• Accommodation services provider: accommodates medical tourists for specific dates.
• Flight ticket services provider: books flights, completes invoicing.
• Translation services provider: reserves a multilingual translator at the destination.
• Tourist activity/tour services provider: provides medical tourists with package/standard or individual tours,
guides and escorts tourist at tourist sites.
• Visa services provider: handles the entire visa arrangement process.
• Insurance services provider: deals with the entire insurance and payment process.
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The conceptual model presented in Figure 2 proposes that the medical tourism process is triggered by the patient’s
application, where the assistance company supports and guides the patient, and medical treatment services are
obtained. Along with the medical services, the medical tourism service includes other services, such as
accommodation, transportation, flight ticket purchase, tourist activities, visa, translation, and insurance. All services
are provided simultaneously, as needed, under the governance of the assistance company. The model also shows
the MTSSC business processes and the members who take part in their execution in order to ensure the smooth
flow of the services. The conceptual model identifies seven MTSSC business processes that are the core of supply
chain management activities and that provide a unique value to the patient. These are service design (SD), service
recovery management (SReM), customer relationship management (CRM), supplier relationship management
(SRM), demand management (DM), capacity and resource management (CaRM), and service delivery management
(SDM). Along with the process flows there is a need to manage information and financial flows throughout the
supply chain. Managing information flows is especially important since IT supports the efficient flow of all
processes and improves accuracy in service delivery, faster response, higher flexibility, and operational efficiency. In
the following subsections, each business process is defined with a focus on the activities of medical tourist,
assistance company and healthcare institution.
Figure 2. Proposed MTSSC model
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3.1. Service Design

SD is concerned with planning and organizing the capacity and resources, creating and improving processes,
communication, and infrastructure as well as designing and enabling the physical elements of the service. In short,
the SD process compasses all processes starting from idea generation to implementation (Goldstein, Johnston,
Duffy & Raod, 2002). To do this, service elements should be well defined and visualized in a proper way (Shostack,
1982). The concepts of the delivery system, facility design, location, service quality, capacity and demand planning,
information and service encounter are essential elements of the design process (Fitzsimmons et al., 2011). All these
elements must be unified to create a consistent and sustainable service. Service innovation is an important aspect of
achieving this goal.
As a part of the SD process, medical tourism service delivery systems focus on the quality dimensions such as
accessibility/convenience, treatment satisfaction, courtesy, physical environment features, technical quality of care
competency, promptness, facility premises, and financial factors (Debata, Patnaik, Mahapatra & Sree, 2015).
Healthcare service quality (Chuang, Liu, Lu & Lee, 2014, Abadi, Sahebi, Arab, Alavi & Karachi, 2018), quality
standards and assurance (Fernando & Lee, 2015, Ajmera, 2017), partnership quality between service providers (Lin,
2014) are significant aspects in the design of medical tourism services. Medical tourists, having a culture and customs
different from the host country, may require some changes to the way the medical services are delivered. For example,
when hosting Muslim medical tourists, service providers need to accommodate Muslim patients’ religious beliefs and
faith (Iranmanesh, Moghavvemi, Zailani & Hyun, 2018). Supplier delivery systems and internal delivery to
departments (Kumar, Ozdamar & Zhang, 2008) should be designed addressing these kinds of patient needs.
Location of a service facility is another concern in medical tourism SD. The location selection decision of a
medical service provider should be made considering the distance between the hospitals and the location of other
services, e.g. considering the transfer of medical tourists from airports (Kumar et al., 2008). The design of the
medical facility with convenient parking and accessibility to the building with medical equipment is another
important point (Pitt, Chotipanich, Issarasak, Mulholland & Panupattanapong, 2016). When designing a medical
service facility, the factors such as the size of the facility (Lin, 2014), meeting patients’ expectations (Pitt et al.,
2016), service provision steps, medical intervention process, facility functions (such as parking, hygiene, and
catering), location of departments according to the flows, etc. are to be taken into consideration.
We define the SD process in MTSSC as a well-defined and structured service development process that is shaped in
accordance with the needs and expectations of the patient in order to create a pleasing medical tourism experience.
The first thing to achieve this is understanding the customer expectations, so that the answers to questions such as
what the target market segment is, what the patients are willing to pay for, which capabilities and resources the
providers need in order to fulfill the needs and expectations of the patients are provided. This way, the providers
can design their service processes, plan their capacity and human resources and make sourcing decisions
accordingly. Along with these, the providers also need to make decisions about the location of the facility, the ways
to access the facility, and recruiting the right people.
3.2. Customer Relationship Management

CRM includes all processes focusing on the interface between the service provider and the customer (Chopra &
Meindl, 2004). The basic processes of the CRM are segmenting the customers, understanding and meeting the
priorities of each segment, identifying opportunities to co‐create value, developing profitable service propositions
that match the requirements of the segment with the capabilities of the firm, customizing these service
propositions according to customer needs, monitoring the plans and execution, and collaborating with other
processes to guarantee the smooth flow of the process (Lambert, 2009).
With respect to CRM, medical tourism service literature focuses on customer satisfaction (Lee & Fernando, 2015;
Lin, 2014; Pitt et al, 2016; Rahman & Zailani, 2017; Kumar & Blair, 2013), customer care (Lunt, 2015), customer
needs (Muljo & Pardamean, 2013), bargaining power of the customer (Muljo & Pardamean, 2013), customer-fitted
services (Medhekar, Wong & Hall, 2014). Ajmera (2017) emphasizes the importance of ‘creating convenience for
patients and developing and strengthening customer relationships’. Kumar and Blair (2013) draw attention to long
term relationships between employees, suppliers, and customers as a contributor to success.
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Medical tourism literature considers information technologies and enhanced communication systems as a medium
to attract medical tourists since these infrastructures can enable patients to reach medical centers/physicians in
other countries (Genc, 2012). Presence in the internet and social media act as effective marketing tools by
enhancing visibility. Additionally, infrastructures related to transportation and communication in a destination
country are factors affecting the medical tourism demand (Chasapopoulos, den Butter & Mihaylov, 2014; Adeola,
Boso & Evans, 2017; Ramos & Rodrigues, 2013).
Consequently, the CRM in medical tourism focuses on the interface between the service providers and the medical
tourist. It involves all the processes that make effort to create demand for medical tourism -including the marketing
activities and making an actual sale to a medical tourist, make customizations in the service offering in accordance
with the patients’ needs and requirements, maintain a good communication and trust with the patients and inform
them whenever needed throughout the medical procedure and afterwards, monitor the outcomes, receive feedback
using questionnaires, face to face or telephone interviews, and report to ensure continuous improvement.
3.3. Demand Management

DM is about finding a balance between the customer requirements with supply chain capabilities via the processes
of forecasting demand and aligning it with sourcing, production, and delivery capabilities (Croxton et al., 2002).
Due to common characteristics of the services being intangible, inseparable and perishable, services cannot be
inventoried for later use. Thus, in order to form a balance between customer demand and service delivery, the
service provider needs to not only to generate demand for its services but also match the demand with its supply
chain’s service delivery capacity and capabilities (Ellram et al., 2004; Baltacioglu et al., 2007). The DM process
covers gathering relevant data, generating forecasts, synchronizing and integrating demand plans with capacity plans
throughout the supply chain (Croxton et al., 2002). While good relations and communication with customers are
required in order to forecast the demand accurately, good relations and communication with suppliers are required
to meet the actual demand.
Demand for medical tourism is defined as request for medical services, at a particular destination, at a given price
and time (Medhekar & Haq, 2015). An effective DM process requires an understanding of the overall medical
tourism experience and an effective synchronization between supply chain partners (Medhekar & Haq, 2015).
Rahman and Zailani (2017) report trust as an important determinant in generating medical tourism demand. There
are studies in medical tourism literature focusing on increasing demand for halal medical tourism services
(Medhekar & Haq, 2015; Rahman & Zailani, 2017), and studying various host countries’ demand patterns (Lin et
al., 2009; Genc, 2012; Johnson & Garman, 2015; Loh, 2015; Vetitnev, Kopyirin & Kiseleva, 2016; Dang, Huang,
Wang & Nguyen, 2016; Tang & Lau, 2017; Tang & Abdullah, 2018).
We define DM as a process that plans medical tourism demand in alignment with the service capacity of all parties
involved in the medical tourism service delivery. It includes gathering data from the market (historical sales and
other factors affecting the demand behavior), forecasting the demand and generating a collaborative demand plan
by taking the impact of the efforts made in the CRM process into account, synchronizing and adapting the capacity
of all supply chain members with the demand plan, and creating the ability to respond to changes in demand and
increasing flexibility.
3.4. Capacity and Resource Management

CaRM involves service providers’ activities to balance capacity and demand for their services (Murray & Berwick,
2003; Xu, Prats & Delahaye, 2018, Sanden, Everwijn, Rouwette & Gubbels, 2005). Back-stage operations and
support processes that are typical for a service delivery system are performed in this context. The processes
included are employee and job scheduling, material requirements planning, facility and equipment scheduling, and
outsourcing planning (Ellram et al., 2004; Baltacioglu et al., 2007).
CaRM includes balancing the capacity and resources with the demand plan generated during the DM process. In
order to integrate capacity and demand with service operations, there are strategies to follow: matching the patient
demand and availability of the health professionals, preventing backlogs, reducing the number of appointment
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types, developing contingency plans, reducing and shaping the demand for visits, increasing the effective supply
(especially the bottleneck resources) (Murray & Berwick, 2003)
Service capacity is dependent on time, labor, equipment and facility constraints (Fitzsimmons & Fitzsimmons,
2011; Wilson, Zeithaml, Bitner & Gremler, 2016). Medical service capacity includes the number of appointment
slots per day for each health professional (Murray & Berwick, 2003) and number of beds or medical equipment in a
hospital. The maximum number of patients to be handled is limited by the capacity of a hospital serving medical
tourists (Malairajan, Ganesh, Qureshi, Anbuudayasankar & Lee, 2012). For example, a hospital has capacities for
medical staff, specialist surgeons and physicians, number of beds and medical material resources and an awaiting list
of patients (Medhekar et al., 2014). Utilizing cutting-edge technological medical equipment, and following the latest
technological innovations improves service capacity and enables enhanced SDM.
Human resource management (Abadi et al., 2018; Jain & Ajmera, 2018; Muljo & Pardamean, 2013; Rahman & Zailani,
2017), resource dependence (Lin, 2014), resource allocation (Malairajan et al., 2012), operational performance
measurement (Lin, 2014; Kim, 2017; Rahman & Zailani, 2017), demand and capacity integration (Murray & Berwick,
2003; Xu et al., 2018; Sanden et al., 2005), and capacity planning (Murray & Berwick, 2003; Farmer, Hosek &
Adamson, 2016; Wirtz, 2016; Tripathi, Elneil & Romanzi, 2018) are some of the topics discussed in the literature
within the context of medical tourism service resource management. Human resource planning is critical due to the
high level of human participation to deliver services in order to guarantee satisfied patients (Rahman & Zailani, 2017).
In brief, CaRM is a process of strategic, tactic and operational planning to balance and manage capacity and
demand via employee and job scheduling, material requirements planning, facility and equipment scheduling, and
outsourcing planning.
3.5. Supplier Relationship Management

SRM focuses on the interaction between the service provider and its suppliers (Chopra & Meindl, 2004). The SRM
process provides the structure for how relationships with suppliers will be developed, managed and implemented
(Lambert & Schwieterman, 2012). It consists of product/service development, sourcing, supply planning, and
purchasing, supplier evaluation (Baltacioglu et al., 2007), and all the communication between the company and its
current and future suppliers (Chopra & Meindl, 2004).
The typical suppliers in an MTSSC are medical service providers, assistance companies providing medical
consultancy, tour services providers offering tourist activities, accommodation providers, flight ticket suppliers,
transportation/transfer service providers, translation service providers, and insurance and visa providers (Medhekar
& Haq, 2015; Rahman & Zailani, 2017). In a MTSSC, members conduct business activities collaboratively and act
as providers to each other. The relationships with the suppliers in a medical tourism service supply chain are
governed via service level agreements between the customers and the suppliers. Negotiating with potential
suppliers, procurement, and performance evaluation are some of the SRM business processes within the medical
tourism service. Studies also mention the need for coordinating the interrelated activities of multiple service
providers (Rahman & Zailani, 2017) especially in terms of CaRM.
We define SRM in medical tourism as a process that structures, plans, and executes the relationships between the
service providers and the assistance company. It involves negotiations with suppliers, designing and implementing
service level agreements, procurement of services and materials, performance evaluation of suppliers and all
collaborative activities. Since service suppliers in a medical supply chain are in direct contact with the medical tourist,
alignment of goals along with high levels of trust and communication between providers are necessary for success.
3.6. Service Delivery Management

SDM focuses on the interaction between the service provider and the customer at the same time and place with the
purpose of service delivery. It is accepted as the main function of the service supply chain (Ellram et al., 2004;
Baltacioglu et al., 2007). According to Ellram et al. (2004), SDM from the service provider’s perspective is about
making promises to the customers, enabling services and meeting these promises, while from the customer side, it
is about clarifying the expectations, enabling the service provider to manage its operations, monitoring the
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compliance, and providing feedback, and payment. Human resources are significant in both SDM and CaRM, since
the human involvement plays a vital role in service delivery.
In terms of service delivery, the literature on medical tourism mainly emphasizes the interaction between the health
professional and the patient (Glasner, 2009; Kumar et al., 2012). Service providers should understand the patients’
requests, and perform appropriate medical procedures. Furthermore, a healthcare professional should inform
patients during a medical intervention about the examination process in order to comfort the patients. Muslim –
friendly medical tourism is a special case, in which understanding Islamic cultural sensitivities is an essential point
for SDM and CaRM (Medhekar & Haq, 2015). For instance, Muslim female patients request female health
professionals (Iranmanesh et al., 2018).
We define SDM as a process that manages all activities that take place between the service provider and the patient
at the same time and place during the service delivery. It includes the patient to be clear about their needs and
expectations and the provider to understand and meet these expectations by utilizing its available skills, capacity, and
resources. It also requires the patient to adhere to the recommended course of treatment and to provide feedback.
3.7. Service Recovery Management

SReM is defined as the activities to deal with the customer dissatisfaction in order to prevent customer loss. It is
also considered as “doing the right thing at the second chance” or “the second chance for the first impression”.
Service recovery process steps are essentially understanding the case, evaluating the situation and options,
implementing a solution, monitoring and reporting (Bolumole et al., 2003). A well-managed service recovery
activity provides an opportunity to satisfy the customer and to gain trust and loyalty (Cengiz, Akdu & Bostan,
2015). In other words, service recovery turns the lost customer into a well-satisfied permanent customer
(Fitzsimmons & Fitzsimmons, 2011). The frequently used ways of recovery are listening, apologizing, recovering in
a fair way, and conciliation (Goldstein et al., 2002).
Since medical tourism is at the intersection of tourism and healthcare activities, the literature research for service
recovery covered these service industries as well. A service failure in the hospitality industry can occur in arrival,
billing, departure, guest room, food services, staff or other services (Wu, Qomariyah, Sa & Liao, 2018). Service
recovery can be performed by apology, explanation, immediate solution, free additional service, upgrade/change,
discount, managerial intervention, or replacement (Wu et al., 2018). Service recovery performance in healthcare
services is affected by fairness, commitment, workplace support (Nadiri & Tanova, 2016), cultural competence,
self-management, social capacity, organizational recovery system and recovery self-efficacy (McQuilken, Robertson,
Abbas & Polonsky, 2018). Furthermore, error management training is an option to improve employees’ service
recovery performance (Yao, Wang, Yu & Guchait, 2019). These are all applicable to service recovery in medical
tourism services. Um and Kim (2018) reveals that a stimulus (informational, interpersonal, procedural or outcome
failures) can trigger dissatisfaction of a medical tourist resulting in switching the service provider, complaining,
negative word of mouth, or inertia as a passive response.
In brief, we define SReM as a process that deals with the medical tourist’s dissatisfaction with the provided services,
in particular with medical services, in order to get a second chance at satisfying the needs and expectations of the
medical tourist. The first step of the SReM process is understanding the source of the dissatisfaction. In case the
failure is related to tourism services the recovery can be executed in terms of apology, free additional service,
upgrade/change, discounts, or payback. However, these recovery options are not suitable for medical service
failure, then the medical procedure needs to be repeated free of all charges. After implementing the recovery
solution, the case should be monitored and reported.
4. Expert Evaluations of the Proposed Model

Expert evaluation is an effective way to elicit judgments on complex and subjective models such as the MTSSC
model proposed in this paper. The proposed model was presented to healthcare management academicians and
business authorities at the 8th International Health Tourism Congress. The participants were asked to provide
feedback on the structure of the model, members of the MTSSC, the business process definitions, and members
involved in each process. The feedback was gathered via an interactive discussion guided by the first author and a
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form consisting of evaluative statements and open-ended questions. The expert evaluations made it possible to
validate our model and definitions.
The experts agreed on and confirmed the proposed structure and the members. They mentioned other parties such
as home care service providers, information technology consulting companies and law offices specialized in health
law to be added to the list of service providers. However, since the suggested supply chain members are not
considered immediate parties, they were not included in our conceptual model.
Experts draw attention to a second version of the proposed model that is more common in practice as illustrated in
Figure 3. The experts indicated that the “medical consultancy” and the “travel agency” are two separate lines of
business, and this type of structure is more frequent in the market. In this second model, the assistance company
provides the medical services for the patients, and all the tourism-related services are supplied by travel agencies
(see Figure 3). The experts pointed out that this structure is preferred by the companies since it allows to focus on
their own competencies. Moreover, the services that a travel agency provides are mainly optional and can be
handled by the patients themselves, or the assistance companies can direct patients to a travel agency upon request.
On the other hand, the experts indicated that the patients prefer the form of the initial version of the model, since
they only want to concentrate on their treatment in a foreign country, instead of trying to answer challenging
questions such as “how will I arrange the travel and touristic activities?” or “will I have trouble receiving a visa or
making insurance payments?”. In other words, since traveling abroad is stressful, patients want a single company to
deal with everything related to both treatment and travel. Thus, all services being managed via a single intermediary
is preferred by patients, mainly for its convenience.
Figure 3. Second version of the proposed MTSSC model
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The experts approved the business process definitions and the members involved in each process. Additionally, they
emphasized the importance of the following issues for each business process:
• SD: Patients’ and patient relatives’ feedback about medical tourism, nursing, and rehabilitation service
experiences as well as their demands and expectations should be taken into consideration when designing
the medical tourism service.
• CRM: Social and cultural support must be provided considering the medical tourists’ requests. Additionally,
qualifications (e.g. multilingual) of medical professionals and patient assistants should be developed to
improve customer experience. Finally, the marketing efforts would be effective in forming an awareness
about medical tourism opportunities and attracting medical tourists to the destination country.
• DM: The characteristics of services should be considered when forecasting demand and planning capacity.
In order to manage demand more effectively, data collection, processing, analysis, and evaluation should be
well defined and structured.
• CaRM: Planning the exact times of appointments, assessing the health professional to the slots of visits,
and arranging operation rooms of a healthcare facility, and focusing on resource and capacity management
for aftercare services are of importance in CaRM. The activities should be managed in coordination to
maintain business continuity.
• SRM: The suppliers should provide assurance on the quality of their services and products in SRM. Apart
from that, the experts mentioned the importance of SRM since any failure in sourcing at the right time and
place, any problems in coordination and communication with suppliers lead to dissatisfaction with the
service.
• SDM: In order to provide assurance to the medical tourists that they are receiving the right treatment,
healthcare professionals should inform patients and their relatives at each phase of the service operation.
Especially, patient representatives should provide guidance to the patient, and service providers should
avoid treating the patient as a cash cow. According to the experts, the major SDM challenge is that the
focus of the business partners remains on “saving the day” instead of making plans and developing
processes to improve the service experience.
• SReM: The service recovery should consider the characteristics of services and the problems these
characteristics can cause. For instance, services are instantaneous and some parts of the service experience
can only be evaluated after a while. Hence, SReM is not only for immediate service failures but should
consider a longer span of time, especially for medical services.
5. Conclusion and Further Research

The success of medical tourism services requires the participation of multiple parties and relies on the coordination
and joint activity of the involved parties. Thus, taking a supply chain perspective to medical tourism service would
be beneficial. The medical tourism supply chain literature mentions the necessity of a conceptual framework to
visualize and demonstrate the structure and members of the supply chain (Lee & Fernando, 2015). Accordingly,
this study seeks to develop a conceptual model of the MTSSC and define the business processes to be fulfilled for
business continuity. It employs a triangulation approach using multiple methods and sources of data to build and
validate the conceptual model and the process definitions. It makes use of literature review, in-depth interviews, and
expert evaluations.
The literature review yielded the initial version of the proposed MTSSC model and process definitions, while the
in-depth interviews with the executives of two separate medical service providers supplied detailed information on
current supply chain practices regarding medical tourism services, and produced the proposed conceptual MTSSC
model. Finally, expert evaluations refined and finalized the MTSSC model and business process definitions, and also
revealed a second version of the MTSSC model.
The proposed model uses a nested process structure rather than a one-dimensional supply chain model to
emphasize the need for intense coordination and collaboration in services. In the model, the assistance company
maintains an intermediary role between the patient and the service providers (medical treatment, transportation,
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accommodation, touristic activities, translation, insurance, and visa). Additionally, the conceptual model identifies
seven MTSSC business processes that are the core of supply chain management activities and that provide a unique
value to the patient: service design, service recovery management, customer relationship management, supplier
relationship management, demand management, capacity and resource management, and service delivery
management. The proposed model also defines the boundaries of these business processes, i.e. defines which
supply chain member/s is/are responsible for which business processes. The expert evaluations revealed a second
version of the model, where the medical consultancy and travel agency services are detached. This structure is
widely observed in the market since healthcare services and tourism and travel-related services are two separate
lines of business and companies prefer to foster their existing competencies.
Lincoln and Guba (1985) and Guba and Lincoln (1994) propose that quality, reliability, and validity of qualitative
research can be established by trustworthiness which is made up of four criteria: credibility, transferability,
dependability, confirmability (Bryman & Bell, 2011). Credibility, which corresponds to internal validity was ensured
by triangulation. Transferability as a means of external validity was ensured by expert evaluations. Dependability
which corresponds to reliability was ensured by following structured research steps and procedures such as
complete records of all research phases, problem formulation, expert selection, fieldwork and interview notes, etc.
Confirmability as a means of objectivity was ensured by maintaining researcher impartiality in all steps of the study.
Additionally, this study performed an exhaustive expert selection process in order to make sure that expert
judgments are reliable and unbiased. In brief, by using multiple methods of investigation and multiple sources of
data to study the phenomenon of our interest, and having results that show mutual confirmation, we believe that
our model and definitions are trustworthy.
The proposed conceptual model is built upon the theories and practice of medical tourism services, supply chain
management, and service operations management. This study contributes to the theory of medical tourism services
management by explaining the MTSSC concepts and business processes and extends existing knowledge.
The major scientific, managerial and practical implications of a conceptual model of medical tourism services
supply chain and business process definitions are:
• Responding to the call of Fernando and Lee, (2015) for a medical tourism supply chain framework, this
study provides a MTSSC framework and defines the relevant business processes for the first time.
• The model provides a better understanding of the MTSSC structure and processes, and a recognition of
the MTSSC members. The definitions of the processes are shaped considering the members’ activities,
therefore, each member will have an idea where and when they have a role in the service design and
delivery in practice. This understanding makes it possible to be prepared and internally organized for each
supply chain member. Furthermore, a supply chain practitioner can use the definitions to understand the
flow of the MTSSC processes.
• A better understanding of the system leads to better process development and control. The supply chain
members may shape their own organizations internally and supply chain-wise by considering this
conceptual model. In other words, any supply chain member would know where it stands in the bigger
picture, develop its business processes, organize its operations and working environment accordingly, and
collaborate with its business partners effectively.
• The model acts as a basis for outsourcing and business collaboration decisions. In this increasingly
complex and resource intensive service business, outsourcing and collaborating with partners would be
more advantageous for business continuity. As expected, supply chain members in medical tourism want to
focus on their own competencies for business excellence. For instance, a medical consultancy company
prefers only to focus on medical cases instead of additionally providing airport transfer or touristic
services, thus it outsources these services and collaborates with service suppliers that are more competent
in those areas.
It is possible to say that the choice of experts and that not all supply chain members are represented in the
interviews are limitations of this research in terms of generalizability. However, experts are effective and
convenient to receive accurate feedback in comparison to other data gathering methods especially in studies that
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define the concepts as well as develop frameworks such as this one. All experts are operating in Turkey, which may
influence the results, yet medical tourism services in Turkey had a great breakthrough and investments have been
made in recent years making Turkey one of the leading destinations in medical tourism and a provider of good
practices. Additionally, this study uses a triangulated approach in order to overcome these limitations.
The limitations of this study also serves as a future research direction. Studying the proposed model by including
wider representation along the actors covering a variety of countries might be possible future studies.
Further research should emphasize service supply chain processes and their interactions in a detailed manner. A
process reference framework can be developed to implement the model emphasizing the collaborative aspects of
medical tourism service supply chain flows. Best practices can be investigated and reported to address questions
such as: Which tools and techniques can be used in order to conduct the processes? What kinds of service business
units can utilize and improve the applicability of the processes? Each service supply chain process can be viewed as
a new topic of study by determining the tools, activities, and business units. Case study method can be used to
establish higher credibility and generalizability of the proposed model.
Acknowledgements
We gratefully acknowledge comments from the participants of the 8th International Health Tourism Congress and
the executives of Marm Assistance and Hospitadent.
Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication
of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
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Procedia - Social and Behavioral Sciences 172 (2015) 336 – 343
Global Conference on Business & Social Science-2014, GCBSS-2014, 15th & 16th December,
Kuala Lumpur
Adoption of Hospital Information System (HIS) in Malaysian Public

Hospitals
Nurul Izzatty Ismaila*, Nor Hazana Abdullahb, Alina Shamsuddinc
a,b&c
Department of Technology Management, Faculty of Technology Management and Business, Universiti Tun Hussein Onn Malaysia , Parit
Raja, Batu Pahat, Johor, 86400, Malaysia
Abstract
Hospital Information System (HIS) is important to be adopted by the hospitals to improve their operations and services. Despite
their importance, only 15.2% of Malaysian Public Hospitals implemented the system through THIS, IHIS and BHIS categories
which shows low adoption level of HIS in Malaysia. This study aims to identify factors affecting the HIS adoption across different
categories of HIS’s hospitals. The finding showed that there are significant differences between factors affecting HIS adoption in
the THIS compared to IHIS’s hospitals, and THIS and BHIS’s hospitals. However there is no significant difference among factors
between IHIS with BHIS’s hospitals.
© 2015
© 2015TheTheAuthors.
Authors.Published
Publishedbyby Elsevier
Elsevier Ltd.Ltd.
This is an open access article under the CC BY-NC-ND license
Peer-review under responsibility of GLTR International Sdn. Berhad.
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Keywords: Technology Adoption; Hospital Information System; Total Hospital Information System; Intermediate Hospital Information System;
Basic Hospital Information System
1. Introduction
Healthcare sector is an important industry to serve high-quality services and healthcare treatment to citizens in
every country in the world. It needs to be improved continuously, especially in the context of healthcare management.
In Malaysia, the healthcare sector is divided into three categories namely Public Healthcare, Non-Governmental
Organization (NGO) Healthcare and Private Healthcare, which includes hospitals and clinics (Country Health Plan,
2011). Among these categories, the public healthcare is the most critical category since it serves the largest number of
* Corresponding author. Tel.:+607-453-3842.

E-mail address: izzatty86@gmail.com
1877-0428 © 2015 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
doi:10.1016/j.sbspro.2015.01.373
Nurul Izzatty Ismail et al. / Procedia - Social and Behavioral Sciences 172 (2015) 336 – 343 337
patients. Accordingly, public hospitals are usually bigger and more crowded. To accommodate escalating number of
patients in public medical hospitals, several initiatives had been taken by Malaysian Government, which includes
enhancing Information Technology (IT) applications in Malaysian Public Hospitals. A systematic hospital Information
System (IS) helps to ensure faster, manageable and efficient hospital services. Furthermore, this system is envisioned
to overcome several problems faced by the public hospitals in Malaysia, for example slow and inefficient services
(Md. Zan, 2007), and esclating negligence cases due to improper medical documentation (Malaysian Health Report,
2009; Bernama, 2009). However, to date, only 21 out of 138 public hospitals implemented either Total Hospital
Information System (THIS), Intermediate Hospital Information System (IHIS) and Basic Hospital Information System
(BHIS). In addition, there is no present study which compared factors affecting different categories of HIS.
2. Hospital Information System (HIS)
HIS is defined as an integrated electronic systems that collect, store, retrieve and display overall patients’ data and
information such as history of patients’ information, results of laboratory test, diagnoses, billing and others related
hospital’s procedures which are used in several departments within hospitals (Aniza et al., 2010; Nor Bizura, 2010;
Nik Azliza et al., 2009). Consequently, HIS has several components, for example Clinical Information System (CIS),
Financial Information System (FIS), Laboratory Information System (LIS), Nursing Information Systems (NIS),
Pharmacy Information System (PIS), Picture Archiving Communication System (PACS) and Radiology Information
System (RIS) (Biomedical Informatics Ltd., 2006). According to Biomedical Informatic Ltd. (2006), the HIS could
have two or more HIS components whereby these components are linked to one another. Each component has different
characteristics, based on its usage, department and users.
The implementation of Hospital Information System (HIS) in Malaysian Public Hospitals are divided into three
categories, which known as Total Hospital Information System (THIS), Intermediate Hospital Information System
(IHIS) and Basic Hospital Information System (BHIS), in which eleven public hospitals represented as THIS, two
public hospitals represented as IHIS and eight hospitals represented as BHIS in Malaysia (Mohamad and Syed Mohd.,
2008; Ismail et al., 2010; Malaysian Health Report, 2009; Malaysian Country Plan, 2011). It presents the total of 21
out of 138 or 15.2% of public hospitals adopted the system in Malaysia. This implementation is based on the hospital
size and number of beds (Mohamad and Syed Mohd., 2008). Table 1 shows the description of public hospitals involved
in HIS implementation.
2.1. Components of HIS in Malaysian Public Hospitals
In Malaysia, the forms of integrated information system that installed are different among the HIS’s hospitals. On
the other words, the Total Hospital Information System (THIS), Intermediate Hospital Information System (IHIS) and
Basic Hospital Information System (BHIS) have different components of information systems installed in their
hospitals (Suleiman, 2008).
The different classification of HIS is determined by different components of Information System (IS) being
implemented in the hospitals. THIS’s hospitals are also be known as paperless hospitals because they have complete
HIS components. While IHIS and BHIS using hybrid system, which maintain both electronic and manual systems.
This is because, both of IHIS and BHIS’s hospitals adopted only with several forms of IS. Therefore, a previous study
by Ismail et al. (2013) found the factors that affecting the HIS adoption in Malaysian Public Hospitals are
Technological, Organizational, Environmental and Human. However, the critical factors are low satisfaction level in
THIS’s hospitals, and low acceptance level in IHIS’ and BHIS’s hospitals. Thus, this finding indicates that THIS’s
hospitals are different from IHIS and BHIS’s hospitals, while IHIS and BHIS’s hospitals are quite similar. Previous
studies by various researchers had identified several benefits and issues of HIS adoption.
2.2. HIS Benefits and Issues
HIS adoption has various benefits, as well as issues or problems. Previous studies found several benefits of HIS as
follows: Patient data of HIS is accessible (Mohammad and Syed Mohamad, 2005; Nguyen, 2011), remote access of
data within the hospital (Aftergut, 2011; Park, 2012), save time and space (Khartik, 2011; Park, 2012), legibility and
338 Nurul Izzatty Ismail et al. / Procedia - Social and Behavioral Sciences 172 (2015) 336 – 343
accuracy of data (Khartik, 2010; Peterson, 2006) and decrease of medication errors (Delbert and Meyer, 2010; Fiumara
et al., 2008). However, previous studies also found several issues of HIS adoption as follows: High cost or expensive
of HIS adoption (Boonstra and Broekhuis, 2010; Orill, 2011), time consuming in dealing with the system (Moseberry,
2011; Orill, 2011), technological and technical issues of the system (Boonstra and Broekhuis, 2010; Moseberry, 2011),
lack of IT skills (Boonstra and Broekhuis, 2010; Moseberry, 2011) and confidentiality and security of the system
(Littlejohns, 2003; Tachninardi and Muura, 1994).
2.3. Technology Acceptance/Adoption Theories
In research, theory is important because it provides a framework for analysis, facilitates the efficient development
of the field, and is needed to solve the real world problems. In this study, Theory of Reasoned Action (Fishbein &
Ajzen, 1975), Theory of Planned Behavior (Ajzen, 1985), Technology Acceptance Model (TAM) (Davis, 1986),
Technological, Organizational and Environmental (TOE Framework) (Tornatzky & Fleischer, 1990), DeLone and
McLean Model (DeLone and McLean, 1992), Diffusion of Innovation Theory and Unified Theory of Acceptance and
Use of Technology (UTAUT) were reviewed in terms of their applicability of use at organizational level. Three
theories are deemed suitable to be applied at the organisational level, namely TOE Framework, DeLone and McLean
IS Success Model, and IDT. However, the TOE was the best theory to be employed in this study because the three
factors of the TOE framework (Technological, Organisational and Environmental) were consistent with factors
uncovered during the first phase of qualitative study (Ismail et al., 2013).
The technological context is important to ensure successful adoption of IT. Kwon and Zmud (1987) mentioned that
successful of IT is depends on importance of internal technology resource-infrastructure,technical skills, developers
and user time. Besides that, Tornatzky and Fleischer (1990) had stated an availability and characteristics inside the
Technology context. Besides that, organizational context is also important to ensure an efficiency of organizational
structure in hospitals. According to Burns and Stalker (1994), the organizational context refers to firm size;
centralization, formalization, and complexity of its managerial structure; the quality of its human resources; and the
amount of slack resources available internally. Whereas, environmental is becomes the important context to ensure an
effectiveness of the IT towards the hospitals. The environmental context refers to surrounding area of the firm,
consisting of multiple stakeholders such as industry members, competitors, suppliers, customers, the government, the
community, etc.(Angeles, R., 2013). A previous qualitative study by Ismail et al. (2013) showed Human contexts are
also significant in HIS adoption in Malaysian Public Hospitals. Thus, this context is added to the existing TOE
framework. Human refers to skill, experience and self-awareness of hospital staff members to deal with HIS, Prior to
this, several hypotheses had been formulated in this study as follows:
H1a: THIS’s hospitals are significantly different with IHIS and BHIS’s hospitals in terms of Technological,
Organizational, Environmental and Human Contexts.
H1b: IHIS and BHIS’s hospitals are significantly different with THIS’s hospital in terms of Technological,
Organizational, Environmental and Human Contexts.
3. Research Methodology
This study employed quantitative approach via the used of cross-sectional survey. The survey had been conducted
at six public hospitals in Malaysia. These hospitals were chosen based on the HIS categories of hospitals, which
includes THIS, IHIS and BHIS’s hospitals. There were 229 respondents among THIS, IHIS and BHIS’s hospitals
were participated in this survey. The respondents were chosen among the HIS users among these hospitals. Hospital
A and Hospital B represented as THIS’s hospital, while Hospital C and Hospital D represented as IHIS’s hospitals,
whereas Hospital E and Hospital F represented as BHIS’s hospitals, as shown in Table 1. The total of sample size
shows 73 respondents were from THIS’s hospital, 83 respondents were from IHIS’s hospitals and 73 samples of
respondents were from BHIS’s hospitals.
Table 1. Research Sites and Research Samplings of Quantitative Study

THIS Sample Size IHIS Sample Size BHIS Sample Size
Hospital A 40 Hospital C 41 Hospital E 43
Hospital B 33 Hospital D 42 Hospital F 30
Total 73 Total 83 Total 73
3.1. Descriptions of Measurements
The questionnaires were obtained from validated questionnaires from Mohammad Chuttur (2009), McGill, Klobas
and Hobbs (2004) and Thiri Naing (2006), as shown in Table 2.
Table 2. Descriptions of Measurements

Contexts Validated Theory/Source Adapted Factors
Questionnaires
Technological Mohammad Technology Acceptance Model Perceieved
Chuttur (2009) (Davis, 1986) Usefulness
Perceieved Ease of
Use
McGill et al. McLean and DeLone IS Success System Quality
(2004) Model (McLean and DeLone,
1992)
Ismail et al. From previous qualitative User Acceptance
(2013) findings
Environmental Thiri Naing Technology,Organization, Environmental
(2006) Environment Model (Tornatzky
and Fleischer, 1990)
Ismail et al. From previous qualitative Training
(2013) findings
Organizational Thiri Naing Technology,Organization, Managerial Control
(2006) Environment Model (Tornatzky
and Fleischer, 1990)
Ismail et al. From previous qualitative Vendor
(2013) findings
Human McGill et al., McLean and DeLone IS Success Information Quality
(2004) Model (McLean and DeLone, User Satisfaction
1992)
Ismail et al. From previous qualitative Skill and
(2013) findings Experience
3.2. Measurement
Overall, this questionnaire has 70 questions. These questions were divided into five sections, as follows: 1) Section
A: Demographic Information, 2) Section B: Technological Context, 3) Section C: Organizational Context, 4) Section
D: Environmental Context. 5) Section E: Human Context. Section A had eight questions of demographic information.
Section B had twenty-six questions, Section C had eleven questions, Section D had eleven questions, and Section E
had fourteen questions. Section B, Section C and Section D had items for Technological, Human t and Organizational
Factors. All items use seven point of Likert Scale to evaluate the questions, as follows: 1 = Extremely Disagree, 2 =
Disagree, 3 = Somewhat Agree, 4 = Neutral, 5 = Somewhat Agree, 6 = Agree, 7 = Extremely Agree. According to
Vagias,(2006), the seven point of Likert Scale is the convenient Likert Scale to evaluate the details of each question.
3.3. Sampling
Overall, this questionnaire has 70 questions. In this study, the researcher had chosen a non-probability sampling
because of the following justifications 1) The population was hidden and hard to reach. This situation made the
development of sampling frame became impossible, 2) Time consuming to find respondents by probability sampling.
This is because, random selection does not worked through this study in hospital environments, 3) Costly when the
researcher had to go to the hospitals for several times to meet several respondents in sampling frames by purposive
sampling method. Thereafter, the type of non-probability used in this study was a purposive sampling. This is because,
the target respondents had been identified as HIS users.
4. Data Analysis
A Statistical Package for the Social Sciences (SPSS) was employed in this study, since it is a common tool in most
quantitative research. ANOVA was used to examine the differences of factors among different categories of HIS.
Prior to the analysis, assumptions of ANOVA test were tested.
5. Findings
Data were obtained from 229 respondents of six hospitals among THIS, IHIS and BHIS’s hospitals. Table 3 showed
that majority of respondents were female (67.2%). In addition, majority of respondents were between 31 to 40 years
old (40.6%). Moreover, the total respondents were Malay (84.5%). Therefore, most of the respondents which
participated in this survey were nurses (38%). The percentage shows 49.3% of the respondents had one to ten year
work experience in the hospitals, whereas 56.3% of the respondents had been involved in between one to three times
of training annually.
Table 3. Respondent’s Demographic

Demography Category Frequency %
Gender Male 75 67.2

Female 154 32.8
Age 21-30 Years Old 78 34.1
31-40 Years Old 93 40.6
41-50 Years Old 41 17.9
>50 Years Old 17 7.4
Race Malay 82 84.5
Chinese 6 6.2
Indian 2 2.1
Bumiputera 7 7.2
Working Position Doctor 13 5.7
Pharmacist 11 4.8
IT officer 9 3.9
Nurse 87 38
Medical Assistant 21 9.2
Medical Record Officer 8 3.5
Others 80 34.9
Work Experience <1 Year 12 5.2
1-10 Years 113 49.3
11-20 years 70 30.5
>20 Years 34 14.8
Computer Training Annually Never 74 32.3
1-3Times 129 56.3
4-6 Times 10 4.4
>6 Times 16 7
According to Table 4, all contexts which includes Technological, Organizational, Environmental and Human are
significantly different across HIS categories.
Table 4. Technological, Organizational, Environmental and Human Contexts Across HIS Categories
Contexts Sum of df Mean F Sig.
Squares Square
Technological Between 21.775 2 10.888 15.891 .000
Groups
Within 154.840 226 .685
Groups
Total 176.615 228
Organizational Between 32.480 2 16.240 21.744 .000
Groups
Within 168.794 226 .747
Groups
Total 201.274 228
Environmental Between 25.209 2 12.605 19.051 .000
Groups
Within 149.527 226 .662
Groups
Total 174.736 228
Human Between 34.995 2 17.497 25.434 .000
Groups
Within 155.478 226 .688
Groups
Total 190.472 228
Note: *p < 0.05, **p < 0.01
A Post-Hoc test were performed to determine which categories differed as shown in Table 5. It is found that THIS
is significantly differed from IHIS and BHIS’s hospitals, while there is no significantly different between IHIS and
BHIS’s hospitals in all four contexts of Technological, Organizational, Environmental and Human contexts. This
finding has proven the previous qualitative finding by Ismail et al. (2013) in which the THIS’s hospital has
significantly difference of IHIS and BHIS’s hospitals, whereas the IHIS and BHIS’s hospital has no significant
difference of THIS’s hospital.
Table 5. Differences of THIS, IHIS and BHIS’s Hospitals By Technological, Organizational, Environmental
and Human Contexts
Dependent (I) TYPE (J) TYPE Mean Std. Error Sig.

Variable Difference
(I-J)
Technological BHIS IHIS .03420 .13282 .964
THIS .67923* .13701 .000
IHIS BHIS -.03420 .13282 .964
THIS .64503* .13282 .000
THIS BHIS -.67923* .13701 .000
IHIS -.64503* .13282 .000
Organizational BHIS IHIS .13166 .13867 .610
THIS .86979* .14305 .000
IHIS BHIS -.13166 .13867 .610
THIS .73814* .13867 .000
THIS BHIS -.86979* .14305 .000
IHIS -.73814* .13867 .000
Environmental BHIS IHIS .07058 .13052 .851
THIS .74680* .13464 .000
IHIS BHIS -.07058 .13052 .851
THIS .67623* .13052 .000
THIS BHIS -.74680* .13464 .000

IHIS -.67623* .13052 .000
Human BHIS IHIS -.10510 .13309 .710
THIS .77779* .13729 .000
IHIS BHIS .10510 .13309 .710
THIS .88289* .13309 .000
THIS BHIS -.77779* .13729 .000
IHIS -.88289* .13309 .000
Note: *p < 0.05, **p < 0.01
Thereafter, this is important to examine the number of differences in estimate effect size when using an ANOVA
test (Levine and Hullett, 2002). In addition, Eta-Squared (η2) was used to estimate the effect size in this study as shown
in Table 6.
Table 6: Size Effect of Technological, Organizational, Environmental and Human in THIS, IHIS and
BHIS’s Hospitals
Contexts Eta Squared
Technological .123
Organizational .161
Environmental .144
Human .184
According to the findings, Human context becomes the most highest of size effect to THIS, IHIS and BHIS’s
hospitals. It shows that the Human Context brought to important factor in influencing the HIS adoption in Malaysian
Public Hospitals.
6. Conclusion and Discussions
This study examined the factors affecting the Hospital Information System (HIS) adoption in Malaysian Public
Hospitals were different among HIS categories. The finding shows there are significant differences between the THIS
with IHIS and BHIS’s hospitals. However, there is no significant difference between IHIS with BHIS’s hospitals,
based on Technological, Organizational, Environmental and Human contexts. Moreover, the Eta-Squared test shows
that Human context had the highest size effect of HIS adoption in Malaysian Public Hospitals. This might imply the
importance of human skills, experience, expert, satisfaction and information quality to successful HIS adoption. This
context has supports the reviews of literature from previous studies in which Fundamental problems such as lack of
computer skills, complex tasks, complex function have influenced the successful HIS adoption. This study has positive
implications, especially to Malaysian Ministry of Health to improve HIS adoption among Malaysian Public Hospitals.
Acknowledgements
This paper is under sponsorship of the University Tun Hussein Onn Malaysia, and the authors wish to express
gratitude to the relevant parties that have directly and indirectly contributed to this study.
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Leadership in Health Services
Country perspective on medical tourism: the Malaysian experience
Noor Hazilah Abd Manaf Husnayati Hussin Puteri Nemie Jahn Kassim Rokiah Alavi Zainurin Dahari
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Country perspective on medical Medical

tourism
tourism: the Malaysian experience
Noor Hazilah Abd Manaf
Department of Business Administration,

International Islamic University Malaysia, Kuala Lumpur, Malaysia
43
Husnayati Hussin Received 6 November 2013
Revised 11 June 2014
Department of Information System, Accepted 18 August 2014
Puteri Nemie Jahn Kassim
Department of Civil Law, International Islamic University Malaysia,
Kuala Lumpur, Malaysia
Rokiah Alavi
Department of Economics, International Islamic University Malaysia,
Kuala Lumpur, Malaysia, and
Zainurin Dahari
Department of Business Administration,
Abstract
Purpose – The study seeks to explore the perception of international patients on Malaysia as a medical
tourism destination country, as well as overall patient satisfaction, perceived value and future intention
for repeat treatment and services.
Design/methodology/approach – Self-administeredquestionnairewasthemainmethodofdatacollection.
The survey covered major private hospitals in medical tourists’ states in the country, namely, Penang, Melaka,
Selangor and Kuala Lumpur. Convenience sampling was used due to the condition of patients as respondents.
Findings – Indonesian patients formed the largest majority of international patients in the country.
Five dimensions of medical tourism in Malaysia was identified, namely, hospital and staff, country
factor, combining tourism and health services, cost saving and insurance and unavailability of
treatment. Of these, hospital and staff was found to be the most important factor for the patients.
Perception of value, overall satisfaction and intention for future treatment was also found to be high.
This indicates that Malaysia is on the right footing in this burgeoning industry.
Practical implications – Findings from the study will enable policy-makers to better position
Malaysia as a medical tourist destination country.
Originality/value – Medical tourism is a recent phenomenon and very little empirical research has
been carried out at the patient level. This study is one of the first few studies which seek to explore
medical tourism from the perspective of the patients themselves.
Keywords Public health, Health care, Health services
Paper type Research paper Leadership in Health Services
Vol. 28 No. 1, 2015
pp. 43-56
The authors wish to thank the Ministry of Education Malaysia for funding the research through © Emerald Group Publishing Limited
1751-1879
its Exploratory Research Grant Scheme (ERGS). DOI 10.1108/LHS-11-2013-0038
LHS Introduction
28,1 The purpose of this paper is to explore dimensions of medical tourism in a destination
country with actual patient data, and perception of the medical tourists on overall
satisfaction, perceived value and future intention for repeat treatment and services. This
paper also explores the predictors of overall satisfaction and future intention, and also
the relationship between overall satisfaction and future intention.

44 Medical tourism has taken both policy-makers and researchers by surprise, an
industry that was never comprehended to be as vibrant as it is today, for the simple
reason that almost always, patients would rush to the nearest medical facility for
treatment. Health care has often been regarded as the most “local” of the service sector.
But medical tourism, which is the practice of patients seeking medical treatment in
another country, may not necessarily be termed “tourism” altogether, for the health
travellers of today are not merely going abroad for health resorts and wellness spas, but
are travelling thousands of miles away from home seeking the whole range of medical
treatment and services, including invasive treatment such as hip replacement surgery,
coronary bypass or even organ transplant such as liver transplant (Vijaya, 2010).
Estimates of the economic potential of the industry indicate that it is a phenomenon not
to be ignored. The oft-quoted Deloitte (2008) Report on medical tourism in Asia
estimates the industry to grow by more than 20 per cent annually, and would be worth
about USD4 billion for the Asian chapter by 2012. Leahy (2008) estimates the industry to
be worth USD60 billion worldwide.
Riding on the medical tourism wave, the Malaysian government has identified the
health travel industry as one of the strategic opportunities under the Healthcare NKEA
(new key economic areas). This will see medical tourism as a key driver of economic
activity that has the potential to contribute significantly to the country’s economic
transformation plan. The country already has the right infrastructure due to its strong
health-care delivery system, and tight control over quality assurance of its medical
services. Health-care strategies adopted by the country since independence have been
successful in raising the health status of the Malaysian population. The country also has
a high number of Western-trained physicians and Malaysian nurses are highly regarded
and well-sought after particularly in the Middle East. Medical education and practise is
well-regulated, and the Ministry of Health closely supervises both public and private
health-care services in the country. Malaysia’s health indicators such as infant mortality
rate and life expectancy are also at par with most developed countries. This has built up
the reputation of the country as a credible health-care provider.
Accreditation of hospitals is also well structured in the country, which is carried out
by the Malaysian Society for Quality in Health (MSQH). The MSQH standards also
addresses strategies identified under the WHO World Alliance on Patient Safety, and
the MSQH Hospital Accreditation Standards has also been certified by ISQua
Accreditation Council, which also certifies the Joint Commission International (JCI)
accreditation standards. Thus, Malaysia already has a strong footing in the
accreditation of its hospitals through MSQH.
The government has also established the Malaysian Healthcare Travel Council
(MHTC), which is a one-stop centre to promote the country’s medical services abroad.
Although a relative newcomer to the industry, the intensification of the industry can
already be seen from the increasing number of international patients into the country. In
2002, the number of health tourists was 84,585 with a revenue of RM35.9 million; but by
2011, the number of international patients had reached 581,308 with a total revenue of Medical
more than RM500 million (MHTC, 2012). The target set for medical tourism under the tourism
Ninth Malaysia Plan is for the country to gain a total of RM2 billion in foreign exchange
from this sector (Economic Planning Unit, 2006). The following table reflects the growth
of the industry, which shows that the industry has been growing at an impressive rate
of 30 per cent annually after the global economic slowdown of 2008/2009 (Table I).
45
Literature review
A review of the literature indicates that medical tourism is not a new concept borne out
of the forces of globalisation. In fact, travelling abroad for health has had a long history
where the wealthier social classes would seek spas, mineral baths and innovative
treatment in favoured destinations such as Switzerland and Austria. Apart from the
spas and health resorts, the tendency then was for patients from less developed
countries to seek medical treatment in Europe or the USA, where the health facilities are
better-equipped and technologically more advanced. (Manaf et al., 2011). However, of
late, there has been a reversal in the trend whereby patients from developed countries
such as USA and Britain are travelling to developing countries such as Thailand and
India for their medical needs (Volz, 2008). A convergence in a global standard of health
care has facilitated the movement of patients. To that extent, Rick Wade, the Senior Vice
President of the American Hospital Association has been quoted as saying that “he has
no doubt that some international hospitals are just as high-quality as their USA
counterparts” (Fried and Harris, 2007).
The recent phenomenon in the crisscrossing and globe-trotting behaviour of patients
is unfathomable. For example, Thailand, a strong contender in the industry, has
received more than one million foreign patients who sought treatment ranging from
executive health tests to invasive surgeries (Connell, 2006). In 2008, Thailand generated
USD1.5 billion from its medical tourism industry (NaRanong and NaRanong, 2011).
Apart from Thailand, other countries which are reaping the benefit of the fallout of the
health travellers are Malaysia, Singapore and India for Asia; Hungary and Poland for
Eastern Europe; Malta and Cyprus for the Mediterranean; South Africa for Africa; Costa
Rica, Brazil, Mexico and Cuba for Central America; and Dubai and Jordan for the Middle
East (Lunt et al., 2010).
To assure potential patients on the standard of quality of care, medical tourism
hospitals in this region leverage on their outcome measures. Singapore’s National
Healthcare Group, for example, which is a conglomerate of acute care and specialist
hospitals, regularly publishes results on outcome measures which are of international
standards. Among others, it reports a 100 per cent rate for dispensing aspirin at
discharge for acute myocardial infarction and 0.6-2.2 per cent 30-day mortality rate for
heart failure (Dunn, 2007). In India, the Apollo Group also liberally publicise milestones
of their hospitals. Apollo hospitals perform 537 liver, kidney and heart transplant in
Year 2007 2008 2009 2010 2011
Total revenue (RM million) 253.8 299.1 288.2 378.9 511.2 Table I.
Increment from previous year (%) 24.6 17.5 ⫺3.6 31.5 34.9 Comparison of
revenue from medical
Source: MHTC (2012) tourism (2007-2011)
LHS 238 days, making it the second busiest transplant programme in the world. They have
28,1 performed over 500 liver transplants with a success rate of 90 per cent. They also
publicised their success rate of hip replacement surgery at more than 98 per cent. Other
health outcomes were also liberally publicised by Apollo, as well as the credentials of
their specialist doctors (www.apollohospitals.com). In Thailand, the Spine Institute at
Bumrungrad Hospital, also publicised on their Web site that they have performed spinal
46 endoscopic surgery on more than 600 patients with a success rate of 95 per cent
(www.bumrungrad.com). While respective hospitals may publish health outcome for
marketing purposes, however, research has also highlighted positive outcome from the
patient experience. Eissler and Casken (2013) from their qualitative study on medical
tourists who had treatment in Thailand, Mexico, Eastern Europe, Costa Rica and India
for a variety of health services: orthopaedic surgery, dermatology consults, bariatric
procedures, cardiac care, assistive reproductive procedures, otolaryngologic
procedures, dental care and hygiene, colonoscopies, mammograms, screening
laboratories and diagnostic imaging, eye care and complimentary medical care –
reported resoundingly positive experiences from their participant exemplars.
For the patients, the motivation for medical tourism is multi-faceted. In the case of
American health travellers, getting medical treatment in another country is a viable
option for the uninsured or underinsured American patient. While Americans enjoy the
highest standard of care, the country’s health-care delivery system is flawed by
excessive costs and issues of inequity and access. The recent Obamacare debacle that
led to the shutdown of US federal government attests to this. The US health-care system
is the costliest in the world (Marlowe and Sullivan, 2007), and it now stands at a
staggering USD2 trillion a year. Reports of individual patients from the USA going
abroad for medical treatment grace the literature (Turner, 2007; York, 2007; Cuddehe,
2009; Gray and Poland, 2008; Milstein and Smith, 2006; Connell, 2006). According to
Enderwick and Nagar (2011), a large portion of the American population, i.e. around 46
million, are either uninsured or underinsured. Thus, given the excessive health care
costs and inadequate insurance coverage, American patients are flocking to other parts
of the world in search of affordable health-care services with the same, if not better,
standard of care. For countries where the health-care systems are publicly financed, as
in the case of the UK or Canada, the motivation for patients from such countries to seek
medical treatment abroad is the long surgical wait list (Johnston et al., 2010). On the
other hand, patients from less developed countries seek health treatment abroad for
better quality of care. Thus, patients from countries such as Vietnam and Indonesia,
flock to neighbouring countries with better health-care delivery system such as
Malaysia and Singapore.
While cost, long wait list and better quality of care maybe the motivating factors for
health tourists to travel abroad for medical treatment, other push factor factors have
also been cited. Crooks et al. (2010) quoted patients wanting access to procedures that are
illegal or unavailable in the home country such as stem cell or surrogacy, and the ease of
air travel, as other motivating factors. The impact of marketing, particularly Web-based
marketing has also been cited by Sarwar et al. (2012) as factors which influenced
patients in selecting their medical tourism destination.
A review of the literature also indicates that medical tourism is a widely researched
topic at the conceptual level (Arellano and Annette, 2007; Connell, 2006; Cuddehe, 2009;
Douglas, 2007; Leahy, 2008; York, 2008; Schroth and Khawaja, 2007). This is understood
since medical tourism is a recent phenomenon and not much field work has been carried Medical
out in the area, although there has been some published empirical work. For example, tourism
Chen et al. (2012) studied the willingness and barriers of potential medical tourists from
China to seek treatment in Taiwan. Martin et al. (2011), developed MEDTOUR, which is
a scale for measuring medical tourism intention. However, in developing the scale, the
respondents comprised a convenience sample of undergraduate students enrolled in a

four-year state university programme. Rad et al. (2010) explored service quality and 47
patient satisfaction among medical tourists in Malaysia. Apart from these, literature
based on empirical fieldwork has not been observed in the literature. The dearth of data
and empirical analysis on medical tourism have also been observed by Pocock and Phua
(2011). This is understandable because getting response from medical tourists to survey
questionnaires is a daunting task. The authors faced major challenges in data collection
in the course of conducting this research. The hospitals are concerned about patient
privacy, and patients, on the other hand, are not in the best of health and would not be
interested in any form of surveys. Manaf (2012) cautioned the reluctance of patients to
cooperate due to their fears in giving feedback on their service providers, as well as the
psychological burden encountered in being ill. Given the mammoth task in getting
patient response, it is comprehensible that empirical data on medical tourism is almost
non-existent from the patient perspective. Thus, it is timely for this study to be carried
out to fill the lacuna.
Methodology
Given the large geographical area to be covered, self-administered questionnaire was
the main method of data collection. Because empirical data on medical tourism is not
widely published, development of items relied heavily on the work of Saiprasert (2011)
on medical tourism in Thailand. Saiprasert’s instrument with constructs covering
perceived quality, value, overall satisfaction, destination image and repurchase
intention with Cronbach’s alpha values between 0.70 and 0.90 was deemed appropriate
for the study. Altogether, 26 items relating to Malaysia as a medical tourist destination
country and items specific to hospital service and standard of care were posed to the
respondents. Items on overall satisfaction (three items), perceived value (three items)
and future intention (seven items) were also posed to the respondents to obtain a more
comprehensive view on medical tourism in the country. The items were presented in a
Likert-scale format response ranging from 1 (strongly disagree) to 5 (strongly agree).
The questionnaire was also translated into Arabic and Indonesian Malay from the
original English. Native speakers of Arabic and Indonesian Malay were requested to
translate the questionnaire and the translated version was then translated again into
English to ensure that the message and intention in each item was not lost in translation.
The Ministry of Health identified 41 hospitals as medical tourism hospitals, and of these,
20 hospitals covering the main medical tourism states of Selangor, Penang, Melaka,
Johor and the capital city of Kuala Lumpur were randomly selected. Respondents of the
survey comprised international patients who come to Malaysia specifically for medical
treatment and other health services. International patients who are residing in Malaysia
were excluded from the survey. As with any survey involving patients, the
recommendation by Manaf (2012) for convenience sampling to be used was heeded.
Three sets of questionnaires in English, Arabic and Indonesian Malay were sent to the
LHS hospitals. Altogether, 1,000 questionnaires were sent out, and of these, 173 responses
28,1 were received and analysed. This gave a response rate of 17.3 per cent.
The mean of the variables was worked out by averaging all the responses for a single
variable. A mean less than 3.0 was classified as being negative perception, while a mean
greater than 3.0 as being positive perception. Data were analysed by SPSS 17 and data
collection was made possible through the cooperation of participating hospitals to gain
48 access to international patients.
Validity and reliability

In establishing the validity of the instrument, factor analysis was carried out. All 26
items on perception of medical tourists on Malaysia and medical tourism in Malaysia
was factor analysed by Varimax rotation. The factor analysis resulted in five factors
and the Cronbach’s alpha of all the five factors exceeded the recommended cut-off value
of 0.70 (Nunnally, 1978). Accordingly, the factors were labelled as hospital and staff;
country factor; combining tourism and health services; cost-saving; and insurance and
unavailability of treatment. For reliability analysis, the aggregate Cronbach’s alpha for
all 26 items was 0.943. This indicated a good internal consistency among the items in the
instrument. Table II shows the extracted factors and the corresponding alpha coefficient
value.
In addition, the corrected item-to-total correlation was computed to measure the
correlation between each item in each factor with the total factor score. In ensuring
reliability, each item in every factor should correlate with the total with a value higher
than 0.3. Items with value lower than 0.3 will have to be dropped, as it may be measuring
something different than the scale as a whole. All the items were found to have
item-to-total correlation greater than 0.3, and were, therefore, retained for further
analysis. Table III shows the item-to-total correlation value for each factor.
Demography
Almost half of the respondents (45 per cent) travelled to Malaysia for the first time for
medical services, and another 24 per cent were here for a second time. Almost 53 per cent
were male, while the remaining 47 per cent were female. More than half (55 per cent) are
aged between 26 and 45 years old, and another 33 per cent are aged between 46 and 65
years old. Distribution by occupation showed that 34 per cent are self-employed,
executive 10 per cent, education 8 per cent, professional/technical 6.5 per cent and retired
10 per cent. Although the majority of respondents are Indonesians (61 per cent),
however, the country profile is very diverse with patients from Libya, Somalia, South
Korea, China, Cambodia, Djibouti, Bangladesh, Japan, Pakistan, Australia, Yemen,
Factor No. of items Alpha coefficient
Hospital and staff 9 0.913

Country factor 6 0.895
Combining tourism and health services 6 0.844
Cost saving 3 0.708
Table II. Insurance and unavailability of treatment 2 0.718
Factor analysis and
reliability scores Source: Survey data
Corrected item-total
Medical
Item Factor correlation tourism
International hospital accreditation Hospital and staff 0.803
Recognized hospital reputation Hospital and staff 0.771
High-standard level of medical staff Hospital and staff 0.764

Ease of medical treatment arrangements Hospital and staff 0.756
High-standard level of medical facilities Hospital and staff 0.749
49
Recognized reputation of physicians Hospital and staff 0.741
Western experienced/trained physicians Hospital and staff 0.658
Tourists safety from crime and terrorist attack Hospital and staff 0.595
Shorter waiting time for medical service than in Hospital and staff 0.567
your country
Ease of travel arrangements Country factor 0.859
Ease of visa and immigration procedures Country factor 0.771
Ease of accessibility from your country Country factor 0.738
Friendliness and helpfulness of the local people Country factor 0.706
No language barriers in traveling in Malaysia Country factor 0.648
Political stability Country factor 0.598
Great place for relaxation after medical treatment Combining tourism and 0.788
health services
Availability of many tourist attraction Combining tourism and 0.724
health services
Preference of privacy and confidentiality Combining tourism and 0.603
health services
Well-reputed as a tourist destination Combining tourism and 0.591
health services
Opportunity to combine medical service with a Combining tourism and 0.534
vacation health services
Various type and availability of medical services Combining tourism and 0.521
health services
Reasonable price and significant amount of Cost saving 0.603
money savings
Opportunity for person who has no or limited Cost saving 0.537
medical insurance in his/her country
Less expensive medical treatment than in your Cost saving 0.449
country
Type of medical treatments that are not allowed Insurance and 0.506
in your country unavailability of
treatment
Type of medical treatments not covered by Insurance and 0.506
medical insurance in your country unavailability of
treatment Table III.
Reliability analysis
Source: Survey data of items
Thailand, New Zealand, Romania, Iraq, USA, Singapore, Iran, Maldives and Mongolia.
As for types of services, 31.2 per cent came for comprehensive medical check-up, 14 per
cent for heart surgery, 8 per cent for cosmetic surgery, 5 per cent for LASIK and sight
treatment and another 5 per cent for dental surgery and treatment. There were also those
LHS who came for IVF treatment, cancer, kidney, nerve and intestinal ailments. Almost half
28,1 (48 per cent) made their decision based on word-of-mouth information and 17 per cent on
the advice of their doctors. Most of the respondents (66 per cent) made their own
arrangement directly with the hospitals.
Data analyses
50 Mean analysis for each dimension of medical tourism, as shown in Table IV, indicates
that hospital and staff is the most important dimension (3.78), followed by combining
tourism and health services (3.69), country factor (3.64), cost saving (3.19) and least for
insurance and unavailability of treatment (2.91). One sample t-test conducted with a test
value of 3.00 and 2.00, respectively, indicates significant difference between the mean
score and the test value. Thus, factors such as hospital accreditation and reputation,
standard of care, reputation of physicians and ease of medical treatment arrangements
are important to the medical tourist. Accreditation is often a motivating factor in the
selection of medical tourist destination, particularly from JCI (Carrera and Bridges, 2006;
Manaf et al., 2011; Peters and Sauer, 2011). To potential medical tourists, an
international accreditation gives the assurance of an internationally accepted level of
technical standard of care, and major destination hospitals leverage on this fact for
market positioning. However, the cost in acquiring accreditation can be quite
substantial. Thus, to offset this, the Malaysian government has allowed for expenses
borne by hospitals in acquiring accreditation to be given double tax exemption (Manaf
et al., 2011). Apart from accreditation, reputation of physicians are also often widely
publicised by destination hospitals, especially on hospital Web sites. This would cover
their academic qualifications, medical affiliations, experience and expertise. Most would
have had some form of training in the West. Bumrungrad Hospital in Bangkok, for
example, boasts of having more than 200 US board-certified physicians (Burkett, 2007).
The questionnaire also elucidated information on the medical tourists’ perception on
overall satisfaction, perceived value and future intention to seek treatment in Malaysia.
All of these variables demonstrate high Cronbach’s alpha, as shown in the Table V.
Mean analysis as in Table VI indicates that of these three variables, the highest score is
for overall satisfaction (3.85), followed by perceived value (3.61) and lastly future
intention (mean 3.55). One-sample t-test with a test value of 3 provides statistical
evidence of positive perception of medical tourists on these three variables.
Regression analysis between dimensions of medical tourism and overall satisfaction

Regression analysis was carried out between overall satisfaction and the five
dimensions of medical tourism. Overall satisfaction was represented by items on
Dimension Mean SD Significance
Hospital and staff 3.7789 0.6632 0.000

Country factor 3.6365 0.7784 0.000
Table IV. Combining tourism and health services 3.6913 0.6508 0.000
Dimension of Cost saving 3.1951 0.8350 0.000
perceptions of Insurance and unavailability of treatment 2.9127 0.9244 0.000
medical tourism in
Malaysia Source: Survey data
satisfaction with medical treatment, hospital services and medical trip to Malaysia. Medical
The analysis shows that 47.7 per cent of variance in overall satisfaction can be tourism
explained by the five dimensions, as indicated by the R2 value in Table VII. The
F-test indicates statistical significance F(5,159) ⫽ 29.96, p ⫽ 0.000. Table VIII shows
that of the five dimensions of medical tourism, hospital and staff, country factor, and
insurance and unavailability of treatment have a p-value of 0.000, 0.008 and 0.029,
respectively, which indicates that these three dimensions may predict overall 51
patient satisfaction. Of these three dimensions, the strongest contribution to the
model is from hospital and staff, as shown by the highest beta score of 0.403. This
finding points to the fact that with respect to medical tourism, what is most
important is the standard of care delivered by competent staff, as well as the
reputation of physicians and the hospital.
Regression analysis between dimensions of medical tourism and future intention

Regression analysis was also carried out between the five dimensions of medical
tourism and future intention of the patients to come back for medical treatment, as
shown in Table IX. The model shows that 55.5 per cent of variance in future intention
can be explained by the five dimensions of medical tourism as indicated by the R2 value.
The F-test indicates statistical significance F(5,158) ⫽ 39.38, p ⫽ 0.000. Future intention
was represented by the patients’ willingness to continue using the hospital service in the
future, and would do so even if the cost increased; would say positive things about their
medical treatment and recommend it to relatives and friends; and would be willing to
spend more money for treatment in Malaysia even if the price increased. The coefficient
Variable No. of items Alpha coefficient
Perceived value 3 0.910

Overall satisfaction 3 0.929
Future intention 7 0.950
Table V.
Source: Survey data Reliability analysis
Dimension Mean SD Significance
Perceived value 3.6101 0.8739 0.000 Table VI.

Overall satisfaction 3.8542 0.7386 0.000 Mean analysis on
Future intention 3.5570 0.8601 0.000 perceived value,
overall satisfaction
Source: Survey data and future intention
Model R R2 Adjusted R2 SE of the estimate Table VII.

Regression analysis
1 0.690 0.477 0.460 0.53310 between dimensions of
medical tourism and
Source: Survey data overall satisfaction
LHS Unstandardized Standardized
28,1 coefficients coefficients
Model B SE Beta t Significance
Hospital and staff 0.454 0.098 0.403 4.623 0.000

Country factor 0.225 0.083 0.240 2.692 0.008

52 Combining tourism and 0.105 0.088 0.089 1.184 0.238
health services
Cost saving 0.070 0.070 0.078 1.000 0.319
Insurance and unavailability ⫺0.107 0.049 ⫺0.137 ⫺2.204 0.029
Table VIII. of treatment
Coefficient-overall
satisfaction Source: Survey data
Table IX. Model R R2 Adjusted R2 SE of the estimate

Regression analysis
dimensions of 1 0.745 0.555 0.541 0.58196
medical tourism and
future intention Source: Survey data
table as in Table X indicates that of the five dimensions, hospital and staff, country
factor, cost saving and insurance and unavailability of treatment can significantly
predict the future intention of the patients. Of these four variables, the strongest
contribution to the model is from hospital and staff as shown by the highest beta score
0.479.
Correlation between overall satisfaction and future intention

Correlation analysis between overall satisfaction and future intention, as shown in
Table XI, indicates a strong positive correlation between these two variables with
r ⫽ 0.839. This shows that patients who are satisfied with their experience are more
likely to come back for future treatment.
Discussion and conclusion

The study sheds light on a number of issues. First and foremost is the profile of the
patients whereby Indonesians make up the majority of medical tourists in the country.
While this is a welcome feature as both countries share similar cultural traits, however,
overdependence on a single market poses a risk exposure. The Malaysian government
realises this and has called for a differentiated position for the industry to broaden its
customer base beyond Indonesia (PEMANDU, 2010). The study also indicates that
while the level of service experienced by the patients was high (mean 3.77 for hospital
and staff dimension); however, it is still not reflective of service excellence, as it is less
than a mean score of 4.00. Knowledge asymmetry in health-care service leads to a
situation where patients as consumers are not in the position to evaluate the technical
aspect of care, but are only limited to the functional aspect such as the hospital ambience
or the customer service. Leading medical tourism hospitals leverage on this fact, and the
authors’ visit to leading destination hospitals in Bangkok attest to this where a blurring
Unstandardized Standardized
Medical
coefficients coefficients tourism
Model B SE Beta t Significance
Hospital and staff 0.635 0.107 0.479 5.927 0.000

Country factor 0.199 0.091 0.179 2.180 0.031

Combining tourism and ⫺0.002 0.098 ⫺0.002 ⫺0.022 0.982
health services
53
Cost saving 0.221 0.78 0.207 2.840 0.005
Insurance and unavailability ⫺0.134 0.54 ⫺0.143 ⫺2.490 0.014
of treatment Table X.
Coefficient-future
Source: Survey data intention
Overall satisfaction Future intention
Overall satisfaction
Pearson correlation 1 0.839*
Significance (two-tailed) 168 0.000
N 167
Future intention
Pearson correlation 0.839* 1
Significance (two-tailed) 0.000 167
N 167 Table XI.
Correlation between
Note: * Correlation is significant at the 0.01 level (2-tailed) overall satisfaction
Source: Survey data and future intention
of line between a five star hotel and a hospital was observed. Similarly, Malaysian
hospitals need to rise to this level of service if they are to attract a more diverse patient
base.
Five dimensions of perception of Malaysia and medical tourism in Malaysia was
identified from the study, namely, hospital and staff; country factor; combining tourism
and health services; cost-saving; and insurance and unavailability of treatment. Of these
five dimensions, the most important is hospital and staff, and this dimension is also the
strongest predictor for both overall satisfaction and future intention. Therefore,
destination hospitals in the country need to realise the importance of this factor in their
service delivery. The strong correlation between overall satisfaction and future
intention should also be considered by destination hospitals so that greater emphasis is
placed on customer satisfaction. It is interesting to note that most literature on medical
tourism would point to cost saving as a significant push factor (Enderwick and Nagar,
2011; Sarwar et al., 2012; Manaf et al., 2011). However, finding from this study indicates
that cost saving is not the main dimension, presumably because most of the patients are
from Indonesia and therefore the main motivation is to seek better quality of care.
This study sheds light on dimensions of medical tourism in the country with actual
patient data, and also the perception of the medical tourists on overall satisfaction,
perceived value and future intention for repeat treatment and services. The relationship
LHS between these variables points to the importance of hospital reputation and staff
28,1 competence to the patients. Thus, while Malaysia may be excited with new
developments in this emergent industry, there is also a need for its service providers to
address its limitations to appeal to a more global market.
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Corresponding author
Noor Hazilah Abd Manaf can be contacted at: hazilah@iium.edu.my
For instructions on how to order reprints of this article, please visit our website:
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Or contact us for further details: permissions@emeraldinsight.com

Volume 1 Issue 2 2016
International Journal of Health Science Research and Policy
DIGITAL HOSPITAL ; AN EXAMPLE OF BEST PRACTICE
Taşkın KILIÇ1
1
Gümüşhane University ,Faculty of Health, Gümüşhane, Turkey, e-mail:taskinkilic79@hotmail.com
Digital Hospital is a concept contributing to enhancing personnel

productivity, facilitating hospital operations, improving the process quality
and ensuring patient safety by integrating cutting-edge technologies such as
medical devices, smart information systems, facility control and automatic
conveyor systems, location-based services, sensors and digital
communication tools into health processes. The primary aim of this study is
to address the theoretical and practical aspects of “Digital (paperless)
hospital” concept, which is addressed in a limited number of studies, and
investigate the digital hospital practices of Izmir Tire Public Hospital and
Giresun Tirebolu Public Hospital, which entered into the list of top digital
hospitals in Europe as examples of best practices. The study was prepared
based on the interviews with the managers of Tire Public Hospital and
Tirebolu Public Hospital awarded with digital hospital certificates by
HIMMS (International Accrediting Agency) in 2016.
18 hospitals received “Stage 6” and one hospital (Tire Public Hospital)
received the top-level “Stage 7” digital hospital certificate, which was
awarded to four hospitals in Europe by 2016 in Turkey. In the hospital
transforming into a top level digital hospital and offering services with this
concept; speed and efficiency of business processes increase, paper and
document expenses are cut to zero, human-made errors are minimized.
Diagnosis and treatment processes are provided not only within the hospital
walls but also to long distances. By the help of digital hospitals health data
are immediately and retrospectively retrieved at any time by the authorized
body, other health institutions and patients and can be forwarded via
sensors, cameras and early warning systems without requiring follow-up by
humans, fast and right decisions can be given thanks to decision support
systems, and the right medicine is administered to the right patient, at right
doses and at the right time by the Closed Loop Drug Delivery System. With
the widespread access to digital hospitals, it will be possible to benefit from
all these advantages and offer the most effective and efficient healthcare
services to the patients within the shortest time. Hospital personnel will have
less workload and be less likely to make mistakes.
Keywords: Digital Hospital, e-Health, Smart Hospital, HIMMS
52
1. INTRODUCTION
In the early years of their foundation, hospitals dating back to Seljuk period were named darush-
shifa and shifahane, (Kayseri Gevher Nesibe Shifahane, Edirne Sultan Bayezid II Darush-shifa etc.)
and located inside the complexes consisting of structures like madrasa, mosque and bathhouse [1].
Hospitals achieved their traditional structures in early 1900s with independent service premises.
Hospitals undergoing transformation in accordance with the needs of the current time,
differently from their early examples, now aim to integrate the state-of-art technology (telemedicine,
mobile health, digital hospitals etc.) into the service processes and carry their services to remote
regions with the concept of “digital hospital” without time and space limit as opposed to traditional
structures providing physical location-dependent services.
Digital hospital concept is a practice coming to the forefront and invested in by developed
countries in recent years. United States have moved one step further by making a first in the world and
founding a hospital without beds in Missouri named Mercy Virtual Care Center that offers distant
diagnosis and treatment methods [2]. Turkey follows the developments in the world closely and makes
reforms in healthcare services accordingly, therefore “digital hospital” works were started in 2013 and
one of the four top-level digital hospitals in Europe (Tire Public Hospital) was founded in 2016. The
outcomes of digital hospitals demonstrate that hospitals practicing this system gain an efficiency of
35% [3].
In this context, the aim of this study is to address the criteria of digital hospital concept and the
advantages of this system compared to traditional hospitals.
2. DIGITAL HOSPITAL
New scientific and technological innovations made it possible the acquisition, archiving,
handling and visualization of an amount of various data and phenomenon everywhere in hospitals,
which are involved in biomedicine, medical engineering, clinical diagnosis, sanitary economics,
hospital administration and culture [4]. Digital Hospital is a concept contributing to enhancing
personnel productivity, facilitating hospital operations, improving the process quality and ensuring
patient safety by integrating cutting-edge technologies such as medical devices, smart information
systems, facility control and automatic conveyor systems, location-based services, sensors and digital
communication tools into health processes [5,6,7]. Common sharing of medical information resources
and adaptation to local circumstances enables the information processing and communication function
to be achieved on a complete platform, which offers completeness to present hospital management and
future medical environment [8].
According to the Ministry of Health, Digital Hospital can be defined in a broad sense from a
hospital where maximum level of information technologies is used in administrative, financial and
medical processes, to a hospital where all kinds of communication tools and medical devices are
integrated with each other and with other information systems, and healthcare staff and patients can
exchange data inside or outside the hospital by using telemedicine and mobile medicine practices [9].
Digital hospital is an important goal of the hospital construction, which is significant for promoting
medical development and improving healthcare quality [10].
53
The use of information and communication systems for the prevention, diagnosis, treatment and
monitoring of diseases and provision of health counseling in healthcare services is described with the
term “e-Health” [11]. In this context, “Digital hospital, mobile health, telemedicine and robotic
health” are defined as the sub-components of e-Health.
Digital Hospital carries the hospital services to individuals outside the hospital walls (to houses,
emergency stations etc.) by integrating information and communication technologies into clinical and
administrative workflow processes in order to offer high-quality healthcare services, as wells as
connecting healthcare staff and units working at distant locations from each other.
Digital hospital concept is recently one of the practices in the forefront in healthcare sector.
Therefore, many hospitals in Europe and Turkey underwent transformation processes and initiated
accreditation activities to receive a “digital hospital” certificate. In 2016, the hospitals in Turkey were
checked by HIMSS (accrediting agency) and 18 hospitals received “Stage 6” and one hospital received
the top-level “Stage 7”digital hospital certificate. HIMSS is a non-profit organization founded in 1961
incorporating 52,000 healthcare provider institutions, 600 firms and 250 associations/foundations
around the world, with structures in the USA, Europe and Asia (EMRAM). The EMR Adoption Model
(EMRAM) is an eight-stage model that allows you to track your progress against other healthcare
organizations around Europe and across the world [2]. The purpose of its foundation is to ensure the
optimum use of information technologies in the provision and development of healthcare services.
Digitalization levels of hospitals are rated with EMRAM at an international level. In this process, the
level of use of information systems in the operation of healthcare organizations is inspected and
accredited. HIMSS uses the universally accepted accreditation and standard model EMRAM to assess
the digital processes and determine the stages of applicant hospitals. In this model, hospitals are rated
from 1 to 7 and the ones completing their digitalization process up to 6th and 7th stages are awarded
with certificates. With EMRAM staging, HIMSS facilitates the adaptation of hospitals to ever-growing
health information technologies at international standards.
For a hospital to be a digital hospital, it must be assessed and awarded with a certificate by the
accrediting agency HIMSS. The relevant assessment criteria and stages are tabulated below. When
criteria in the table are met, hospitals apply to the HIMSS agency. Experts assigned by HIMSS inspect
the relevant hospital on-site and rate it pursuant to its compliance with the published criteria, and
award it with a certificate accordingly [13].
54
Table 1. - HIMSS EMRAM Digital Hospital Stages and Criteria
Stage 7 A hospital at this stage never uses paper documents while providing services. All data, documents
and medical images are processed electronically. Data stored in a digital environment are analyzed
and used to increase the quality of healthcare, ensure patient safety and offer efficient services. The
relevant data are standardized electronically ready for use and information exchange by authorized
persons and institutions (management, other hospitals etc.). The hospital ensures the data
continuity of all service processes and publishes such data. At this stage, healthcare materials such
as blood products are also made available via Closed Loop Medication Administration System.
Stage 6 A full-fledged and marketable physician documentation system is in practice for at least one in-
patient clinic. Third stage clinical support system provides guidance in all clinical processes.
Closed loop medication management system and coded drugs system are fully in practice. To
maximize the patient safety, other automated identification technologies and automated delivery
systems such as electronic medication management record and computerized physician order
entry/e-Prescription and Barcoding or RFID (radio frequency identification) integrated with the
pharmacy are in practice. Thus, in accordance with “5 rights (right patient, right drug, right dose,
right route and right time)” principle developed in order to prevent Erroneous Drug Use, patient
credentials and medicine barcode are verified at the patient bedside.
Stage 5 Medical images in the full-fledged Radiology Image Archive and Communication System (PACS)
are open to the access of all physicians and sent to other locations via intranet. At this stage, if
image documents of cardiology department (ECG etc.) are entered into the PACS system, the
hospital is given extra points.
Stage 4 At this stage, the second stage of clinical decision support systems for evidence-based medical
protocols is available. In this system, any licensed Clinician can write an order and add a nurse for
his/her access to data in the Computerized Physician Order Entry (CPOE) system. If the
Computerized Physician Order Entry system is used in an in-patient service area and previous
stages are completed, then this stage is deemed to be completed as well.
Stage 3
Clinical documents regarding nursing care (vital signs, flow sheets, nursing notes, eMAR) and/or
electronic medication management record and order entry and tracking systems must be integrated
with electronic patient records and clinical data store in at least one service process. The first stage
of clinical decision support may be practiced to check the errors in order entry. Drug/drug,
drug/food, drug/laboratory interaction data are usually available in the pharmacy. Medical pictures
in the picture archive must be accessible from the system via intranet to the physicians outside the
radiology department.
Stage 2
Information systems of the clinical data repository (CDR) send all kinds of medical information
and results of the patients to a system viewable by the physicians. This system sends data to the
Electronic Patient Record or Clinical Data Archive receives feedback and forward them to the sub-
systems. The system can receive and send medical picture documents and enable information
exchange between hospitals.
Stage 1 It describes that digital systems are set up in main clinical support units (pharmacy, laboratory and
radiology).
Stage 0 It describes the hospitals where even main clinical support units (pharmacy, laboratory and
radiology) and processes are not included in digital environment.
3. METHOD
In the present study, the results concluded by considering the interviews with the managers of
Tire Public Hospital and Tirebolu Public Hospital awarded with digital hospital certificates by
HIMMS (International accrediting agency) in 2016 are presented below.
55
4. FINDINGS
4.1. An Example of a Digital Hospital - Tire Public Hospital

After interviews with the managers of hospitals it was seen that in the course of awarding Tire
Public Hospital with “Digital Hospital, Stage 7”certificate, following arrangements were determined
to be made:
ü Patient admission, hospitalization and other clinical processes, consultation and referrals are
moved onto paperless digital platform.
ü Practices such as e-prescription and e-signature are initiated in the hospital.
ü Orders for MR, X-Ray, ECG, blood and other tests (hearing test etc.) are concluded without
papers in a computer environment. Results of these orders are submitted in the digital
environment. These results can be accessed anywhere both by healthcare staff and patients via
phones and tablets.
ü All generated data (records, results, invoices etc.) are archived in the digital environment, and
information safety is ensured.
ü Treatment orders of physicians are completely processed in an online environment
immediately and by remote access.
ü With the computer terminals placed in patient rooms, nurses enter the treatment information
into the system without using any paper or document, thus pharmacy, stock tracking and
invoicing system can record the entries and exits immediately.
ü Thanks to the Closed Loop Medication Administration System the right drug is administered to
the right patient, at right doses, via the right route and at the right time.
ü All administrative documents and correspondences in the hospital (excluding purchasing
documents as required by laws) are followed up in the electronic system and e-signature is
used in the documents.
ü Programs such as budget and stock alert systems are used to view the resources all the time.
ü Infrastructure components such as fire system, security, electricity, water and natural gas are
followed up by a central system. In emergency cases, these technologies can be activated.
ü None of the data generated in the hospital get lost and all data can be accessed from anywhere
and anytime.
ü As paper is not used, stationary costs are saved.
ü Hospital services can be provided fast and efficiently thanks to the smart software.
Practices listed above are the requirements for Stage 7 in “Digital-Paperless Hospital”
classification. Moreover, Giresun Tirebolu Public Hospital in Turkey awarded with “Stage 6”
certificate was checked and informed that all processes (drug tracking, patient admission etc.) had to
be performed in the digital environment in at least one clinic of the hospital in order to be awarded
with the Stage 6 certificate. Therefore, Pediatric Clinic of the hospital was equipped with a digital
system and strictly checked by HIMSS.
56
5. CONCLUSION
As seen in our study, Digital hospitals increase the speed and efficiency in business processes
and cut the paper and document costs to zero. From the viewpoint of working personnel, human-made
mistakes are eliminated and data can be retrieved by authorized units, other healthcare institutions and
patients immediately and retrospectively at any time [14].
Diagnosis and treatment processes can be managed not only within the hospital walls, but also
from long distances. Some processes can be managed with sensors, cameras and early warning
systems without the need for follow-up by humans (for example, software that warns of too high blood
test results).
With the Closed Loop Medication Administration System between the pharmacy and the
patient’s room, which is one of the services provided by Digital Hospitals, after the drugs are e-
prescribed by the physician, they are brought to the patient via a channel with smart software and
taken to be administered by the relevant personnel. Thanks to the closed loop drug delivery system,
patients can benefit from healthcare services better and waste of drugs can be prevented.
In digital hospitals, fast and right decisions can be given thanks to the decision support systems.
A structure is formed in compliance with the lean management philosophy, which is a much discussed
and increasingly more practiced approach in recent years, and transition to lean hospital practices is
accelerated.
With the widespread access to digital hospitals, it will be possible to benefit from all these
advantages and offer the most effective and efficient healthcare services to the patients within the
shortest time. Hospital personnel will have less workload and be less likely to make mistakes.
6. REFERENCES
[1] Songur, H., Saygın, T., Şifahaneden Hastaneye: Sağlık Kuruluşlarının Değişimine Genel Bir
Bakış, Süleyman Demirel Üniversitesi Sosyal Bilimler Enstitüsü Dergisi 19, (2014), 1
[2] ***, Mercy Virtual Care Center, www.mercyvirtual.net, 2016
[3] ***, Bilişim Zirvesi, Akıllı Hastane, http://saglikbilisimzirvesi.org/dijitalhastane, 2016
[4] Wei-dong, W.A.N.G., The digital hospital in future: understanding and management of our future
hospital, Information of Medical Equipment, 7 (2004)
[5] Della Mea V., What is e-Health (2): The death of telemedicine?, Journal of Medical Internet
Research, 3 (2001), 2, e22. doi:10.2196/jmir.3.2.e22.
[6] Allen A., Morphing Telemedicine - Telecare - Telehealth - eHealth. Telemed Today, Special issue:
2000 Buyer's Guide and Directory, 1 (2000), 43.
[7] Holland,M., The Digital Hospital of Tomorrow: The Time Has Come Today,
https://h41368.www4.hp.com/h41111/rfg_formprocessor/digital_hospital/uk/en/pdf/DH-IDC-
PAPER-HI216948.pdf , 2009
[8] Chang, Zhanjun, et al. , Realization of integration and working procedure on digital hospital
information system, Computer Standards & Interfaces 25 (2003), 5, pp. 529-537.
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[9] ***, T. C. Sağlık Bakanlığı, Dijital hastane, http://saglik.gov.tr/DH/belge/1-34974/dijital-kagitsiz-
hastane-nedir.html, 2016
[10] Li, Jin-Song, and Xiao-Guang Zhang., Construction Goals and Development Trend of Digital
Hospital, Yiliao Weisheng Zhuangbei 31 (2010), 2, pp.5-7.
[11] ***, European Comission, eHealth, http://ec.europa.eu/health/ehealth/policy/index_en.htm

Sağlık, 2016
[12] Kılıç, T., e-Sağlık ve Teletıp Hollanda ve Dünyadan İyi Uygulama Örnekleriyle, AZ yayınları,
Turkey, 2016, pp.110-118
[13] ***, EMRAM Stage Criteria http://www.himssanalytics.org/research/emram-stage-criteria,

2015
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58

Asian Journal of Computer and Information Systems (ISSN: 2321 – 5658)
Volume 01– Issue 02, August 2013
Hospital Information System (HIS):At a Glance

Yousef Mehdipour*, Hamideh Zerehkafi**
*PhD Scholar in Education, Institute of Advanced Study in Education, Osmania University, Hyderabad, India.
Faculty, HIT Department, Zahedan University of Medical Sciences
**MBA Student, College of Commerce and Business Management, Osmania University, Hyderabad, India
_________________________________________________________________________________________________
ABSTRACT—Information is the foundation for policy making, planning, programming, and accountability. Health
informatics is the intersection of information science, computer science, and health care. It deals with the resources,
devices, and methods required to optimize the acquisition, storage, retrieval, and use of information in health and
biomedicine. Boddy et. al (2005) describes an information system (IS) as“a set of people, procedures and resources
that collects data which it transforms an`d disseminates”. Most professionally run hospitals and clinics now rely on
Hospital Information Systems (HIS) that help them manage all their medical and administrative information. A
health information system (HIS) can be defined as “comprising all computer-based components which are used to
enter, store, process, communicate, and present health related or patient related information, and which are used by
health care professionals or the patient themselves in the context of inpatient or outpatient patient care” (UMIT,
2005). It is also known as Healthcare Information System. In health organization such as hospitals, implementation
of HIS inevitable due to many mediating and dominating factors such as organization, people and technology.
Data for this paper were collected through bibliographic and internet research. Four key areas will be addressed in
this paper:
1. An analysis of HIS and its components.
2. Benefits of HIS
3. Phases Of Implementation Of HIS
4. Suggestions for selecting of HIS
Study showed that End-user training is crucial for the success of an HIS. Without the users being trained properly in
their assignments the chance of failure increases substantially. Training is not only important as a mean for teaching
the individuals how to perform certain tasks, it’s also one of the most pervasive methods of communicating
organization goals to the personnel.
Key Words: Hospital Information Systems, Hospital, System, Electronic Medical records
_________________________________________________________________________________________
1. INTRODUCTION
Healthcare is a very important part of our society. On the other word, One of the most important issues is health
services. In recent times, Health care concept of the people has undergone a tremendous change which has led to higher
expectations and an increased demand for high quality medical care and facilities. Hospitals provide a medical assistance
to people. Healthcare organizations of all sizes face a critical need to manage and integrate clinical, financial and
operational information. In order to accomplish this task, a Hospital Information System should be developed.
It is commonly defined as a comprehensive information system used to collect, store, process, retrieve, and
communicate patient care and administrative information for all hospital-affiliated activities and to satisfy the functional
requirements of all authorized users in a hospital (Van Bemmel J.H, Musen M.A. 1999). Therefore, Information Systems
are computer systems that collect, store, process, retrieve, display, and communicate timely information needed in
practice, education, administration and research (Malliarou, 2006; Malliarou et al., 2007). The benefits of using
Information Systems are many. They not only reduce errors and increase speed of care and accuracy but they also can
lower health costs by coordinating services and improving quality of care. The best introduction for hospital information
systems has been made in 2011 International Conference on Social Science and Humanity, which is: “Hospital
Information Systems can be defined as massive, integrated systems that support the comprehensive information
requirements of hospitals, including patient, clinical, ancillary and financial management”.
A Hospital Information System is essentially a computer system that can manage all the information to allow health care
providers to do their jobs effectively. It is also known as Healthcare Information System. Hospitals are becoming more
reliant on the ability of hospital information system to assist in the diagnosis, management and education for better and
improved services and practices. In health organization such as hospitals, implementation of HIS inevitable due to many
mediating and dominating factors such as organization, people and technology.
Asian Online Journals (www.ajouronline.com) 54

The technology changes quickly and if the system is not flexible it will not be able to accommodate hospital growth. A
good HIS offers numerous benefits to a hospital including but not limited to the delivery of quality patient care and better
financial management. The HIS should also be patient centric, medical staff centric, affordable and scalable. An effective
HIS also delivers benefits such as enhances information integrity; reduces transcription errors; reduces duplication of
information entries; and optimizes report turnaround times.
2. AIM OF HOSPITAL INFORMATION SYSTEM

The HIS is a comprehensive, integrated information system designed to manage the administrative, financial
and clinical aspects of a hospital. the aim of a hospital information system is to achieve the best possible support of
patient care and administration by electronic data processing. As an area of medical informatics the aim of an HIS is to
achieve the best possible support of patient care and outcome and administration by presenting data where needed and
acquiring data when generated with networked electronic data processing. Hospital Information Systems main demands
are correct data storage, reliable usage, fast to reach data, secure to keep data on storage and lower cost of usage.
Damen(1991) stated that the purpose of the Hospital Information System is to raise “managing” from the level
of piecemeal spotty information, intuitive guesswork and isolated problem solving to the level of systems
insight, systems information and systems problem solving.
Hospital Information Systems provide a common source of information about a patient’s health history. The
system have to keep data in secure place and controls who can reach the data in certain circumstances. These systems
enhance the ability of health care professionals to coordinate care by providing a patient’s health information and visit
history at the place and time that it is needed. Patient’s laboratory test information also visual results such as X-ray may
reachable from professionals. HIS provide internal and external communication among health care providers.
The HIS may control organizations, which is Hospital in these case, official documentations, financial situation reports,
personal data, utilities and stock amounts, also keeps in secure place patients information, patients medical history,
prescriptions, operations and laboratory test results. The HIS may protect organizations, handwriting error, overstock
problems, conflict of scheduling personnel, official documentation errors like tax preparations errors.
3. BENEFITS OF HOSPITAL INFORMATION SYSTEM

The main goals of Information system are: Planned approach towards working; Accuracy; Reliability; No Redundancy;
Immediate Retrieval of Information; Immediate Storage of Information; and Easy to Operate. Furthermore, The benefits
of using Hospital Information System are:
 Easy access to doctors data to generate varied records, including classification based on demographic, gender,
age, and so on. It is especially beneficial at ambulatory (out-patient) point, hence enhancing continuity of care.
As well as, Internet-based access improves the ability to remotely access such data.
 Improved quality of patient care.
 It helps as a decision support system for the hospital authorities for developing comprehensive health care
policies.
 Efficient and accurate administration of finance, diet of patient, engineering, and distribution of medical aid. It
helps to view a broad picture of hospital growth.
 Improved monitoring of drug usage, and study of effectiveness. This leads to the reduction of adverse drug
interactions while promoting more appropriate pharmaceutical utilization.
 Improved quality of documentation.
 Enhances information integrity, reduces transcription errors, and reduces duplication of information entries.
 Hospital software is easy to use and eliminates error caused by handwriting. New technology computer systems
give perfect performance to pull up information from server or cloud servers.
 Development of a common clinical database.
4. WHO BENEFITS FROM HOSPITAL INFORMATION SYSTEM

The information regarding hospital information system can gathered from the staff members and patients, the computer
user and the administration staff. Hospital information systems can be characterized by their benefits; their functions;
their types of processed information and their types of services offered. The following groups benefit from Hospital
Information System:
A) Physicians
 Introduces Computerized Provider Order Entry (CPOE)
 Improves accuracy & legibility of, and access to, the required patient medications
 Improves clinicians’ efficiency & effectiveness through provision of key patient information (e.g., allergies) at
time of ordering, plus conflict checking, order checking and online access to best practice information
 Improves care through the logging of all orders
 Reduces medication error rates
B) Nurses

 Will allow immediate access to orders and results

 Will provide immediate access to patient demographics, medication and test results
 Will provide improved access to information on line (i.e.: suggested medications or drug alerts)
 Will decrease the need for paper, decrease errors and increase patient safety
C) Allied Health Professionals
 Will allow immediate access to orders and results
 Will provide immediate access to patient demographics, medication and test results
 Will provide improved access to information on line (i.e.: suggested medications or drug alerts)
D) Ward and Registration Clerks
 Will provide a single point of contact for patient registration information and reduce duplication of effort
E) Clinical Benefits
 Provide a common source of information about a person’s health history
 Enhance the ability of health care professionals to coordinate care by providing a person’s health information
and visit history at the place and time that it is needed
 Link information from diagnostic information systems such as X-ray and laboratory into the EPR
 Strengthen internal and external communication among health care providers
 Eventually be accessible for use in all of Manitoba’s academic and community hospitals, as well as long term
care facilities
 Allow care providers access to the patient’s health history and results between facilities
 Will provide improved access to information on line (ie: suggested medications or drug alerts)
F) Administrative Benefits
 Will provide improved access to information on line (i.e. suggested medications or drug alerts)
 Strengthen internal and external communication among health care providers
 Will decrease the need for re-registrations of patients across multiple sites
5. COMPONENTS OF HOSPITAL INFORMATION SYSTEM

Hospital Information System is a comprehensive, integrated computer system. Within this umbrella system, there are
varieties of subsystems in medical specialties, There are five key components or “modules” in the system, include:
1. Registration
The system captures and records patient demographics and visits at the point-of-care. Registration data will be
displayed consistently and automatically on screens in the clinical system.
2. Order Entry and Results Reporting
All clinical orders will be listed with indications of what has been completed and what is pending. Electronic
alerts will appear for orders duplication and errors and provide information to assist clinical decision-making.
All test results in the patient’s electronic chart will be filed with alerts for abnormal results.
3. Clinical Documentation
This module provides on-line documentation of clinical encounters such as flowcharts and structured notes.
Eventually this information will be shared across health care facilities within Manitoba.
4. Scheduling
Patient scheduling schedules patients for appointments with clinicians or for tests and procedures.
5. Patient Billing
All billable health services will be accessible and processed in this system. Examples: private rooms, out-of-
country coverage . The vendors selected to provide the software is Eclipsys. The Eclipsys suite of clinical
software is known as Sunrise Clinical Manager (SCM), Sunrise Access Manager (SM). MidexPro and MediSoft
are the software for the billing system.
6. SUBSYSTEMS OF HIS
As Lippeveld T. (2000) stated Hospital information systems contribute to an "integrated effort to collect, process, report
and use health information and knowledge to influence policy-making, programme action and research .
There are different types of HISs including routine- and clinical HISs. Components of a hospital information system
consist of two or more of the following:
1. Picture Archiving Communication System (PACS)
2. Radiology Information System (RIS)
3. Clinical Information System (CIS)
4. Physician Information Systems (PIS)
5. Financial Information System (FIS)

6. Laboratory Information System (LIS)

7. Nursing Information Systems (NIS)
8. Pharmacy Information System (PIS)
 Picture Archiving And Communication System (PACS): a PACS is a medical imaging technology which
provides economical storage of, and convenient access to, images from multiple modalities (source machine
types).[1] Electronic images and reports are transmitted digitally via PACS; this eliminates the need to manually file,
retrieve, or transport film jackets. The universal format for PACS image storage and transfer is DICOM (Digital
Imaging and Communications in Medicine). Non-image data, such as scanned documents, may be incorporated
using consumer industry standard formats like PDF (Portable Document Format), once encapsulated in DICOM. A
PACS consists of four major components: The imaging modalities such as X-ray plain film (PF), computed
tomography (CT) and magnetic resonance imaging (MRI), a secured network for the transmission of patient
information, workstations for interpreting and reviewing images, and archives for the storage and retrieval of images
and reports.
 Radiology Information System (RIS) - These systems are also popular for their ability to provide radiology billing
services, appointment scheduling as well as reporting and patient database storage. The radiology practice has
become more complex with advances in technology and more hospitals now turn to RIS to manage the business side
of their practices.
 Clinical Information Systems (CIS): A Clinical Information System is a computer based system that is designed
for collecting, storing, manipulating and making available clinical information important to the healthcare delivery
process. Clinical Information System helps healthcare organizations improve the delivery of clinical services.
hospital information systems present clinical information and reports that enable clinicians to make more informed
decisions at the point of care.
 Nursing Information Systems (NIS) – These computer based information systems are designed to help nurses
provide better patient care. A good NIS can perform a number of functions and deliver benefits such as improving
staff schedules, accurate patient charting and improve clinical data integration. The nursing department can have a
better managed work force through schedule applications enabling managers to handle absences and overtime. The
solution can also be used to monitor staffing levels and achieve more cost-effective staffing. Patient charting
applications allow users to enter details regarding patients’ vital signs. Nurses also use it for admission information,
care plan and all relevant nursing notes. All important data is securely stored and can be retrieved when required.
Clinical data integration is also very useful, allowing nurses to collect, retrieve and analyze the clinical information
and then integrate it to design a patients' care plan. All these features in NIS ultimately lead to a reduction in
planning time and better assessments and evaluations. The chance of prescribing the wrong medication also
decreases since there is always a reference for electronically prescribed drugs.
 Physician Information Systems (PIS) - As the name suggests, PIS systems aim to improve the practice of
physicians and are also recommended by the government for deployment. Physicians can avail themselves of the
Federal Government stimulus package aimed to provide better medical care. Various packages are available to suit
different budgets and can be implemented to increase efficiency, cut costs and deliver high quality patient care.
Physician information systems are delivered through computers, servers, networks, and use widely deployed and
popular applications such as, electronic medical records (EMRs), electronic health records (EHRs), and more. Most
of these services have 24/7 remote support that allows hospital staff to troubleshoot problems occurring during
system usage.
 Pharmacy Information Systems (PIS) - Designed to address the demands of a pharmacy department, PIS helps
pharmacists monitor how medication is used in hospitals. PIS helps users supervise drug allergies and other
medication-related complications. The system allows users to detect drug interactions and also helps administer the
proper drugs based on the patient’s physiologic factors.
 Financial Information System (FIS): Financial Information Systems are computer systems that manage the
business aspect of a hospital. While healthcare organization’s primary priority is to save lives and not making
profits, they do acquire running costs from day to day operations; including purchase and staff payroll.
 Laboratory Information System (LIS): A Laboratory Information Management System (LIMS), sometimes
referred to as a Laboratory Information System (LIS) or Laboratory Management System (LMS), is a software-based
laboratory and information management system that offers a set of key features that support a modern laboratory's
operations.
7. PHASES OF IMPLEMENTATION OF HOSPITAL INFORMATION SYSTEM

Life Cycle Model is one of the methods for the development of Information Systems. This method contains the following
seven distinct phases: the definition of the user needs, the analysis of the current system, the design of the new system,
the codification of the new system, the acceptance and the evaluation, the implementation, and the maintenance of the
new system (Damigou et al., 2006).

Kling et al. (2000) say that a pure technological view on ISs will lead to failures, and gives the following explanation as
to why: ”It cannot adequately account for the interactions between ICT, the people who design, implement and use
them, and the social and organizational contexts in which the technologies and people are embedded”.
A lot of implementations of ISs fail, and the reasons for it are usually not pinned down to one cause. Abreu and Conrath
(1993) say that one can almost find as many reasons for IS failures as the number of failures themselves, and that a
significant proportion of new systems are underutilized, do not meet their potential, or fail to be used at all.
Phases of implementing an HIS are (Allan and Englebright, 2000):
1.Planning phase 2.Analysis phase 3.Design phase 4.Development phase
5. Implementation phase 6.Evaluation phase 7.Upgrade phase
a. Planning Phase
The planning phase involves the following steps:
1. Define problem and /or stated goal
2. Conduct feasibility study
 State objectives
 Determine scope
 Determine information needs
 Decide whether to proceed
 Negotiate the project definition agreement
 Write the project definition document
3. Allocate resources
b. Analysis Phase
In the Analysis Phase data must be collected in the form of written documents, questionnaires, interviews, observations.
After analysing data with data flowcharts, grid chart, decision tables, organizational charts a model can be made. Data
must be reviewed before proceeding to the design phase.
c. Design Phase
The design phase is divided into two parts:
I) Functional Design
1. Personnel 2. Time Frame 3.Cost and Budget
4.Facilities and Equipment 5. Data Manipulation and Output 6.Operational Considerations
7.Human-Computer Interactions 8. System Validation Plan
II) Implementation Design

1. Design Inputs 2. Design Outputs 3. Design Files and Databases, Design Controls
d. Development Phase
The Development phase includes the following:
1. Select Hardware 2. Develop software 3. Test System
4. Document system
 User’s manual
 Operator’s manual
 Maintenance manual
e. Implementation Phase
The implementation phase includes a detailed description of the system that specifies not only all hardware and software
components but implementation, training, operation, and maintenance procedures as well. Includes the following steps:
1. Train users 2. Install System 3. Manage and Maintain System
f. Evaluation Phase (I)

The evaluation and test approach is to test each entity with successively larger ones, up to system test level. Steps of
project testing are: Program testing; String testing; System testing; Project documentation; User acceptance testing.
The following criteria are considered essential in selecting a Hospital information system and can be used as a basis for
evaluation:
1. Applications 2. Overall system performance 3. Evaluation features 4.Ease of system
use

5.Configuration or programming performance 6. Security 7. Simplification of reports
8. Database access 9. Hardware and software reliability 10. Connectivity 11. System cost
g. Evaluation Phase (II)

Methods and tools for evaluating a system s functional performance include:
1. Record review 2. Time study 3. User satisfaction 4. Cost-benefit analysis
h. Upgrade Phase
Some of the important considerations in upgrading a system include the following new technologies:
1. Bedside /point-of-care terminals 2. Workstations 3. Multimedia presentations
4. Desicion support systems 5. Artificial intelligence 6. Neural networks
7. Integrated systems architecture 8. Interfaced networks 9. Open architecture
Usage of the system is a crucial factor for success for HIS, and the users of the system use it on a voluntary basis. Barki
and Huff proposed in 1985 that use is an appropriate measure of implementation success when use is voluntary (Abreu
and Conrath, 1993). And also, Kimaro and Titlestad (2005) point out the problems if the communication between
developers and users is lacking: It will lead to insufficient capturing of design needs and thus system failures. Intended
users and developers need to agree on what is being designed by sharing technological and contextual understandings
and available design options.
8. CONCLUSION
End-user training is crucial for the success of an IS. Without the users being trained properly in their
assignments the chance of failure increases substantially. Training is not only important as a mean for teaching the
individuals how to perform certain tasks, it’s also one of the most pervasive methods of communicating organization
goals to the personnel (Gupta and Bostrom 2006).
Despite the benefits Hospital Information Systems have to offer, they are not widely used in healthcare and
where they have been installed, they have not been readily accepted. Many problems have been reported during the
implementation of health information systems in Healthcare environment. This could probably due to lack of adequate
training and failure of educate the end-user what the reasons are for their introduction. Problems that have been reported
when introducing computers to support health care are the lack of standardized medical terminology, computer anxious
users, fear of less individual care and too much control as well as unclear benefits (Goossen et al., 1997; Harris, 1990;
CNA, 2006; Reuss, 2007).
System developers, however, have been remiss in providing relevant, useful information to the various
healthcare professionals involved in the care of the patient. There is also a need for users to develop a framework of
understanding about how the systems function. To implement HIS for users who do not understand it may lead to the
failure of the system. Users are drivers of the system if they do not have reasonable knowledge about it, it is difficult for
it to be optimally driven to provide objectives. There is a general ignorance of information systems amongst health
workers. It is time to analyse the problems that exist in the development and use of ISs and to look for solutions to solve
them (Jeffrey, 1998).
The key for effective administration and management of the Service of a Hospital is the availability of reliable, valid, and
qualitative information. This fact predicates the existence and appliance of Hospital Information Systems, and makes
indisputable their superiority against the manual procedure. Organizations may need to redesign the computer interface,
to provide better hardware and to maintain a more reliable network function to meet the Users' needs during the adoption
process, as well as to modify or devise appropriate documentation regulations (Damigou, 2007).
The health sector still lacks the discipline of system thinking, shared vision and a team approach. Study of HISs
systems that have already been implemented need re-evaluation to determine not just whether they work, but how and in
what circumstances they work (Dowling, 1985).
A critical factor governing the sustainability of information systems is the availability of qualified and experienced
personnel. Information systems require active management if they are to succeed. Procedures need to be established for
data collection, reporting, follow-up of missing reports, data quality control, data summary and providing feedback (Jett ,
2007).
Finally, no hospital information system can be regarded as a success unless it has the full participation of its users. Thus
human and social factors would have to be considered in its design, more often than not, they can be easily addressed by
providing adequate training and education about the system.
9. SUGGESTIONS
Some of the important considerations in selecting a HIS include the following:
1. Total cost of package- Generally, HIS providers are happy to visit and discuss the requirements of your hospital
with you. Solutions are available for hospitals of all sizes and budgets. It is important to have a hospital information
system that has a low cost of ownership. Some vendors reduce costs by having a design that requires less hardware

and fewer servers. This type of design is known to cut upfront acquisition costs and also reduces maintenance in the
long run.
2. Web based system- In addition to the user friendly features, a good HIS system must be available on the web.
Availability on the web means authorized personnel can access the information whenever they want from anywhere.
This does not bind all caregivers to their office desks and also provides them with information when they need it
most. A web based system becomes even more important if it is used to share information between two or more
hospitals. Healthcare facilities in different geographic locations can share relevant data quickly if they use an internet
based HIS.
For instance, a hospital may decide to shift a patient to another facility for better care or specialty treatment. If the
present hospital has updated all the patient information in their HIS, the second hospital can instantly access the
information needed for treatment. The medical history of the patient will always be stored within these facilities and
can be readily retrieved if the patient is not able to provide it himself.
3. Implementation and support- Change is always resisted by humans and deploying or upgrading a hospital
information system may also invite employee criticism. It is always better to ask the vendor for support in an
implementation and request for staff training. Choose a vendor that offers 24x7 supports via the telephone or web, so
your hospital staff can immediately access support. Some hospitals also consult their staff while making a
purchasing decision, as the staff may be able to tell you something new or inform you about things others may have
overlooked.
4. User-Friendly : The interface should be user friendly and simple
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Resumen
Ante un incremento de la competencia debido
a la aparición de más destinos emergentes
Jorge Humberto Trujillo
en México, una ciudad capital en proceso de
metropolización como Tuxtla Gutiérrez, se
Licenciado en Turismo; Maestro en Estudios Urbanos y prepara para iniciar un proceso de desarrollo
Regionales; Candidato a Doctor en Geografía; Estudios de
Master en Alta Gestión de Plan y Estrategia de Destinos
turístico complejo a partir de la consideración
Turísticos; Premio 1996 del Instituto de Administración de aspectos territoriales (físicos, sociales
Pública del Estado de México; Medalla Ignacio Manuel y económicos) entendidos como producto
Altamirano Basilio 1996; Catedrático de programas de
Licenciatura y Posgrado en Turismo y áreas afines; Director
social, a manera de características esenciales
de Desarrollo Turístico y de Promoción y Fomento de la que le diferencian y le puede posicionar como
Secretaría de Desarrollo Económico del Gobierno del competitivo en función de la capacidad de
Estado de México; Coordinador del Área de Turismo e
Investigación en la Escuela de Administración Turística
sus agentes sociales para favorecer y facilitar
de la Universidad Anáhuac México Norte; Actualmente, experiencias turísticas satisfactorias. En este
Director de Turismo del Gobierno sentido, el presente informe es el resultado pre-
Municipal de Tuxtla Gutiérrez, Chiapas.
Dirección de Turismo, Gobierno Municipal de Tuxtla
liminar de un ejercicio dialéctico que ha com-
Gutiérrez, Chiapas, México. binado estudios de posgrado en alta gestión de
E-mail oficial: [jtrujillo@tuxtla.gob.mx] destinos turísticos y la experiencia de dirigir la
E-mail personal: [jorgehtr@gmail.com]
oficina de turismo durante 18 meses.
Abstract
¿CÓMO GESTIONAR UN Towards an increase of competition and every
DESTINO TURÍSTICO time the appearing of even more emerging
EMERGENTE Y VIVIR destinations, a capital city of middle type like
PARA CONTARLO? Tuxtla Gutiérrez starts a complex touristic
CONSTRUCCIÓN DE development starting with some territorial
UNA ESTRATEGIA considerations in a social product way and
COMPETITIVA A PARTIR in that sense, understood like factors that
DE LA COMPLEJIDAD differ and can position like competitive in
TERRITORIAL DE UNA order to the social agent’s capability to help
CIUDAD CAPITAL: EL CASO and access satisfactory touristic experiences.
DE TUXTLA GUTIÉRREZ1 This article has been elaborated with base on
the management realized during the last 18
HOW TO FORM AN months, which has allowed the author finish
EMERGING TOURISTIC his studies of high management in planning
DESTINATION AND and touristic destinies strategy.
LIVE TO TELL IT? THE
CONSTRUCTION OF A Palabras Clave: Espacio turístico, Gestión
COMPETITIVE STRATEGY turística; Competitividad turística.
STARTING FROM THE
TERRITORIAL COMPLEXITY Key words: Touristic Environment; Touristic
OF A CAPITAL CITY: THE Management; Touristic Competition.
SITUATION OF TUXTLA
GUTIÉRREZ2 Introducción
Tuxtla Gutiérrez, Chiapas, es la ciudad capital
del Estado de Chiapas. Lo es desde que con-
1
Artículo de reflexión como producto de investigación. servadores y liberales debatían sobre el sitio
2
Fecha de realización: 2008.
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Universidad Externado de Colombia Facultad de Administración de Empresas Turísticas y Hoteleras
que debía tener tal condición. Lugares como históricos, culturales, étnicos, se mantengan
San Cristóbal de las Casas o Ciudad Real, en un estado de conservación, a pesar de los
Comitán de Domínguez o hasta Tapachula, procesos de transculturación, comercializa-
fueron considerados por los conservadores, ción y de aprovechamiento productivo que
pero fue hasta con el liberal Joaquín Miguel han impactado en ese Estado?
Gutiérrez que se decide por Tuxtla Gutiérrez,
aún y cuando la importancia histórica de la Al revisar el mapa de la entidad, pareciera
misma heroica Chiapa de Corzo era mucho ser evidente una respuesta de corte otra vez
mayor. La discusión entre uno y otro grupo geográfico. Primero, la localización de la
político, lleva a elegir Tuxtla Gutiérrez a par- entidad y su lejanía física con respecto a la
tir de una razón geopolítica de defensa: el río capital de la república en el contexto de una
Grijalva, elemento físico que obstaculizaba nación histórica y tradicionalmente centra-
alguna posible incursión militar para regresar lizada en todos los sentidos; segundo, su
la condición de capital a San Cristóbal de accesibilidad física, misma que en el formato
las Casas. terrestre durante años fue por la vía Oaxaca lo
que significó hasta 15 horas y en el formato
En el contexto de su función como ciudad aéreo significó un aeropuerto al que le fue
capital, Tuxtla Gutiérrez ha enfrentado los imposible recibir vuelos durante seis meses
desafíos correspondientes al crecimiento del año debido a las condiciones climáticas
poblacional, los asentamientos humanos, los del lugar elegido para tal efecto, y tercero, la
servicios públicos, la dotación de infraestruc- Sierra Madre de Chiapas y la Sierra Madre
tura, el crecimiento urbano, las necesidades Occidental que juntas son una gran muralla
sociales, así como los permanentes requeri- difícil de transitar.
mientos de oportunidades productivas. La
complejidad es, sin lugar a dudas, la constante Entonces, pareciera que la dificultad para
y su evolución es particularmente marcada a acceder a esa entidad hizo posible que
partir de unos 7 u 8 años. muchas de sus manifestaciones culturales
se mantuvieran aún desconocidas, aunque
A la sombra de todos estos matices, Tuxtla otras de tipo natural no han tenido la misma
Gutiérrez es una ciudad con una localización suerte sobre todo en el campo de las maderas
geográfica importante, ya que se ubica como preciosas en la selva.
una de las puertas de entrada hacia el Estado
de Chiapas, al igual que Palenque, Comitán o Tanto las manifestaciones culturales como
Tapachula. Pero el caso de Tuxtla Gutiérrez los recursos naturales de la entidad le han
es de suma importancia debido a que por dado alguna oportunidad en el campo de la
esa vía se canalizan los flujos comerciales, actividad turística y en este sentido, Chiapas
de productos y humanos que vienen desde ha vendido el concepto de la naturaleza, la
la costa del Golfo y en especial, desde la selva y los grupos étnicos, aunque las difi-
carretera que une a la Zona Metropolitana cultades mencionadas, en algún momento le
de la Ciudad de México con la península han aumentado el valor.
de Yucatán, ésta última tan importante en
términos de la actividad turística. Así, los sitios turísticos más importantes
de Chiapas son San Cristóbal de las Casas
Adicionalmente, existe un tercer factor que con su imagen urbana, su comida y su gente
es recogido de la visión histórica que ha logró ubicarse en el programa Pueblos Má-
pasado de generación en generación: la cul- gicos y Ciudades Coloniales; Palenque con
tura. ¿Cómo es posible que tantos elementos su zona arqueológica maya de primer orden
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arqueológico se incorpora a la gestión de los Segundo, un análisis estratégico de las condi-

Centros Integralmente Planeados del Fondo ciones imperantes en esa ciudad con el fin de
Nacional de Fomento al Turismo (fonatur); definir una estrategia técnicamente depurada
Chiapa de Corzo con su gastronomía, arte- y sectorialmente legitimada.
sanía y arquitectura es el punto de entrada al
recorrido fluvial por el Cañón del Sumidero; Tercero, una narración del proceso reciente
Comitán de Domínguez, ciudad cultural de que abarca un año, en el que se da cuenta de
donde provienen Belisario Domínguez y los obstáculos encontrados desde dentro para
Rosario Castellanos, al igual que los Lagos la gestión del destino. Empecemos.
de Montebello.
Desarrollo
Pero y Tuxtla Gutiérrez, ¿qué pasa con la
ciudad capital? Dentro de la contabilidad mu- A. Evaluación diagnóstica
nicipal, 3 de cada 4 empleos están ubicados Tuxtla Gutiérrez fue fundada por los Zoques
en el sector terciario, mientras que el sector con el nombre de Coyatoc que significa “lu-
primario casi se ubica en tan sólo un 5% de su gar, casa o tierra de conejos”. En 1486 y 1505,
territorio y la industria es incipiente. Por otro los aztecas invadieron la región, destruyendo
lado, el crecimiento poblacional, resultado Coyatoc y le nombraron Tochtlán, cuyo sig-
de la migración del campo a la ciudad por nificado es lo mismo; más tarde los españoles
la búsqueda de mejores condiciones de vida, castellanizaron este nombre llamándolo Tuxt-
ha acelerado la necesidad de que la ciudad la. En 1848 se agrega el apellido de Gutiérrez
sea más competitiva para ofrecer entornos a la Ciudad, en honor a don Joaquín Miguel
favorables para el crecimiento económico y Gutiérrez, quien luchó por la independencia
el turismo es una oportunidad latente. del Estado. Chiapas está ubicado en el sureste
de México y Tuxtla Gutiérrez en la parte
Por lo tanto, en el contexto de la Maestría centro de la entidad.
en Alta Gestión de Estrategia y Política de
Destinos Turístico, programa interinstitucio-
nal de la Universidad Oberta de Catalunya,
la Organización Mundial del Turismo y la
Fundación Themis, se encuentra en proceso
la investigación Definición de una estrategia
competitiva a partir de la complejidad terri-
torial de una ciudad capital: el caso de Tuxtla
Gutiérrez. De ésta se desprende el objetivo de
analizar la actividad turística de esa ciudad
capital desde una perspectiva territorial con el
fin de cumplir con tres especificidades:
Primero, una evaluación diagnóstica de su Fuente: elaboración propia con base en infor-
competitividad en los niveles territorial y mación del Gobierno del Estado de Chiapas,
turístico de un destino considerado como México, 2008
emergente pero que ha quedado marginado
de los programas de desarrollo del gobierno El municipio se ubica en la región económica
federal y estatal. I Centro, limita al norte con San Fernando y
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Osumacinta, al este con Chiapa de Corzo, al territorio estatal. En el municipio se encuen-

sur con Suchiapa y al oeste con Ocozocoautla tran áreas naturales protegidas que son:
de Espinosa y Berriozábal. Las coordenadas
de la cabecera municipal son: 16º 45’ 10’’ de Reserva Estatal Cerro Mactumatzá constitui-
latitud norte y 93º 07’ 00’’ de longitud oeste da principalmente de vegetación secundaria
y se ubica a una altitud de 600 metros sobre (selva baja caducifolia y subcaducifolia con
el nivel del mar. vegetación secundaria arbustiva y herbácea),
613.20 has. de esta reserva se ubican en el
Los climas existentes en el municipio son: municipio que representan el 1.81% de la
Aw0(w) cálido subhúmedo con lluvias en superficie municipal
verano que abarca el 99.92% y A(C)w0(w)
semicálido subhúmedo con lluvias en ve- Centro Ecológico Recreativo El Zapotal
rano que ocupa el 0.08% de la superficie que está constituido principalmente de ve-
municipal. En los meses de mayo a octubre, getación secundaria (selva baja caducifolia
la temperatura mínima promedio va de los y subcaducifolia con vegetación secundaria
15ºC a los 22.5ºC, mientras que la máxima arbustiva y herbácea), 80.5 has. de este centro
promedio oscila entre 27ºC y 34.5ºC. En el se encuentran en el municipio representando
periodo de noviembre - abril, la temperatura el 0.24% de la superficie municipal.
mínima promedio va de 12ºC a 18ºC, y la
máxima promedio fluctúa entre 24ºC y 33ºC. Parque Nacional Cañón del Sumidero el cual
Y en los meses de mayo a octubre, la precise constituye principalmente de selvas secas
pitación media fluctúa entre los 900 mm. y (selva baja caducifolia y subcaducifolia),
los 1.200 mm., y en el periodo de noviembre 3.781.32 has. de este parque se ubican en
a abril, la precipitación media va de los 25 el municipio representando el 11.15% del
mm. a 200 mm. territorio municipal y de la Zona Protectora
Forestal Vedada Villa Allende la cual se cons-
tituye principalmente de selvas secas (selva
baja caducifolia y subcaducifolia), 445.03
has. de esta zona se ubican en el municipio
representando el 1.31% de la superficie
municipal.
Los dos últimos son de especial importancia

para el desarrollo turístico de la capital, ya
que son considerados como recursos turísti-
cos y ambos son de gran atracción.
En el área de los recursos turísticos, se consi-

deró la metodología fas (Factores, Atractores
Fuente: elaboración propia con base en infor-
y Sistemas de Apoyo) de la Organización
mación del Gobierno del Estado de Chiapas, Mundial del Turismo para la clasificación,
México, 2008 con los resultados siguientes:
El municipio cuenta con 4.920.077 has. de Recursos Naturales 2

áreas naturales protegidas, que representan el Cañón del Sumidero Maravilla de México
14.51% de la superficie municipal y 0.3% del
Parque Cañón del Sumidero y sus 5 miradores
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Recursos Culturales 22 Hoteles Estableci- Habitaciones

Parque Central (Catedral San Marcos, Iglesia mientos
de Santo Domingo, Iglesia San Roque, Palacios Total 94 3872
Federal, Estatal y Municipal, Congreso)
1 Estrella 16 388
Museo de la Ciudad
2 Estrellas 25 879
Casa de la Cultura del Municipio
3 Estrellas 10 609
Parque de la Marimba
4 Estrellas 6 548
Museo de la Marimba
5 Estrellas 4 550
Centro Cultural Jaime Sabines
En posadas 14 278
Instituto de las Artesanías
Sin clasificar 15 558
Zoológico Miguel Álvarez del Toro
Suites
(ZooMAT) 4 62
y condominios
Museo Zoque
Jardín Botánico Fuente: Directorio de Servicios Turísticos de
Tuxtla Gutiérrez, Chiapas, México, 2008
Museo del Jardín Botánico
Museo Regional de Antropología El último elemento es el de los módulos de
e Historia de Chiapas información turística:
Museo de Paleontología
Teatro de la Ciudad Módulos de información turística 6
Museo Chiapas de Ciencia ZooMAT (setpe) 1

y Tecnología (much) Aeropuerto Internacional (setpe) 1
Iglesia Ortodoxa de San Pascualito Parque de la Marimba
Monumento a la Bandera (Municipio y (setpe) 1
Parque de la Juventud Parque Central (Municipio) 1
Parque 5 de Mayo Oficina sectur (setpe) 1
Parque Morelos Caseta Poniente (Plan de Ayala) (setpe) 1
Parque Joyyo Mayu

La localización, identificación y distribución
Parque Deportivo y Recreativo Caña Hueca de los recursos, servicios y módulos turísticos
del municipio sugiere la configuración de
Recursos Artificiales 6 agrupamientos que dan origen a estaciones
turísticas, de las cuales se reconocen a 12:
Parque Ecoturístico Cañón del Sumidero
Parque de Convivencia Infantil 1. Instituto de las Artesanías
Estadio del equipo de fútbol Jaguares 2. Parque y Museo de la Marimba
Centro de Convenciones y Polyforum Chiapas 3. Parque Central
4. Parque Morelos - Parque de la Juventud
Mirador Los Amorosos 5. Centro Cultural Jaime Sabines
Mirador Copoya 6. Centro de Convenciones y Polyforum
Chiapas
En el rubro de servicios turísticos de hospe- 7. Miradores del Cañón del Sumidero
daje, los resultados son los siguientes: 8. Mirador de Los Amorosos
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9. Calzada de los Hombres Ilustres Estas zonas condensan vocaciones que tien-
10. Estadio de Futbol Víctor Manuel Reina den a tres grandes conceptos: Natura (Ver-
11. Corredor Zoque (Mirador Pichanchas y de), Cultura (Café) y Aventura (Amarillo),
Museo Zoque) mismos que se presentan ya en la promoción
12. Reserva El Zapotal (zoo mat y much) como se advierte a continuación en la imagen
siguiente:
Fuente: elaboración propia con base en información de la Dirección de Desarrollo Turístico

del Gobierno Municipal de Tuxtla Gutiérrez, Chiapas, México, 2008
Tales zonas fueron incorporadas a una matriz Desarrollo

(Organización)
(Actividades)
Crecimiento
Prospección
de análisis estratégico adl modificada3 de

(Recurso)
Despegue
Madurez
(Visitas)
doble entrada que incorpora un juicio sobre Posición

1) Grado de desarrollo, así como sobre 2)
Posición competitiva con relación a afluencia,
el resultado es el siguiente:
Líder 2, 6,
5 7 12
10
Competidor 3, 4
Favorable 1, 9
3
Jorge Trujillo. Modelo de Regionalización Turística para la Marginal 8, 11
Planeación del Desarrollo de la Actividad Turística del Estado
de México, Instituto de Administración Pública del Estado de
México, Toluca, México, 1997, p. 103.
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Dada la configuración de esas 12 zonas en el Tlaxcala, Hidalgo y Morelos) y 2) los Esta-

marco de una ciudad en pleno crecimiento dos colindantes al Estado de Chiapas como
se pasó a un análisis interno de cada una de Veracruz, Tabasco y Campeche. El promedio
las mismas, por lo que se aplicó la metodo- de estancia es de 2.9 días en temporada alta,
logía de evaluación diagnóstica contenida lo que llega a representar el 50% del tiempo
en el documento intitulado Identificación que el visitante pasa en el Estado. A pesar
de Potencialidad Turística en regiones o de la cantidad y la calidad de las estaciones
municipios, documento que forma parte de turísticas distribuidas en el territorio munici-
una producción de Cuadernos técnicos de pal, los flujos turísticos se concentran en el
competitividad que la Secretaría de Turismo Parque de la Marimba, Miradores del Cañón
federal ha elaborado como apoyos para la del Sumidero y el Zapotal, particularmente
gestión [www.sectur.gob.mx]4. El modelo en el zoo Miguel Álvarez Del Toro.
plantea un extenso procedimiento que incluye
la ponderación de las siguientes variables: El tipo de viaje es en familia, el medio más
a) planeación, b) crecimiento y desarrollo usado es terrestre. La temporada alta es en
económico, c) infraestructura, d) planta turís- Semana Santa, verano, fin de año y fines
tica, e) producto turístico y f) financiamiento de semana largos (6 en 2008), mientras que
turístico. Cada una de estas variables tiene en la temporada baja se reciben congresos,
una relación de unidades de análisis que son convenciones y viajes de incentivo.
calificadas de 0 a 2.
Los segmentos con mayor potencial para
Los resultados observados muestran dos Tuxtla Gutiérrez de acuerdo con la vocación
patrones de comportamiento; por un lado, de sus recursos turísticos, componentes ur-
los tres primeros (a, b y c) quedan evaluados banos e infraestructura son:
por encima de la media y los tres segundos
(d, e y f) se ubican por debajo de la media. a. Turismo Cultural – Urbano,
Lo anterior sugiere que la ciudad ofrece los b. Turismo de Aventura,
elementos propios de la estructura urbana c. Turismo de Reuniones,
y sus instituciones, pero también señala la d. Hay potencial para Turismo de Natura-
necesidad de realizar programas de trabajo leza.
relacionados propiamente con el desarrollo
de productos turísticos y el aumento del valor B. Análisis
de la oferta local. Las tendencias mundiales de la actividad
turística muestran un crecimiento sostenido
En cuanto a la demanda, para 2006, las cifras acompañado de un proceso de fragmentación
oficiales (setpe) registran más de 610 mil vi- de ese mercado en el que la demanda aumenta
sitantes. El perfil investigado desde la oficina su poder de negociación y está requiriendo
municipal muestra que fundamentalmente nuevos destinos y productos turísticos espe-
la procedencia es nacional, en particular de cializados. Esto está significando una opor-
dos grandes centros emisores: 1) la zona tunidad para la aparición de nuevos destinos
metropolitana de la ciudad de México y su y productos turísticos, lo que ha acelerado la
área de influencia que incluye a los Estados competencia.
que le colindan (Puebla, Estado de México,
Fortalezas
– Dispone de infraestructura y servicios pú-
4
Secretaría de Turismo. Identificación de Potencialidad blicos con cobertura amplia debido a que es
Turística en Regiones o Municipios, Ciudad de México, Gobierno la capital del Estado de Chiapas.
de México, 2000.
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– Cuenta con una variedad de servicios turís- – El destino carece de una identidad turística
ticos de calidad internacional. única y de penetración constante en el mer-
– Tiene un grupo de agencias operadoras de cado nacional.
turismo competitivas y con experiencia en el
ramo tanto de ocio como de negocio. Las funciones de la ciudad capital de una
entidad federativa cuyo crecimiento pobla-
– Tiene un aeropuerto con llegadas naciona- cional, urbano, comercial y de servicios;
les de 4 aerolíneas con desplazamientos a la y su ubicación estratégica como puerta de
ciudad de México, Guadalajara, Monterrey, entrada al territorio estatal, le han permitido
Puebla, Toluca, Oaxaca, Villahermosa y a Tuxtla Gutiérrez generar expectativas en
Mérida. dos segmentos de demanda turística a partir
de motivos de desplazamiento, por un lado,
– Ofrece una gama de recursos turísticos con el de ocio y placer, al mismo tiempo que el de
potencial en materia de aventura, cultura, reuniones (congresos, convenciones y viajes
congresos y convenciones. de negocios e incentivo), ambos, sobre una
plataforma cultural que le diferencia de las
– Opera el Consejo Municipal de Turismo demás ciudades del país.
como espacio de diálogo y legitimización de
las decisiones aplicadas en la actividad. Las fortalezas del destino con relación al
segmento de ocio y placer están en su tem-
– Está considerada como una de las 15 ciu- poralidad en Semana Santa, verano, fin de
dades más seguras del país. año y fines de semana largos; el clima; el
recorrido fluvial, la calidad de los servicios
– Su población es amable y hospitalaria. de hospedaje y su incorporación a esquemas
de comercialización como los viajes todo
– Las características de su geografía permite pagado, mientras que las fortalezas del mismo
disponer de un clima que favorece la realiza- en el segmento de congresos y convenciones
ción de actividades recreativas y turísticas. son su temporalidad en meses de ocupación
baja, el Centro de Convenciones y Polyfo-
Debilidades rum Chiapas, los organizadores de eventos
– Tuxtla Gutiérrez es un destino aún no posi- (dmc´s) y el funcionamiento de la oficina
cionado en la mente del consumidor y poco de promoción del centro de convenciones.
conocido por los intermediarios. En ambos casos, la infraestructura aeropor-
tuaria y carretera favorecen su desarrollo ya
– Carece de productos turísticos en la mayoría que disminuyen el recorrido y el tiempo de
de los segmentos en los que tiene potencial. desplazamiento.
– Su gestión es desintegrada ya que cada Las debilidades del destino se ubican en el

subsector opera su propio programa y genera tramo carretero de Las Choapas a Tuxtla
sus ideas, sin el consenso necesario. Gutiérrez, la necesidad de diversificación de
microproductos turísticos, la concentración
– Carece de un sistema de información turís- de los visitantes en tan sólo tres sitios de
tica que dé cuenta del comportamiento, perfil, interés turístico (Cañón del Sumidero, Zoo
percepción, movilidad y grado de satisfacción mat y Parque de la Marimba); la falta de
de los visitantes. vinculación comercial entre las estaciones
turísticas integrando recorridos, valor bajo.
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Las condiciones y los recursos naturales y El punto mencionado no es menor, ya que

culturales del municipio han generado una tal vocación e identidad turística son los
expectativa local en torno a la actividad insumos básicos para la construcción de
turística, lo que ha motivado la inversión en una estrategia competitiva del destino. El
los últimos dos años en empresas de hospe- punto central es que como destino turístico,
daje hasta por unos 35 millones de dólares, Tuxtla Gutiérrez muestra recursos naturales
aproximadamente. y culturales de alcance mundial; una infraes-
tructura correspondiente a la ciudad capital;
La sumatoria registra Centro de Convencio- una planta (equipamiento e instalaciones) de
nes y Poliforum Chipas con capacidad hasta calidad turística internacional y empresarios
para 3.800 asistentes; 1.300 cuartos de hotel con empuje y visión de negocio.
de 4 y 5 estrellas; un aeropuerto nuevo y fun- La cuestión es que la sola existencia de tales
cional que recibe a Click Mexicana, Aviacsa, componentes sin una identidad reconocida y
Interjet y Alma con vuelos desde la Ciudad una vocación consensual y aceptada por los
de México, Guadalajara, Monterrey, Villa- agentes involucrados en el desarrollo turístico
hermosa, Oaxaca, Mérida y Toluca; servicio local, no garantiza su funcionamiento como
de transportación turística con recorridos un sistema organizado y competitivo. La
por las 12 estaciones turísticas de la capital; fragmentación de inicio de la gestión queda
una terminal de transporte terrestre recién desarticulada de la estructura territorial sobre
inaugurada con 160 operaciones diarias y la cual se pretende desarrollar. Lo anterior
hasta 200.000 personas mensuales que entran conlleva a observar dos problemas centrales,
y salen de TG, muestran el potencial de la tales como:
vocación turística de la capital de Chiapas
al tenor de tres conceptos: Natura, Cultura, – Dinámicas empresariales desintegradas en
Aventura. dos sentidos:
Estos tres conceptos requieren, para su reco- a) Vertical, es decir, entre empresas que
nocimiento e identificación por la demanda, comparten una misma función: hospedaje,
ser soportados en la identidad cultural y las alimentación, transportación, etc., y
condiciones territoriales de la ciudad como
plataforma tangible e intangible que le b) horizontales, es decir, entre empresas y
diferencia de las demás ciudades capitales organismos de diferentes funciones pero que
y destinos de México, hasta ubicarle como se complementan en una cadena productiva:
experiencia de viaje única. hoteles, restaurantes, agencias de viaje, ser-
vicios públicos.
La vocación turística de Tuxtla Gutiérrez
debe obedecer a la plataforma territorial, a – Inercias que explican al turismo como
su espacio geográfico, sus componentes y una responsabilidad netamente empresarial,
condiciones. Seguir tal directriz significa, restándole la importancia a la calidad del
más allá de la facilitación, la posibilidad de ordenamiento e imagen urbana, la salud, el
identificar y reconocer una identidad local transporte, el medio ambiente, la seguridad,
que al ser desarrollada permita estar en la limpieza, etc., o que dejan a la fórmula
camino de dar forma y función al destino, servicios–promoción la responsabilidad de
a fin de diferenciarlo ante los competidores aumentar el volumen de visitas, haciendo a un
nacionales e internacionales. lado temas como estrategia, calidad, costos,
precio, organización territorial, etc., que son
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reconocidos como factores de competitividad tienen mayor influencia como autoridad nor-
por la Organización Mundial del Turismo. mativa que la propia de turismo por la misma
naturaleza de su misión.
Los dos problemas anteriores cocinados con
varios ingredientes adicionales: desconfianza Por lo tanto, queda manifiesto que el trabajo
entre los actores públicos y privados, ausen- de fomentar el turismo depende de la habi-
cia de un programa de trabajo sobre turismo lidad y esfuerzo de la oficina municipal de
y falta de información confiable sobre el com- turismo para trabajar coordinada y coopera-
portamiento de la actividad turística local. tivamente con otras áreas municipales y los
empresarios en particular. Esa necesidad se
C. Alcances de la gestión ve acrecentada en la medida en que el 90%
Ante tales circunstancias, históricamente la del presupuesto de la Oficina Municipal de
gestión pública local del turismo ha sido muy Turismo se distribuye hacia gasto corriente
limitada, según los señalamientos del sector y se carece de presupuesto para inversión,
empresarial hasta, hace poco más de un año por lo que, en este último sentido, cada pro-
(2007). Las acciones de fomento se pueden yecto debe pasar por un proceso que inicia
considerar como reactivas a los planteamien- en la Presidencia para justificarlo y buscar
tos de una iniciativa privada muy comprome- apoyo. De ser aceptado, el proyecto pasará
tida con sus intereses dentro del sector. por el H. Cabildo que al aprobarlo genera el
financiamiento para la puesta en marcha de
Así, las acciones primeras preponderante- la acción.
mente de promoción, se concentraron en res-
ponder a las iniciativas del sector hotelero con En un tercer plano, es también evidente que la
el único propósito de lograr elevar el nivel de mayor influencia en materia de turismo den-
confianza a fin de permitir cooperación para tro del ámbito estatal se ubica en la Secretaría
el trabajo conjunto. de Turismo y Relaciones Internacionales,
instancia que concentra el mayor presupuesto
No obstante, algunas iniciativas en el desarro- por concepto de turismo y se convierte en la
llo del segmento de congresos y convenciones responsable en el manejo del 2% del impues-
generadas por la firma de acuerdos entre la to al servicio de hospedaje. En conclusión,
oficina municipal, el centro de convenciones la debilidad del municipio encuentra en la
y la Asociación de Empresas de Turismo de fortaleza del Estado la posibilidad de llevar
Negocios vinieron a generar una plataforma a cabo proyectos sin probabilidad alguna de
que impulsó el trabajo en este segmento. liderar tales iniciativas. Lo que muestra la
viabilidad de un apoyo discrecional.
Lo que más se advierte es un cierto tipo de
“sed” por generar alternativas de acción que El panorama planteado llevó a la oficina
promuevan el turismo, en particular para au- municipal de turismo a gestionar apoyos
mentar la estancia, las actividades, el gasto y exógenos a través de la Fundación Themis y
la derrama económica en ese destino. la Organización Mundial del Turismo (omt)
ante quienes se logró la elaboración del
Aunque, si bien es cierto que la oficina mu- Proyecto Chiapas 2015: Plan de estrategia
nicipal de turismo tiene la responsabilidad de y competitividad para el cluster de Tuxtla
fomentar el turismo definitivamente carece de Gutiérrez, acción que permitió beneficiar a
autoridad para lograrlo. Así es posible adver- otros 4 destinos turísticos del Estado hasta
tir que otras direcciones como Ordenamiento pensar en un gran corredor turístico interna-
Territorial y Salud, o hasta Protección Civil cional. Esta acción implicó una participación
165
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y cooperación del Gobierno Federal a través ticos hacia el lado contrario que le podrán
de la Secretaría de Turismo, del Gobierno vincular a ciudades como Coatzacoalcos,
Estatal por medio de la Secretaría de Tu- Veracruz, y Villahermosa, Tabasco, con alto
rismo y Proyectos Estratégicos, los cinco nivel socioeconómico y capacidad de gasto
Gobiernos municipales y la omt a través de ya que su estructura económica responde a
la Fundación Themis, institución que contrató la empresa paraestatal de petróleo llamada
a dos expertos internacionales y convocó a Petróleos Mexicanos.
14 voluntarios internacionales que sumados
a una decena de voluntarios locales se dieron El desafío en esencia para la oficina munici-
a la tarea de llevar a cabo una investigación pal de turismo se encuentra en la posibilidad
documental y de campo. Sin lugar a duda, de cambiar la reactividad por la proactividad,
ésta es una gran acción coordinada por la de estar involucrado a guiar el proceso, esto
oficina municipal de Tuxtla Gutiérrez que lo hace algo muy diferente. Para tal iniciativa,
ha recuperado el tejido social de la confianza es necesario elevar el nivel de la capacidad
entre los empresarios y las autoridades hasta de gestión de la oficina, de quienes trabajan
aportar conjuntamente 200 cuartos-noche en ésta, subir del nivel operativo a un nivel
de hotel, 1000 alimentos, transportación de gestor o líder de proyecto con recursos
dentro de la entidad, 300 litros de gasolina, técnicos que favorezcan los resultados, aun-
14 boletos de avión, acceso y facilidades a que los recursos no permiten la contratación
los sitios de interés e información sobre los de personal con mayores capacidades de
antecedentes. respuesta. El personal requiere crecer.
Por otro lado, la relación económica entre tres Por otro lado, comprender lo anterior implica
ciudades vecinas –dos capitales y otra indus- necesitar mejores reglas de operación para
trial– ha generado la expectativa de recuperar mantener el apoyo técnico del personal de
lo que se ha denominado como la Ruta de otras áreas que no la turística, por lo que, la
los Zoques, concepto que involucra a Tuxtla definición de los espacios turísticos al puro
Gutiérrez con una región que incluye a muni- estilo de Boullón o como ahora se les define
cipios como Berriozabal, Ocozocuautla, San (estaciones turísticas) conlleva el reconoci-
Fernando, Chicoasen, Ozumacinta, Tecpatán, miento de que ese espacio no es continuo y la
Coapilla y Copainalá con un potencial impor- gestión debe diferenciarlo, pero no sólo eso.
tante de tipo cultural en el que históricamente
ha existido el grupo étnico Zoque adicionado Diferenciarlo implica dos situaciones: por
con apreciación estética, arquitectura civil y un lado, atenderlo en forma diferente, ya
religiosa, sitios naturales, artesanía, etc. Esta que la oficina municipal de turismo no puede
zona fue incluida en el estudio realizado por atender una colonia “X” de la misma forma
la omt por lo que se considera que será una que a un sitio de interés turístico, mientras
oportunidad de aumentar el valor de la capi- que por el otro, atenderlo de forma diferente,
tal y su zona de influencia complementando permite a otras oficinas municipales (Salud,
a esos atractivos, la basta infraestructura y Ordenamiento Territorial, Servicios Muni-
equipamiento turístico de la primera. Ambos cipales, etc.) apuntalar el desarrollo turístico
proyectos vienen a articular territorialmente municipal desde su ámbito de competencia.
a Tuxtla Gutiérrez con los sitios turísticos
tradicionales del Estado (San Cristóbal de Esto es, la zonificación ofrece la posibilidad
las Casas, Chiapa de Corzo, Comitán de de ordenar el territorio desde una perspectiva
Domínguez y Palenque) conformando un turística con el fin de que la oficina municipal
corredor y con sitios potencialmente turís- de turismo lleve a cabo una gestión enfocada
166
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SOCIEDAD
y controlada, pero también permite que otras ticos para integrar zonas de interés turístico
oficinas participen en ese paquete de gestión o estaciones denota una complejidad mayor
turística municipal de manera coordinada que debido a que no se encuentran atomizadas o
por citar un ejemplo: incluiría iluminación, agrupadas sino más bien dispersas pero en
pavimentación, limpieza, seguridad, protec- torno a una enorme vialidad primaria que
ción civil, tránsito, áreas verdes y un largo cruza toda la ciudad y que por su longitud
etcétera, de otra forma la actuación sería un llega a tener tres nombres: Bulevar Belisa-
tanto caótica. rio Domínguez, Avenida Central y Bulevar
Ángel Albino Corzo, y con éstas, dos libra-
Conclusión mientos norte y sur.
De ser el nivel municipal el supuesto líder del
desarrollo turístico local las condiciones res- Históricamente, la capital no ha logrado
ponderían a las necesidades también locales ser considerada como un destino turístico
de una manera más proporcional. El territorio y más bien se ha considerado como una
se convierte, muy al estilo de Porter, en una ciudad de paso ya que se llegaba por avión
ventaja comparativa que requiere de infor- y sólo se cruzaba la ciudad para subir a la
mación, conocimiento y organización para región turística de Los Altos. No obstante,
transformarse en una ventaja competitiva. la Asociación de Hoteles ha reportado un
80% de ocupación hotelera en este periodo
El territorio es pues un factor que diferencia a preliminar de verano (2008) cuando el año
los competidores y es la base para la construc- anterior se ubicaba en 60% y hay un creci-
ción de una identidad. Permite la oportunidad miento sostenido de visitas de 6% durante los
del trabajo coordinado y cooperativo entre dos últimos años. Entonces, parafraseando al
las diferentes competencias, es un factor que Presidente de la Asociación de Empresas de
puede facilitar u obstaculizar el desarrollo Turismo de Negocios (aetne), para llegar a
turístico del destino, por lo que es importante San Cristóbal de las Casas (Los Altos) ya no
“leerlo” e “interpretarlo” a fin de que a partir se requiere pasar por Tuxtla, debido a que el
de esto, se pueda construir una estrategia del nuevo aeropuerto Ángel Albino Corzo queda
destino para competir. en Chiapa de Corzo (punto intermedio entre
ambos), esto significa que tales porcentajes
En el caso analizado, su identificación como ya no se explican por la necesidad de pasar
ciudad capital de un Estado puede llegar por Tuxtla, sino que ha logrado integrar su
a considerarse como una debilidad ya que propio valor en el mercado nacional5.
otros territorios asociados a playa, están ya
posicionados en la mente del mercado. Es La definición estratégica registra la concen-
evidente que se ha olvidado al territorio y sus tración de la actividad turística en ciertas
componentes de tipo natural para concebirlo zonas de interés turístico pero obliga al
como destino turístico. El parque del Cañón aprovechamiento de las demás sin uso, por
del Sumidero y la Reserva del Zapotal que lo tanto, la diversificación es un camino obli-
incluye el zoo Miguel Álvarez Del Toro, gado, es decir, aumentar el valor a partir de
son partes importantes de la identificación de nuevas zonas y de nuevos productos en las
marca, son recursos ancla que han permitido zonas conocidas.
dar identidad al destino, sobre todo el Cañón
pero esto va más allá.
Su configuración a partir de la localización y 5

Entrevista con el Lic. Mario Ramos Grajales, Presidente de la
distribución de los recursos y servicios turís- Asociación de Empresas de Turismo de Negocios de Chiapas
(aetne), 2008.
167
y
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En el caso de los segmentos de mercado Claval, P. Organización regional del espacio:

señalados, es importante advertir que las regiones, naciones, grandes espacios, Madrid,
estructuras de trabajo inflexibles serán un Geografía humana económica contemporánea
problema para la evolución de la sensibilidad Akal/textos, 1987.
de los empresarios, por lo que se antoja que
Cooper, C. et ál. Tourism: principle and practice,
éstas sean más flexibles a manera de clubes London, Pitman, 1993.
de producto las que permitan un trabajo más
efectivo. Al mismo tiempo que en la medida De La Torre, O. El turismo fenómeno social,
en que se vean mas fortalecidas, será nece- México, Fondo de Cultura Económica, 1980.
sario un trabajo horizontal entre éstas. Un
buen ejemplo son los congresos y las con- Díaz, J. Geografía del turismo, Madrid, Síntesis,
venciones, actividades que rápidamente se 1999.
articulan a los grupos de trabajo de aventura,
Directorio de Servicios Turísticos de Tuxtla
cultura y natura.
Gutiérrez. Chiapas, México, 2008.
La ciudad es un tipo de destino que muestra Fernández, L. Geografía general del turismo de
una mayor complejidad de gestión que aque- masas, Madrid, Alianza, 1991.
llos dedicados fehacientemente al turismo, lo
que ha incidido en que federación y Estados Fernández, L. Historia general del turismo de
carezcan de un programa diseñado para su masas, Madrid, Alianza, 1991.
desarrollo como Pueblos Mágicos o Ciudades
Coloniales, ni tampoco mucho interés por George, P. Geografía económica, Barcelona,
España, Ariel, 1977.
proponerlo y, por lo tanto, su capacidad para
ser competitivo en esta materia se pone en G obierno de la R epública . Síntesis del pro-
entredicho y depende en mayor medida del grama nacional de turismo 1984 – 1988, México,
interés que demuestre la autoridad en el nivel Secretaría de Turismo, 1984.
local y su habilidad para incorporar recursos
humanos que respondan a tal desafío… ah y Gobierno de la República. Programa nacional
claro… ¡vivan para contarlo! de modernización del turismo 1991 – 1994, Se-
cretaría de Turismo, México, 1991.
Bibliografía
Aguilar, L. El estudio de las políticas públicas, Gobierno de la República. Seminario: “Pers-
México D.F., Editorial Miguel Ángel Porrúa, pectivas del turismo en el mundo y para Améri-
1996. ca”, conferencia dictada por Enzo Paci, Jefe del
Departamento de Estadísticas de la omt, México,
Baron, R. Tourism terminology and standard Secretaría de Turismo, 1994.
definitions, Tourist Review, 1984.
Gobierno de la República. Programa nacional
Boullón, R. Planificación del espacio turístico, de turismo 1996 – 2000, Secretaría de Turismo,
México, Editorial Trillas, 1985. México, 1996.
Cabrero, E., A. Ziccardi e I. Orihuela. Ciu- Gobierno de la República. Programa nacional

dades competitivas – ciudades cooperativas: de turismo 2001 – 2006, México, Secretaría de
conceptos clave y construcción de un índice para Turismo, 2001.
ciudades mexicanas, México, cofemer, 2003.
Gobierno del Estado de México. Atlas general
Callizo, J. Aproximación a la geografía del del Estado de México, Toluca, iigecem, 1993.
turismo, España, Editorial Síntesis, 1991.
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G obierno del E stado de M éxico . Programa Pearce, P. Tourism reserch: critique and cha-
estratégico de desarrollo turístico del Estado de llenges, London: Routledge, The fundamentals
México, México, Secretaría de Desarrollo Eco- of tourist motivation en D. Pearce y R. Butler
nómico, 2002. (eds.), 1993.
Hall, M. y S. Page. The geography of tourism and Pujadas, R. y J. Font. Ordenación y planificación
recreation, EU, Editorial Routledge, 2002. territoria, Madrid, Síntesis, 1998.
Instituto Nacional de Estadística, Geogra- Sancho, A. Introducción al turismo, España,

fía e Informática.
Estadísticas de turismo según Organización Mundial del Turismo, 1998.
el censo económico de 2004, Ciudad de México,
inegi, 2005. Secretaría de Turismo. Identificación de Po-
tencialidad Turística en Regiones o Municipios,
Jiménez, A. Turismo, estructura y desarrollo, Ciudad de México, Gobierno de México, 2000.
México, Mc Graw Hill, 1992.
Smith, S. Geografía recreativa. México, Trillas,
K rugman , P. Desarrollo, geografía y teoría 1992.
económica, Barcelona, España, Antoni Bosch,
1997. S warbrooke , J y S. H orner . Consumer be-
haviour in Tourism, Burlington Butterworth &
Law, C. Urban tourism, London, Continuum, Heinemann, 1999.
2002.
Trujillo, J. Modelo de regionalización para la
Lipietz, A. “El posfordismo y su espacio”, In- planeación del desarrollo turístico del Estado de
vestigación Económica, n.º 205, México, unam, México, México, iapem, 1997.
1993.
T rujillo, J. “Apuntes breves sobre la com-
Lozato, J. P. Geografía del turismo, Madrid, plejidad en la gestión de destinos turísticos no
Editorial Masson, 1990. prioritarios. El caso de Ixtapan de la Sal, Estado
de México”, Revista Turismo, n.º 1, septiembre
M éndez , R. Geografía económica: la lógica 2001, México.
espacial del capitalismo global, Barcelona, Ariel,
1997. Trujillo, J. “Caos y complejidad en la gestión
de regiones turísticas competitivas, el caso del
Organización Mundial del Turismo. Baróme- Estado de México, en La economía del Estado
tro omt del turismo mundial, vol. 3, n.º 1, Enero, de México en el nuevo contexto del siglo xxi”,
Madrid, omt , 2005. Toluca, México, Gobierno del Estado de México
y El Colegio Mexiquense, A.C., 2003.
Pearce, D. Desarrollo turístico, su planificación
y ubicación geográficas, México Editorial Trillas, Vera, F. et ál. Análisis territorial del turismo,
1988. Madrid, Editorial Ariel, 1997.
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The Malaysian Health Care System: A Review
Dr. David K. L. Quek, † MBBS (Mal), MRCP (UK), FRCP (London), FAMM (Mal), FACC (USA)
President-Elect, Malaysian Medical Association,
MMA House, 4th Floor, Jalan Pahang, 53000 Kuala Lumpur, MALAYSIA
Email: drquek@gmail.com
Abstract. Malaysia has a dual-tiered system of healthcare services: a government-led and funded public sector, and a thriving
private sector creating a dichotomous yet synergistic public-private model. As yet, we don’t have a unified system of universal
access to healthcare for every citizen. The public sector caters to the bulk of the population (~65%), but is served by just 45%
of all registered doctors, and even fewer specialists (25-30%). The heavily subsidised public sector is almost entirely borne by
budget allocations, with patients paying only nominal fees for access to both outpatients and hospitalisations. The private
sector on the other hand, has grown tremendously over the past 25 years. However, this two-tiered system with quite different
goals may be unsustainable in the longer term. There appears to be ambivalence as to whether to adopt a market-driven
healthcare system or to resort to single-payer National Health Service model where universal access to health care is
guaranteed. Closer partnership, collaboration and sharing of services and personnel may be the way forward. An integrated
system of medical information and expertise access may lead to greater cohesion and efficiency of healthcare services. More
cross-purchases of services should be facilitated where there are shortages. Information exchange can be made efficient
through the use of a unified system of health information portability mechanisms, while safeguarding and ensuring patient
confidentiality and privacy. Full integration of private-public healthcare sectors appears unlikely, but better partnership and
collaboration of services can be aspired to, where the best of each system can be harnessed for the healthcare betterment of
our citizens. We should aim for a more cost-effective system. A single or easily portable system of reimbursement should also
be considered.
Keywords: Malaysian Healthcare System, Healthcare Services Sharing, Public-Private Integration,

Corporatisation, Single Payer Initiative,
1. INTRODUCTION expected that the government guarantees a comprehensive

provider function at greatly subsidised rates or at token
sums—that taxes and other contributions should provide
Malaysia currently has a dichotomous public-private
adequately for most if not all its citizens, with the
system of health care services. From what was largely a
government taking up the shortfalls for unexpected costs
government-led and funded public service enterprise since
due to catastrophic or chronic ailments.
the time of independence, our healthcare service has over
On the other hand however, there appears to be a
the decades (since the 1980s), transformed into a buoyant
covert if unannounced shift in thinking that eventual
dual-tiered parallel system, with a sizable and thriving
corporatization of the public sector facilities and services
private sector. But, we have not approached a unified
should be allowed to unfold, where market forces dictates
system that is a declared national healthcare policy of
the price, extent and quality of the services offered. The
offering universal access to every citizen.
ultimate aim is that the government should play only a
There appears to be strong ambivalence as to whether
regulatory, monitoring and facilitator role to safeguard the
to fully tap into the free market system for healthcare
welfare of its citizens, while at the same time encouraging
provision and funding or to resort to a single payer publicly
growth of the less-bureaucratic, better-run and more
controlled system where universal healthcare access is
competitive private sector.2
assured. Some mix of these two disparate systems seems to
Thus, despite public dissent, over the past 20 years or
be in play at the current moment.
so, there have been sporadic if partially successful attempts
On the one hand, there has always been an
to privatize or corporatize various components of the public
overarching concern for the common citizen, especially the
health sector, e.g. the government’s drug procurement and
poorer segment of Malaysian society, where there is an
distribution centre (to UEM’s subsidiary Southern Task,
implied social contract and acknowledged ‘right’. There is
later renamed as Remedi Pharmaceuticals, then as
a deep-seated commitment of the Malaysian government to
Pharmaniaga); and the divestment of its support services
eradicate poverty and develop human capital.1 It is
________________________________________
† : Corresponding Author
(cleaning, linen, laundry, clinical waste management, reality is that in the rural and more mountainous or remote
biomedical engineering maintenance) to Pantai Medivest, (less accessible river-bound or jungle/forest) regions, the
Radicare and Faber Mediverse.3 deployment of facilities as well as manpower is uneven and
Furthermore, there has been full and implicit there remains great disparity and inequitable distribution of
encouragement of the private sector to flourish with health care personnel, especially doctors.
differing modes of financing and capital injection. Nevertheless, Malaysia boasts of having a healthcare
Government-linked corporations (GLCs) such as the KPJ facility within every 5 km radius, which, renders especially
(Kumpulan Pelaburan Johor) and Sime Darby groups and for the rural folk, relatively easy access to these clinics
latterly the Ministry of Finance investment arm, Khazanah, whenever the need arises. However, not all are manned
have been pushed to become major players in modernizing with adequately trained staff—most are under the charge of
and extending the reach of the private health care services a jururawat desa (or rural health nurse), with sporadic
in Malaysia and beyond. visits by a medical assistant or a doctor, ranging from
A UNDP Human Development Report (2006)4 paper weekly to monthly schedules.3
determined that in 2005, the Malaysian government spent Deployment of medical personnel to such rural sites
just 2.2% of its gross domestic product as its contribution remains very unpopular with the better-trained and
to the public sector healthcare funding, while some 1.6% of educated staff, that views the remoteness of such postings,
our health care expenditure came from the private sector. unrewarding. There should be greater monetary and even
The World Health Report 2006 stated that the Malaysian promotional/seniority incentives such as hardship
government spends some 6.9% of its total expenditure, on allowances or tax breaks, (such have been offered to
health care.5 teachers) promised preferential selection for training and
Yet despite such a low level of national investment on development protocols and career development, to attract
healthcare (just 3.8% of GDP), we have achieved quite more doctors and personnel to such areas.9
laudable health outcomes results. Our life expectancy at The MMA (Malaysian Medical Association), through
birth has risen from 55.8 years and 58.2 years for men and its Section Concerning House Officers, Medical Officers
women, respectively in 1957, to 71.8 and 76.3 years, and Specialists (SCHOMOS) has been arguing for more
respectively for 2006.6 structured deployment planning, such that even with these
The tax-funded public healthcare sector caters for the incentives, there should be detailed contractual
bulk of the population (~65%), but is served by just about undertakings that these personnel would be re-deployed to
45% of all registered doctors, and even fewer specialists bigger centres of their choice, (for clearer career
((25-30%).7 The cost of these services is almost entirely development programmes or pathway) once they have
borne by budget allocations from the central treasury, with completed their ‘hardship’ service in the interior.10
patients paying paltry nominal sums for access both to Failure to appreciate these doctors in particular, have
outpatient clinics or admissions to hospitals. These are led to many younger doctors complaining that the
offered at unrealistically cheap but clearly cost-effective if government is not concerned about their welfare and their
heavily subsidised rates. However, this is questionably future. Thus after such remote postings which they view
sustainable in the longer term, if we allow market forces to with some discomfort, many are ready to throw in the towel
prevail.8 and leave once their service contracts in compulsory
service is over. By showing more concern and offering
2. PUBLIC HEALTHCARE SECTOR more incentives, we may be able to hold on to more of our
public service staff, rather than losing them immediately
after these postings.
2.1 Rural Health Service
This is one of the largest sectors in the services 2.2 Tertiary Healthcare Services
department whereby the government provides almost all Notwithstanding these problems, the past 5 decades
the infrastructure and the human resources. Doctors, nurses, have seen the Malaysian healthcare structure remaining
pharmacists, dentists and other allied healthcare workers quite well integrated. The rural health service provides
are employed and deployed by the Minister of Health to effective primary healthcare coverage, which is connected
various healthcare centres: from rural clinics to district to large hospitals in each state and the capital city through a
hospitals to tertiary specialist hospitals throughout the unique system of referral. For medical and surgical
country. emergencies, these are adequately provided for, with a
The distribution of these resources to various parts of government-managed fleet of ambulances, including airlift
the nation is arguably based on the size, need and capacities for more interior remote sites.
population of the various districts and states. However, the Tertiary Care Hospitals have recently made its
presence felt in the Malaysian public healthcare sector, and clinics. This comes at a premium, with the government
beginning in the 1980s, with the expansion and reimbursing some RM 31.3 to 144.5 million per year, from
privatisation of the University of Malaya Specialist Centre 1993 through 2004, respectively, for these services.12
(Petaling Jaya), and the building of the Universiti However, because of higher wages and better work
Kebangsaan Malaysia Medical Centre (Bandar Tun Razak, conditions/benefits, specialists at the IJN appear to have
Kuala Lumpur), and the renowned National Heart Institute less rapid turnover (3% annually), and thus enjoy greater
(Institut Jantung Negara, IJN), along Jalan Tun Razak. consistency and continuity of services.13 This also makes
These have provided excellent specialist care for several continuing manpower and specialist training possible, too,
highly specialized medical disciplines such as cardiology, to enable it to maintain its reputation as a centre of
cardiothoracic surgery, nephrology, cancer care, neurology excellence. But obviously this comes at a higher cost—
and some infectious diseases. These however cater perhaps this expenditure is more realistic in terms of
predominantly to our Malaysian civil servants, pensioners healthcare economics. This successful model has now made
and their dependents (including many of our VVIPs), but it an object for takeover by a GLC, Sime Darby Bhd.2
due to facility constraints, long waiting times are now the So this model of public-private partnership appears to
norm. be successful and beneficial and attempts have been made
In the past decade or so, several other public hospitals to have it emulated. However, there have been serious
with tertiary specialist facilities have been developed in misgivings about this concept of healthcare reform because
most major cities in the country, in Penang, Melaka, Johor of its wider socio-economic implications; the Coalition
Bahru, Kuching, Serdang, Selayang, Ampang, Sungai Against Health Care Privatisation has been most vocal
Buluh, Kota Bharu, Kuantan and Kota Kinabalu. against any development toward the passing of any extra
Although these have added to the capacity to cater to cost to the public.14,15, 16
the growing demands for tertiary specialist medical care,
the problems of understaffing and staff poaching continue. 2.4 Full Paying Patient
We seem to be unable to adequately provide enough In 2005, another patient fee-paying system was
manpower and skills development to sustain better than introduced i.e. Full Paying Patient (FPP) scheme, where
average care at these centres. part of the fees were used for physicians’ reimbursement to
Poor planning and maintenance has led to supplement their income/allowance. Thus, this scheme
infrastructure failures such as has been recently highlighted provides those who are willing to pay more, quicker access
in KK’s Queen Elizabeth General Hospital, where an entire and shorter waiting times for elective surgeries and other
wing has been condemned, shutting down essential services therapies. While this is one mechanism to recover some
such as intensive care and surgical operating units. This ad costs for the healthcare system, it is only a minor fraction
hoc approach has in the past few years, forced the heavy- of what the system truly costs. There has been great
handed expensive purchase of the former Sabah Medical unhappiness that this will only encourage queue jumping
Centre to be converted to the Likas’ Maternity Hospital. from those who are well-to-do, and therefore penalise the
Now, there are plans to purchase of the newer just poor and less-financially endowed, and consumer pressure
completed 171-bed SMC at Luyang, to replace the groups have called for their abandonment.15,16
condemned section of the main hospital in KK for the Still, the sporadic but unending attrition of losing
public!11 specialist to the private sector has long been the problem of
the public healthcare sector, and staff and expertise
2.3 Purchasing Private/Corporate Sector Expertise retention is a perennial problem, which has yet to be
Migration of trained staff especially medical resolved or tackled sensibly and judiciously. Some 300
specialists to the private sector continues to bug the system, doctors and 50 specialists leave the public sector
which then causes the expert service to stall, because the annually.7,15, 16
requisite expertise had been lost. In critically short-staffed
services such as neurosurgery, the public sector has to 3. PRIVATE HEALTHCARE SECTOR
occasionally buy the services of private neurosurgeons to
attend to their patients, especially during emergencies. The private sector on the other hand, has always
Currently, in Kota Kinabalu, Sabah, cardiology and attracted both general and family physicians who had opted
cardiac surgical services are purchased with weekly out by opening individual clinics or by joining more
rotations of specialists from the corporatized IJN, at hefty established group practices; while specialists join the
prices. Also being a corporatized medical centre, the IJN better-paying more personalised care practices in urban
has been billing the government to take care of its public private medical centres.
servants, pensioners and referrals from its MOH hospitals Private healthcare expansion began in earnest during
the Mahathir premiership in the 1980s, where private complaints of there being too little work and income for a
hospital beds increased nearly 10-fold (from 1171 to 10405 sizable number of clinics in larger urban centres.
between 1980 to 2003), and the private sector’s share of This underutilisation of many urban clinics is wasteful,
hospital beds increased from 3.9-5.8% to 23.4-26.7%.17,18 and could perhaps be one mechanism to help out the
On average over the years depending on the economic overcrowded public sector outpatient clinics.
circumstances, this private sector constitutes around 55% of Redistributing public sector patients who sometimes
all registered doctors, who look after some 25% of the have to wait several hours, to a panel of urban or suburban
population, most on a self-paying fee-for-service private clinics nearer their home, can be a real option for
arrangement, and increasingly through some third party better patient care and attention. A payment mechanism can
paying (e.g. health insurance) mechanisms.19 be worked out to address this purchasing of services, which
will generate a win-win scenario for all concerned.
3.1 General Practitioner Clinics However, logistics and bureaucratic red tape and
Importantly nationwide, private clinics cater to most of registration exercises have made this approach of sharing of
the fee-for-service self-paying public, which include: services impossible to carry out at the present moment.
private sector employees through panel doctor
contract/insurance arrangement; thus relieving the already 3.2 Private Medical Centres & Hospitals
overloaded Ministry of Health’s public clinics. In general, For more serious illness and injuries, hospital care
the choice for such private clinic consultations and through well-equipped emergency departments (EDs) is
treatment is due to easier access, simpler registration and now the expected practice. These medical emergencies are
appointment, and shorter waiting times. There is also previously offered only at larger public sector general or
possibly greater continuity of care with better personal district hospitals. These days however, most private
attention from one’s own family physician or general medical centres boast of state-of-the-art emergency care at
practitioner—i.e. superior personal touches and closer more luxurious settings and costs. Personal and more
encounters are the added values in private clinic visits, attentive specialist care are now demanded and offered at
despite greater fees for consultation and medicines, which many of these private EDs, where many orthopaedic
are frequently bundled together. surgeons and neurosurgeons now practice privately.
Some crossover of services however exists. Depending However, private medical centres are not simply for
on patients’ demands or choices, these generally emergency and/or trauma care. Most are now developed as
complement each other for the greater benefit of the competitive consumer-driven full-fledged healthcare
patients concerned. Dissatisfaction or uncertainty with facilities to cater for the more discerning public who would
services from either sector has on many occasions led to pay more to obtain perhaps better (perceptibly), more
patients seeking second opinions and/or therapies from the personalised, faster (less or no waiting time) and possibly
opposite sector, and vice-versa. Although there have been more comfortable and/or luxurious medical care.
counter-accusations of poor and/or unprofessional care, or Health insurance or maintenance organisations have
mismanagement issues, each sector does cater to the also bought into this system to offer more premium benefits
differing demands and expectations of the public. In to their clients, particularly those of the corporate world,
economic terms there is some duplication of services, and where risk-averse and delay-averse market-driven results
possibly over-utilisation and wastage of resources, but are expected. Executives and staff are offered contracted
patient choice is preserved as a right. quicker and direct access to possibly more expert
Thus, urban GP clinics provide easy care for common specialised care, with faster turnaround times and earlier
ailments and simple trauma/injury management, at very return to work expectations.
reasonable costs, especially for areas outside the main Of late, the entry of different national and transnational
capital city—Kuala Lumpur-Klang Valley, and capital flow into the private healthcare system has further
complement the public sector in helping alleviate the developed the service capacities of this sector. Healthcare
patient crush on their severely overloaded outpatient industry players such as the state-owned KPJ group (Johor
clinics. State Development Board), Parkway Holdings (Singapore-
However, of late, with the mushrooming of many GP based, American-invested), and latterly Khazanah National
clinics in close proximity to one another, competition for Berhad (a Ministry of Finance Malaysian GLC) have
patients has become keener, and many clinics are simply greatly influenced the direction and expansion of these
eking out a living, struggling to keep afloat. Some have private services, while at the same time inflating the cost of
resorted to creative complementary alternative medicine or private health care services by offering more sophisticated
aesthetic/beauty health care shifts to supplement or even amenities and newer technology-driven expert care.
revamp their practices. Still the MMA continues to receive Together with the Association of Private Hospitals
(APHM), there has been a move to expand the services feel that it has to budget for health or medical care, and this
toward attracting foreign medical tourists, which is targeted is reflected in many of our pensioners complaining of
to grow to 30% in 2008, and nearly 1 billion ringgit as of costly unplanned-for medical care. This is also reflected in
2005.17,20 our government’s paltry allocation of importance toward
healthcare spending in our national budget.
3.3 Private Healthcare Facilities and Services There has been flip-flopping ambiguity from the
Act/Regulations MOH, as whether to allow market forces to dictate
Currently, the Private Health Care Facilities and healthcare costs, but overall, there has been no public will
Services Act (PHCFSA)21 and Regulations (PHCFSR)22 to enact what could be unpopular.2 Suggestions to end free
have prodded the private sector to transform for the better, treatment at public hospitals and highlighting that rising
purportedly for safeguarding the safety of patients. But healthcare cost is too heavy a burden for the government,
forced administrative micro-management, stiff fines and had not been too well-received by the citizens.26,27
restrictions have angered many private medical This strategy seemed to have disappeared following
practitioners.23 Many are unhappy with the highhanded the recent electoral setbacks of the incumbent government.
tone and manner of the regulations, inspections and In a recent interview for internet media Malaysiakini, the
implementation, which have been construed as trying to new health minister Dato’ Liow admitted that the public
criminalise doctors.24 At least one physician had been jailed hospital services are heavily subsidised by the government:
for technical non-registration, and a few have been fined RM12.9 billion or 98% of the entire budget, while patients
heavily because of technical breaches of these new paid only 2%! But, Dato’ Liow reiterated his views that
regulations. Some clinics have been inspected with disdain government subsidies for patients utilising public
and rudeness.25 healthcare facilities would continue (RM1 for outpatients
clinic visits, RM5 for specialist clinic visits, and maximum
4. HEALTHCARE SPENDING & ACCESS RM50 for third-class ward hospitalisation costs), and
ISSUES2 pledged the populist view that such a quantum would
continue, despite this being unchanged since the 1970s!28
Healthcare spending is still suboptimum in Malaysia, There is great expectation that the government of the
the government spending just 6.9% of its total expenditure day should not jeopardise this by instituting any
on health care services (i.e. 2.2% of the GDP). In 2003, mechanism, which can change this status quo—hence there
Malaysians spend just USD 374 in total (Purchasing Power is relatively very little public or open debate on these
Parity) per person per year on healthcare expenditure, with issues.
the government contributing USD 218.5
This compares with USD 1156 for Singapore, USD 4.2 Access Failure & Medical Assistance Fund
260 for Thailand, USD 2244 for Japan, USD 1074 for But concerns as to failures in access continue to pop
South Korea, USD 2874 for Australia, USD 2389 for the up sporadically in the mass media.29 Poorer patients have
United Kingdom and USD 5711 for the United States of resorted to the mass media appealing for financial
America.5 As can be seen, although we pride ourselves as assistance to help defray medical costs, especially for some
becoming more developed than many other nations around costly or tertiary specialist care—e.g. in one week alone in
us, we have yet to emulate those with better and arguably October 2007, there were at least 3 appeals for help.30,31,32
more advanced healthcare services. Thus, this has prompted some stopgap measures such
Out-of-pocket spending as a percentage of private as setting up a Medical Assistance Fund (MAF) of RM 25
expenditure on health takes up about 75% of the total costs, million, by the Ministry of Health. However, this fund can
with some form of private prepaid plans (e.g. insurance) only be utilised at public or quasi-governmental healthcare
contributing 11.9 to 14.2% over the years from 1999 to facilities, and appeals have to be vetted stringently to
2003. Social security expenditure as a percentage of ensure need and priority, which had drawn sharp criticisms
general government spending on health hovers around of this being too bureaucratic and slow, even unfair.33 Yet
0.8% only, mostly from requested withdrawals from the another Emergency Fund (D’tik, an acronym for Dana
specific allowable account within the Employee Providence Talian Insan Kritikal Yayasan Kebajikan Negara) has been
Fund savings (EPF).5 set up. This fund of RM5 million, provides critically ill
patients access to treatment within 24 to 72 hours, but is
4.1 Public Aversion to Paying More currently only available at Kuala Lumpur Hospital as its
Because of the ingrained norm of having to pay so pilot medical facility to kick-start the programme.8,26
little or not at all in public hospitals and clinics (which are Clearly, such setbacks and failure of access implied
almost totally subsidised), the Malaysian public does not that the public healthcare sector needed a revamp to
enhance its capacities. Providing such services at huge or because this would undermine the community-rated
near-total subsidy appears untenable and unsustainable, and concept of the SIKK.15
still left gaps, which had to be filled by creation of some Also considering the fact that only 1.2 million
extra mechanism to expedite access (predominantly by Malaysians pay any taxes, collection of such a mandatory
offering extraneous funds and/or donations). Thus, this ‘health tax’ would be a struggle and challenge. It has been
explains in some way the government’s overt calculated that based on an estimated 4.63 million families
encouragement for the private sector to flourish and in Malaysia (25 million population, average family size
develop, in order to cater to the more willing, discerning, 5.4), this sharing of the burden (RM13 billion as of 2003)
paying citizens, and leaving the public sector to look after would encumber each family household around RM2,808
the less endowed. per year or RM235 per month.15 Clearly, many would not
be able to pay, because more than 58% of Malaysians earn
4.3 Corporatisation / Privatisation Controversy less than RM2000 per month, per family; and paying more
Earlier hints that the public sector health services than 10% of the salary on healthcare premiums would be
should be restructured into a government-owned non-profit too high! Besides, the government would still have to
entity, made economic sense in its first offering. This cough up possibly billions of ringgit to sustain the
‘corporatisation’ model implied converting most of the shortfalls and other preventive health care measures. This
larger public hospitals into operating as quasi-private scheme has been criticised and rejected by the Coalition
entities. This would avoid creating a two-tier system, and Against Healthcare Privatisation, as putting the onus of
would facilitate disbursement of funds when a single payer premium paying on the lower- and middle-income private
health insurance scheme was introduced.34 At least that is sector employees and citizens.15, 16
what had been planned. So, for the foreseeable future into the next 4-5 years at
However, many are still quite in the dark as to when or least, it is very unlikely that there will be any attempts to
if these would be enacted, and serious doubts and anxiety resurrect such a tendentious issue as a national health
have been raised. This ambivalence is now quite insurance mechanism. Our current system which has been
understandable because earlier attempts to corporatize these described by Chee H. L.19 as segmented, polarising and
public hospitals and facilities were scuttled after news leaks eventually untenable, is therefore likely to be the status quo
prompted severe backlashes from some consumer and for the time being, and making this work better for our
pressure groups and opposition politicians.15,16,17,35 citizens should be the way forward, at least for the interim.
4.4 Skim Insurans Kesihatan Kebangsaan (SIKK) 5. PARTNERSHIP: COLLABORATION VS.

This brings us to the question of having a single payer INTEGRATION OF SERVICES
system, which has been earlier mooted as the preferred The health minister Dato’ Liow has said that
system for encouraging or implementing universal access “Government and private sectors should work together.
to health for all.7 Because the doctors that we train are for the nation,
The much-awaited National Healthcare Financing irrespective of (whether they work for the) government or
Scheme, now rebranded as the National Health Insurance private. Doctors are serving the people. In Malaysia, 41
Scheme (Skim Insurans Kesihatan Kebangsaan, or SIKK), percent of our population go to private hospitals and
appears to be a political deadweight. Following the clinics and 59 percent go to public health institutions.
formation of the new government, this has once again been Therefore, the private sector is playing an important role to
deferred for fears of public disavowal and protests. ease the burden and also the workload in government
Perhaps, there are just too many variables inherent in the hospitals.”26
Malaysian system, which renders such a scheme too It is heartening that the current health minister is
politically incorrect, too inexpedient to implement.36,37,38 enlightened and positive about this private sector
Interestingly, when it was raised earlier, the MOH contribution. Therefore, this is an opportune time to ensure
tried to allay public fears by announcing that civil servants that the mechanisms for better partnership between public
(which number 1.2 million people, including military and and private healthcare sectors be forged to facilitate closer
police personnel) and their dependants, 200,000 disabled and more meaningful collaboration.
persons, 435,000 pensioners, 250,000 hardcore poor and an
unknown number of unemployed individuals, would be 5.1 Is More Privatisation the Way Forward?
exempt from the SIKK. What is not clear is whether the One way to further this is by privatising more of the
government would pay the premiums for these people or public healthcare facilities, but this is fraught with
that they will continue under the present system of uncertainties, although such exercises might make
healthcare. The latter option would defeat the purpose, administrative and economic sense and offer greater
balance sheet accountability. One inevitable problem will
be the almost inescapable escalation of the cost of services 5.3 Toward a More Efficient System
to ‘real’ terms, with progressively less subsidies. The poor In his book on ‘Good and Bad Power’, Geoff Mulgan
unfortunately, could be left out of the loop with uncertain (a British political scientist) discusses that while most
safety nets to cushion their plight. governments provide the structure, it is the more
The recent suggestion by Sime Darby Healthcare to comprehensive, well thought-of infrastructure provisions
acquire a stake in IJN (now a corporatized entity 99.99% that lead to transformative services—that “much of the
owned by the Ministry of Finance) has already brought a recent thinking about service… has adopted models from
swift and negative dissident response from a newspaper the private sector… largely drawn on industrial… models
editor.39 Gunasegaram P. has stated his dismay that “for favouring speed, standardization, flow and efficiency.” He
large sections of the Malaysian public, the very idea of went on to describe: “(t)hese services are human,
privatising IJN is shocking because charges will rise to immediate, personalized and rich in communication,
astronomical levels.” He questioned whether there is any anticipating need rather than just meeting it and ‘going the
net benefit to the public or government, and that if there extra step.’ In the case of therapeutic services the servant’s
were any reasonable doubt, this privatisation should not be job is to change the master, to make him healthier, fitter,
undertaken. He alluded to past experiences that previous and happier.”47
privatisation exercise of other services had not brought In a paper on the Singapore model of public-private
down costs for the public or government. He concluded that partnership, Dr MK Lim identifies 3 key questions which
“(t)here are some things that should not be up for sale at should be answered: (a) how to raise revenues to pay for
any price. Affordable health care for the general public is health care; (b) how to pool risks and resources; and (c) how
one of them.”40 to organise and deliver health care in the most efficient and
In another article in The Edge Daily, it was reported cost-effective manner.
that the health minister and his ministry is not too happy It is clear that there is no foolproof system anywhere on
with this divestment, either.41 However, the Prime Minster the globe. Some of the more successful models involve a mix
and his deputy appears to have already endorsed the plan, of safety nets with monitored privatization/corporatization of
just cautioning the GLC against forgetting its social services and allowing ‘coopetition’ (competition and
responsibility to the poor, and they seem to imply that this cooperation) to thrive.48 He further argues that “even in
exercise would allow the private healthcare sector to grow Europe, the sustainability of health care systems founded on
even more.42 egalitarian welfarism is increasingly being challenged as
Latest reports suggest that this takeover bid by Sime growth in demand outstrips supply. The debate is no longer
Darby has been deferred indefinitely due to public outcry, about ‘who should pay?’ or ‘who should provide?’ but ‘who
and possible political fallout.43,44 The former Health can do the job more efficiently?’”
Minister Datuk Seri Chua Soi Lek has also condemned this
sell-off bid, which he said has put paid the good will of the 5.4 Fine-Tuning Private-Public Partnership
government, despite it costing the government just a Thus, as our two-tiered system is now so well
‘paltry’ RM 200 million a year (about 2.5% of the national entrenched, we should find ways and means to ensure that
health budget) to run the IJN.45 Thus, there is this incessant it works better and more efficiently, where we can
tussle for public need/good versus free-trade market-driven synergise our efforts to provide good quality, safe, and
practices from administrative or financial/budgetary cost-effective healthcare for our patients. However, this
realities points of view. must not only be affordable but also be self-funding and
self-sufficient.
5.2 ‘Rentier Capital’ Divestment Concerns Where too much bureaucracy bogs down the better
There are of course, also worries about ‘rentier capital’ productivity and efficiency, these should be dismantled and
economics where state assets are divested to politically restructured in ways that encourage best practices, and
well-connected private entities through a system of political which empowers and benefits the patient ultimately.
patronage, perpetuating mutual dependence between the Practice issues such as difficulty in cross-referring
business elite and the political rulers, i.e. the ‘crony patients between private and public sectors should be
capitalist’ model that supervenes the true nature of this eliminated; data and medical information portability and
form of take-over. Most economists believe that this form sharing should be facilitated and unified. Where there is
of rentier capitalist model unfairly enriches these business excess of amenities on either side, these should be shared
elites at the expense of costlier services and goods to the with crossovers of public to private sector and vice-versa.
public at large, and is therefore, wasteful and Conversely, more cross-purchases of services should be
counterintuitive toward better productivity.46 facilitated where there are shortages. Arbitrary turf
protectionist methods to deny either patient or physician
access to information or services of either sector should be 2008.
removed. <http://www.themalaysianinsider.com/index.php/malaysia/
Information exchange can be made more efficient 14449-pm-wants-sime-darby-to-guarantee-treatment-for-
through the use of a unified system of health information poor-if-it-takes-over-ijn> (Accessed 18 Dec 2008.)
portability mechanisms, e.g. MyKad or some other central
access information systems, while safeguarding and 3
Gomez E.T. & Jomo K.S. (1999) Malaysia’s political
ensuring patient confidentiality and privacy. economy: politics, patronage and profits. Cambridge.
Full integration of private-public healthcare sectors Cambridge University Press.
appears unlikely, but better partnership and collaboration of
4
services can be aspired to, where the best of each system UNDP Human Development Report 2006. The Human
can be harnessed for the healthcare betterment of our Development Index ranks Malaysia 61st, with a literacy
citizens. We should aim for a more cost-effective system, rate of 88.7%, Education index of 0.84, life expectancy
although not necessarily a lower cost one. A single or index 0.81 and PPP GDP of USD 10,276. Malaysia spent
easily portable system of reimbursement should also be some 8% of the GDP on education with the government
considered. spending some 28% of the total budget on education alone
While corporatisation/privatisation is still much feared, with 36.5% for tertiary education.
as a model of divesting central control of unavoidable http://hdr.undp.org/hdr2006/pdfs/report/HDR06-
rising costs and developmental constraints, this might be complet.pdf. Pgs. 302, 320. Accessed 21 October 2008.
the way to go, if the model for market-driven healthcare is
adopted. This is the model practiced by Singapore, with its 5
The World Health Report 2006: Working together for
well-tried and tested schemes that can be tweaked to health. WHO, Geneva.
respond to the many diverse facets of healthcare
peculiarities.43 Or conversely, a single-payer (and/or single 6
Merican M. I. Medicine and Healthcare in 2020. Berita
insurance) National Health Service mechanism could be Academi, 2007, Vol 16;3, Pg.2.
introduced, learning from the examples of say, Taiwan,
Canada or the UK.48, 49 7
Malaysian Medical Association, MMA. Health for All:
Whatever the decision, the government must make Reforming Health Care in Malaysia. Academe Art &
greater efforts to engage and explain to the public the Printing Services, Selangor, 1999
policy directions that it wants the country to advance with 8
regards healthcare services. This is especially urgent Quek D. K. L. Equitable Access to Health Care for All: Is
because by 2010, when trade and services liberalisation is this still a Pipe Dream for Malaysians? A Medical
set to take place in ASEAN (Association of South East Professional’s Perspective. Paper presented at Suhakam’s
Asian Nations), with the roll-out of the AFTA/WTO “Human Rights & Access to Equitable Healthcare”
(ASEAN Free Trade Area/World Trade Organisation) Dialogue, Kota Kinabalu, Sabah, 08 January 2008
agreements, there will be other considerations of foreign 9
participation and entry into this economically important Mastura Ismail. The New Team for Nationals SCHOMOS
sector. 2008/2009. MMA News, 2008 (June), Vol. 38 (5):pg 13-14.
10
Mastura Ismail. Budget 2009: Increment of Specialist
Allowance. MMA News, 2008 (October), Vol. 38 (9):pg14.
ACKNOWLEDGMENT
Thanks to the MMA secretariat for support in obtaining 11
Joe Fernandez. Politicians ticked off over KK hospital
some references and research data.
woes. <http://www.malaysiakini.com/news/103275>
(accessed 28.04.09)
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Teoh S. Najib: Sime Darby must commit to poor in Kingdom (1984). He is currently fellow of the Royal
takeover of IJN. The Malaysian Insider, 18 Dec 2008. College of Physicians of London, the Academy of
<http://www.themalaysianinsider.com/index.php/business/1 Medicine of Malaysia, the National Heart Association of
4417-najib-sime-darby-must-commit-to-poor-in-takeover- Malaysia, the ASEAN College of Cardiology, the Asian-
of-ijn> (Accessed 18.12.2008) Pacific College of Cardiology, The American College of
Chest Physicians and the American College of Cardiology.
43
Cabinet hits pause button on IJN Sale. Malaysiakini, 19 He is actively engaged in teaching and lecturing, earlier at
December 2008. http://www.malaysiakini.com/news/95152 the Universiti Kebangsaan Malaysia (1985-1991), and now
(Accessed 19 December 2008) lectures on specialist topics in Cardiovascular Medicine for
the National Heart Association of Malaysia, ASEAN and
44
Choo C.M. & Chong D. Cabinet all but kills Sime Asia-Pacific Colleges of Cardiology. He has published
Darby’s bid for IJN. The Malaysian Insider, 19 December more than 40 medical and cardiology papers in national and
2008. international journals, and lectured more than 200
http://www.themalaysianinsider.com/index.php/malaysia/14 medically-related talks.
503-cabinet-all-but-kills-sime-darbys-bid-for-ijn (Accessed He has been involved in medical professional issues
19 December 2008) for many years, being editor-in-chief of the MMA News
(Berita MMA) from 1996 to 2007, and written more than
45
Chua S. L. IJN Dollars and Cents. 100 editorials/commentary articles on medical professional
<http://drchua9.blogspot.com/2008/12/ijn-dollars-and- issues, medico-legal issues, medical ethics and education.
cents.html> (Accessed 30 December 2008.) He has been an invited participant in several Ministry of
Health programmes such as National Health Policy
46
Jomo K.S. and Gomez E.T. (2000) The Malaysian Planning, 9th Malaysia Plan mid-term review, National Use
development dilemma. In M.H. Khan, & K.S. Jomo (Eds.), of Medicines Committee, National Seminar on Health
Rents, rent-seeking and economic development: theory and Economics & Financing. He is also a 2-term elected
evidence in Asia. Cambridge; Cambridge University Press. member of the Malaysian Medical Council (2004-2010), a
regulatory/disciplinary body of the Ministry of Health. He
47
Geoff Mulgan. Civic Commitment (chapter 12). In Good recently attended an INSEAD executive programme on
and Bad Power: The ideals and betrayals of government. leadership development in Fontainebleau, France. His
(2006), London, Penguin Books (pg 226-251). email address is <drquek@gmail.com>
48
Lim MK. Transforming Singapore health care: public-
private partnership. Ann Acad Med Singapore 2005;
34:461-7
48
Susanne Grosse-‐Tebbe and Josep Figueras. (eds.)
Snapshots of health systems in 16 countries. WHO, 2004. (accessible from the internet:
<http://www.euro.who.int/document/e85400.pdf> http://cpds.fep.um.edu.my/events/2009/workshop/290
(Accessed 15 December 2008.) 42009/PPT%20&%20full%20paper/session%203/The
49
%20Malaysian%20Health%20Care%20System1-
Physicians for a National Health Program. International presentation-dr%20david%20quek.pdf)
Health systems. PNHP, 2008.
<http://www.pnhp.org/facts/international_health_systems.p
[This paper was presented at the Intensive
hp?> (Accessed 15 December 2008.)
Workshop on Health Systems in Transition (April
29 & 30, 2009) Organised by the Women's
AUTHOR BIOGRAPHY Development Research Centre (KANITA) & the FEA
of University of Malaya at Conference Room, Level 3,
Dr David KL Quek is President-Elect of the Malaysian Postgraduate Building, Faculty of Economics and
Medical Association (MMA) Kuala Lumpur, Malaysia. He Administration, University of Malaya, Kuala Lumpur.]
received his medical degree (MBBS) from the University
RESEARCH ARTICLE Adv. Sci. Lett. 23(8), 7861-7864, 2017
Copyright © 2017 American Scientific Publishers Advanced Science Letters Vol. 23 (8)
All rights reserved
Printed in the United States of America
Medical Tourism: Why Malaysia is a

Preferred Destination?
Suseela Devi Chandran1 Ahmad Shah Pakeer Mohamed, Azizan Zainuddin, Fadilah Puteh & Nur Alia Azmi
1
Faculty of Administrative Science & Policy Studies, University Teknologi MARA (UiTM), Shah Alam 40450 Malaysia
Healthcare in Malaysia has undergone major transformations. Compared to the pre-colonial days where medical care was
confined to traditional remedies, medical tourism now has emerged as one of the key contributors to the nation’s economic
growth. In fact, Malaysia has developed as one of the Asia’s most recognised developing countries in medical tourism.
Healthcare in Malaysia is under the purview of the Ministry of Health (MOH). However, to boost medical tourism MOH works
closely with the Ministry of Tourism and Culture (MOTAC) to provide an efficient system of health care encompassing of both
government and private healthcare institutions. In fact, Malaysia has emerged as one of the leading choices for foreign patients
seeking healthcare treatment abroad. The objective of this paper is to analyse the contributing factors for the rise in medical
tourism in Malaysia. First, this paper discusses briefly the importance of tourism industry as one of the contributors to the
national economy. Second, this paper analyses the importance and the popularity of medical healthcare and the contributing
factors that have placed Malaysia as one of the preferred medical healthcare destinations in the region.
Keywords: Medical Tourism, Healthcare.

The objective of this paper is to analyse the
contributing factors for the rise in medical tourism in
1. INTRODUCTION Malaysia. First, this paper discusses briefly the importance
of tourism industry as one of the contributors to the
The year 2016 was a successful year for national economy. Second, this paper discusses the
Malaysia’s medical tourism. The Malaysia Healthcare significance and popularity of medical healthcare and
Travel Council (MHTC) – an agency under the Ministry of provides an explanation on the contributing factors that
Health (MOH), Malaysia received numerous awards and have placed Malaysia as one of the preferred medical
global recognition from International Medical Travel healthcare destinations in the region.
Journal. Among the awards won by MHTC were ‘Health
& Medical Tourism: Destination of the Year’, International 2. MALAYSIA TOURISM: AN OVERVIEW
Hospital of the Year, ‘International Cosmetic Surgery
Clinic of the Year, ‘International Dental Clinic of the Year’, The growth and development of tourism industry is
‘International Fertility of the Year’, and ‘Best Marketing generally regarded to move in tandem with social and
Initiative of the Year’14. This brings to the main question of economic development. The increase in the general wealth
this paper, why Malaysia is a preferred destination for of the nation has resulted in a corresponding increase in
medical healthcare. demand for tourism products. For instance, economic
*
Email Address: suseela@salam.uitm.edu.my wealth provides the resources for improvements in
transportation, thus providing easy access to remote tourist
Healthcare travel or medical tourism could be destinations. The tourism industry has remained agile in
defined as the activities of traveling outside the country of responding to market demands by phasing out unattractive
residence for the purpose of receiving medical care. tourist products and creating relevant products to meet the
Growth in the popularity of medical tourism has new interests in the market. Also, more appropriate
captured the attention of policy-makers, researchers as well attractions are engineered to suit the more discerning high
as the media. In fact, global medical tourism industry is end market11.
expanding tremendously and is forecasted to generate Malaysia began to focus on tourism as an industry
revenue of between USD38.5 to 55 billion annually based only in the 1990s with the launching of the Visit Malaysia
on an estimated 11 million patients seeking cross-border Year (VMY) program. The success this program in 1990
healthcare worldwide.
7861
Adv. Sci. Lett. 23(8), 7861-7864, 2017 RESEARCH ARTICLE
had spurred the government to launch the second VMY in No Country 2014 Market Country 2015 Market
1994. The revenue from tourism in 1994 increased (Million) Share (%) (Million) Share (%)
significantly to RM 8.3 billion. The third VMY was

launched in 2007 in conjunction with Malaysia’s 50th 1. Singapore 13,932,967 50.8 Singapore 12,930,754 50.3
Independence Anniversary. In 2014, Malaysia celebrates 2. Indonesia 2,827,533 10.3 Indonesia 2,788,033 10.8
its fourth VMY with the theme “Celebrating 1Malaysia 3. China 1,613,555 5.9 China 1,677,163 6.5
Truly Asia” to reflect the diversity in unity of all
4. Thailand 1,299,298 4.7 Thailand 1,343,569 5.2
Malaysians9. Hence it is palpable that the tourism industry
has progressed significantly over the years, given several 5. Brunei 1,213,110 4.4 Brunei 1,133,555 4.4
government initiatives in terms of11: 6. India 770,108 2.8 India 722,141 2.8
 generating foreign exchange earnings 7. Philippines 618,538 2.3 Philippines 554,917 2.2
 increasing employment in the industry 8. Australia 571,328 2.1 Australia 486,948 1.9
 fostering regional/rural development 9. Japan 553,106 2.0 Japan 483,569 1.9

 diversifying the country’s economic base 10. United 445,789 1.6 South 421,161 1.6
 the promotion of the country’s cultural diversity and Kingdom Korea
 promoting tourism industry abroad 11. Others 3,592,183 13.1 Others 3,179,441 12.4
Total 27,437,315 100.0 Total 25,721,251 100.0
The tourism industry’s contribution to economic Table.2. Main Purpose of Visit to Malaysia 2015
development has been made possible through the
Purpose 2015(%)
development and improvement of tourism products over
the last three decades to cater to a wide range of local, Holiday 57.9
regional and international tourists. The tourism industry in Visit Friends/Relatives 21.4
Malaysia is an important foreign exchange earner, Shopping 6.4
contributing to economic growth, attracting investments Business 5.0
and providing employment. The number of inbound Health Treatment 3.4
tourists to Malaysia increased steadily during the period Corporate Meeting 1.7
2012 to 2014 from 25.03 million to 27.4 million, with an Honeymoon 0.6
average of one to 2 million foreign visitors per month. Sports 0.6
However, in 2015, although tourism was the second Others 3.0
highest private investment contributor at RM24.5 billion Total 100
and the third largest GNI contributor at RM67.1 billion6,
inbound tourism expenditure decreased to RM74.1 billion As shown in Table 2, one area of attraction among the
compared to 2014 (RM80.1 billion). Malaysia witnessed a tourists is medical/health tourism. Medical tourism is a
drop in tourists arrival in 2015 (25.7 million) compared to new form of niche tourism market which has been rapidly
2014 (27.4 million). Of the 25.7 million tourists who growing in recent years. Many scholars like Goodrich &
visited Malaysia, 12.9 million were from Singapore. Other Goodrich (1987), Laws (1996), and Connell (2006)
the top 10 tourist arrivals in the short-haul markets were described medical tourism as an activity whereby people
from Indonesia (2.78 million), Thailand (1.34 million), travel to overseas countries to obtain healthcare services
Brunei (1.13 million) and the Philippines (0.55 million).
and facilities such as medical, dental, and surgery whilst
The key medium-haul markets were from China (1.67
million), India (0.72 million), Australia (0.48 million), having the opportunity to visit the tourist spots of that
Japan (0.48 million) and South Korea (0.42). United country4. Meanwhile, Bookman & Bookman (2007) in
Kingdom which was the only long-haul market in the top Dawn & Pal have defined medical tourism as travel with
10 list in 2014 dropped from the top 10 in 2015. The top the aim of improving one’s health, and also an economic
10 markets for international inbound tourist for 2014 and activity that entrails trade in services and encompasses two
2015 are shown in Table 1. In 1992, the Malaysian Tourism sectors, namely - tourism and medicine. It is also defined
Board (MTB) had developed indicators to analyze the main as all arranged activities related to travel and hosting a
purpose for tourist to visit Malaysia. These indicators were tourist who stays at least one night at the destination
helpful for MTB to strategize and promote the selected country for the purpose of maintaining, improving or
areas accordingly. Table 2 on the other hand, depicts the restoring his/her health through medical intervention18.
main purpose of tourists visit for the year 2015. One interesting phenomena in medical tourism is that, a
substantial number of patients travel to developing nations
Table.1. Top 10 Tourist Arrivals by Country of for healthcare treatment. The primary reason to seek
Nationality 2014 and 2015 medical services in less developed countries is the
attractive affordable low costs5. The reason developing
countries are able to provide healthcare services
inexpensively is directly related to the nation’s economic
status. Indeed, the prices charged for medical care in a
destination country generally correlate with that nation’s
per capita gross domestic product. Among the countries
7862
most sought for medical treatment are India and Thailand. and nurses, environmental friendly facilities, and
Other Asian countries that are well known for medical comprehensive network of hospitals and clinics have
tourism are Singapore and South Korea. Only in recent contributed to the increase in health tourism.
years, Malaysia has become an alternate destination for One of the factors is the healthcare services. Malaysia
medical tourism besides Thailand, Singapore and India. offers excellent public and private healthcare services at
Since the year 2000, there has been a gradual increase in very affordable price compared to developed countries
the number of tourists seeking healthcare in Malaysia. The mainly because of the lower operational cost given
economic slowdown in 2015, however, witnessed a slight government subsidies, favorable exchange rates, lower
decrease in the healthcare sector whereby Malaysia malpractice costs and lower cost of living. According to
Suwinski (2012), affordable hospitalization costs for a
recorded 850,000 visitors compared to 882,000 healthcare
routine cardiac bypass would cost in Malaysia between
travellers in 2014. Nevertheless, the number of healthcare USD6,000-7,000 compared to USD130,000 in the United
travellers coming from the Gulf Cooperation Council States. Furthermore, the National Heart Institute of
(GCC) to Malaysia increased significantly. Malaysia is Malaysia (IJN), has been able to attract foreign patients by
ranked amongst the best destination for Muslim travellers3. offering advanced healthcare at a fraction of the price
This leads to the question of why Malaysia is viewed as a medical tourists pay at hospitals in the United States and
preferred destination for medical tourism. Europe. An angioplasty procedure that may cost
US$100,000 (RM305, 741) in the United States is for
3. WHY MALAYSIA IS A PREFERRED MEDICAL example, available for US$13,000 (RM39, 750) in
TOURISM DESTINATION? Malaysia. Furthermore, Suwinski (2012) added that
Malaysia targets the cost conscious, middle range group
Malaysia has developed an immense potential in and is particularly renowned for cardiovascular and
medical tourism and is seen as one of the ideal destination orthopedic procedures, although Malaysia has patients for
for healthcare needs. Given that the healthcare in Malaysia other treatments as well. As mentioned by the Medical
is regulated by MOH, the treatments are considered to be Tourism officer in IJN mentioned that Malaysian hospitals
reliable, safe and effective amidst comfortable do not only offer the latest medical technology, but a total
surroundings, ease of access and at affordable prices13. conducive environment for treatment2. These factors
Table 3 indicates that the number of tourists travelling to account for the increasing number of tourists seeking
Malaysia for healthcare treatment has increased steadily health treatment in Malaysia in 2015 (850,000).
during the period 2009 to 2015. Although, Malaysia Furthermore, Malaysia is also a preferred destination
witnessed a decline in healthcare visitors in 2015 (850,000 for medical tourism because of its cost differences
medical tourists) compared to 2014 (882,000 travellers), Malaysia’s handling of the Asian Financial Crisis proved
the total revenue earned was more than RM900 million in compared to other countries such as Thailand, India,
2015 compared to RM777 million in 2014.7. Singapore and South Korea. For instance, Malaysia and
Singapore receive a lot of patients from Indonesia.
Table.3. Healthcare visitors to Malaysia 2009-2015 However, price competitiveness relative to Singapore is
Year 2009 2010 2011 2012 2013 2014 2015 seen as a key factor that influences Indonesian patients to
No. of 336, 393, 583, 672, 770, 882, 850, select Malaysia instead of Singapore for healthcare
Health 000 000 000 000 000 000 000
treatment. Table 4 shows the differences in medical costs
care
Visitors in terms of some major medical treatments in different
countries.
For 2016, although the year end data is yet to be
released, the Malaysian government has targeted revenue Table.4. Medical procedures and cost differences among
of RM1.3 billion. Despite some countries like India various countries
promoting its medical tourism aggressively, it has not COUNTRIES
deterred the Indians from seeking medical treatment in PROCEDURE Malaysia Thailand India Singapore Costa South United
other developing countries like Malaysia. According to Rice Korea States
MOTAC representative in New Delhi, many Indians in
India perceive Malaysia’s medical/health services as being Heart Bypass RM 36,000 RM33,000 RM27,900 RM49,000 RM72,000 RM102,45 RM390,000
of quality, trustworthy and credible services4. With over 4 0
million international tourists coming to Malaysia in the last Heart valve RM45,000 RM30,000 RM27,000 RM37,500 RM45,000 RM88,500 RM488,00
5 years it is not surprising why Malaysia is one of the top Replacement
5 medical tourist destination in the world. Angioplasty RM24,000 RM39,000 RM33,600 RM33,600 RM27,000 RM58,800 RM171,000
The Malaysian government believes that there are Hip RM30,000 RM36,000 RM27,600 RM27,600 RM36,000 RM34,200 RM129,000
several factors such as effective marketing strategy, Replacement
responding to the need of tourists, cost-effective treatment, Hysterectomy RM12,000 RM13,500 RM18,000 RM18,000 RM12,000 RM38,100 RM160,000
favorable exchange rates (one ringgit Malaysia equals Knee RM24,000 RM30,000 RM33,000 RM33,000 RM33,000 RM72,300 RM120,000
approximately USD 0.20), quality improvement, Replacement
medicines at affordable rates, technology orientated,

peaceful environment, proficient English speaking doctors
7861
Adv. Sci. Lett. 23(8), 7861-7864, 2017 RESEARCH ARTICLE
As shown in Table 4, price is one of the core strengths of making way to Malaysia. For instance, Malaysia has
Malaysia’s medical tourism. Malaysia offers quality established government-to-government agreements with
services with compatible pricing, especially considering three Middle East countries, namely Oman, Libya and
the high costs of medical treatment in some developed Kazakhstan. With these agreements in place, it paves the
countries like the United States. At such, Malaysia’s way for these countries to pay for their citizens healthcare
healthcare services are an attractive alternative to patients services in Malaysia. Table 5 shows the Muslim visitor
around the globe.13 arrivals and expenditures for the year 2010, 2014 and
Hence, with top-notch medical services providing projections for 2020.
reliable, safe and effective treatments in comfortable
surroundings with ease of access and affordable prices, Table.5. Muslim Visitor Arrivals to Malaysia for the
Malaysia has certainly become a leading choice for foreign Period 2010 to 2020
patients seeking healthcare treatment abroad13. Moreover, Year (Inbound Tourism) 2010 2014 2020
Malaysia’s healthcare institutions have also obtained the
accreditation status from the Joint Commission Inbound Muslim Visitors 4.64 5.27 6.59
International (JCI) 18. JCI is the most established medical Arrivals (Millions)
tourist industry accrediting body in the world. There are a Expenditure by Muslim 3,427 4,270 5,228
minimum of 7 healthcare institutions in Malaysia that have Visitors (US$)
received JCI accreditation. Furthermore, to boost this
industry the Malaysian government provided double tax 5. CONCLUSION
exemption for hospitals to encourage them to obtain JCI
accreditation under medical tourism initiatives. In general, Malaysia is an established medical tourism
Another factor that contributes to the increase in the destination. The combination of factors such as quality care,
number of medical tourists is the high quality and regulations, safety standards, state-of-the-art facilities that
recuperation services provided. Malaysia’s medical have been furnished to meet international standards and the
institutions offer a one-stop destination for medical tourists, governing laws within this industry has contributed to the
offering from pre-operative consultations to post-operative growth of medical tourism in Malaysia. Also, Malaysia
rehabilitative treatments and therapies to aid the patients. healthcare offers specialties in various medical disciplines
These institutions combine care, proximity, and technology and medical practices that are at par with the some of the
to provide high quality recuperation and rehabilitation developed countries, incorporating both sophistication as
services. For example, although India’s medical treatments well as international expertise. One of the strength and
in some procedures are cheaper than Malaysia, other uniqueness of Malaysia’s medical tourism is the
factors such as government support, infrastructure, shorter government’s support. The Malaysian government has
waiting time, privacy, and friendly environment comes into initiated several attractive incentives in collaboration with
consideration for tourists. This proves why Malaysia is a various agencies to promote the country as a medical
preferred destination especially amongst the middle class tourism hub. The government effort to work closely with
group of Indian travelers for healthcare1. Malaysia is well the private sector reflects the commitment of the
known for high success rate in fertility treatments, which government. However, Malaysia needs to also expand its
combine holistic care, therapeutic services, and option of
core health services to promote wellness segment to remain
using traditional recuperative methods besides the modern
competitive in the region and become a leading choice for
treatment.
Besides the above factors, Malaysia also attracts foreign patients seeking healthcare and wellness treatment.
medical travellers from Muslim nations. Malaysia is now Although Malaysia’s private healthcare in urban areas is
well-known among Gulf Cooperation Council (GCC) already well served, Malaysia needs to focus on specialty
countries for providing “halal health treatments” i.e. services and holistic healthcare. Malaysian hospitals would
besides offering halal-certified hospitals, MHTC entice also need to ensure more healthcare institutions and
medical travellers from Muslim countries by ensuring halal hospitals adhere to the JCI accreditation in order to attract
food, providing prayer rooms, and also providing halal medical tourism. This would definitely help the healthcare
medical treatments such as insulin made from bovine industry to take a leap forward to greater heights.
products rather than porcine based. Many GCC countries
feel that Malaysia shares many similarities in terms of its ACKNOWLEDGMENTS
religion and food thus providing a natural environment for
patients seeking treatment in Malaysia. Furthermore, This study was supported partially by Research
MHTC also provides a dedicated call center and website Management Centre (RMC) UiTM, Shah Alam under the
(in Arabic language) to cater for the medical travellers FRGS Grant 600-IRMI/FRGS/5/3(33)/2016.
from the GCC countries. This further helps the travellers to
inquire about hospital services, treatments, hotel stay and REFERENCES
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1
Interview with MHTC officer, Mr. Wong Kee Mun (Senior
Manager for Research & Informatics) on 25 April 2014 at
3.00pm.
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7861

Computer Standards & Interfaces 25 (2003) 529 – 537
www.elsevier.com/locate/csi
Realization of integration and working procedure on digital

hospital information system
Zhanjun Chang a,*, Song Mei a, Zheng Gu a, Jianqin Gu a,
Liangxiao Xia a, Shuang Liang b, Jiarui Lin a
a
Institute of Biomedical Engineering, Huazhong University of Science and Technology, 1037 Luo Yu Avenue, Wuhan 430074, China
b
Department of Software, Xian Jiaotong University, Xian 710049, China
Received 21 November 2002; received in revised form 1 February 2003; accepted 8 February 2003
Abstract
The integrating method and working procedure of a digital hospital information system were discussed in this paper. It
adopts a unique modularized structure that allows interplatform data exchange among different hospital information systems
(HIS, RIS and PACS) through the seamless integration of the above-mentioned three systems according to the international
standards (DICOM, HL7 and TC251). The realization of communication interface standardization, function modularisation,
common sharing of medical information resources and adaptation to local circumstances enables the system function,
management function, information processing and communication function to be achieved on a complete platform, which
provides such advantages as common sharing, openness, security, extensibility and simple operation, and offers completeness to
present hospital management and future medical environment. Currently, it is being successfully applied at many hospitals in
China such as the 5th People Hospital of Zhengzhou City to realize the digitized, network-dependent and film-independent
modern hospital management.
D 2003 Elsevier Science B.V. All rights reserved.
Keywords: Digital Hospital; Integration; Information Sharing; Modality Worklist; Modularization
1. Introduction over 80% of the whole diagnostic data in hospitals.

Cooperation, information exchanging and sharing are
At present, hospital information systems run in indispensable among various hospital systems either
China are not able to share medical image diagnostic in the hospital Local Area Network (LAN) or in the
information due to the various standards and formats Internet. Medical service involves mass information,
adopted by different manufacturers. The annual gen- the efficiency of which is positively proportional to
eration of over one million medical images represents the automation degree of data processing. Demand for
medical service requires hospital digitization, which
necessitates the realization to integrate digital hospital
* Corresponding author. Tel.: +86-27-8754-3733.
information systems.
E-mail addresses: zhanjun-chang@peoplemail.com.cn, Nowadays, the mainstream of medical infor-
zhanjunchang@hotmail.com (Z. Chang). matics development is changing from traditional
0920-5489/03/$ - see front matter D 2003 Elsevier Science B.V. All rights reserved.
doi:10.1016/S0920-5489(03)00017-5
530 Z. Chang et al. / Computer Standards & Interfaces 25 (2003) 529–537
radiology to modern digital medical informatics. 2.3. The medical clinical diagnosis needs the
The key technical support is guaranteed by the integration of HIS, RIS and PACS
information integration among Hospital Information
System (HIS), Radiology Information System (RIS) Medical clinical diagnosis requires both the PACS
and Picture Archiving and Communication System image data and the HIS and RIS clinical information.
(PACS), for the sake of medical information shar- The scope of information shared can be extended
ing, teleconsultation, hospital efficiency enhance- through the integration of HIS, RIS and PACS, which
ment and medical service extension. Thus, the requires each system open its own interface and
realization of integration and working procedure of internal structure.
digital hospital information system are described in The integration not only needs Digital Imaging and
this article. Communications in Medicine (DICOM) standard to
simplify the PACS problems through various manage-
ment and service classes, and needs TC251 standard
2. The requirement of integration to shield the differences among operating systems and
network protocols, but also applies Health Level 7
Although HIS, RIS and PACS are generally made (HL7) standard to simplify HIS and RIS problems.
independently by different manufacturers, the deve- The openness and interconnection of DICOM and
lopment trend demands these systems to be inte- HL7 are conducive to the integration of PACS, HIS
grated. Consequently, standardization and applic- and RIS, the realization of working procedure, and the
ability is the key for the integration of HIS, RIS standardization of different medical imaging equip-
and PACS [1,2]. ment manufacturers.
2.1. PACS needs to integrate HIS and RIS

3. The realization of integration [6]
PACS is a comprehensive system for the digital
processing of medical images. PACS without clinical 3.1. The purpose of integration
information and image data is only an electronic
storing system, unable to search and retrieve accord- To realize the digital hospital information system
ing to disease codes. HIS and RIS mainly deal with through the seamless connection of HIS, RIS and
text information of clinical data. To directly obtain PACS, which can achieve the system function, and
text materials from HIS and RIS can avoid the information processing and communication func-
information disorder resulting from the repeated input tion on a complete platform.
of patients’ demographic data in PACS, HIS and RIS To optimize the working procedure, share medical
[3]. resources, improve work efficiency, economize
funds and increase revenue.
2.2. HIS and RIS need to integrate PACS To realize telemedicine through and provide
information sharing in the network so that the
HIS is a huge database applied system based on radiology and clinical doctors can make a compre-
the modularized structure of Browse/Server. RIS is a hensive use of clinical image and text information,
computer information system based on hospital and share the information with image experts at
radiology working procedure [4,5]. These two sys- different places by high-speed transfer of such
tems are mainly responsible for the network-based multimedia information flow as data and video
management of medical radiology examination images in a real-time way [7].
working procedure and communication, and the To provide the patients with individualized service
storing of the patients’ clinical information including through the construction of huge database of
multimedia information such as numbers, texts, patients’ information which can satisfy such
voices and images. PACS is the main source of extended functions as medical service, research,
medical images. education and telemedicine services.
Z. Chang et al. / Computer Standards & Interfaces 25 (2003) 529–537 531
3.2. The principle of integration The system adopts 1000 Mbyte/s (Trunk) + 100
Mbyte/s commutative fast Ethernet (Workgroup), with
The standardized principle: The equipments and HL7 and TCP/IP as medical information transfer
interfaces conform to DICOM, HL7 and TC251 protocol and network protocol, respectively. The trunk
standards, which is the basis for the realization of provides inside-hospital chief computer communica-
HIS, RIS and PACS integration and working proce- tion service that can not only transfer high-rate infor-
dure [8,9]. mation flow of texts, video images, figures, voices
The radiology centered principle: Radiology is the and so forth, but also achieve domestic and interna-
core of the working procedure of digital hospital tional medical information transfer through the con-
information system, since the working procedure can nection with the Internet. This network adopts the
be realized through the connection of all digital parts Asynchronous Transfer Mode (ATM) technology to
of the radiological work in which a large proportion of support a large-scale parallel communication struc-
the medical image information is cumulated. ture. The transfer rate can reach Gbyte level that
The general planning and modularised principle: enables an efficient and real-time transfer of huge
To ensure the exchange of hospital image and text multimedia information to meet the needs of the
information and the extension of service range, gen- system.
eral planning and modularized design are based on a
comprehensive consideration of system structure, Information exchange conforms to DICOM3.0
function and response. standard. Transfer of quantities of data can be
The advanced principle: The system should present realized through JPEG compression.
an advanced characteristic to achieve the optimum System database is oracle.
function/price ratio. The operating system is Microsoft Windows/Unix.
The extensible principle: The software and hard- The development tool is PowerBuilder. The
ware of the system should have an extensible charac- application software is Microsoft Visual C++ 6.0.
teristic to satisfy the demand to extend present
hospital system functions and resources [10]. To ensure a full use of archived information, a
The secure principle: The system prohibits unau- double integrated archiving system is adopted that
thorized entrance to avoid loss of privacy as medical combines the on-line archiving by independent inte-
information belongs to personal secrets. And the grated IDE hard disc system and the off-line copying
system has the ability to accommodate errors to and archiving by CD-R disc, with an expected on-line
maintain a secure running for 24 h. storing duration of over 1 year.
The system equipments include network server,
3.3. The integration of the configuration acquisition workstation, terminals, network equip-
ments, printer, database server, storage management
The Browser/Server mode, a Web-based multi- server, image workstation, and so on, see Fig. 1.
player structure, is adopted for the system configu-
ration [11], according to the TC251prENV12967-1 3.4. Integration of the interface
standard set by CEN [12]. Since the middleware
platform of the multi-layer system structure can shield The interfaces among HIS, RIS and PACS, and
the differences among network hardware platforms medical image equipments take a seamless connec-
and those among operating systems and network tion, conform to DICOM3.0 standard, support HL7
protocols [13], the Browser/Server structure only and TC251 standards and allow the mutual informa-
needs standard browsers such as IE and Netscape to tion exchange between the radiology department and
realize the information exchange with servers at any clinical departments.
node in the network through terminals of different All system data exchange is achieved through the
operating systems, which settle down the problems of modularized interface. And through the Gbyte Ether-
inter-platform connecting and scheduling among HIS, net exchanger connection by the fiber modules, the
RIS and PACS. transfer rate at each port can reach 100 Mbyte/s.
Fig. 1. Network structure of digital hospital.
For standard medical image equipments that con- teraction and interoperation of the images among
form to DICOM3.0, images identical to the original non-standard equipments through the PC-supported
ones in the examination equipments can be obtained DICOM3.0 interface, see Fig. 2.
by inputting collected image information into the
network through DICOM gateway and the data com- 3.5. Integration of the data
munication card that connects to DICOM in the
PACS. In this way, image information can be col- Data Fusion of HIS, RIS and PACS information
lected without any loss. data is the key to digital hospital information system
For non-standard medical image equipments, a integration.
digital interface board can be fixed between non- The Modality Worklist (MWL) of DICOM stand-
standard equipments and PACS. Then, the collected ard is provided by RIS. MWL includes multiple
images can be converted into DICOM3.0 format by Scheduled Procedure Step (SPS). The appointment
A/D converting card. With high-speed PC as the data and medical treatment data (patient name/ID,
image converting workstation, the collected images date/time, code, etc.) of multiple patients included in
are converted into DICOM3.0 format to form the each SPS will be matched with MWL according to
physical network, which enables the indirect connec- certain rules when the data is transferred to the net-
tion with the DICOM3.0-based network and the con- work workstation. The matching results will be dis-
struction of an interoperation platform by the in- played for timely correction. The formation of MWL
Fig. 2. Flow chart of non-DICOM exchange.

is generally completed by the information registration 3.6. Realization of working procedure

workstation through the network.
Patients’ information from PACS and RIS is re- Patient registration information is input into the
ceived through PACS quality-control module, and patient registration unit of HIS. The doctors inform
matched and revised according to preset rules. The RIS the appointment requests through HIS. HIS can
DICOM patients’ information in PACS is replaced automatically retrieve and review patient’ reports and
with that in HIS and RIS (name, sex, age, etc.) images from RIS and PACS according to patient
through certain patient codes. As a result, PACS codes. After the input of basic patients’ information,
images and RIS data are fused into the same database. the system will automatically record relevant infor-
The quality-control module may also amend the mation of the examination process to form the elec-
DICOM patient’s image information directly to main- tronic patient case history.
tain the consistence of patients’ information in the RIS receives appointment/command allocation
whole system. from HIS, fills the appointment sheet according to
Under the circumstances that the quality-control the situation of the radiology department, orders the
module is not present in PACS, or the information is appointment processes and then send the appointment
inputted wrongly, or the same RIS patient information requests to PACS.
matches multiple radiology examinations, or the When the patient information reaches PACS from
imaging equipments does not support the appointment HIS and RIS, PACS obtains, processes and archives
function, the information of the same patient from DICOM images by imaging equipments through appli-
HIS, RIS and PACS must be matched manually cation form or scheduling table. When the patients are
according to certain principles. taking radiology examination, the equipments can
Upon the matching of the information of the same automatically obtain MWL information from RIS.
patient from HIS, RIS and PACS, the imaging equip- MPPS allows the imaging equipments to provide
ments can directly obtain information from MWL to with HIS, RIS and PACS information imaging status
check patient’s examinations and thereby to realize such as ‘‘Start’’, ‘‘Complete’’ and ‘‘Abort’’ as well
appointment function. other information such as process coding and image
Imaging equipments should have relevant interfa- table forming.
ces to support the obtaining of MWL that conforms to Imaging equipments such as X-ray and MRI trans-
DICOM standard. Modality Performed Procedure fer examination images and relevant SPS and MPPS
Step (MPPS) allows the imaging equipments to auto- information to PACS image archiving unit, and delete
matically obtain MWL information from RIS for the images and information upon receipt of archiving
patient examination and provide RIS and PASC with conformation from PACS after it receives the images.
its executive information. HIS, RIS, PACS and each imaging equipments must
If the imaging equipments do not support direct maintain the consistence of patients’ examination in-
obtaining of MWL, the patients under various exami- formation during the working procedure, including
nations in the radiology department must be coded name, sex, birthdate, examination date, parts examined,
manually to maintain the consistence of patients’ imaging equipment type, etc. Relevant examination
information in the whole system. results are added into patients’ electronic case history
When the patients’ radiology examination refer- and are extracted when reviewing is requested. For
ences reach PACS from HIS and RIS, PACS can emergency cases, the information can be collected by
preliminarily extract patients’ previous examination various imaging equipments and displayed on the
images according to MWL. For patients with doctors’ workstation screen for them to monitor the
radiology examination history, PACS can retrieve patients’ condition in a timely manner. For patients with
and extract the archiving images for comparison. previous radiology examination history, the archiving
When the checking process ends, the images and images are extracted and returned automatically to the
diagnosis reports will be automatically returned to diagnosis workstation with the processed image data.
RIS and HIS for the clinical doctors to check At the RIS station, radiology doctors can easily
immediately. review and compare old and new image data, make
Fig. 3. Flow chart of digital hospital.
radiology reports and forward them to the clinical and out sending, image data storing and manage-
workstation. At the same time, clinical doctors at the ment, etc. And it allows new equipments to be
HIS workstation can directly retrieve and review linked into the network.
PACS image data and the radiology reports through Medical function includes application and appoint-
information sharing, and reach the right conclusion ment inspection and management. Image inspec-
after diagnosing, see Fig. 3. tion, appointing, registering, ordering, searching
and retrieving; writing, reviewing, amending,
3.7. Functions realized statistical analyzing, and text and image editing
of the text and image radiology reports.
The system realizes the seamless connection Information management function includes data
among HIS, RIS and PACS through modularized function and image function. Data function
interfaces, which can achieve system function, man- includes collecting, converting, analyzing, com-
agement function, information processing and com- pressing, storing, etc. Image function includes col-
munication function on a complete platform, see lecting, converting, registering, displaying, replay-
Fig. 4. ing, storing, etc., such as magnifying, reducing,
brightness and contrast regulating, image turning
System management function includes the system and reverting, etc. [14].
initialization, system self-inspection, database System communication function includes network
management, real-time data display, report printing building of respective subsystems and imaging
Fig. 4. Functional modules of digital hospital.

apparatuses for the sake of information flow of the to avoid unauthorized amendment. Network data
system. Each network terminal is managed through packets are transferred encryptedly and decoded at
user visiting limit. The various images and infor- the client side to avoid an illegal capture.
mation of the patients are retrieved and used level by Calamity protective measures are adopted. Multi-
level. Telemedicine and academic exchange can be ple copy servers are equipped at the network center to
achieved through the link to the Internet. make copy for data and references regularly. When the
host computer collapses, data files are recovered
3.8. System security mechanisms rapidly and losslessly.
An integrated double archiving system is formed
For a 24-h secured running of the system, the by hard disc and CD-R to take full advantage of their
following measures are adopted. functions, so that the same data can be archived at
The authorization mechanism is bettered for the different places. The independent integrated hard disc
uniform management of users of different levels. system is applied for long-period online storage and
Users are identified by Windows 2000-based PKI real-time resource sharing, while the CD-R perma-
(public key infrastructure). Since PKI is internally nently safe the copies offline.
set in Windows 2000, the security is maintained for Double server coping is adopted for server archive,
the exchange of electronic information. Users/Admin- with two fiber exchangers, fiber/disk array and exten-
istrator passwords are set at each terminal to identify sion units equipped.
users, limit visiting scope of and avoid unauthorized The center workstation is provided with double-
entrance [15]. circuit power supply to ensure the power supply for
Data Packet is filtered by the firewall according to the system. Other protective measures are also adop-
adopted protocols, URL and other rules. Whenever ted such as the fire-proofing, thunder-proofing, etc.
necessary, doubtful data packet can be held to ensure
network security.
Antivirus management is divided into two parts. 4. System testing procedure
One is to take standard antivirus software and update
it regularly. The other is to impose strict administra- Testing is an effective way to ensure the successful
tion and operation regulations on the system admin- running of the system. It cannot only find system
istrator/operator to protect the system from virus errors, but also evaluate system performance objec-
infection. tively, see Fig. 5.
References are secured by level with important
data archived encryptedly. Database security mecha- (1) The Browser/Server structure of the system is
nisms are set with passwords for important datasheets tested according to the characteristics of respective
Fig. 5. Test flow chart of digital hospital.

unit. HIS, RIS, and PACS interfaces are also under result the annual revenue in this respect is 0.96 million
test. For the firewall of the system, simulated at- w (80*40*300) [16]. The system is currently being
tack test is adopted. Database security mechanisms successfully run at about 40 hospitals in China such as
and data working procedure are tested as well. the 5th People Hospital of Zhengzhou City, the
(2) After unit testing, comprehensive testing by unit is Chinese Medicine Research Institute, the Center Hos-
taken for RIS and HIS as well as RIS and PACS. pital of Zhengzhou City, etc.
(3) After the by-unit testing, HIS, RIS and PACS At present, there are 614 third level and 7110
undertake a comprehensive testing. second level hospitals in China that have a certain
(4) After the testing procedure mentioned above, the number of large medical equipments. The basic con-
errors occurred are corrected. And then rerun the struction is completed and information management
testing procedure till the system runs steadily. network is built in these hospitals that meets the
primary requirements for digital hospital construction.
With the realization of integration and working pro-
5. Conclusion cedure on digital hospital information, radiology
diagnosis level will be greatly improved. And the
In this paper, the web-based modularized multilayer common sharing of medical information resources
structure is adopted for the organic integration and will definitely facilitate the digital hospital construc-
network building among respective function modules tion and medical informatics development.
of HIS, RIS and PACS in consistence with DICOM,
HL7 and TC251 standards. It provide such advantages
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Elrod and Fortenberry BMC Health Services Research 2018, 18(Suppl 3):923
https://doi.org/10.1186/s12913-018-3678-5
DEBATE Open Access
Target marketing in the health services

industry: the value of journeying off the
beaten path
James K. Elrod1 and John L. Fortenberry Jr.1,2*
Abstract
Background: Target marketing, a practice used to more effectively address the wants and needs of customers,
involves three interrelated activities: market segmentation, targeting, and product positioning. The practice follows
a perfectly logical process. For a given offering, healthcare institutions select a desired group to pursue and arrange
service characteristics and related attributes in a manner to entice that particular group to forward patronage and
become customers. Pursuits often focus on heavily-traveled routes teeming with competitors, but occasionally an
off the beaten path can be identified to amplify target marketing efforts.
Discussion: In an earlier chapter of its history, Willis-Knighton Health System identified and pursued an off the
beaten path in its bid to capture market share in pediatric healthcare services. The direct route—targeting current
and prospective parents—was heavily pursued by competitors, prompting the institution to seek a unique approach;
a road less traveled which would reach the same audiences but do so via a different route. Children, as direct care
recipients, supplied one such route, and while their ability to influence associated parental decisions was unclear, the
institution viewed developing a bond with them to have great potential. Painstaking efforts yielded Willis-Knighton
Health System’s Pediatric Orientation Program, fostering an affinity between the institution and children, which in turn
influenced parents, affording opportunities for enhanced patronage in pediatric medicine and beyond.
Conclusions: Willis-Knighton Health System’s decision to look off the beaten path for an avenue capable of amplifying
its target marketing initiatives resulted in a novel pursuit which distinguished the institution from its competitors and
set the stage for achieving its goal of providing healthcare services for a greater percentage of children in the marketplace.
Additional spillover effects bolstering share in other areas also were afforded. This unique initiative addressed desires to
pursue an increasingly important road less traveled to reach prime audiences. When roads less traveled can be identified,
opportunities abound for better connecting with customer groups, warranting investigation and pursuit.
Keywords: Target marketing, Segmentation, Targeting, Positioning, Hospitals, Healthcare
Background to the populace without regard for individual tastes and

Healthcare establishments, especially comprehensive preferences [3, 5, 6]. These appeals are general in nature,
medical centers, offer myriad health and wellness services, designed to address the masses as a whole, hence the
affording communities with access to a wide array of name mass marketing. Such one-size-fits-all strategies
offerings that address injury and illness [1, 2]. By providing have their place, but very often, marketing results can be
such broad collections of services, health and medical improved by engaging in what is known as target marketing,
institutions can make a case for employing a mass market- an approach which tailors services and their associated
ing approach to advance their organizations [3, 4]. With attributes to appeal to particular audiences sharing like
such an approach, available offerings are marketed broadly characteristics and qualities [3, 6–9].
Emerging out of desires to more appropriately address
* Correspondence: john.fortenberry@lsus.edu the various wants and needs of different customer groups,
1
Willis-Knighton Health System, 2600 Greenwood Road, Shreveport, LA
71103, USA
target marketing involves three interrelated activities:
2
LSU Shreveport, 1 University Place, Shreveport, LA 71115, USA market segmentation (i.e., dividing a market into groups
© The Author(s). 2018 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0
International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and
reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to
the Creative Commons license, and indicate if changes were made. The Creative Commons Public Domain Dedication waiver
(http://creativecommons.org/publicdomain/zero/1.0/) applies to the data made available in this article, unless otherwise stated.
Content courtesy of Springer Nature, terms of use apply. Rights reserved.

Elrod and Fortenberry BMC Health Services Research 2018, 18(Suppl 3):923 Page 18 of 48
exhibiting common characteristics), targeting (i.e., select- beyond the boundaries of established markets, directing
ing attractive segments on which to focus), and product attention toward uncontested market space for growth
positioning (i.e., assembling service-related attributes in a opportunities [3, 10–13]. Kotler and Trias de Bes, in
manner to entice targeted audiences to extend their Lateral Marketing, recommended that markets be viewed
patronage) [3, 10]. The customized approach resulting broadly in an effort to identify opportunities to serve
from target marketing tends to resonate more powerfully customer groups that have previously been overlooked
with audiences than that afforded by mass marketing, [3, 10, 14]. These perspectives essentially are suggesting
permitting greater opportunities to convert prospects into that institutions forgo “follow the herd” mentalities or
customers [3, 4, 10]. Further, it improves customer at least complement these pursuits with opportunities
satisfaction and also allows for better use of promotions which set a new course and direction on roads less
resources by directing tailored communications to desired traveled. In similar fashion and illustrative of these
populations, minimizing wasted circulation [3, 4]. modern thoughts on target marketing, Willis-Knighton
Target marketing makes sense; the practice follows a Health System, in an earlier period of its history, discovered
perfectly logical process. For a given offering, healthcare and followed a road less traveled in pursuit of a particular
institutions select a desired group to pursue and arrange market share goal in a most challenging environment [19].
service characteristics and related attributes in a manner
to entice that particular group to forward patronage and Willis-Knighton Health System and market share growth
become customers. In many cases, health and medical ambitions
services have fairly obvious targets. Women of childbearing Willis-Knighton Health System is a nongovernmental,
age, for example, have potential needs for maternity ser- not-for-profit healthcare provider delivering comprehensive
vices. Parents, courtesy of their infants and young children, health and wellness services through multiple hospitals,
have needs for pediatric medical care. Employers, due to numerous general and specialty medical clinics, an
their workforces, have needs for occupational health all-inclusive retirement community, and more. Based in
services. By focusing on the specific wants and needs of Shreveport, Louisiana, the system holds market leadership
market segments, healthcare institutions can deliver in its served region, centered in the heart of an area
services and support specifically designed and suited known as the Ark-La-Tex, where the states of Arkansas,
for the associated groups [3, 4]. Louisiana, and Texas converge. Willis-Knighton Health
Pathways leading directly to obvious target audiences System’s extensive service array can accommodate virtu-
for given offerings, however, are typically heavily tra- ally any medical care want or need, regardless of one’s age.
versed, with associated routes teeming with competitors This, combined with its market leadership, attracts patient
eager to gain the affections and associated patronage of populations from across the region, fueled further by the
the designated groups. In essence, many establishments institution’s acceptance of most health insurances and,
are using the same approaches directed toward the same notably, its provision of substantial amounts of charity
audiences [11–15]. Such activity limits opportunities for care for those unable to pay for services. The system’s
market share gains, especially for those institutions not origins date to 1924 with the establishment of Tri-State
in market leadership positions, as the dominance of Sanitarium, founded to address the healthcare needs of
more powerful parties generally affords advantages over the burgeoning population of west Shreveport. Sold in
contender entities pursuing parallel strategies. In such 1929 to Drs. James Willis and Joseph Knighton, the
cases, it is helpful to explore possible alternatives; roads establishment continued operations and, in 1952, it was
less traveled that lead to the same target audiences, but renamed in honor of Drs. Willis and Knighton. For the first
do so via an indirect route, amplifying efforts to engage several decades of its existence, the establishment played an
and attract desired groups [4, 11, 14]. important but relatively small role in delivering the region’s
With market competitiveness in the healthcare industry healthcare. In the 1970s, however, Willis-Knighton Health
at all-time highs [3, 16–18], roads less traveled (i.e., novel System embarked on an ambitious growth campaign to
approaches for addressing circumstances and situations expand its footprint beyond west Shreveport, effecting
which are known to and used by few, if any, rivals) are a number of strategies [20–22], notably including pursuit
highly desirable, as they provide institutions with oppor- of market share in the ultra-competitive area of pediatric
tunities to differentiate themselves from competitors, medical services.
increasing the likelihood of success in attracting prospects During this period, the greater Shreveport marketplace
and encouraging exchange [3, 11–14]. Target marketing was burgeoning with young families, making pediatric
researchers in recent years have blazed new trails which care a very lucrative service line for healthcare estab-
reveal advantages associated with pursuing opportunities lishments capable of attracting associated patronage. In
off the beaten path. For example, Kim and Mauborgne, in the area of labor and delivery services, the gateway to
Blue Ocean Strategy, communicated the value of looking provision of years of pediatric care as newborns grow

older, Willis-Knighton Health System possessed less at one of Willis-Knighton Health System’s institutions.
than 10% of the available share in the market [19]. Available to first grade classes at all schools in Caddo and
Share improvements were needed, especially as success Bossier parishes, students, accompanied by their teachers,
in this area would likely generate spillover effects with are bused from their learning institutions to designated
the potential to bolster share in other areas. Achieving hospitals where they engage in a variety of health
this, however, would be anything but easy, as the market education activities. These informative field trips offer
featured a number of competitors, including one posses- first graders the opportunity to learn about hospital opera-
sing market leadership in pediatrics and virtually all other tions, the roles played by various healthcare professionals,
categories of care. Competitive assessments revealed that and the process of healthcare delivery from admission to
all were targeting current and prospective parents—the discharge, all in a manner easily understood by young
direct and obvious target market—in their bids to main- children. First graders are typically 6–7 years old and are
tain or grow market share in pediatric medicine. Realizing embarking on their first year of elementary school, making
that the upside potential associated with mirroring for an excellent time to introduce them to matters of
competitive approaches would be limited—something health and wellness. Among other learning experiences,
confirmed by the institution’s own prior efforts to build students engage in role playing exercises—presenting as
market share using like practices—executives decided physicians, nurses, and patients, dressing in costumes
to search for a unique approach; a road less traveled fitting given roles—where they address health events
which would reach the same audiences but do so via a which they themselves might encounter, such as a broken
different route. The intention was for this to complement, arm or tonsillitis. They also learn about healthy habits,
rather than replace, Willis-Knighton Health System’s including proper hygiene, nutrition, and physical fitness.
existing target marketing efforts directed toward current Overall, the learning experience helps to acclimate students
and prospective parents. to hospitals and healthcare experiences, reducing or elimin-
A comprehensive evaluation of the pediatric healthcare ating associated fears and allowing them greater comfort
patronage process ensued. As evidenced by the target when facing their own illnesses and injuries or those
marketing pursuits of competitors, parents represented experienced by family members and friends. Each child
the obvious target for pediatric medical services, as they completing the orientation session receives a stethoscope
occupied the all-important role of decider. Once parents and a hat featuring the Willis-Knighton Health System
had selected providers, children certainly played a role logo and the designation “Future Nurse” or “Future
in customer retention, but in the context of target Doctor.”
marketing, the operative question concerned their ability For the educational benefit alone, Willis-Knighton
to influence the initial patronage decisions of their Health System’s Pediatric Orientation Program was well
parents. There certainly was evidence from other industries worth its development, implementation, and investment.
that confirmed the influencing capability of children on the Over the course of its 39-year history, thousands of first
purchase decisions of parents [23–27], with retail (e.g., toys, graders have come to understand that hospitals and
foods) supplying perhaps the best example of this. Assum- healthcare providers are there to benefit them, reducing
ing that an affinity between institution and child could be fear and anxiety that otherwise might persist and negatively
nurtured, executives believed that the same would be impact their willingness to welcome receipt of care. But the
observed in the area of healthcare services. Willis-Knighton benefit of the program extends also to target marketing,
Health System possessed a long-standing commitment to something which initially prompted its development.
education, regularly holding seminars focused on things Through these orientation sessions and the positive
such as healthy eating, physical fitness, smoking cessation, experiences that they provide, children gain familiarity with
and similar initiatives, prompting the notion that something Willis-Knighton Health System. Such positive exposures
in the area of children’s health education could provide an have long-term benefits, as these children will eventually
avenue for developing a bond with youth which, in turn, grow into adults with families of their own and associated
would influence their parents. Painstaking efforts yielded healthcare needs, with these formative experiences likely
Willis-Knighton Health System’s Pediatric Orientation influencing provider selections. In the nearer term,
Program. however, the parents of children completing the orientation
program also gain exposure to the institution, indirectly
Willis-Knighton Health System’s Pediatric Orientation but powerfully, potentially impacting their current pediatric
Program care selections and possibly even influencing selections in
Initiated in 1979 and now in its 39th year of operation, other areas of care, including those pertaining to their own
Willis-Knighton Health System’s Pediatric Orientation medical needs.
Program introduces first graders to hospitals and health- Parents must be informed of field trips and grant per-
care via an onsite tour and orientation session conducted mission for their children to partake in them, bringing

Willis-Knighton Health System to their attention as they afforded opportunities to address in positive fashion the
consider and sign approval forms. Further, Willis-Knighton health education needs of children in the region. Unique
Health System invites parents to accompany their children routes off the beaten path are not always available, but
during the Pediatric Orientation Program, providing when they can be identified, opportunities abound for
another exposure opportunity. And even if parents better connecting with desired audiences, courtesy of
choose not to attend, following the session, their children resulting energized target marketing efforts. Given associ-
undoubtedly will share associated experiences with their ated benefits, healthcare institutions in search of enhancing
mothers and fathers, offering yet another opportunity for market share would do well to actively explore target
parents to learn about Willis-Knighton Health System. marketing possibilities situated off the beaten path.
Going forward, the children potentially will reflect on
Acknowledgments
their enjoyable Willis-Knighton Health System experi- A special note of thanks is extended to Rhonda MacIsaac, Kierstin Whitten, and
ences when matters of health and wellness come up, the greater Willis-Knighton Health System family for their helpful assistance
supplying additional opportunities for the institution to throughout the development and publication of this article.
enter family discussions.
Funding
Essentially, through children and their experiences Article processing charges were funded by Willis-Knighton Health System.
attending Willis-Knighton Health System’s Pediatric
Orientation Program, parents gain exposure to the institu- Availability of data and materials
Not applicable.
tion, opening the door for patronage consideration. Paired
with target marketing initiatives that directly appeal to About this supplement
parents—the pathway traversed by most every competi- This article has been published as part of BMC Health Services Research Volume
18 Supplement 3, 2018: Engaging patients, enhancing patient experiences: insights,
tor—this program added a road less traveled, creating dual innovations, and applications. The full contents of the supplement are available
streams of influence aimed at patronage deciders. Over online at https://bmchealthservres.biomedcentral.com/articles/supplements/
time, this target marketing innovation, combined with volume-18-supplement-3.
other initiatives aimed at increasing pediatric medicine
Authors’ contributions
market share (e.g., recruitment of renowned pediatricians, The authors jointly developed the submitted manuscript, with each
construction of kid-friendly servicescapes, initiation of performing critical roles from early conceptualization through to the
production of the full manuscript. The manuscript resulted from a
unique branding initiatives), resulted in Willis-Knighton
collaborative effort. Both authors read and approved the final manuscript.
Health System’s acquisition of market leadership in the
category. Successes on the pediatric medicine front pre- Authors’ information
sented opportunities for share gains on other fronts, JKE is President and Chief Executive Officer of Shreveport, Louisiana-based
Willis-Knighton Health System, the region’s largest provider of healthcare
eventually leading the institution to market leadership services. With over 53 years of service at the helm of the institution, JKE is
in the region [19]. While this growth cannot be solely America’s longest-tenured hospital administrator. A fellow in the American
attributed to the innovative target marketing strategy College of Healthcare Executives and honoree as a Louisiana Legend by
Friends of Louisiana Public Broadcasting, he holds a bachelor’s degree in
introduced in the late 1970s, Willis-Knighton Health business administration from Baylor University, a master’s degree in hospital
System’s Pediatric Orientation Program is believed to administration from Washington University School of Medicine, and an
have played a meaningful role in the advancements honorary doctorate of science and humane letters from Northwestern State
University of Louisiana. He is the author of Breadcrumbs to Cheesecake, a
achieved. From its origins to present day, this unique book which chronicles the history of Willis-Knighton Health System.
target marketing approach has not been copied by any JLF Jr. is Chair of the James K. Elrod Department of Health Administration,
of Willis-Knighton Health System’s competitors, creating James K. Elrod Professor of Health Administration, and Professor of Marketing
in the School of Business at LSU Shreveport where he teaches a variety of
a lasting competitive advantage. courses in both health administration and marketing. He holds a BBA in
marketing from the University of Mississippi; an MBA from Mississippi
Conclusions College; a PhD in public administration and public policy, with
concentrations in health administration, human resource management, and
Willis-Knighton Health System’s decision to look off the organization theory, from Auburn University; and a PhD in business
beaten path for an avenue capable of amplifying its target administration, with a major in marketing, from the University of Manchester
marketing initiatives seeking pediatric medicine market in the United Kingdom. He is the author of six books, including Health Care
Marketing: Tools and Techniques, 3rd Edition, published by Jones and Bartlett
share gains resulted in a novel pursuit—its Pediatric Learning. JLF Jr. also serves as Vice President of Marketing Strategy and
Orientation Program—which distinguished the institution Planning at Willis-Knighton Health System.
from its competitors and set the stage for achieving its
Ethics approval and consent to participate
goal of providing healthcare services for a greater percent- Not applicable.
age of children in the marketplace. Additional spillover
effects bolstering share in other areas also were afforded. Consent for publication
Not applicable.
This unique initiative addressed desires to pursue an
increasingly important road less traveled to reach prime Competing interests
audiences, but beyond target marketing matters, it also JKE and JLF Jr. are both employed with Willis-Knighton Health System.

Publisher’s Note
Springer Nature remains neutral with regard to jurisdictional claims in
published maps and institutional affiliations.
Published: 14 December 2018
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www.emeraldinsight.com/1746-8809.htm
The challenge
The competitive challenge of emerging
of emerging markets: the case markets
of medical tourism
329
Peter Enderwick and Swati Nagar
Auckland University of Technology, Auckland, New Zealand Received January 2010
Revised May 2010
Abstract Accepted August 2010
Purpose – Increasing globalisation of the healthcare sector suggests that there may be new
competitive opportunities for emerging economies in this price-sensitive sector. The purpose of this
paper is to examine the extent to which emerging economies, and in particular the four major Asian
competitors – Thailand, India, Malaysia and Singapore – can compete successfully in the medical
tourism (MT) sector.
Design/methodology/approach – The authors evaluate this sector in terms of Porter’s Diamond of
National Competitiveness, as well as considering the challenges that competitors must address. The
primary challenges relate to attracting consumers, proving assurances of quality for a credence good,
increasing scale while maintaining quality, addressing ethical issues and moving beyond simple
price-based competition.
Findings – The authors conclude that the major Asian competitors in MT benefit from strong
government support, rely heavily on overseas linkages and accreditation, and are competing in very
similar ways. In the future, further differentiation is both likely and desirable.
Originality/value – The paper offers a theoretically based analysis of the future competitiveness of
the rapidly evolving MT industry in four key Asian economies. This industry appears to relate well to
the comparative advantage of emerging economies and offers future opportunities for upgrading and
value adding.
Keywords Thailand, India, Malaysia, Singapore, Emerging economies, Business development,
Globalization, Health care, Medical tourism, Competitive strategy
Paper type Research paper
Introduction
The economic rise of emerging markets has been well documented (van Agtmael, 2007;
Enderwick, 2007; Sirkin et al., 2008) illustrating the growing importance that these
economies play as both final markets and production sites for an increasing range of
products and services. One of the most important recent developments, particularly
within the leading emerging markets, the so-called BRIC economies of Brazil, Russia,
India and China, has been the strong competitive challenge emanating from domestic
firms based in emerging markets (Ramamurti and Singh, 2009; Sauvant, 2008). In a
number of industries – consumer electronics, steel manufacture and solar energy for
example – emerging market firms have moved beyond being merely OEM suppliers and
have achieved strong global market positions (Buckley et al., 2007; Gammeltoft, 2008).
The best known example is the Indian business process outsourcing industry (Davies,
2004; Kobayashi-Hillary, 2004). Another service industry attracting strong interest is International Journal of Emerging
so-called medical tourism (MT) which refers to the practice of travelling across Markets
Vol. 6 No. 4, 2011
international borders to seek healthcare. The scope of MT is broad: it comprises elective pp. 329-350
procedures, complex specialized surgeries such as heart valve replacement, as well as q Emerald Group Publishing Limited
1746-8809
dental and cosmetic surgeries. DOI 10.1108/17468801111170347
IJOEM The MT industry may be one of considerable appeal to emerging markets. On initial
6,4 examination, it appears to play to their strengths. It is expected to experience strong
growth in the foreseeable future (Deloitte, 2008); it is an industry where emerging
markets enjoy a huge cost and price advantage and where they can combine
complementary activities such as medical and tourism services. In addition, MT is a
sector that lends itself to government intervention and support, a characteristic of
330 many successful industries in a number of later developing economies (Luo et al., 2010).
However, MT also brings significant competitive challenges. Potential consumers need
to be assured with regard to quality and safety; there are legal issues with respect to
liability in the case of misadventure and the willingness of home country medical
practitioners to provide post-operative care. It is already a competitive business with
some 50 countries claiming MT as a national industry (Gahlinger, 2008).
This paper examines the potential that MT offers as an internationally competitive
industry for emerging markets and in particular for four Asian countries – Thailand,
India, Malaysia and Singapore that are fast developing players in the industry. To assess
the potential of the MT industry, we seek to answer a number of questions. The first is
whether or not MT is an industry that is appropriate for emerging economies. To answer
this question, we look at the requirements for successful industries in emerging markets.
This involves a consideration of national, industry and firm characteristics. Second,
we also examine the competitive advantages that are necessary conditions for success in
the MT industry and in particular, the extent of such advantages in the four major Asian
competitors. The third question we consider is the extent to which concerns within the
industry can be addressed as well as the policy implications and in particular, the value
of government involvement in the development of MT services.
To answer these questions, the discussion is structured around six main sections.
The following section offers an overview of the MT industry and in particular its size
and growth potential. We also discuss the key drivers and constraints affecting industry
growth. The third section develops the conceptual literature on the requirements for
successful industries in emerging markets using Porter’s Diamond of National
Competitiveness (Porter, 1998). The fourth section then offers an overview of four key
Asian emerging markets and their competitive position in the global market for MT
services. The fifth section discusses some of the chief concerns surrounding the MT
industry which would need to be addressed by any successful international competitor.
The final section offers concluding thoughts.
The nature of the MT industry

MT is an industry with a considerable tradition. In Roman Britain, patients travelled to the
major spa towns such as Bath to take the supposedly healing waters. From the eighteenth
century, numerous other spa and sanatorium towns from Europe to the Middle East
attracted prosperous visitors. The development of cheap long haul travel has now opened
up global options for such travellers. Horowitz and Rosensweig (2008) suggest that the key
difference between historical and contemporary medical tourists is that the latter enjoy
new healthcare opportunities which do not necessitate almost unlimited resources.
Because of this broader appeal, MT has grown strongly in recent years, primarily as
a result of rapidly rising costs and increasing waiting lists in the developed economies
(Bookman and Bookman, 2007; Connell, 2006). Inadequate resources and the nature of a
good where demand always seem to exceed supply means that consumers are
increasingly looking at global solutions to their needs. However, it should also be The challenge
recognized that for some medical tourists the overseas destination may offer superior of emerging
medical facilities or treatments that are not available locally (Teh and Chu, 2005).
MT is broad in its coverage. While it is generally understood to include a range of markets
medical procedures, it is more encompassing than this. We would also include dental
tourism, where individuals seek dental care outside their local healthcare system,
fertility tourism which may involve fertility treatment or surrogacy procedures, as well 331
as appearance enhancing cosmetic surgery. The motives which underlie these different
procedures vary. In many cases, particularly for medical interventions, the primary
motive is lower cost or as a means of circumventing long waiting lists. Fertility
treatment may be sought overseas when procedures or approaches have not yet been
approved in the patients’ home country. In certain cases, often for cosmetic surgery,
privacy concerns may prompt the choice of overseas treatment.
Size and growth of MT

Forecasts of MT suggest significant future potential growth. One widely cited estimate
is that the industry will grow in value from $40 to $100 billion between 2004 and 2012
(Deloitte, 2008; Herrick, 2007) and that medical tourists could comprise 4 percent of the
total travel population (Taiwan Institute of Economic Research, 2009). The Deloitte
report suggested that MT originating from the USA could increase ten-fold over the
next decade. They estimated that three-quarters of a million Americans travelled
overseas seeking healthcare in 2007 and this was predicted to double to one-and-a-half
million in 2008. Market research suggests that while only 10 percent of people from the
UK and the USA have travelled overseas for medical treatment, a much larger
proportion, perhaps 60-70 percent, would consider seeking treatment abroad (Research
and Markets, 2009). While medical travellers seek out services in many parts of the
emerging world, Asia is an increasingly popular destination. MT in Asia is estimated
to be worth more than $3 billion, accounting for more than 12 percent of the global
market and is growing at more than 20 percent a year (Velasco, 2008).
There has been considerable criticism suggesting that these figures seriously
overstate the true size of the MT industry. For example, estimates by McKinsey
suggest that the market for genuine medical tourists may be only 75,000 patients a
year, a mere 10 percent of the Deloitte estimate (Ehrbeck et al., 2008). The principal
explanation for such a significant discrepancy is the view that estimates of MT are
conflated by expatriates living overseas or conventional tourists experiencing
unexpected medical problems.
Estimates of likely future growth of the industry are sensitive to both economic
conditions and a number of constraining factors. It appears that the number of medical
tourists has certainly slowed in the current recession (Einhorn, 2008a). A priori, the
expected impact of a recession on overseas medical travel is not clear. On the one hand,
the lower costs offered overseas may be expected to increase numbers. On the other
hand, difficult conditions may force potential patients to postpone non-essential
treatment, particularly cosmetic or appearance surgery.
Growth of MT also faces a number of constraints. Key among these are capacity
constraints (number of beds, supply of medical staff, advanced technology
and infrastructure) in emerging markets, planned US healthcare reform, a strong
competitive response by developed country medical providers, decisions by health
IJOEM insurers on whether to cover treatment services offered overseas and the possibility of
6,4 a series of medical mishaps which could adversely affect consumer decision making.
Also, critical to the pace of future growth is the efficacy of consumer decisions
regarding treatment options. Healthcare decisions are inherently complex and involve a
number of risks: medical, emotional and commercial. Healthcare is also an example of a
credence good – a good characterized by high pre-buying costs and high post-buying
332 costs of quality detection. It is difficult for the consumer to accurately judge utility even
after consumption (Benz, 2007). Furthermore, healthcare services have bundled credence
characteristics where the seller provides both treatment and recommendations for the
extent of such treatment (Alford and Sherrell, 1995; Darby and Karmi, 1973). Such
characteristics where the seller is better informed regarding the utility offered creates a
situation of asymmetric information. Because of a deficiency of objective information the
buyer relies on third-party judgments which may be provided through accreditation,
affiliation, testimonials or the seller’s reputation.
The complexity of commercial decisions is in part the result of the importance of third
parties, particularly insurance companies, in healthcare decisions. Multifarious issues
arise with chronic diseases where handover and follow-up in the home country must
occur. Insurance companies have difficulties in handling such situations. Furthermore,
standard travel insurance does not provide adequate coverage for MT, where common
exclusions generally preclude pre-existing conditions, non-emergency dentistry and
cosmetic surgery. Similarly, the situation regarding legal redress in the event of medical
mishap is far from clear. It is unlikely that a medical tourist would have any recourse
through their home court system where they use the services of a non-medical
“intermediary” (see below) who cannot, by definition, commit medical malpractice.
While these factors may constrain the expected very high growth rates of MT,
MT is just one facet of the globalisation of healthcare which is likely to radically
reshape healthcare services. It is now common practice for the interpretation of
diagnostic tests, the annotation of medical and insurance records and drug testing to be
outsourced overseas. While such outsourcing and MT could impose considerable costs
on developed countries healthcare systems, it has been suggested that overall the
impact could be positive, for example, substantially lowering very high US health costs
(Cox and Sood, 2009).
The key drivers of MT

It is possible to identify a number of factors which are driving the growth in MT. A key
driver is the increasing recognition that people will be required to take greater
responsibility for their wellbeing and medical costs. Rising costs and growing waiting
lists mean that many people will seek out new sources of treatment. Furthermore, more
individuals, particularly within the USA, now find themselves either uninsured or
underinsured. For example, only 43 percent of small US businesses still offer health
coverage, compared with 96 percent of companies with at least 50 employees (Tozzi,
2009). A large number of people, around 46 million in the USA alone, are either
uninsured (Kaiser Commission, 2009) or are not fully covered for medical insurance
purposes. Recent survey evidence suggests that particularly for higher cost treatments,
around a third of US patients are willing to travel overseas (Deloitte, 2008; Khoury,
2009). Many developed country patients are increasingly familiar with foreign trained
doctors; a quarter of all physicians in the USA today, suggesting that there could
be greater willingness and acceptance of overseas treatment. At the same time, there is The challenge
growing demand for treatments such as cosmetic and dental surgeries, typically of emerging
excluded from insurance.
A major stimulus to MT would occur if medical insurance companies included the markets
option of overseas treatment within their plans. There are tentative signs that some US
health insurers are willing to consider extending coverage to allow for lower-cost
overseas treatment. For example, Blue Cross and Blue Shield of South Carolina have 333
agreements with a number of overseas hospitals enabling some of their 1.5 million
members to choose the option of overseas treatment (Einhorn, 2008b). Blue Shield of
California, for example, allows patients to seek medical treatment in Mexico (Cox and
Sood, 2009). Insurers are also facilitating the growth of MT through the development of
closer links with intermediaries such as Planet Hospital. Insurance companies face a
number of concerns which must be overcome. These include problems in ensuring
effective cross-border continuation of care where patients return home but still require
on-going care. Furthermore, insurance companies have a responsibility to ensure that
all medical providers have the necessary credentials to provide an appropriate level of
service. While accreditation offers a powerful indicator of quality, comprehensive
credentialing is a complex and difficult process.
It is also the case that some major employers are looking at the option of overseas
treatment. General Motors, for example, has sought proposals to provide an overseas
health option for its employees. The Maine-based Hannaford Brothers grocery store
chain offers employees the option of having knee replacement operations in Singapore
(Twedt, 2008). However, rapid growth in corporate use of overseas healthcare will
require solutions to the complex challenges that continue to exist.
Characteristics of successful industries in emerging markets

It is important to understand that emerging markets differ in significant ways from the
more advanced OECD economies. Some of the key differences are in terms of their cost
and factor conditions, their stages of development – economic, social and political –
and in their business systems (Enderwick, 2007). For these reasons we might expect
emerging markets to display marked differences in the types of industry in which they
can attain international competitiveness. In general, we might expect them to have
greater success in industries which are labour and cost intensive, do not require
considerable investments in technology and brand development, where strategic
disruption is possible and which have particular appeal to consumers towards the
“bottom of the pyramid” (Prahalad, 2004). The largest emerging markets such as China
and India might be expected to enjoy competitive advantage in industries
characterized by sizable economies of scale. Empirical evidence tends to support
these expectations. Emerging markets are strong competitors in industries such as
clothing and footwear, toys and simple sports goods where labour is a considerable
proportion of total cost (Han et al., 2009; OECD, 2007). Similarly, a number of studies
have highlighted the technological dependency of emerging markets (Bell, 2006;
Hemais et al., 2005) as well as the very limited number of global brands and companies
emanating from such markets (Dawar and Frost, 1999; Wu and Pangarkar, 2006).
Businesses and products originating in emerging markets have had disruptive success
in a number of industries including small cars from India, online gaming from China
and the low cost net book computers (Prahalad, 2004). At the same time, it is important
IJOEM to recognize that there are certain preconditions that must be met before any
6,4 internationally competitive industry can be expected to thrive. The most important of
these is the achievement of economic and political stability (Enderwick, 2007). Such
stability facilitates consumption and investment decisions and makes the attraction of
foreign technology, ideas and capital possible. The absence of stability, as currently
manifested by economies including Zimbabwe and Somalia, means very little
334 industrial development will occur.
Despite the differences between emerging and developed markets, we might still
expect the general principles of comparative and competitive advantage to apply. One
widely utilized framework examining national competitiveness is that of Porter (1998).
Porter’s analysis highlights the importance of four sets of factors: demand
considerations; factor conditions; related and supporting industries; and strategy,
structure and rivalry. This analysis is useful in examining the MT industry.
Demand conditions
Competitive success is more likely in an industry for which there is strong local
demand (Porter, 1998). Such demand encourages innovation, high-quality standards
and the attainment of scale. Certainly in the case of MT, local and regional demand has
been instrumental in the development of medical capability. Singapore, for example,
has long been recognized as the preferred Asian location for those in the region seeking
medical intervention. Similarly, Thailand’s leading hospitals draw heavily on local and
regional demand (Cohen, 2008). Specialist pockets of demand, such as gender
reassignment treatment have created areas of high-level competence, as in the case of
Bangkok Phuket Hospital or India in providing cardiac care. Bangkok International
Hospital has a special Japanese Medical Centre staffed with Japanese doctors and
nurses. In addition, rapidly rising costs and increasing waiting lists in developed
economies mean that emerging markets have appeal for global consumers. As the
earlier discussion indicated, international demand for MT appears to be both strong
and stable (Teh and Chu, 2005). International demand is also facilitated by the falling
costs of cross-border travel as well as the ease of obtaining comparative information
from the internet on alternative offerings. Modern media also provides much richer
data with more than simply price comparisons; for example, patient testimonials and
simulated walkabouts of facilities can be accessed.
The Asian region is also likely to experience considerable future growth in
healthcare services (CII-McKinsey, 2002). At present, there are only about 140,000
hospitals serving an Asian population of 3.5 billion. With Asia’s population forecast to
reach 5.6 billion by 2050, massive increases in healthcare expenditures are inevitable.
The need to replace aging facilities and to upgrade medical technologies will be key
healthcare expenditure drivers in countries such as China, India and Indonesia. This
will help to alleviate capacity constraints.
Factor conditions
Factor conditions and particularly the quality factor inputs, are recognized by Porter as
a key determinant of competitive success. In the case of medical treatment, a number of
emerging economies enjoy strong factor or supply conditions. In many cases, they
produce considerable numbers of doctors and nurses. Of course, in many developing
countries, qualified medical workers emigrate, seeking better paid positions.
A second-factor advantage enjoyed by emerging economies is much lower cost. The challenge
While cost levels vary significantly, on average, medical procedures in locations such of emerging
as India and Thailand are perhaps one fifth those in the USA or other developed
economies (Koncept Analytics, 2008). Labour costs are a significant proportion of total markets
costs. In the USA, labour costs typically are equal to more than half of hospital
operating revenue. At the same time, medical costs are rising rapidly in the more
advanced economies, particularly within the USA (Congress of the United States, 2008; 335
Cox and Sood, 2009). The above average rate of medical cost increase is attributed to
additional expenditure on prescription drugs and technology, an aging population and
a shift in the nature of healthcare with a greater preponderance of chronic illness.
In those advanced economies which offer subsidized medical care, the result has been
longer waiting times and lists for treatment.
Emerging economies enjoy several other sources of cost advantage (Herrick, 2007).
Major cost savings are likely to result from the way in which healthcare services are
organized in many emerging markets. In comparison with the USA or Europe there is
likely to be much less third party, particularly government and insurance, participation in
healthcare services. One estimate suggests that in the US third parties (insurance
companies, government and employers) account for 87 percent of healthcare expenditure.
The comparable figure for a country such as India is just 22 percent (Herrick, 2007).
Because patients are less directly involved in the purchase decision there are fewer
incentives to seek out the lowest prices. Similarly, providers are less likely to emphasize
price when competing for business. In summary, third-party involvement inhibits
effective competition. A second factor is that levels of price transparency and disclosure
are much higher in emerging markets where package prices for medical tourists are
readily available. This facilitates price comparisons. Price transparency is also facilitated
in emerging market hospitals by the lower likelihood of cross-subsidization whereby
paying patients contribute to the costs of providing charity care. Third, the healthcare
industry is subject to fewer regulations in emerging market, particularly those that restrict
collaborative relationships between physicians and hospitals, above all direct
employment arrangements. The Stark Laws in the USA, designed to discourage
kickbacks, mean that efficient contracting may not occur (Herrick, 2007). Finally,
malpractice litigation costs are likely to be much lower in countries other than the USA
(Herrick, 2007). An analysis of these sources of lower cost also suggests that emerging
economies are likely to be able to maintain these advantages over time.
While emerging markets enjoy a cost advantage, this has not been achieved at the
expense of technology. Despite labour costs, where emerging markets enjoy the largest
savings, being such a large proportion of total cost, investment in leading edge
technology still occurs. For example, Bangkok Hospital offers Gamma Knife treatment
for neurological diseases. Bumrungrad International Hospital in Thailand has some of
the most sophisticated information technology and control procedures in the world.
Its “robot pharmacy” distributes medicines to patients with a very high degree of
precision minimizing the risks of incorrect dosages or provision to the wrong patient.
It has also made major investments in automated laboratory facilities and a
sophisticated computerized health information system.
A third attraction that MT offers to emerging economies is the opportunity to
develop a high value industry which also has strong positive employment effects.
The MT sector, particularly when aligned with accommodation and more general
IJOEM tourist services, has the potential to add substantially to employment creation. At the
6,4 same time, a portion of this employment will be of highly qualified medical
practitioners and support staff.
Related and supporting industries

One of the key findings of Porter’s research on national competitiveness was that
336 successful industries rarely exist in isolation; in most cases they enjoy competitive
benefits from other sectors, related and supporting industries. In the case of MT, such
benefits of scope appear to be significant. The very term MT implies a likely linkage
with tourism more generally and in many cases treatment and recuperation time are
coupled. Given the possible medical cost savings many medical tourists are able to
combine treatment and a holiday for less than simply the cost of treatment at home.
In the same way, MT also draws heavily on a country’s transport and education and
training industries. Potential patients need to be able to travel easily both into and
perhaps within, the host country. Countries such as Thailand and Singapore, which
have well-developed tourist sectors, also usually have strong transport industries. The
tertiary education sector provides the supply of medical staff which is essential for MT.
We can also identify benefits of scope when related medical services are also available.
In many cases, patients will seek a combination of services. General hospitals are better
able to deal with international patients with multiple problems or to respond to
complications. Individual hospital groups are also broadening their scale and scope. For
example, India’s Apollo Hospital Group now has 8,000 beds, nursing and hospital
management colleges, pharmacies, diagnostic clinics as well as a number of innovative
medical services including air ambulance, medical consultancy and telemedicine. Several
of the hospitals within the group enjoy Joint Commission International (JCI accreditation).
Intermediaries. There are also a number of supporting industries which contribute
to the success of a MT sector. One is the emergence of a range of intermediary
organizations which facilitate connections between medical providers and potential
patients. Medical intermediaries scrutinize healthcare providers and screen customers
to assess those who are physically well enough to travel. They comprise four main
types. One is the traditional hotel group such as ITC-Welcome Group in India which
has broadened its business portfolio to act as broker between the patient and the
provider. These organizations emphasize the travel and accommodation elements of
MT. Second, a number of travel agencies such as Commonwealth Travel in Singapore
have used their experience in cross-border logistics to expand into MT. In some cases,
close alliances have been forged between healthcare providers and travel companies.
For example, Bumrungrad Hospital in Bangkok, one of Asia’s leading hospitals, has a
partnership with Diethelm Travel, Thailand’s leading inbound tourist organization.
Rapid growth of MT has encouraged the development of a third group of
intermediaries; dedicated medical travel planners. Specialist companies such as
MedRetreat, Planet Hospital, Global Choice Healthcare and BridgeHealth International,
act on behalf of potential patients in locating suitable treatment abroad.
MedRetreat, for example, facilitates North Americans seeking treatment in three
Asian destinations and offers trained “destination programme managers”
who accompany patients to appointments as well as arranging transport and
accommodation. The company has enjoyed strong growth with client numbers tripling
between 2005 and 2007.
BridgeHealth International illustrates the brokerage role of intermediaries helping The challenge
insurers, employers and individuals arrange medical travel plans. Fourth, a number of of emerging
the larger medical healthcare providers such as Bumrungrad in Thailand and Apollo in
India have developed specialized clinical programs for international patients. These markets
providers build out from the clinical focus to encompass logistics, accommodation and
recuperation time.
Facilitators perform a valued role for both insurers and consumers. For insurers, 337
intermediate facilitators bring high levels of expertise which can be useful in assessing the
suitability of patients and providers. For potential patients or consumers, intermediaries
offer the convenience of one-stop services, a wealth of experience and know-how,
assistance with other services and possible savings through their power to negotiate.
Accreditation. In addition to exchange facilitating intermediaries, we also need
to consider the role of accreditation organizations. Because medical treatment can be
considered “credence goods”, the quality of which is difficult to assess even after
consumption, it is associated with high levels of risk. Some of this risk is generic: it is the
risk that any human being faces with a medical procedure anywhere in the world. Such
risk typically stems from unexpected complications or deficient procedures. However,
when treatment is provided overseas, further risks must be considered. Where patients are
exposed to a different disease-related epidemiology the risk of contraction of infection may
be high. Uncertainty with regard to the standard of post-operative care as well as the
potential dangers of intercontinental travel soon after a procedure, all add to risk levels.
Differences in the availability and effectiveness of complaints policies and legal remedies
in diverse locations must also be factored into decision making. Accreditation serves, at
least in part, to remedy such risk levels.
The most highly regarded medical accreditation group, based in the USA is the JCI
(2009) which has been offering accreditation of overseas hospitals and other healthcare
facilities since 1999. JCI has approved more than 250 hospitals in more than
30 countries (Twedt, 2008). Also widely regarded is the UK-based Trent International
Accreditation Scheme. A number of Asian hospitals pursue dual accreditation in an
attempt to offer assurance to both North American and European patients.
Strategy and structure

Firm strategy within the MT industry focuses on overcoming the competitive
challenges that arise in a service sector characterized by high levels of risk, the need for
credibility and direct marketing. Much of the competition in healthcare services
focuses on non-price factors. While there are considerable differences in the cost levels
of healthcare services provided in developed and emerging markets, there may be
limited price competition between competing providers in particular locations. This
expectation follows from the nature of credence goods which often may display a
direct, rather than the more common inverse relationship, between price and demand
(Dulleck and Kerschbamer, 2006). In such cases, price operates as a signal of quality.
Economic theory suggests that in unregulated markets the prices of credence goods
may be expected to converge. This occurs because suppliers of credence goods tend to
charge relatively high prices for low-value goods where consumers cannot discern low
value, while competitive pressures force down the price of high value goods.
Many of the perceived “competitive strategies” that are used by healthcare providers
are designed primarily to increase credibility (Piper, 2010). We have already discussed
IJOEM the role of accreditation. There are a number of other strategies commonly observed. One
6,4 is the adoption of advanced technology. An area where emerging markets have made
major investments is electronic medical records. Electronic data facilitate the remote
evaluation of potential patients and reduce the risk of interpretation error. Only about
one-quarter of US hospitals have adopted an electronic format for patient data.
A second competitive strategy is hospital affiliation, under which an emerging
338 market hospital aligns itself with a world-class institution, usually in the developed
world. Examples include the affiliation between India’s Wockhardt and Harvard
Medical School. The International Medical Centre in Singapore, which is JCI accredited,
is also affiliated with Johns Hopkins International. Such affiliations offer access to
leading edge practice, research and positive reputational effects. Increasingly, a number
of emerging market hospitals are building collaborative relationships with regional
competitors. For example, India’s Max Healthcare draws upon the expertise of
Singapore General Hospital in areas such as medical practices, training and research.
A third observable strategy is the publication of physician credentials. A large
proportion of doctors with Western training or experience may be used to signal a high
level of quality and competence. While all the doctors at Thailand’s Bumrungrad
hospital are Thai nationals, more than half have international training or overseas
certification, including 200 with US board certification.
A fourth strategy emphasizes the possibilities opened up by modern information
technology and online communities. This has enabled the creation of sophisticated
web sites which offer both information and interaction. India’s Wockhardt Hospital
Group for example, has a web site which offers factual information as well as
opportunities for live chats, patient video testimonials, consultation for a second opinion,
as well as a virtual tour of facilities. This is supported by a contact centre in Bangalore
that operates 24/7 and toll-free phone help lines in major markets including the USA,
Canada and the UK. Also, increasingly available are online communities which offer
electronic word-of-mouth assessments where potential patients can search for
testimonies of patients who have experienced overseas treatment. Examples include
Plastic Surgery Journeys.com or Health Medical Tourism.org. In addition, attempts to
offer differentiated services focus on quality factors such as use of evidence-based clinical
guidelines, coordination of pre- and post-discharge care and provision for adverse events
requiring services unavailable at the particular facility. Such capabilities are designed to
offer consumers assurance of quality and safety (Wockhardt Hospital, 2008).
One of the strengths of emerging economies in developing MT is the considerable
rivalry that exists in these markets. First, there is strong competition between
locations. As mentioned earlier, at least 50 countries claim to possess an internationally
competitive MT sector. Second, there is intense competition between providers in the
Asian region, particularly between the major suppliers in India and Thailand. Third,
the real growth in MT has come from private hospitals and there exist strong
incentives for further development. All successful markets are characterized by high
levels of internal rivalry. India, for example, has 3,000 hospitals but a smaller number
such as Apollo, Wockhardt, Fortis and Columbia Asia dominate MT. Thailand, with
more than 400 hospitals offering advanced healthcare services has eight JCI accredited
providers including Bumrungrad, Bangkok Hospital, Piyavate and Samitivej. Private
hospitals within Malaysia account for just 20 percent of beds, but more than 50 percent
of doctors. Such competitive pressure ensures that costs are contained, new technology The challenge
is readily adopted and that service is emphasized. of emerging
Government and chance
markets
Two further elements included in Porter’s analysis are government and chance. There is
evidence of both at work in MT. Government has played a significant role in the MT
sector of a number of emerging nations, primarily in facilitating scale and scope and in 339
international marketing of capability. In 2003, the Singaporean authorities created
Singapore Medicine, a government-business partnership which brings together relevant
organizations and promotes Singapore as an international medical hub offering
treatment, research, conventions and education in the medical field. Similar government
initiatives to facilitate medical clusters can be found in Taiwan, Thailand and India.
Other government decisions can also facilitate or hinder cross-border MT. Thailand
has enabled medical tourists to stay for 30 days without a visa and to arrange with
relative ease, any necessary extension. Criticism of relative inefficiencies in the
issuance of visas in India encouraged the creation of an M Visa available to foreigners
seeking medical treatment. The South Korean Government has recently changed the
laws to allow hospitals to use advertising agencies to target medical tourists.
Complex trade-offs exist in the adoption of domestic regulations affecting MT.
For example, a successful MT industry requires effective controls on the illegal practice
of medicine. At the same time, approved doctors should be board certified. Differential
regulation can also be used to bestow competitive advantage within service industries
(Enderwick, 1989). For example, Singapore’s Living Donor Liver Transplant
programme at the Gleneagles hospital attracts a significant percentage of overseas
patients, in part because unlike many other countries, including India, Singapore’s
regulations permit transplants between partners who have an emotional link. While the
ethics of each case is carefully assessed, such legislation does enable a differentiated
position to be developed. On the other hand, government policy can add significantly to
costs and difficulties. A recent proposal to tax cosmetic surgery in India (International
Medical Travel Journal (IMTJ), 2009) caused concern within the sector that they would
suffer a competitive disadvantage within the region. At the same time, a recent proposal
to introduce a 5 percent tax on such surgery in the USA, designed to help finance the
proposed healthcare overhaul, was seen as a stimulus to outbound MT.
Competitive position of Thailand, Singapore, Malaysia and India

While Porter’s diamond of national competitiveness is a useful framework for
examining the development of the MT industry, it does have a number of limitations.
One is that it appears to be of limited value when examining the maintenance or
upgrading of competitiveness over time (Grein and Craig, 1996). This confines its value
in understanding how Asian providers such as India and Malaysia might move beyond
a competitive position based principally on cost. Second, concerns have been expressed
regarding the validity of assumptions which underpin the model. Specifically,
ideas developed in the 1980s assume strong levels of competition, comparatively stable
market structures and primarily cyclical fluctuations in business activity. Porter’s
work, developed inductively, focuses on actual situations and assumes predictable
sources of change through well-understood processes of new entrants or the rise of
substitute products. Much has changed in the last 30 years and the growing
IJOEM importance of digital technologies, global competition and government deregulation
6,4 has created new competitive dynamics (Downes and Miu, 2000; Shapiro and Varian,
1998). These emerging conditions highlight many of the characteristics of industry
dynamics noted above, particularly the instability, complexity and dynamism of
competition. Clearly, to fully understand the evolution of competitiveness in MT a
more dynamic framework would be desirable.
340 As discussed earlier in the paper, the MT industry has enjoyed strong growth in the
emerging markets in recent years and numbers are now significant as shown in Table II.
Amongst emerging economies, the markets that have seen the most prominent
growth are India, Singapore, Malaysia and Thailand as outlined in Tables I-III. MT in
these markets is projected to be worth almost US$6 billion by 2012 (Table III) (www.
hotelmarketing.com 2006). The Asian MT market is expected to grow at a compound
average growth rate of 17.6 percent between 2007 and 2012 (Companiesandmarkets.com,
2010). Such growth projections may be rather optimistic in the light of the recent global
economic recession. There certainly appears to have been a slow down in the industry.
For example, the number of Americans travelling abroad for medical care dropped
from 750,000 in 2007 to 540,000 in 2008 before recovering to 648,000 in 2009.
However, there is a view that suggests that recovery will be rapid as pent-up demand,
particularly for cosmetic and elective procedures rebounds (Deloitte, 2009).
The growth experienced by these markets is perhaps because consumers in
developed economies are not satisfied with health providers and insurers and now
have the opportunity seek such services on a global basis. Although these markets
compete on the basis of price, each of them is seeking to develop particular niches. For
example, the Bangkok International Hospital has a special Japanese Medical Centre
staffed with Japanese doctors and nurses that cater to the growing number of Japanese
patients (Health Tourism, 2009a). India has built its reputation on the back of its
extensive experience and links within the pharmaceutical sector which have made the
market a prominent base for drug testing. For instance, the Apollo hospital group is
involved with major pharmaceutical companies for drug testing and also subcontracts
operations and medical tests for Britain’s National Health Service. This increases the
credibility of services offered by hospitals like Apollo in India.
The growth of MT experienced by these economies in particular is indicative of a new
business model that is driving change within the medical services sector. Traditionally,
healthcare focused on the medical service providers rather than patients. However, with
deregulation and opening of these markets the focus has shifted from providers to
patients and services that they require at a range of prices. In addition, medical
organizations, hospitals and companies have increasingly open networks and interaction
which has allowed greater awareness of standards and options amongst patients.
In addition, facilities in these markets show greater responsiveness to the needs of
specific client groups. For instance, many hospitals in Thailand and Malaysia have
special prayer rooms and Halal food for their Muslim patients. These services
are designed to provide the patients with the familiarity of home in an alien environment
(Cohen, 2008). Perhaps, one of the main attractions of these emerging markets is the fact
that the services rendered cater to different needs. For instance, quality is the main
attraction for patients coming for treatments from parts of South East Asia, Middle East
and Africa, while cost savings and ease of access are the primary reasons for most
westerners seeking medical services in these markets. The examples discussed in this
Markets Highlights Competitive advantage Drawbacks
Thailand One of the most preferred destinations for MT The market has an organic approach Variability in the quality of medical
targeting a particular niche. The hospitals professionals. Discrepancies in the services
offer high quality treatments. The country provided. The country has also suffered from
also has the largest hospital in Asia (Bangkok political turmoil in recent times
Hospital) and (Bumrungrad) was the first The treatments are more expensive than in
Asian hospital to receive the ISO9001 India
certification and JCI accreditation (Thai
Website, 2009; Health Tourism, 2009a)
Singapore Healthcare infrastructure is comparable with Singapore offers services that are on par with The most expensive treatments in Asia
that of the Western world Western countries. The country also provides
a clean and structured environment which is
attractive for many Western tourists in
particular as it minimizes culture shock.
Singapore has 11 hospitals that have JCI and
seven that are ISO 9001-2000 certified (Health
Tourism, 2009b). There is also a range of
(Chinese) alternative medicine clinics (herbal
and acupuncture)
(continued)
The challenge
of emerging
markets
of Thailand, Singapore,
Malaysia and India in MT
Comparative position
341
Table I.
6,4
342
Table I.
IJOEM
Markets Highlights Competitive advantage Drawbacks
Malaysia Rising prominence of MT in the country is Malaysian specialists rank among the best in Political unrest in certain parts of the country
making it an attractive alternative the world in terms of training and expertise. makes travel risky for westerners in
Medical tourists are attracted to the country particular
due to its favourable exchange rate, political
and economic stability and high rate of
literacy. Malaysia has six hospitals that are
JCI accredited and 35 private providers that
have ISO9001-2000 certified (www.hospitals-
malaysia.org 2009). The GOVERNMENT of
Malaysia has taken a proactive role in
promoting the country for MT. For example,
it has implemented a “Green Lane System” to
expedite clearance for medical travellers into
Malaysia (www.hospitals-malaysia.org 2009).
The facilities have state-of-the-art equipment
and amongst other treatments have a strong
reputation for diagnostic, curative and dental
services
India The Indian MT industry has an increasingly The industry takes pride in offering a high Suffers from poor infrastructure. Inefficient
outward focus and is gaining an international level of internationally qualified personnel. processing of medical visas and registration
reputation The country also has extensive experience of tourists adversely affects potential patients
with medical outsourcing and has strong wanting to travel to India for medical reasons
links with the pharmaceutical sector. India
serves as a good option for elective surgery
and low cost of the treatments makes it
attractive for the uninsured. The market has
built a specialist reputation in heart surgery,
hip re-surfacing and infertility treatments.
Rejuvenation opportunities through yoga and
ayurveda
section suggest that the facilities in these markets have assumed healthcare The challenge
consumerism which supports the idea that individuals seeking treatments should of emerging
have more control over their decisions. However, despite the potential of MT in these
markets there are issues. markets
Concerns with MT
The growth of MT raises a number of concerns and there are a several controversies 343
that an emergent country entrant would need to address.
The first major area of controversy is the likelihood that MT will exacerbate
existing inequalities in access to healthcare. We can envision a number of sources of
inequality. One is the implicit assumption that underpins the growth of MT that
consumers will take increasing responsibility for their health and wellbeing. While the
internet offers access to vast amounts of data, comparative costs and alternative
providers, internet access varies significantly between countries in terms of literacy,
access and openness. This suggests that opportunities for MT will be uneven, not
simply because of income differences, but also because of information asymmetries.
A second source of inequality is that the growth of a successful MT industry could
occur at the expense of domestic healthcare. Fears focus on the attraction of medical
personnel from the public to private health providers and of rising costs and prices.
Certainly, for many emerging economies there is likely to be a significant gap in
standards between the domestic and the cross-border market. Medical tourists are
attracted to the latest technologies and luxurious facilities. Such conditions rarely prevail
in the domestic market. For example, fewer than half of India’s primary health centres
have a laboratory or a labour room, two-thirds lack adequate stocks of essential drugs
and less than 20 percent have a telephone connection. Inadequate funding, a lack of
qualified staff and rampant corruption all mean that quality healthcare is denied to many.
This is in sharp contrast to private hospitals catering to international tourists where the
Country Latest year Number of medical tourists
Thailand 2009 1,200,000

Singapore 2008 646,000
Malaysia 2007 341,000 Table II.
India 2007 450,000 Significance of MT in
Thailand, Singapore,
Sources: Mitra (2007); Companiesandmarkets.com (2010) Malaysia and India
Country Projected value ($)
Thailand 1.8 billion

Singapore 1 billion
Malaysia 590 million Table III.
India 2.4 billion Projected growth in the
Total 5.8 billion value of MT in Thailand,
Singapore, Malaysia
Sources: Mitra (2007); Companiesandmarkets.com (2010) and India (2012)
IJOEM Confederation of Indian Industry certifies hospitals. While such hospitals are expected
6,4 to hold down prices for the domestic population through higher pricing for medical
tourists, charges are still well beyond levels affordable by the vast majority of Indians.
However, the Apollo Hospital group in India does make provision for poorer
patients. It has set aside free beds, created a trust fund and is pioneering remote,
satellite-linked telemedicine across India. More generally, there is a broader question of
344 whether the relatively affluent medical tourists are widening the gap between domestic
and now international health access (Bagadia, 2009). It may also be the case that the
principal negative impacts of the growth of MT fall on the more affluent domestic
patients who may not wish to use the public health system but increasingly find
private hospitals unaffordable.
The counter to many of these concerns is the idea that trickledown effects will bring
wider benefits to India. In its most general form this could occur as a successful MT
sector adds to GDP and to potential government spending on healthcare. More
specifically, the growth of private healthcare facilities could halt or reverse medical
brain drain and the presence of sophisticated medical technologies and highly skilled
personnel might be expected to generate positive spillover effects. Investments in
medical equipment, training and organization might eventually benefit the population
at large.
A second major area of concern is medical ethics. Ethical issues arise in a number of
areas. One fear is that a growth in MT will encourage illicit trading in human organs
and it will be the very poorest who are exploited. Organ transplant tourism often
involves organs from live donors who act, not from altruism, but because they are poor,
vulnerable, or easily coerced. One study found a majority of Indian donors were below
the poverty line and 96 percent sold a kidney to pay off debt (Shimazono, 2007). The
success of organ transplants has resulted in a supply side shortage in developed
countries and encouraged “transplant commercialization” to circumvent waiting lists.
The ethical boundaries which constrain decision making in the developed countries
may not exist in emerging markets. A further contentious ethical issue is the use of
experimental treatments of critically ill patients with procedures not yet authorized in
Western countries, such as stem cell research. These could be used to create a leading
position in an embryonic field.
A third area of concern mirrors the apprehension that is often expressed about
offshore sourcing: the possible negative effects on home country output and
employment. In the case of MT, it is demand (patients) that is being diverted overseas.
This could have a negative impact on medical personnel in markets such as the USA
and Europe, if a significant amount of demand shifts overseas (Bies and Zacharia,
2007). Because of the considerable cost differences between developed and emerging
markets, there is likely to be a sizeable negative multiplier effect. For example, if US
patients spend $3 billion on overseas healthcare this represents something like
$15 billion in revenue to US healthcare providers. However, for two principal reasons
this may be an overly negative assessment. First, the demand for healthcare appears to
be almost unbounded and it could be argued that overseas sourced services actually
contribute to satisfying unmet demand. Second, technological changes mean that the
present pattern of MT may be simply a transitory stage. In the future, it may be
possible to automate many routines, with likely cost reductions and increased capacity,
reducing the need to travel overseas (De Arellano, 2007).
Conclusions and future research The challenge
Our discussion of the suitability of MT as a competitive sector within Asian emerging of emerging
markets suggests a number of conclusions. First, while considerable controversy
surrounds the exact magnitude and growth rate of MT, there is little doubt that markets
globalisation of healthcare is occurring. MT is one part of a more general globalisation
of medical activities. Such globalisation, while facilitated by technological
developments, particularly the falling costs of travel, communication and control, 345
is driven by consumer frustration with national healthcare systems characterized by
long waiting lists or spiralling costs. The shortcomings of public health systems
coupled with new opportunities to source services overseas, has brought competition to
national healthcare structures. At this stage, it would be more accurate to describe the
rise of emerging economies in the MT sector as evidence of the globalisation of
healthcare competition, rather than presenting a disruptive innovation.
A second conclusion is that the Asian emerging markets we have considered are all
enjoying strong growth in the area of MT. This growth is based on budding healthcare
consumerism, the idea that individuals will have greater knowledge of and control over,
healthcare decisions. Of course, disparities in information access and income mean that
this is unlikely to be a comprehensive process and may well contribute to growing
inequality in access to leading edge medical services. Much of this growth may be
understated and in particular, may be overlooked by healthcare providers in developed
markets. This is because many patients when advised of the need for treatment simply
never return. The traditional assumption that the patient decided to forego the procedure
may be increasingly tenuous. In deciding to seek treatment abroad, the average medical
tourist spends US$362 per day, compared with the typical tourist of just US$144 per day
meaning MT offers significant value adding (Lopez, 2009). For these reasons,
MT appears to offer several attractions for emerging economies.
Third, when we consider the competitive position of the major Asian emerging
economies in MT, a picture of remarkable similarity surfaces. All are competing on the
basis of a significant cost and price advantage and all are offering a comparable range of
full care services. There is just tentative evidence of the development of niche offerings.
As mentioned above, Thailand is building an international reputation for gender
reassignment treatment, India for cardiac care and Singapore for the application of
sophisticated technology. Given the very small size of its domestic market Singapore has
been the most proactive in building specialist capability. It is seeking to build a regional
medical hub and is actively sending its leading doctors to world class centres through its
Health Manpower Development Programme. This combination of leading capability
and a high level of medical tourists will enable Singapore to maintain a critical mass in
important but low volume services such as liver transplants. This suggests the
competitive benefits for developing more strongly differentiated positions, perhaps
most effectively based on the enhancement of particular areas of expertise.
All four countries are attempting to integrate medicine with more traditional tourism
to offer price competitive packages. Singapore, perhaps the least advantaged in terms of
tourism options, is broadening the appeal of MT through education and medical
conventions. Government plays a major role in the development of MT in all cases. Their
role is both an informational one (promoting medical services, facilitating accreditation)
and a capacity building one (encouraging clusters, overcoming infrastructure
deficiencies and tackling market failures). All international MT competitors seek
IJOEM to address the credence nature of medical services through common strategies,
6,4 particularly Western-based accreditation. These similarities suggest that while MT is
still a nascent industry for emerging economies, its future development is likely to see
increasing differentiation and a move by leading competitors to add value. The network
relations between emergent medical providers and the accreditation and legitimacy
offered by more established healthcare providers, highlights the considerable
346 interdependency in the industry. There appear to be mutual benefits in nurturing
such relationships which effectively promote consumer choice.
A fourth conclusion is that emerging markets face similar challenges when
competing for medical tourists. One is the difficulty of attracting overseas clients,
particularly when source countries have limited knowledge of the range, cost and
quality of medical services offered by emerging markets (Cohen, 2008). This is
particularly difficult when it is recognized that the majority of patients are repeat
consumers or take up services recommended by a friend. A further major challenge is
expanding capacity without sacrificing quality. This challenge is reported by
Thailand’s leading MT provider Bumrungrad Hospital, where overseas patients are
42 percent of volume but 55 percent of revenue (Knowledge@Wharton, 2009).
All competitors struggle to find the appropriate combination of medical and tourism
services. Various models are apparent – teaming up with airlines, tourist agencies,
even establishing direct links – and no clearly superior arrangement is apparent yet.
Fifth, it is apparent that the growth of MT is bringing more general change to the
medical services sector. In some cases, new business models are discernible. We can
clearly see a change in domestic medical systems from closed to much more open and
networked ones. No longer is it the case that Western countries are always the leaders in
medical research, services and technology; increasingly a number of emerging markets
are strong competitors. Patients increasingly travel for treatment, beyond their region or
province to explore global standards, prices and offerings. At the same time, individuals
are progressively more responsible for managing their wellbeing and healthcare. They
are increasingly opting for discretionary interventions such as dental and cosmetic
surgery. The deferring to medical professionals operating within an enigmatic process of
referrals, priorities and self-regulation is no longer the only choice many patients enjoy.
In a similar vein, MT is altering perceptions of how medical facilities should be
designed and managed. Leading international hospitals look more like first-class hotels
with welcoming public spaces separated from treatment areas, offer high levels of
customer service, promote consultative doctor-patient relationships and utilize
minimally invasive technologies to create so-called “hotelspitals” (Cohen, 2008). These
changes to traditional business models suggest that there may be attractive openings for
innovative emerging economy firms to establish alternative service offerings.
Sixth, it is likely that health providers in the developed countries will react to the
mounting competitive threat presented by the growth of MT. Some will consolidate
their eminent positions in medical research and practice, utilizing such advantages in
the achievement of collaborative arrangements or direct expansion into emerging
markets. Governments will also pursue reforms to try to improve efficiency and
effectiveness in the delivery of medical services. Future competitiveness will hinge
around decisions by major medical insurers and their receptiveness to covering
overseas treatment. Increased flexibility and mobility in the recognition of licenses and
board certification could allow more effective utilization of high-cost medical staff.
Within the USA a review of the federal Stark Laws which limit direct relationships The challenge
between physicians and providers and in the handover of patients from overseas of emerging
treatment centres. In the light of the growing globalisation of healthcare services, the
usefulness of such laws requires reconsideration. The more general overhaul of the US markets
healthcare system will be pivotal to the future of MT and the outsourcing of related
medical activities. Emerging economies cannot simply assume that MT will be a sector
where they will have unfettered access; competition and collaboration are both likely to 347
increase and to become more complex.
Finally, the long-term future of MT is by no means clear. It may be that MT
represents a transitional phase between the formerly closed healthcare systems of the
last century and a future of a fully globalised medical system with remote robotic
operations controlled from and provided, at low cost anywhere in the world. In the
interim, we may expect to see the leading international medical providers expand their
offerings to the broader field of general healthcare and into wellness. These hospitals
may internationalize their operations into neighbouring countries and will increasingly
attract outsourced specialist medical services including diagnostic work, management
of patient records, drug testing and research and the pioneering of new controversial
procedures. Such opportunities will enable successful competitors to add value
whether directly in the medical field or in related vacation activities and to move
beyond being simply the lowest cost providers.
While our discussion has shed light on a number of facets of MT and their attraction
for emerging economies, there is still much that is not well documented. First, there is
considerable controversy regarding the precise number of medical tourists. Estimates,
particularly of the number of Americans travelling overseas for treatment, vary
widely. While it may be difficult to separate out medical tourists from the broader
group of general tourists, more accurate data would be helpful.
Second, the complex welfare effects of the outsourcing of healthcare are not clearly
understood. While such an option may increase consumer choice, improve the
incentives for medical professionals to remain in their home countries and stimulate
technological upgrading of local facilities, the impact on home country providers and
access of host country locals to quality healthcare is unclear (Hazarika, 2010; Terry,
2007). Further analysis of these questions is urgently required.
Third, it is important to acknowledge the limitations of this paper. It provides a
mere overview of the industry with a particular focus on the primary emerging Asian
providers of MT services. This perspective is drawn from fragmented, but existing,
secondary data. A key limitation is that we do not have any consumer or user data.
We are not able to analyse the experiences of users of MT services and in particular,
their perceptions of the competitive strengths of various providers. This is an
important shortcoming and further work to provide a more balanced analysis is
required. We would also benefit from more detailed case studies of the competitive
strategies of successful providers which could provide a complementary firm-level
perspective to the more general analysis offered in this paper. The emerging
MT industry is an area where further work is needed.
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Corresponding author
Peter Enderwick can be contacted at: peter.enderwick@aut.ac.nz
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Hospital Operating System
Unleashing Throughput Potential
White Paper
Case Study: Mercy St Vincent Medical Center
Prepared by Ben Sawyer

Executive Vice President
And
Jim Rosenblum
EVP Products & CTO
StatCom, LLC
October - 2009
Outline
1. Introduction: The Throughput Challenge

2. Case Study
a. Mercy St Vincent Medical Center
b. Operational Challenges
c. Current State Analysis
i. White space defined
d. System Aim & Future State Baseline
e. Results
3. Transformational Approach
a. Mindset – System Aim
b. Methodology – Transformation Engineering
c. Technology – Adaptive System Intelligence
4. Operational Analytics
a. Performance Monitoring
5. Learnings
a. Simultaneous patient flow
b. Key transformation priorities
c. Recommended blend of improvement ingredients
6. Summary
Hospital Operating System 2

Introduction: Throughput Challenge
In the business management theory of constraints, throughput is the rate at which a system achieves its purpose.
For a hospital the purpose or “aim of the system”, as W. Edward Deming refers to it, is to deliver quality patient care
as efficiently as possible. Unfortunately, the fragmentation of a hospital’s activities across departmental operational
silos propagates waste, compromising throughput.
The assertion of this white paper is that a hospital will not “Health care is characterized by
be able to manage throughput for the achievement of its fragmentation — among disciplines, among
purpose until it becomes a system of interconnected departments, among organizations, and
activities. among geographic locales — while those it
serves depend on coordinated effort. The
Most hospitals function as a collection of departments or system propagates waste: waste of time,
independent operating units. W. Edward Deming widely resources, and good will”
credited with improving production in the United States (To Err is Human – The Institute of Medicine)
during the cold war through the application of his statistical
process control theories, describes such organizations as lacking “system aim”, resulting in impaired throughput and
competition for limited resources among silo-based components struggling to optimize their part of the operation.
Evidence of this competition is prevalent in hospitals demonstrated by competition for beds, wheelchairs, medications,
IV pumps, and so forth. While significant process improvement efforts have been undertaken to attempt to resolve the
symptoms of this fragmented delivery process, these efforts have largely failed because they are not addressing the
root cause. Disconnected patient care activities are the root cause of what is “wrong with healthcare”: highly variable
service delivery, inconsistent quality and performance outcomes, and reduced patient, provider, staff, and employer
satisfaction.
An operational gear is missing…
Process
Financial Data
People Clinical
Data
What is missing is a hospital operating system which connects all of a hospital’s disparate activities into one
interconnected system, providing real-time operational data so leaders can “manage what is measured”. A hospital
operating system would allow hospitals to expose the non-value added white space (wait times, delays, and other
wasted actions) in operations, and to facilitate patient throughput actions across departments in support of system aim.
Process
Financial
Data
People Clinical
Data
Operations
Hospital
Operating
System
The good news is that this has been done before. The healthcare industry can learn from how other industries
have addressed similar throughput challenges. From the airline industry (air traffic control), to automotive (Toyota
Production System - TPS), to retail (Walmart), to package express (UPS and FedEx) many industries have already
addressed the fragmentation of activities across operational silos, identifying and eliminating waste, and effectively
improving throughput performance. The outcomes have been the fulfillment of organizational purpose and
significant competitive advantage.

This white paper details an operational case study of Mercy St Vincent Medical Center in Ohio. It embarked on a
throughput transformation effort which connected disparate patient care activities into a hospital operating system
in support of the system aim of quality patient throughput. The label that Mercy St Vincent applies to its
transformation effort is “Patient First: Journey to Zero” (zero errors and zero re-work). As disparate activities
became interconnected and waste was eliminated, Mercy St Vincent experienced rapid improvements in length of
stay (LOS), cost savings, and improved admission volumes in spite of a down economic market. These results
have been validated by the Health Systems Institute at Georgia Tech, the leading graduate program in health
systems engineering.
Case Study
Mercy St. Vincent Medical Center, a 400+ bed teaching hospital in Northern Ohio, is the critical care regional
referral and teaching center within the Mercy Health Partners (MHP) system, a seven-hospital faith-based system
serving Northwest Ohio and Southern Michigan. MHP is a member of Catholic Healthcare Partners (CHP), which
consists of 36 hospitals, long-term care facilities, hospice programs and home health agencies across five states.
Mercy St Vincent’s President/CEO is Imran Andrabi, MD. Dr Andrabi is a family practice physician who had
previously served as the Chief Academic Officer and Chief Operations Office.
Operational Status & Challenges
By all external standards, Mercy St Vincent Medical Center has been a high performing hospital: winning a top 100
hospital designation, earning a JD Powers & Associates top performer award, and rating equally well on other
standards of performance from patient satisfaction scores to regulatory compliance and core measure outcomes.
Like many other high achievement hospitals, they had already initiated a Lean and Six Sigma department in 2006,
a DRG assurance program, employee retention and training programs, a top-ranked patient satisfaction
improvement program, and a CPOE/EMR system.
Patient throughput problems persisted at Mercy St Vincent “We had layered one improvement
however which negatively impacted organizational program on top of the next in an attempt
performance measures. The downturn in the economy hit to secure breakthrough performance but
the northern Ohio market particularly hard, causing the never achieved sustainable
unemployment rate to climb to 15%, and exacerbating the improvement”.
challenges Mercy St Vincent already faced. As expected,
non-pay cases increased and elective procedures dropped. (Samantha Platzke, Senior Vice President,
CFO, and Chief Transformation Officer -
Mercy St Vincent engaged strategic partners to assist in their
transformation effort. An operational discovery audit was conducted in order to better understand the reasons
behind the challenges that Mercy St Vincent faced and to provide a starting point for current to future state design.
Summary findings included:
1. Enterprise patient flow had no system aim and
“We were experiencing significant operational no senior role who “owned it”
challenges due to market turbulence, process 2. There were no clear system level throughput or
inefficiencies, and stretched facility and capacity key performance indicators
personnel resources. We knew we needed to
approach this problem differently than we had in 3. Department level performance improvement
the past in order to succeed for the long term. efforts were underway, however those efforts
did not roll up to a system level initiative
(Imran Andrabi, MD, President/CEO Mercy St
Vincent) 4. Competition existed between departments for
limited resources. Examples:
a. Critical care beds – OR and ED were competing for the same beds
b. Excessive use of ‘stat’ when ordering services, tests, and pharmaceuticals (30% on average)
5. Responses to flow challenges were reactionary

As the operational discovery audit demonstrated, Mercy St
Vincent was not functioning as an integrated system.
Rather, it was an assemblage of disconnected islands of We came to understand that a lot of non-value
excellence. That learning helped to explain why previous added activities were inherent in our patient
improvement efforts, which had focused on problem areas throughput processes, something we came to
within the silos, had not yet resulted in improved throughput. call “white space.” We had no clear system
aim and no enterprise-wide operational flow
White Space system to give us the data necessary to see or
Non-value added actions or white space were abundant with respond effectively to the white space. We
Mercy St Vincent operations as they are in most hospitals. were in a non-productive cycle of anecdote and
For example, the phone calls and time required for nurses to opinion driving inaccurate conclusions and
coordinate the diagnostic, procedural, and services delivery unintended consequences” (Imran Andrabi, MD,
for their patients is not direct value-added action. Another President/CEO Mercy St Vincent)
example was the cross-departmental coordination and
phone calls necessary to facilitate a unit transfer. If this white space could be identified and eliminated, and these
disparate activities could be interconnected it would translate into improved patient throughput.
The diagrams below demonstrate the concept of white space, the process of identifying it, and the effect of
reducing or eliminating it.
Value‐added
Non‐value‐added (diagnose, treat,
(white space) procedures)
Patient 1
Patient 2
Patient 3
• Healthcare systems measure and report By far, the greatest opportunity to
on the black spaces improve lies in the whitespace. In
healthcare, this is an area that is
• Healthcare systems do not measure or virtually untouched.
report on the white space
“The Average
Patient Case” Non‐value‐added Value‐added
(white space) (diagnose, treat, procedures)
Length of Stay (L.O.S.)
Average = 5.1 days
(OLD)
Length of Stay (L.O.S.)
Average = 3.5 days
(NEW)
BENEFITS
•$ (Cost/case)
• Available Capacity (higher turns)
•Fewer Defects and Safety Concerns

Current State Analysis
Senior leaders at Mercy St Vincent took the initial discovery
findings seriously and collaborated on a detailed current
state process flow analysis to better understand how “A system is a network of
disparate activities and white space were resulting in interdependent components that work
persistent patient throughput challenges. Key flow together to try to accomplish the aim of
challenges were analyzed in preparation for future state the system. A system must have an aim.
design in support of Mercy St Vincent’s system aim. All Without the aim, there is no system.”
processes were evaluated as interconnected activities within (W. Edward Deming)
the dynamic environment of hospital operations.
This first phase of the transformation effort was difficult work. It required St Vincent Mercy senior leaders to
develop a deep understanding of their front line operations and to be persistent enough to achieve the insights
necessary to drive an effective future state design.
System Aim & Future State
“It was not until we appreciated the impact of our Once the root cause challenges were understood and
disconnected processes and the associated non- prioritized, the Mercy St Vincent senior team was able
value added ‘white space’ waste, that we were clarify their system aim as “quality patient throughput”.
then able to identify the levers necessary to re- The label that they gave their system aim effort was
align our organization around a system aim of “Patient First: Journey to Zero”. With help from their
quality patient throughput. (Imran Andrabi, MD, strategic partners, Mercy St Vincent developed future
President/CEO Mercy St Vincent) state process flows and the operational levers
necessary to make their transformational efforts a
reality. The clarity of their system aim enabled them to
see their operation through a different lens. This new perspective helped drive them to make some important
changes that they would not have otherwise initiated. For example:
1. Launching a centralized care coordination center hub to manage hospital-wide operations
2. Moving case management into the forefront of operations and patient flow logistics
3. Designating clinical care coordinators in each operational unit to be closely aligned with the hub
In order to effectuate and sustain Mercy St Vincent’s improvements future state processes were hardwired into the
hospital operating system technology so that the daily chaos of hospital operations could be effectively coordinated.
Key performance indicators were reported on from the hospital operating system reporting database so that Mercy
St Vincent could receive real-time feedback on their progress, and alerts when adjustments were necessary.
Results
Barb Martin, Chief Nursing Officer at Mercy St Vincent explains One year after initiating this
Mercy St Vincent’s results as follows. transformational effort, St Vincent Mercy
reduced their ALOS by 14.3%, lowered
“Reduction in employee expenses per day as a measure of their direct costs by $8.6 million, and
efficiency accounted for 34% of our cost savings. We were able increased their admission volume by
to eliminate agency costs and nursing premium pay. We no 11.2% for a total impact of $10.3 million.
longer needed the Observation Unit as status is now taken care (Confirmed by the Health Systems Institute
of upfront – that was 16 dedicated FTE’s. In spite of significant at Georgia Tech)
process change our employee opinion scores went up, and our
nurse separation rate also improved by 41%. LOS improvements as a measure of throughput accounted for the
other 66% of the cost savings. We experienced a 0.7 day reduction in non-CMI adjusted LOS from 5.1 to 4.4. As a
result our cost per EIPA-CMI adjusted (equivalent inpatient admission - adjusted for outpatients and case mix)
improved significantly. One of the more interesting outcomes is that the LOS improvements saved us 10,400 days
annually which gave us the ability to care for 2,260 more admissions with no additional capital or fixed costs. That
new volume represents the size of one of our sister hospitals, Mercy Tiffen. So in effect, we created another
hospital within a hospital from a capacity standpoint.”
The 11.2% increase in Mercy St Vincent’s
Physicians are often frustrated when rounding because they
admission volume, in spite of a down do not know where the patient is or the status of the orders.
economic market, was a direct result of Physicians admit patients and round at all hours and are
improved throughput. Physician affinity is typically time-pressed to get to the next patient or move on to
closely tied to efficient patient throughput the operating room. Improved throughput benefits hospitals
processes. and physicians alike.

Mercy St Vincent considered physician throughput needs carefully during the future state design process. For
example, the decision to create a central logistics hub and departmental clinical care coordinators so that patient
movement and status notifications could be expedited was very important to the physicians. The result has been
positive cycle of improvement leading to better physician affinity driving increased admissions.
Transformational Approach
Three Ingredients
There were three interactive improvement ingredients that were essential for Mercy St Vincent to connect disparate
processes, wash out white space, and improve throughput.
1. Mindset – System Aim Alignment
2. Methodology – Transformation Engineering
3. Technology – Adaptive System Intelligence
Mindset – System Aim Alignment
In the airline industry the FAA has mandated that “safety first” be the aim of the system. Everything from detailed
aircraft maintenance audits and service, mandatory safety instructions, and passenger and safety checks before
takeoff by the flight attendants are actions aligned around the system aim of safety first. As a result, the likelihood
of injury or death is greatly reduced.
When Mercy St Vincent clarified that “quality patient throughput” was their system aim, it became the lens through
which they evaluated every current process, role, and function. The realignment of their operation to that system
aim gave them the framework by which to make trade-off decisions as they selected their future state. Examples
as mentioned previously included:
1. Launching a care coordination center as a hub for
“It is important not to define the aim of a hospital-wide operations
system in terms of activity or methods. It
must always relate directly to how life is 2. Moving case management more into the forefront
better for everyone. The aim of the system of operations, and
must be clear to everyone in the system. The
3. Designating clinical care coordinators in each
aim must include plans for the future. The
operational unit who were closely aligned with the
aim is a value judgment.” (Edward Deming)
hub
If Mercy St Vincent’s system aim for example had been to
“reduce resource consumption per patient” then the expression of that system aim would have likely resulted in
reduced variable cost per patient, but it would not have necessarily resulted in improved throughput or the quality of
care for patients.
As the awards and recognition achieved by Mercy St Vincent prior to beginning their operational transformation
demonstrates, many hospitals achieve recognition for relative comparative performance, and yet still have not
reached their full operational potential. The measuring stick itself may be incorrect. As long as all hospitals are
constrained by the fragmentation of silo-based operations,
comparative benchmarking will be flawed. When exceptional While a simple concept, the power of system
throughput begins to appear within an industry sector performance aim in operational transformation should not
standards begin to change. A good example of this was the be underestimated. Particularly given the
transition to ISO-9000 standards in manufacturing. How then prevalence of silo-based operations and
does the fragmentation of silo-based operations play itself out in thinking that characterizes today’s
today’s hospital? healthcare industry.
The typical hospital is comprised of many “islands of excellence.”
Individual departments work to meet or exceed patient care standards for their particular discipline. While this is
admirable on the surface, the unintended consequence is a department-centric paradigm which encourages
improved component performance at the expense of system throughput. In silo-based operations, the lack of
system aim leads to disconnected islands of excellence. This
“Management of a system requires the adversely impacts throughput in three key ways:
constant facilitation of the
interrelationships between all of the 1. Cross-vertical handoffs do not occur seamlessly.
components within the system and of the Ideally, the movement of patients from admission
people working in it.” (W.Edward Deming) through diagnostics, treatment, nursing units, and finally
to discharge occurs without significant delays. In
department-centric hospitals one department’s needs
are not necessarily compatible with another department’s priorities. For instance, nurses on a med/surg
unit may not notify bed management — or they may do so only after a substantial delay — that a bed has
been vacated. Consequently, there are vacant beds that could be occupied by revenue-generating patients
— who are kept waiting somewhere else.
2. Inputs and outputs are controlled at a departmental, not system, level. Unless the hospital is on
diversion, the usual patient entry points (i.e., the admission office and the emergency department) have
little or no control over their admitting patient volumes. In other words, they are expected to accommodate
all comers. Problems arise when other departments, such as nursing units, limit their inputs, causing a
backlog of patients and making it difficult to deliver patient care according to prescribed protocols. As
described earlier, these obstacles are not intentional. Rather, they reflect the exercise of departmental
priorities over system aim.
3. Efficiencies gained in one department do not necessary contribute to hospital-wide patient flow. As
Mercy St Vincent’s experience demonstrates, it is quite common in hospitals to undertake departmental
efficiency improvement initiatives. Frequently, when departmental flow is optimized with respect to system
flow, poor system throughput performance is the result (it is sub-optimized). For example, if the emergency
department boosts its efficiency, but it is not coordinated with a similar endeavor on the nursing units,
particularly the critical care units, the number of ED boarder patients will rise. This optimization of
departmental flow at the expense of system throughput is a frequent occurrence in the healthcare industry.
The symptoms of silo-based operations are:

• Anecdote and opinion about system throughput challenges replaces fact-based understanding and
decision making
• Low coordination and collaboration persist instead of orchestrated care execution around system aim
objectives
• Non-value added white space is not visible or well understood, particularly in the hand-offs between
operational units
• Hospital flow tasks stay open-looped, meaning they are not completed on time and correctly from a system
flow standpoint
• Unintended consequences are experienced as operational components compete for limited resources
Methodology – Transformation Engineering

In spite of a well defined Lean and Six Sigma department, Mercy St
Vincent had not achieved the improved throughput performance they When hospitals like Mercy St Vincent break
desired. As discussed, there was an absence of a clear system aim out of the operational constraints of silo-
and the enterprise operational levers necessary to facilitate improved based thinking a paradigm shift occurs,
throughput. However, the fragmentation of processes and daily unleashing their potential for significant
chaos of healthcare operations also had to be taken into account performance breakthroughs.
when evaluating Mercy St Vincent’s system throughput opportunities.
In some industries, work is performed in environments that

While automotive, shipping and other are more predictable, so performance improvement
similar industries have dramatically principles can be applied to create reproducible processes
lowered costs, improved quality, and that will work for longer periods of time. While a factory for
decreased variability across their entire example, may succeed in keeping its environment relatively
enterprise, hospitals have not enjoyed the static, hospitals cannot. Daily variability in patient needs,
same sustainable success using identical volumes, and provider and resource availability result in an
process improvement (PI) tools environment that is fundamentally dynamic.

Deming instructs that “If you can't describe what you
are doing as a process, you don't know what you're Hospitals have and continue to use PI initiatives
doing.” The dynamic interconnectedness of hospital
to craft improvements at a moment in time.
operating processes has to be well understood before
crafting future state recommendations. However, these improved processes are
imbedded into an inherently dynamic
For Mercy St Vincent, this important principle was environment so inevitably the efficacy of the
used when developing the current state to future state improvement degrades over time.
design. Process flows from admission through
discharge were simultaneously evaluated through the
system aim lens of “quality patient throughput” and the dynamic nature of the interconnected flow processes. Major
milestones or key performance indicators (KPI’s) for all critical future state processes were identified and linked to
the respective sub-processes so that Mercy St Vincent could stay on top of the dynamic nature of their hospital
environment and “work on their business while they were working their business.” Finally, all future state flows
were translated into realistic standard operating procedures in support of a comprehensive training program for
front-line staff in preparation the launch of Mercy St Vincent’s hospital operating system.
Technology – Adaptive System Intelligence

To successfully leverage and sustain future state
In dynamic systems all processes are improvements within a hospital operating system, the
interconnected. As such, a well-tuned adaptive technology must incorporate dynamic interconnectivity so
system should be capable of responding to the that the future or ideal state can be maintained while
variable nature of the dynamic environment. managing the daily chaos of hospital operations.
As such, a system with adaptive intelligence should have the following characteristics:
• Allow goals to be set
• Contain sensing mechanisms, registering information relevant to the system’s goals
• Contains effector mechanisms, allowing the system to act on its environment
• Contain conversion processes which take information about the environment (via the sensors),
compares that information to the system’s goals and modifies the environment as necessary
As the diagram on the next page demonstrates a system with adaptive intelligence should:
1) Be a human-machine system compromised of people, IT systems, standard operating procedures and
executive mind-set—focusing on hospital operational efficiency and quality with enterprise impact
2) Interconnect all processes that result in patient movement and order-execution including:
a. Visualizing pertinent information to all stakeholders
b. Facilitating departmental and functional hand-offs
c. Choreographing activities of clinical and non-clinical staff around patient flow, logistics and order
execution
3) Be adaptively intelligent, meaning:
a. Allow for operationally relevant goals to be recorded
b. Receive input, in real-time, from the environment that is relevant to the system’s goals
c. Influence activity in the hospital in ways relevant to achieving operational goals
d. Compare the environment to the system’s goals and influence behaviors by sending error-
correcting signals to those who can change the environment
e. Predict and/or recognize trends and intervene proactively

Adaptive System Intelligence Diagram
A system with the adaptive system intelligence

defines a new breed of hospital efficiency systems
– a hospital operating system

Operational Analytics
Performance Monitoring
To sustain and improve upon performance gains operational data and analytics must be readily available to
hospital leaders. Three sources of information exist within a hospital operating system:
1. Open data base compliant (ODBC) access to raw data for manipulation within tools such as Excel, and
Crystal Reports
2. Standardized reports, and
3. Real-time operational dashboards
Operational dashboards can be made available to all areas requiring real-time information in support of throughput.
As demonstrated below, these operational analytics are also supported on a mobile platform for instant retrieval
regardless of location.
Bed Mgmt
Executive
Nursing &
Case
Mgmt
Transport
EVS
Learnings
Simultaneous Patient Flow
While the healthcare industry has spent a lot of time developing individual patient care paths, the notion of
optimizing simultaneous patient throughput with respect to LOS, quality, safety, and resource consumption gets
less attention and is inherently more challenging from an operations standpoint.
As discussed previously, it is very difficult to effectively coordinate the different priorities and requirements
necessary for simultaneous patient flow using manual approaches. The challenge is to manage today’s chaos, not
just schedule for tomorrow’s anticipated load.
Similar to airport operations, reservations do not translate into smooth logistics on any given day because of
constantly changing conditions. Airports manage this chaos with air traffic control and operational control centers
whose algorithms make decisions upon these changing conditions.
Most hospitals do not have control systems like airports to manage daily chaos. Instead, many diagnostic and
service area departments optimize their department schedule around outpatient demands and simply work
inpatients in when feasible. They do this with short notice notifications to Nursing and often without visibility to the
patient’s pending discharge status or other priority criteria.

As a result compensatory behaviors abound including:
1. Overdependence on ‘stat’ designations when orders are placed
2. Work-ups being done in the ED, and using up valuable treatment space, in order to leverage the ED’s
priority access to diagnostics
3. Demand for critical care or step down beds increases, because of priority access to diagnostics and/or
better nurse to patient ratios
Key Transformation Priorities

1) Commit to system aim and who owns it
2) Define transformation for your organization and communicate it (e.g.“Quality Patient Throughput”)
3) Identify patient throughput critical path (future state) vs. current processes
4) Surface your KPI’s (major milestones) so you can “work on your business while you’re working your
business”
5) Reduce white space (i.e. Non-value added tasks and sub optimized processes)
Ideal ‘Blend’ of Improvement Ingredients

To achieve optimal throughput (evaluated against LOS improvements), and based upon Mercy St Vincent’s
success, the Health Systems Institute at Georgia Tech suggests the following blend of technology, methodology,
and mindset change ingredients.
(Note: ALOS of 3.5 represents Mercy St Vincent’s target goal)
How LOS % Change % of Total
Impact
Technology 0.9 17% 55%

Methodology 0.4 8% 26%
Mindset 0.3 6% 19%
Total Improvement (ALOS 5.1 to 3.5) 1.6 31% 100%

Summary
This white paper provides a case study of how Mercy St Vincent Medical Center, a 400+ bed academic teaching
hospital in Northern Ohio, was able to unleash it’s throughput potential in one year by linking disparate patient care
activities into one interconnected hospital operating system. The essential ingredients in Mercy St Vincent’s
transformation were:
1. Mindset – System Aim Alignment
2. Methodology – Transformation Engineering
3. Technology – Adaptive System Intelligence
The throughput challenges that Mercy St Vincent faced are applicable to most hospitals. In spite of achieving many
comparative benchmark awards, and initiating many industry standard improvements, Mercy St Vincent had not
achieved the desired performance break through. They needed a new approach which could leverage what they
had and recalibrate their operations based upon a new paradigm.
A paradigm shift in operations…
From To
silo driven data data that actually explains the
simultaneous flow of patients
across the system
optimizing parts optimizing the whole
anecdote and more effective fact-based

opinion decisions
low coordination and

collaboration orchestrated care execution
highly uncertain more predictable service

service delivery performance
Mercy St Vincent Results

In spite of a depressed economic market, including an unemployment rate of 15%, in one year Mercy St Vincent
was able to:
1. Reduce their ALOS by 14.3%
“It was not until we appreciated the impact of our
2. Lower the direct costs by $8.6 million disconnected processes and the associated non-
3. Increase their admission volume by 11.2% value added ‘white space’ waste, that we were then
able to identify the levers necessary to re-align our
4. Improve quality and safety performance
organization around a system aim of quality
measures
patient throughput.
5. Achieve total financial impact in one year of
$10.3 million (Imran Andrabi, MD, President/CEO Mercy St Vincent)
Like most hospitals, the operational challenges that

Mercy St Vincent faced included:
1. Enterprise patient flow had no system aim and no senior role who owned it
2. There were no clear system level throughput or capacity key performance indicators
3. Department level performance improvement efforts were underway; however, those efforts did not role up
to a system level initiative
4. Competition existed between departments for limited resources
5. Responses to flow challenges were reactionary
The Mercy St Vincent case study demonstrates that a hospital will not be able to manage throughput for the
achievement of its purpose until it becomes a system of interconnected activities. Mercy St Vincent’s transformed
throughput operations by connecting disparate patient care activities into a unified hospital operating system. The
results are more predictable service delivery, consistent quality and performance outcomes, and improved patient,
provider, and staff satisfaction.
The Mercy St Vincent’s example should serve as a roadmap for other hospitals and health systems to follow.

See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/280688529
STRATEGIC MARKETING & COMPETITIVE ANALYSIS OF MALAYSIAN MEDICAL

TOURISM INDUSTRY, 2015
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2015
International Journal of Business, Economics and Law, Vol. 6, Issue 2 (Apr.)
ISSN 2289-1552
STRATEGIC MARKETING & COMPETITIVE ANALYSIS OF MALAYSIAN MEDICAL

TOURISM INDUSTRY
Saleh Abdullah Saleh
Othman Yeop Abdullah Graduate School of Business
Northern University of Malaysia
E-mail: salah_s77@yahoo.com
Fawad Hussain
Department of International Business,
School of International Studies,
College of Law, Government and International Studies,
Universiti Utara Malaysia,
06010, Sintok, Kedah Darul Aman.
E-mail: fawadhussain.fawad@gmail.com
Mohammad Basir B Saud

E-mail: basir372@uum.edu.my
Mohd Azwardi MD. Isa.

E-mail: azwardi@uum.edu.my
ABSTRACT
Medical Tourism is one of the kind and biggest industries in the world, and it plays an important role in the world economy at macro
level. Medical Tourism industry is supporting the national growth when the foreign exchange is inflows as an added engine for
social transformation which produced a favorable image on the global platform. Previously, patients from the east were travelling
to the west to get the best medical treatment. Nowadays, patients from west and developed countries, travel to east and developing
countries which provided reasonable as well as better medical services, equipped with most advanced medical technologies in health
care treatments. This paper is a strategic and competitive analysis of Malaysian medical tourism industry which has identified poor
or no follow-up care for medical patients. After the patients being hospitalize for a short while, then, while waiting for returning
flight home, they will travel within that country. Also discuss the weak malpractice law; patients suffer and have limited ability to
complain about poor medical care services. In addition, Malaysian tourism industry is the ambassador to other sub industries. On
the other hand, medical tourism also affects the host countries with the problem of internal brain drain, whereby all good doctors
give up serving the public sector and go into the exotic, private health centers, which serve the medical tourists with lucrative salary
and benefits. Medical tourism started to be given prominence by the Malaysian government after Asian Financial crisis as an
economic diversification. Thus, Malaysian Ministry of Health had set up Malaysia Healthcare Travel Council (MHTC) to promote
and develop the country's health tourism industry rigorously and position Malaysia as a healthcare ASEAN’s region hub. Therefore,
this paper will highlight some of the key strategies and competitive elements needed to be improved in the medical tourism industry
as compare to other regional competitors such as Singapore and Thailand.
Keywords: Medical tourism industry, competitive analysis, government strategies, medical tourism strategies.
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I-Introduction
Medical Tourism is one of the biggest industries in the world, and it plays an important role in the world economy at macro level.
Medical Tourism industry is supporting the national growth when the foreign exchange is inflows. Basically Medical Tourism is a
kind of industry, which is cure to macroeconomic problems, as an added engine for social transformation and to produce a favorable
image on the global platform. It is a generous incentive to the industry. This has attracts many entrepreneurs to invest in medical
tourism without necessarily considering internal and external factors affecting the tourism sector. In fact globally medical tourists are
looking for ways to obtain access to affordable health care. (Ramirez de Arellano, 2007).
Malaysia‘s healthcare industry is estimated at a value of around US$10.3 billion in 2010. In the same year approximately 4.4% of
GDP is dedicated to the health care sector. Previously, Malaysian healthcare tourism grows at a rate of 25.3 per cent a year since
1998. This signifies a more advanced medical care services in Malaysia (Brandt & Lim, 2012). Some 400,000 foreigners were
healthcare tourists in Malaysia for 2010, generating revenue of US$ 101.65 million (RM306.98 million) for the country. The figure
is expected to increase to US$ 116.5 million (RM351.83) until the end of 2011. Malaysia now receives 85–90% of its patients from
ASEAN countries and the rest of 10–15% from Japan, Australia, UK, Middle Eastern and European countries (Brandt & Lim, 2012).
There is also increasing interest from US and Canada. The government says it expects the country to be hosting 1 million health
travelers a year by 2020, contributing RM27.8 billion to gross national income (Brown, 2011).
The healthcare system in Malaysia is a mixed public-private one. In terms of the number of doctors, the ratio is fairly balanced. In
2002, for example, 54 per cent of the doctors were in the public sector and 46 per cent private (Leng, 2007). As according World
Tourism Organization (WTO) report the worldwide earning for international tourism reached a new record of US$623 billion
(Madrid, 2013). As one of the factors contributing to globalization, the tourism industry has become more competitive than ever
before due to the rapid development through information technology. Base on the report of United Nations World Tourism
Organization (UNWTO) International tourist arrivals grew by 4% in 2012 to reach 1.035 billion, according to the latest UNWTO
World Tourism Barometer. Emerging economies (+4.1%) regained the lead over advanced economies (+3.6%), with Asia and the
Pacific showing the strongest results. Growth is expected to continue in 2013 only slightly below the 2012 level (+3% to +4%) and in
line with UNWTO long term forecast (UNWTO: Report, (2013); (Madrid, 2013). With an additional 39 million international tourists,
up from 996 million in 2011, international tourist arrivals surpassed 1 billion (1.035 billion) for the first time in history in
2012((Madrid, 2013).
II-The Importance of Global Strategic Marketing

Tourism is as an important economic activity for many countries in the globalized world. Like many countries, Taiwan has been
engaging in the development of tourism, and its government has implemented several tourism strategies over the last decade. In order
to successfully develop the industry, tourism marketing has been emphasized in various disciplines in which design is one of the key
elements. Globalization has compressed the world as a whole with information technology playing an important role on the linkage
of global networks (Fox, 2001).
Several researchers have pointed out the relationship between information technology and the formation of globalization (e.g.,
George 2006; James 1999; Wahab & Cooper, 2001).
Globalisation brings with it increasing interaction between nation states and has reinforced the relationships among them. This
fosters the development of the international tourism industry (Das & Cassandra, 2009). Tourism has become one of the big global
and globalized industries that are dominated by information (Werthner & Klein 1999). In fact, tourism and the Internet, a global
communication technology, are two of the major factors of globalisation (Pechlaner & Raich, 2001).
In recent times, medical tourism has emerged in many countries as a new form of trade item or value-added tourist product. These
countries have been actively developing this industry through government investment and support. It has been estimated that the
global medical-tourism industry currently generates annual revenues up to US$ 60 billion (negatively 40 billion), with
20% annual growth (Horowitz, Rosensweig, & Jones, 2007) (Ko, 2011).
III - Global Strategic Marketing and Competitive Analysis

Global Strategic planning and channels allows the organizations to enter in the international markets. The government along with
tourism companies needs to do some research prior attracting foreign tourists or medical tourist. This will improve the country’s
overall profitability, competitiveness as well as improve resources to be used in a better direction which effect overall profitability at
the end of the day. The government and industry needed to improve the expert level in that specific field. At the early stage the
companies should find compromises between the competitors and host environmental which may impact and justify the costs in each
of the company’s functions. In the beginning the company needs to take help of other people who are expert in tourism medical
industry and consumers by giving those incentives and cash rebates and medical facilities like any other developed country.
Marketing policy is the segmentation of the market. Segmentation is to divide a market which exists of heterogeneous products into
homogeneous parts. The advantages of segmentation for a company are to be more efficient, to be able to find a niche market and to
have a more simplified marketing policy. Positioning refers to the place a product occupies in consumers’ minds regarding important
attributes relative to competitive products. To position a product a company needs to be well informed about the competitors, target
group and the own company. When there is enough knowledge acquired, a positioning matrix can be made.
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IV- Concepts and Theories

Ko, (2011), explained that, apart from high levels of interest in medical tourism in the public and private sectors, in academia and the
mainstream media, there is a lack of theoretical research or models that comprehensively explain medical tourism systems and the
relationships between systems and their component factors. As a result, there is much room for confusion and problems between
industry stakeholders, governments, corporations, academia, research institutes and insurers. Thus a theoretical model that can
comprehensively cover the phenomena of medical tourism systems is required, and the medical tourism system model is a vital
component of this theoretical foundation. A study conducted by (Ko, 2011), has develop a medical tourism system model (MTSM)
that can explain the roles and function of the components (medical tourists, medical tourist generating regions, medical tourist
destination regions, suppliers of medical tourism products, intermediaries, medical tourism services, and human resources) of the
medical tourism system. This model is also resolving conflicts among the components of the medical tourism industry and is
contributing to the formation of rational policies regarding medical tourism (Ko, 2011).
V - Issues, Opportunities and Challenges

Malaysia’s Ministry of Health has formed a special national committee for the promotion of health tourism. This has contributed to
the reversal of the geographical trend of medical tourism. In the past, patients from the east were travelling to the west to get the best
medical treatment. Now, patients from Western developed countries, travel east to developing countries for the best medical and
technologically advanced health care. Eastern Europe has now joined the bandwagon including Hungary and Poland which are
popular for dental work (Al-Lamki, 2011).
Given below are some of the major issues and challenges faced by medical tourism industry in Malaysia:
1. Poor or no follow-up care.

2. After being in hospital for a short while and having a vacation, the patient comes home with, perhaps, complications of the
surgery or side effects of the drugs. It is a surgical principle that every surgeon looks after his own complications and
obviously that does not apply for most if not all patients who have been treated abroad.
3. Many countries have very weak malpractice laws and thus patients have limited ability to complain about poor medical
care.
4. Medical tourism also affects the host countries with the problem of internal brain drain, whereby all good doctors give up
serving the public sector to go into the exotic, private health centers, which serve the medical tourists.
5. Globalization impacts world health care, both in the host and the donor countries.
(Al-Lamki, 2011).
VI - Global Marketing Environment

Medical Tourism Industry in global marketing environment is highly decentralized industry which operating across a broad range of
countries to attract potential medical patients. In the global perspective no geographic area (including the home region) is assumed a
priori to be the primary base for any functional area. Each function including research and development, sourcing, manufacturing,
marketing and sales is performed in the location(s) around the world most suitable for that specific function and output of that
industry (Akkaya, 2001).
Technology and globalization shape the world. All over the world medical companies and organizations are availing opportunities
and one the best example is United Arab Emirates (UAE), which has taken serious steps to grow their Medical Tourism Industry as
per their empirical data their Medical Tourism market has grew 7% in 2013 and their health care spending is predicted to hit U$D
16.8bn by 2015 (Rai, 2013).
Globally Medical Tourism market is heavily promoting medical tourism since last many years, with visitor packages that are both
attractive in term of location, healthcare facilities, expert staffs and in pricing. The Medical Tourism market is doing joint ventures
and accreditation with other recognized and renowned medical organizations from developed countries (Nasim & Momaya, 2010)
There are challenges in term of medically recognized and qualified human resource. “Staffing is one of the biggest challenges facing
the healthcare sector today, but you also can’t deny that UAE is still a very young player in the field of medical tourism,” (Rai,
2013).
Some of the critical challenges can be building the foundation for Medical Travel so that the tourist all over the world can be
attracted in term of travel fright, medical facilities and expertise. In addition to that it is also a big challenge to develop an effective
medical travel program in public hospitals. Overcoming the gap between accreditation and medical tourism and meet the new
challenges.
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There are some other challenges such as:
 How will healthcare globalization impact international patient travel?

 Integration and Structuring Effective Health Insurance.
 Plans to Meet the Needs of Travelling Patients
 Ensuring Quality and Managing Risks in Medical Travel.
 Out Sourcing of talent.
 Perfect pricing.
VII - Cross Cultural Complications

There are some cross cultural complication which much suite the nature of medical tourism market such as style of business within
the market. Language also plays an important role to the comfort level of patients. In the cross cultural complication apart from
language, race and nationalities, geographic are also some of the significant divisions. On the other hand, institution plays an
important role to attract the medical tourist. In the preference from the tourist perspective religious groups, educational system, mass
media and family are the attraction factors to visitors. In the cross cultural setting socio cultural factors such as social interaction and
hierarchies also help the tourist to select the medical tour destination (Vasiliki, 2012).
VIII - Regulatory Environment

An adequate regulatory environment is required in term of role of government in Medical Tourism activities (free or not free
markets). The government need to introduce a stable policy and try to decrease barriers to international tourist trade such as
flexibility in taxing system and favourable tourist trade policies. However, laws and regulations affecting medical tourism marketing
regulations can change the priority of tourist and laws and regulations affecting business activities such as acceptance of foreign
investment, etc (Vasiliki, 2012)(Spasojevic.M & Susic.V, 2010).
IX - Competitive Analysis and Strategy

Competitive analysis and it strategy towards successful marketers depends on how unstable medical tourism marketing environment,
and do it better than competitors. Whilst easy to say, in practice it is not easy to do. Many competitive industries and organizations
are very difficult to penetrate, despite all the intelligence techniques that may be available to get information.
X - Industry Analysis Forces and Global Competition

Porter’s diamond is the best ever, shown model for business leaders, which may analyze which competitive factors may reside in
their company's home country, and which of these factors may be exploited to gain global competitive advantages. Medical Tourism
market can also use the Porter's diamond model during a phase of globalization, in which their managers and corporate decision
makers may use the model to analyze whether or not the home market factors support the process of globalization, and whether or
not the conditions found in the home country are able to create competitive advantages on a global scale. Given below is the Porter’s
Diamond which shows the Medical Tourism strategy, demand conditions, factor condition and related and supporting industries.
Porter’s Diamond
Government Firm strategy, Structure and

Rivalry
Factor Condition Demand Conditions
Related and Supporting

Industries
Source : http://www.valuebasedmanagement.net/ porter_diamond_model.html
XI - Competitive Advantage and Strategic Models

Competitive advantage is a primary concern for the marketing function within organizations. In addressing competitive advantage,
marketing has drawn extensively on the work of Michael Porter. Porter's ``five forces model'' (Porter, 1985) provides the basis for
structural analysis of industries in most texts (Baker, 1992; Bradley, 1995). Porter's model has also popularized what had tended to
be the domain of macro-economists, namely the study of competitiveness. (Laurence, Paula Chris, 1999).
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The competitive advantage gained through competitive exercises is often ownership-based, e.g. a strong market position, or access-
based, e.g. winning over rivals by securing a dominant distribution channel in a jointly contested foreign market.
XII - Strategic Positioning

Strategic positioning looks at more than just a particular product. Strategic positioning entails positioning your business or brand in
the marketplace to your best advantage. This is especially important in a changing market because when the ground is shaking you
need to be firmly on solid ground. Strategic positioning is more comprehensive than product positioning. Product positioning entails
fighting for a marketing position in the mind of the customers. Strategic positioning goes beyond that by entrenching that position
clearly in the minds of the leaders and staff of the business. That motivates them and guides their decision making. Porter’s model
suggests that study of firm advantage needs to take place in the context of a national environment. The national environment is
conceptualized as four determinants (and two exogenous variables) labeled the ``diamond''. The model advocates that any study of
competitive advantage at firm level must take place within the context a particular domestic competitive environment or diamond.
Thus, increasingly, marketing courses and texts incorporate the diamond as part of the analysis of industry (Baker, 1992; Laurence,
Paula Chris, 1999). Strategic co-option attempts to align other parties’ interest with that of the focal firm, providing possible
competitive advantages by opening windows of opportunities, removing external obstacles or neutralizing threats. It is often done
through a third party to influence the firm’s fight with rivals. It also could happen between rivals who tacitly collude to jointly deal
with customers or a third rival (Porter, 1980). The major difference between strategic co-option and cooperative maneuver is that the
former is much more subtle, informal, implicit, sometimes illegal, but most times without clearly specified binding measures. A firm
could also directly co-opt customers. It should be noted that, in general, competitive advantages gained through co-opting outside
parties are primarily access-based, e.g. the right to access certain markets closed to other foreign competitors, or sometimes
ownership-based, e.g. owning a special license obtained through lobbying.
XIII - Competitive Innovation and Strategic Intent

Competitive innovation and medical tourism market strategy depends on a true competitive innovative, which should be rooted of a
strong culture bacgrounds that motivates the commitment in innovative behavior. Innovativeness is therefore includes of dua
constructs innovations and innovative culture. The most important prespective is to promote medical tourism market learning culture
automatically innovativeness will improve (Škerlavaj, Song, & Lee, 2010). The strategic intent usually incorporates stretch targets,
which force companies to compete in innovative ways. It also consists of building layers of advantage, searching for “loose bricks,”
changing the terms of engagement, and competing through collaboration (Hamel and Prahalad, 2005).
Further more, medical tourism market these days are working hard to formulate a innovation strategy and from other participants.
Innovation must be continous the reason due to the pace of change and competition in business or market is very fast and
competitive. The continours factor of innovation should be strategize, which can further rise multiple innovation channels (Dean,
2004).
XIV - Analyzing and Targeting Global Market Opportunities

Globalization gives the impression to have shrunk the importance of geographical distance. Increasing volumes of global trade and
capital flows are indicators of the globalization of the world economy. Technological developments have potentially made possible
the incorporation of markets through two channels. First, information technology has improved and has easiness access to
information regarding foreign countries and foreign partners. Second, technological improvements ease economic integration
because they lower shipping costs (Buch, Kleinert, & Toubal, 2003).
W. Chan Kim and Renée Mauborgne which has really make a good contribution to advancing the thinking on availing global market
opportunities. The authors have given a clear purpose and the strategic view. With the help of practical frameworks and models that
helps one to quickly shape up their organizational strategies. The objective is to target a market which is full of opportunity and create
the strategy, rather than the other traditional approaches to strategy development According to the authors the Blue Ocean is a space
and this space is based on global markets and this market is targeting new opportunities and customer and value proposition. In the
simple words the Blue Ocean creates uncontested market space. On the other hand the Blue Ocean creates the competition irrelevant.
As according to the author it helps to capture and create news demand and helps to break the value-cost trade off. This is the
unknown market space. Blue oceans, in combination and contrast which are defined by untapped market space, demand creation, and
the opportunity for highly profitable growth. Although some blue oceans are created well beyond existing industry boundaries, most
are created from within red oceans by expanding existing industry boundaries, as Circe do Soleil did. In blue oceans, competition is
irrelevant because the rules of the game are waiting to be set. On the other hand, Red ocean represents all the industries in existence
todays. This is the known market space. As per what the author discussed that Red oceans industry boundaries are defined and
accepted and the competitive rules of the game are known. Here companies try to outperform their rivals to grab a greater share of
existing demand. Red Ocean is competing in existing market place and it and beat the competition with exploiting the existing
demand by making the value cost trade off. The red ocean helps to align the whole system of a firm’s activities with its strategic
choice of differentiations or low cost.
XV - Global Market and Buyer

A study conducted by Tang, (2006), on Chinese SMEs found that weak tie weak-tie networks are crucial to the firms’ trade growth in
global markets and were proactively developed and exploited in the course of the firms’ development. The author also provided
alternative view saying that strong tie network in global markets change business values and approaches of the Chinese firms
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targeting at developing globally. In term of attracting buyers in global markets managerial implications concerning the important
influence of intelligent buyers networking on global market can be located (Tang, 2006).
Strategic planning and channels allows the organizations to enter in the international markets. The corporate board and the line
managers need to understand and address the internal arrangements to meet their external obligations. On the other hand the
company needs to do some research prior entering to any foreign market in order to prevent any uncertainty. This will improve the
company’s profitability, competitiveness as well as improve the organization’s resources to be used in a better direction which effect
overall profitability at the end of the day. At the early stage the companies should find compromises between the competitors and
host environmental which may impact and justify the costs in each of the company’s functions. In the beginning the company needs
to take help of suppliers, subcontractors, distributors, buyers and consumers by giving those incentives and cash rebates.
XVI - Global Market Segmentation, Targeting and Product Positioning

Marketing policy is the segmentation of the market. Segmentation is to divide a market which exists of heterogeneous products into
homogeneous parts. The advantages of segmentation for a company are to be more efficient, to be able to find a niche market and to
have a more simplified marketing policy. Positioning refers to the place a product occupies in consumers’ minds regarding important
attributes relative to competitive products. To position a product a company needs to be well informed about the competitors, target
group and the own company. When there is enough knowledge acquired, a positioning matrix can be made.
XVII - Global Marketing Strategy

It is the process of conceptualizing and then conveying a finish or final product (tangible) or service (intangible) globally with the
intention of reaching the international marketing community. Proper global marketing has the ability to catapult a company to the
next level, if they do it correctly. Different strategies are implemented based on the region the company is marketing to. The
organizations need to focuses on marketing popular items within the country. Global marketing is especially important to
organizations or companies that make available products or services that have a worldwide demand. Globalization deals with the
integration of the many country strategies and the subordination of these country strategies to one global framework. As a result, it is
conceivable that one company may have a globalized approach to its marketing strategy but leave the details for many parts of the
marketing plan to local subsidiaries. Few companies will want to globalize all of their marketing operations. The difficulty then is to
determine which marketing operations elements will gain from globalization. Such a modular approach to globalization is likely to
yield greater return than a total globalization of a company`s marketing strategy (Akkaya, 2001).
XVIII - Opportunities, Issues and Challenges

The Malaysian government encourages the development of the healthcare industry through tax incentives. Yes the government is
willing to avail opportunities by tax incentives. Tax incentives are available for building hospitals (industry building allowance),
using medical equipment (exemption from service tax for expenses incurred on medical advice and use of medical equipment), pre-
employment training (deduction for expenses incurred), promoting services (double deduction for expenses incurred on promotion of
exports), and use of information technology. Furthermore, the national committee on health tourism has proposed further incentives,
including exempting from taxes the revenue from foreign patients in excess of five per cent (threshold) of the total revenue for the
hospital, double deduction for money spent on accreditation, and reinvestment allowance in relation to accreditation requirements.
(MOH 2002b:110) (Leng, 2007).
Facilities Hospital Beds Per Capita GNP
(at Purchasers' Value, in 1978 prices,

YEAR (NO) (NO) (% OF TOTAL)
RM)
1980 50 1171 4.7 3221

1985 133 3666 14.5 3758
1990 174 4675 15.1 4426
1995 197 7192 19.4 5815
1997/8 216 9060 25.1 --
2000 224 9547 21.9 7593
2002 211 9849 25 --
Table 1- Private Medical Facilities and National Income
Source: Ministry of Health (MOH) Annual Report, various years; GNP figures from Fifth and
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Seventh Malaysia Plans (Malaysia 1986, Malaysia 1996) cited in (Leng, 2007).
The above table 1 shows the private medical facilities and national income in Malaysia. As what we can see that in early 1980,
private hospital beds made up only five per cent of total acute beds, but this private share again dropped in 1999 (to 21 per cent), an
effect of the 1997 Asian financial crisis, but has since recovered to 25 per cent (2002) (Leng, 2007).
Table 2 - Hospital and Number of Beds in Malaysia
Number of Public Number of Private

Number of Registered
Doctors and Dentists
Year Hospitals Beds Hospitals Beds
2000 120 34573 224 9547 17763

2005 125 34414 218 10542 20796
2006 128 34761 222 10794 22856
2007 134 35739 223 11637 24877
2008 136 38004 209 11689 28742
2009 136 38004 209 12216 34103
2010 137 37793 217 13186 36789
Source: Ministry of Health Facts 2010, published by the Ministry of Health Malaysia August 2011, www.moh.gov.my accessed on
21st November 2011. Note: number of public hospitals includes MOH Special Institutions (Cited in (Brandt & Lim, 2012)
Given above table 2 show the updated statistics for public and private hospitals, number of registered doctors and dentists and
number of beds in Malaysia. Challenged by the new competition from Thailand and Malaysia, Singapore has now increased its
efforts, with MOUs signed at governmental level with some Middle Eastern countries, including the United Arab Emirates (UAE)
and Bahrain. Three growth areas have been targeted by Singapore Medicine heart, eye and cancer treatment. (The Straits Times, 26
November 2003). Indeed, the loss of doctors from the public sector has been significant, as medical officers and specialists leave for
the private hospitals that are increasingly more lucrative due to a growing international market. So far, this has been offset by the
recruitment of foreign doctors, as well as by the doctors who have to undergo their first three years of compulsory government
service (Leng, 2007).
XIX - Product and Service Marketing

To institutionalize quality assurance programmes in Malaysian Medical Tourism, and to make this visible, include encouraging
private hospitals to seek and acquire governmental accreditation and quality (MS ISO 9000) certification. Accreditation of hospitals,
introduced in 1997, is implemented by the MOH in collaboration with the Malaysian Society for Quality in Health.
Malaysian Medical tourism services sector is undeniably a key engine of growth in Malaysian Economy (Rouse & Basole, 2008).
There are many reasons for the growth of the services sector in Malaysia, the reason due to increasing competition in a global
economy, pressure to innovate, and changing customer demands. This has led to more complex environments, markets, product and
service offerings, and stakeholder relationships (Shah, 2008).
The Malaysian government has allocated RM 10,276 million for health services according to the Ninth Malaysia Plan report (9MP),
a 7% increase over the previous plan. It has plans to improve the condition of its existing hospitals in order to cope up with the rising
and aging population. Over the last couple of years they have increased their efforts to overhaul the systems and attract more foreign
investment. Presently product and services Malaysian hospitals are providing includes neurology, cardiology, neurosurgery, neuro &
cardio pathology, neuro-oncology, cardiothoracic surgery, rehabilitation, advanced diagnostics and imaging, telemedicine, palliative
care and so on. Apart from the product and services suppliers and buyers terms common with product-oriented industry. There are
enablers in service-oriented industries. Private associations, accreditation firms, hotels, airlines are just some of the enablers that play
a role in the medical
Tourism industry. In term of product and service Malaysia medical tourism industry is lacking in term of providing best quality of
care that meets the international product and services standards. On the other hand, patient or medical tourists are having concerns of
safety, privacy and comfort. It is also very important that medical tourist get personal consultation and care before, during and after
treatment (Shah, 2008).
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XX - Global Strategic Marketing Issues and Challenges

Currently, hotels and tourist agencies in Malaysia are linking up with medical centers to offer holiday packages that combine hotel
accommodation together with health screening and medical check-ups (Wong 2003). A strong element in the Malaysian strategy is to
capitalise on its image as a ‘Muslim country’, with easily available halal food and conveniences for practising Muslims. The Muslim
countries targeted include Middle East countries, Brunei, and Bangladesh. Appointing ‘local’ agents is a common marketing strategy
of hospitals. One recently-established company is aggressively employing both strategies – of targeting Muslim countries as well as
tying up with agents in these countries (Leng, 2007).
Conclusion
Malaysian Government and medical tourism industry are trying their level best to align their initiatives and be competitive within the
region. Malaysian private hospitals looks more export driven and playing an important role in attracting medical tourist. Furthermore,
government needed to consider it’s taxing and exempting policy in order to make the public as well as private hospitals to be very
competitive, modern and offering those services which other similar neighboring country industry is unable to offer.
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47
Cogent Social Sciences
ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/oass20
Exploring key factors of medical tourism and

its relation with tourism attraction and re-visit
intention
Jen-Hung Wang, Hang Feng & You Wu |
To cite this article: Jen-Hung Wang, Hang Feng & You Wu | (2020) Exploring key factors of
medical tourism and its relation with tourism attraction and re-visit intention, Cogent Social
Sciences, 6:1, 1746108, DOI: 10.1080/23311886.2020.1746108
To link to this article: https://doi.org/10.1080/23311886.2020.1746108
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Wang et al., Cogent Social Sciences (2020), 6: 1746108
https://doi.org/10.1080/23311886.2020.1746108
LEISURE & TOURISM | RESEARCH ARTICLE

Exploring key factors of medical tourism and its
relation with tourism attraction and re-visit
intention
Received: 08 July 2019 Jen-Hung Wang1*, Hang Feng2 and You Wu2
Accepted: 16 March 2020
Abstract: Tourism is a globalized industry. Health, wellness and medical tourism
*Corresponding author: Jen-Hung
Wang, Graduate Institute of are recognized as one of the most developed and thriving in the tourism industry.
Hospitality Management, National
Kaohsiung University of Hospitality
The purpose of this study is to explore the key factors of medical tourism and
and Tourism, Kaohsiung, Taiwan discuss its relation with tourism attraction and re-visit intention. The results reveal
Email: kingwang@mail.nkuht.edu.tw
that: (1) The key criteria are doctor’s expertise and reputation, health evaluation,
Reviewing editor:
Juan Ignacio Pulido-Fernández,
international certified doctors and staffs, the safety of medication quality, quality of
Spain medical treatment, high healthcare quality, service orientation of medical staff,
Additional information is available at advanced medical treatment, availability of medications, on-site pharmacy and
the end of the article prescription assistance, waiting time for medical treatment from time to first con-
tact to real treatment, quality of required treatment, and hospital contact infor-
mation. (2) The key criteria have a significant positive influence on tourism
attraction and re-visit intention. (3) Tourism attraction has no influence on re-visit
intention.
Subjects: Sports and Leisure; Social Sciences; Tourism, Hospitality and Events; Economics,
Finance, Business & Industry
Keywords: Medical tourism; tourism attraction; re-visit intention
1. Introduction
Tourism has become a globalized industry and is an economic backbone (Hallmann et al., 2012). It
is also the most important market in the service industry (Mir & Tajzadeh-Namin, 2014). UNWTO
Tourism Highlights 2015 Edition by the United Nations World Tourism Organization (UNWTO)
pointed out that tourism had experienced continuous expansion and diversification, which
ABOUT THE AUTHORS PUBLIC INTEREST STATEMENT

Dr. Jen-Hung Wang had graduated from Chung Highlighting
Yuan Christian University (Taiwan), and got the 1. Health, wellness and medical tourism are
Ph.D. in Business Administration. He is the recognized as one of the most developed and
Assistant Professor of Graduate Institute of thriving sector of today’s tourism industry that
Hospitality Management in National Kaohsiung has increased its activities worldwide.
University of Hospitality and Tourism. 2. The most important key aspects are inter-
Mr. Hang Feng had graduated from City active online services, external activities, and
University of Macau, and got the Master Degree in hospital information and facilities.
Business Administration. His research interest is 3. The most important key criteria are doctor’s
related to Medical Tourism. expertise and reputation, health evaluation, and
Dr. You Wu had graduated from City University international certified doctors and staffs.
of Macau, and got the DBA Degree in Business 4. Key criteria have a significant positive influ-
Administration. Her research interest is related to ence on tourism attraction and re-visit intention.
Jen-Hung Wang MICE industry. 5. Tourism attraction has no influence on re-
visit intention.
© 2020 The Author(s). This open access article is distributed under a Creative Commons
Attribution (CC-BY) 4.0 license.
Page 1 of 26
https://doi.org/10.1080/23311886.2020.1746108
makes it the largest and fastest-growing industry. It has become the key driver for creating job
opportunities, start-ups, foreign exchange earnings and building infrastructures. The number of
international tourists increased from 25 million in 1950 to 1.33 billion in 2014. It is expected to
increase 3.3% annually from 2010 to 2030. The number of tourists may reach 1.8 billion in 2030.
The international tourists’ expense in tour destinations increased from 2 billion USD in 1950 to
1.245 trillion in 2014, which was 3.7% more than in 2013.
Health, wellness and medical tourism are recognized as one of the most developed and thriving
sectors of today’s tourism industry that has increased its activities worldwide (Quintela et al.,
2016). It is also deemed as the sector with the fastest growing speed (Yeoh et al., 2013) and the
most important type in tourism (Connell, 2013). Medical tourism is also called health tourism or
medical travel (Hopkins et al., 2010; Sarantopoulos et al., 2014), and medical treatment combined
with sightseeing activities (C. H. Lin et al., 2010). The development of medical tourism promotes
the exchange and interaction of knowledge worldwide, which propels relevant industries in the
medical and tourism sectors as well as the advancement of society. Medical tourism increases
gross national income and foreign exchange earnings. It is also a very important channel to
improve service, create employment, balance international payments and thrive on tourism (Liu
& Zhang, 2016).
The Global Wellness Tourism Economy 2013 Edition jointly published by the Global Spa and
Wellness Summit (GSWS) and Stanford Research Institute (SRI) shows that in 2013 the scale of
global medical tourism was around 436 billion USD, which accounted for 14% in the entire
world tourism (199IT Data Center, 2014). It was expected that in 2017 the earning of global
medical income would reach 678 USD.5 billion, which would account for 16% of the revenue of
world tourism, and the Compound Annual Growth Rate (CAGR) would reach 9.9% (199IT Data
Center, 2015). The number of global medical tourists grew from 20 million in 2006 to 40 million
in 2012, and each medical tourist contributed an average of around 1 USD,000 earnings (199IT
Data Center, 2014). Medical tourism provides lower costs, but high quality and immediate
treatment to the public and also the benefits from exotic tour and shopping. Moreover, for
those who cannot afford higher medical costs in their home countries, the international
medical tour can improve their life quality, or even extend their life span (Gao & Liu, 2010).
The cause for this study is due to most other studies generally focusing on international
trends and globalization (Constantin, 2015; Kim et al., 2013), affecting factors and evaluating
methods (Liu & Zhang, 2016; Shan & Yao, 2016), conceptual framework (Quintela et al., 2016),
policy analysis (Liu, 2012; Pan & Lai, 2013; Pocock & Phua, 2011; Rikke & Despena, 2015; Zhang,
2012), feasibility analysis (Haddadzadeh et al., 2011; J. R. Wang et al., 2015), cost analysis
(McKinnon & Bhatt, 2010), safety analysis (Turner, 2012), public hygiene analysis (Johnston et
al., 2011), marketing analysis (Manhas & Ramjit, 2015), business strategies (Chen et al., 2015;
K. S. Chang et al., 2013; Wu & Chen, 2013), and motives of participation and satisfaction (Wu et
al., 2015; Zhang et al., 2013). It can be known from the fore-stated references that there is little
research discussing the key factors that affect consumers’ willingness to participate in medical
tourism. For the medical tourism industry, the exploration of key factors is critical for sustain-
able development. This study found few medical tourism studies integrating tourism attraction
and re-visit intention. Most of all, we think that these three dimensions are the most critical
factors to formulate stainability strategies, and this study explores this issue in-depth.
2. Literature review
2.1. Key criteria of medical tourism and tourism attraction

This study would like to explore the key criteria of medical tourism have a significant positive
influence on tourism attraction or not. However, few studies have studied the relation between
them. Only some studies pointed out medical tourism can attract tourists to a destination to get
the medical service and enjoy the tour (Li et al., 2011; J. R. Wang et al., 2015; C. S. Wang et al.,
Page 2 of 26
https://doi.org/10.1080/23311886.2020.1746108
2011). It also can add to the attraction if the following can be done: to spend more on promotion
and marketing (Ayoubian et al., 2013), to provide the high-quality guarantee, advanced medical
treatment, and health service with competitive cost (Alberti et al., 2014), to set up proper market-
ing mix strategy (Al-Azzam, 2016), to create good medical standards (Izad et al., 2013) or have
comprehensive health-care service and equipment (Goodrich, 1993). On the other hand, this study
defines medical tourism as, “Based on one’s needs, such as plastic surgery or health check, one
chooses to go to a destination to receive medical service. Meanwhile, during the treatment, one
can also enjoy the local sceneries and customs” via Iulia-Maria (2015), Chuang et al. (2014),
Sarantopoulos et al. (2014), Sheppard et al. (2014), Menvielle et al. (2011), Smith et al. (2011),
and Hopkins et al. (2010), and tourism attraction as, “The intangible power to attract tourists to go
to a destination for medical service and leisure activities” via Chu and Hsu (2015), Fadda and
Sørensen (2017), Lin and Huang (2016), Y. L. Liu et al. (2012), and C. C. Yang et al. (2015). This study
infers that if the key criteria of medical tourism of a destination perform better, such as treatment
techniques or service quality, the target destination will attract more tourists. For example,
Thailand is not only popular with many tourist attractions, but also famous for its surgery
techniques, such as heart transplant surgery or sex reassignment surgery. Therefore, the
Hypothesis 1 of this study is:
H1: Key criteria of medical tourism have significant positive influence on tourism attraction.
2.2. Key criteria of medical tourism and re-visit intention

This study focuses on the key criteria of medical tourism performance in better detail than previous
studies previously mentioned, such as treatment techniques or service quality that will increase
the tourists’ re-visit intention. In a time, this study defines re-visit intention as, “The level of
intention of tourists’ willingness to revisit that destination for a medical tour” via Che et al.
(2015), DiPietro and Campbell (2014), Weaver and Lawton (2011), Lee and Back (2008), Cole and
Scott (2004), Kozak (2001), Baker and Crompton (2000), and Wongkit and McKercher (2016)
indicated that, among various surgeries in Thailand, medical quality plays a very important role.
Lai et al. (2016) also revealed that comprehensive service quality and approachable service would
increase tourists’ re-visit intention. Past studies also showed that service quality would positively
affect the re-visit intention (C. C. Chang et al., 2016; Han et al., 2016; Huang et al., 2016; Huang &
Ku, 2013; Kuo & Hsiao, 2014; Orel & Kara, 2014; C. T. Lin et al., 2013; Ranjbarian & Pool, 2015; A. Y.
S. Lin et al., 2015; C. T. Yang et al., 2013; Yee & Faziharudean, 2010), while some studies concluded
that they have no significant relation (Liang & Tsai, 2008). The perspective of this study also
inclines toward a positive relationship. For instance, South Korea is famous for its cosmetic
surgeries. Many consumers would visit South Korea again due to its outstanding cosmetic surgery
techniques. Thus, the Hypothesis 2 of this study is:
H2: Key criteria of medical tourism have significant positive influence on re-visit intention.
2.3. Tourism attraction and re-visit intention

Past studies showed that tourism attraction has had a significant positive influence on re-visit
intention (Lin & Ku, 2009; Y. L. Liu et al., 2012; Liu & Hsiao, 2012; Liu & Lo, 2010; Kuo & Wu, 2014;
Teller & Alexander, 2014; Vigolo, 2015; C. Y. Chang et al., 2015). Based on these findings, tourism
attraction is an important predictable variable for re-visit intention. However, some studies showed
that they have no significant influence on re-visit intention (Kuo et al., 2010; W. G. Yang et al.,
2015). The perspective of this study also inclines toward a positive relationship. For example,
Taiwan has not only tourism attraction, but excellent techniques for medical tourism. They will
enhance the tourists’ re-visit intention. Thus, the Hypothesis 3 of this study is:
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Figure 1. Research Framework H1 (+)

and Hypothesis.
Tourism Attraction
Note: Dashes mean no relevant
reference is available. Key Criteria of Medical Tourism H3 (+)
Re-visit Intention
H2 (+)
H3: Tourism attraction has significant positive influence on re-visit intention.
The research framework is shown in Figure 1.
3. Construct the evaluation framework of medical tourism

This study constructs the preliminary framework via literature review, and the aspects, the criteria,
and the literature sources are shown in Appendix 1. After the preliminary framework was built, two
experts were interviewed, and their background is shown in Table 1. The main purpose of inter-
viewing these experts is for revising the preliminary framework, such as adding, removing, keeping
or combining information. (If the interview details are required, please contact the correspondent
author.) General Manager Yu has been working in this business for 3 years, and his educational
background is tourism. He said in the interview that he had taken consumers for medical tourism
to many destinations covering entire Asia and was with considerable experience. The consumer
expert in this interview already had three plastic surgeries and had a certain level of understanding
and experience of the medical tour. Therefore, their opinions are representory. Later, the second
expert interview was held to ask the two experts to score the importance of each criterion for the
medical tour. The scale ranges from 0 to 100. Zero means “not important at all”, and 100 is
“extremely important”. (If details are required, please contact the correspondent author). Then,
after discussing with the two experts, it was decided that only the criterion scores ≥87.5 would be
in the final framework, as shown in Table 2. After the final framework constructed, this study
invited the two experts to evaluate the inter-influence level among criteria – 0 means “no
influence at all”, and 100 is “extremely strong influence”. After retrieving the criteria inter-influ-
ence evaluation from the experts, the study ran the average calculation and made a relation graph
covering the scores ≥80, ≥82.5 and ≥85. After discussing with the experts, the study set the
influencing threshold to ≥85. It indicates that if the inter-influence scores of criteria are ≥85,
they are relevant or vice versa. The result is as demonstrated in Table 3.
4. Methodology and research design

This study adopted ANP to analyze the weights and the rankings of aspects/criteria to learn the key
aspects/criteria, and SEM to test the hypotheses.
Table 1. Experts’ information

Attribute Position Years of practice & Education
Times of joining
medical tour
Practical General Manager 3 Years Master
Consumer 3 Times Bachelor
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Table 2. Final evaluation framework of medical tourism

Aspect Criteria
Hospital information and Hospital contact information (e.g., address, phone and email) (A1)
facilities
Hospital introduction (e.g., mission or technique) (A2)
(A)
Related information and service of Getting to the hospital (e.g., Entry visa
assistance) (A3)
On-site pharmacy and prescription assistance (A4)
Source of obtaining the related information about medical tourism (e.g., internet or
recommendation from others) (A5)
Admission and medical Billing information (B1)
services
Appointment booking (B2)
(B)
Availability of medications (B3)
Safety of medication quality (B4)
Quality of medical treatment (B5)
Service orientation of medical staff (B6)
Waiting time for medical treatment from time to first contact to real treatment
(B7)
Required treatment available here (B8)
Quality of required treatment (B9)
Health evaluation (B10)
High healthcare quality (e.g., ISO, NCQA, ESQA) (B11)
Interactive online services Interactive tools for online enquiries (C1)
(C)
Pre-admission consultations at a distance (online or by phone) (C2)
Medical records available via the Internet (C3)
External Activities Referral services for international physicians (via teleconference, online enquiries or
(D) phone) (D1)
Links to relevant agencies/tourist attractions (D2)
Medical technique and level Number of hospital and clinic beds (E1)
(E)
Accreditation by JCI (Joint Commission International) which is a gold standard in
hospital certifications worldwide (E2)
State-of-the-art medical equipment (E3)
Accreditation of the medical facility (e.g., JCI, ISQUA) (E4)
Reputation of the hospital/facility (E5)
Diversified medical treatment (E6)
Doctor’s expertise and reputation (E7)
International certified doctors and staffs (E8)
Advanced medical treatment (E9)
Commercial environment Good arrangement of the program and pick-up service (F1)
(F)
Marketing communication e-Commercial marketing (G1)
(G)
Clear contents of medical tour pamphlets (G2)
Multiple-language communication platform (such as websites) (G3)
Country environment Overall positive country image (H1)
(H)
Safe to travel to country (H2)
Stable economy (H3)
Perception of safety and security as related to culture and political environment
(H4)
Tourism destination Popular tourist destination (I1)
(I)
Attractiveness of the country as a tourist destination (I2)
Page 5 of 26
Table 3. Result of dependence
A1 A2 A3 A4 A5 B1 B2 B3 B4 B5 B6 B7 B8 B9 B10 B11 C1 C2 C3
https://doi.org/10.1080/23311886.2020.1746108
A1 ⋆ ⋆ ⋆ ⋆
A2 ⋆ ⋆
A3 ⋆ ⋆ ⋆ ⋆ ⋆
A4 ⋆ ⋆
A5 ⋆
B1 ⋆
B2 ⋆
B3 ⋆ ⋆ ⋆ ⋆
B4 ⋆ ⋆ ⋆ ⋆ ⋆ ⋆
B5 ⋆ ⋆ ⋆ ⋆ ⋆
B6 ⋆ ⋆
B7 ⋆ ⋆ ⋆ ⋆ ⋆
B8 ⋆
B9 ⋆ ⋆
B10 ⋆ ⋆
B11 ⋆
C1 ⋆ ⋆
C2 ⋆
C3 ⋆ ⋆
D1 ⋆ ⋆
D2 ⋆
E1 ⋆
Page 6 of 26
(Continued)
Table 3. (Continued)
A1 A2 A3 A4 A5 B1 B2 B3 B4 B5 B6 B7 B8 B9 B10 B11 C1 C2 C3
https://doi.org/10.1080/23311886.2020.1746108
E2 ⋆
E3 ⋆
E4 ⋆ ⋆
E5 ⋆ ⋆
E6 ⋆ ⋆ ⋆ ⋆
E7 ⋆ ⋆ ⋆ ⋆
E8 ⋆
E9 ⋆ ⋆ ⋆
F1 ⋆
G1 ⋆ ⋆
G2 ⋆
G3 ⋆
H1 ⋆
H2 ⋆
H3 ⋆ ⋆
H4 ⋆
I1 ⋆
I2 ⋆
Page 7 of 26
D1 D2 E1 E2 E3 E4 E5 E6 E7 E8 E9 F1 G1 G2 G3 H1 H2 H3 H4 I1 I2
A1
https://doi.org/10.1080/23311886.2020.1746108
⋆ ⋆ ⋆ ⋆
A2 ⋆ ⋆ ⋆ ⋆ ⋆
A3 ⋆
A4 ⋆
A5 ⋆
B1 ⋆
B2 ⋆
B3 ⋆
B4 ⋆ ⋆
B5 ⋆ ⋆ ⋆ ⋆
B6 ⋆
B7 ⋆ ⋆
B8 ⋆ ⋆
B9 ⋆ ⋆
B10 ⋆
B11 ⋆ ⋆ ⋆ ⋆
C1 ⋆ ⋆ ⋆ ⋆
C2 ⋆
C3 ⋆ ⋆
D1 ⋆ ⋆ ⋆
D2 ⋆ ⋆ ⋆ ⋆
E1 ⋆
E2 ⋆
Page 8 of 26
(Continued)
D1 D2 E1 E2 E3 E4 E5 E6 E7 E8 E9 F1 G1 G2 G3 H1 H2 H3 H4 I1 I2
https://doi.org/10.1080/23311886.2020.1746108
E3 ⋆
E4 ⋆ ⋆
E5 ⋆
E6 ⋆
E7 ⋆ ⋆ ⋆ ⋆
E8 ⋆ ⋆
E9 ⋆ ⋆ ⋆ ⋆ ⋆
F1 ⋆
G1 ⋆
G2 ⋆
G3 ⋆
H1 ⋆ ⋆ ⋆ ⋆ ⋆
H2 ⋆ ⋆ ⋆ ⋆
H3 ⋆ ⋆ ⋆ ⋆ ⋆
H4 ⋆ ⋆
I1 ⋆ ⋆ ⋆ ⋆
I2 ⋆ ⋆ ⋆ ⋆ ⋆
Note: ⋆means the affecting scores are ≥85
Note: A1-Hospital contact information; A2-Hospital introduction; A3-Related information and service of Getting to the hospital; A4-On-site pharmacy and prescription assistance; A5-Source of obtaining
the related information about medical tourism; B1-Billing information; B2-Appointment booking; B3-Availability of medications; B4-Safety of medication quality; B5-Quality of medical treatment; B6-
Service orientation of medical staff; B7-Waiting time for medical treatment from time to first contact to real treatment; B8-Required treatment available here; B9-Quality of required treatment; B10-
Health evaluation; B11-High healthcare quality; C1-Interactive tools for online enquiries; C2-Pre-admission consultations at a distance; C3-Medical records available via the Internet; D1-Referral services
for international physicians; D2-Links to relevant agencies/tourist attractions; E1-Number of the hospital and clinic beds; E2-Accreditation by JCI which is a gold standard in hospital certifications
worldwide; E3-State-of-the-art medical equipment; E4-Accreditation of the medical facility; E5-Reputation of the hospital/facility; E6-Diversified medical treatment; E7-Doctor’s expertise and reputation;
E8-International certified doctors and staffs; E9-Advanced medical treatment; F1-Good arrangement of the program and pick-up service; G1-e-Commercial marketing; G2-Clear contents of medical tour
pamphlets; G3-Multiple-language communication platform; H1-Overall positive country image; H2-Safe to travel to the country; H3-Stable economy; H4-Perception of safety and security as related to
culture and political environment; I1-Popular tourist destination; I2-Attractiveness of the country as a tourist destination
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4.1. Analytic network process (ANP)

Saaty advanced ANP in 1996, and, in 2001, he recommended using ANP to solve the problems of
interdependent relationships among the criteria or alternatives (Saaty, 2001). In ANP, when nodes
correspond to levels or components, that means there exists the network feedback in a system
(Saaty, 1980). ANP has four steps (Meade & Sarkis, 1999; Saaty, 1996). (1) Establish the model and
the framework. (2) Do the pairwise comparison to get the priority vector. (3) Construct the super
matrix. (4) Choose the best alternative. In our study, we only did step 1 to 3.
4.2. Structural equation modeling (SEM)

SEM is mainly used for exploring the cause–effect relation among various latent variables, which is
confirmatory analysis (Chiou, 2009). SEM includes three types of variables: manifest variables,
latent variables and error variables. Confirmatory Factor Analysis (CFA) is majorly used for two
conditions: (1) When developing a measurement model, it is used for testing whether the factor
structure of the model is proper. (2) It is used for exploring the relation among latent variables to
check whether they are consistent with a specific understanding or theory, which is a test for
theoretical concept (Chi & Hung, 2011). Thus, this study employed AMOS to run CFA and confirmed
the relation among variables, and then proved the hypotheses.
4.3. Scope, object, and sampling

Many Asian countries are actively promoting medical tourism and have become hot destinations
for tourists from the Middle East, Europe and the U.S. (Wang, 2007). The costs of medical service
are relatively cheaper in Asia than that of in Europe and the U.S., and the techniques of medical
treatment are good and with shorter waiting time, high-quality treatment service and active
government intervention (Liu, 2012). Such conditions tend to attract more international tourists
to go for touring while engaging in medical service. Therefore, medical tourism has become trendy
in the Asia region (C. S. Wang et al., 2011). According to the report of VISA Inc. and Oxford
Economics, Thailand, Singapore and South Korea are the most popular countries of medical
tourism in Asia region and the top three destinations for medical tourism in Asia (go.huanqiu.
com, 2016).
Thailand is the major service provider of medical tourism (Arunanondchai & Fink, 2006). Its
business in health and medical tourism developed quite early, and its world-class service and
reasonable charges have won the favor of international tourists, so it is recognized as Asia
Wellness Center (Amazing Thailand, 2016). In 2012, around 2.5 million tourists received medical
treatments in Thailand’s international-certified hospitals and clinics, which accounted for 10% of
the total number (MyMedHoliday, 2013). Furthermore, according to the report of Thailand’s
Ministry of Public Health, in 2015, the output of medical tourism sector was 4 USD.516 billion
with a year growth rate at 18%. Over three million international visitors got medical treatment in
Thailand. Kasikorn Research Center’s report shows that, in 2016, 3.2 million foreign visitors
received medical service in Thailand (Bioclub, 2016).
Singapore set its international medical tourism as the position Hub of Asia’s Medical Service
(Singapore Tourism Board, 2016). In 2014, among 51 countries, Bloomberg ranked Singapore got
the most effective medical health system. In the same year, the think tank of The Economist
ranked its medical and wellness treatment effectiveness as the second best of the year (Singapore
Tourism Board, 2016). The IMD World Competitiveness Yearbook 2009 ranked its medical and
wellness infrastructure number four. In 2007 and 2008, Travel Weekly (Asia) reviewed Singapore
the best destination for medical care and wellness tour in the world. In 2013, the Medical and
Health Tourism Report evaluated it as the most favorable destination for medical tourism
(Singapore Tourism Board, 2016). In addition, the total spending on medical tour visitors in
Singapore reached 832 USD million (Singapore Tourism Board, 2016).
Despite the fact that Taiwan is not in the top three choices in Asia, the most prosperous regions
in the twenty-first century are all nearby. It can be the bridge of the East Asia region, or even is
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the center of Asia (Chi et al., 2012). According to the health evaluation of health care by the
Economist Intelligence Unit (EIU) in 2000, Taiwan was ranked second, only after Sweden (Liu & Liu,
2010). In addition, among the top 200 hospitals, Taiwan got 14, which was ranked third in the
world, just after the U.S. and Germany and far better than other Asian countries. Meanwhile, the
medical quality, techniques and costs in Taiwan are superior to other Asia countries (Liu & Liu,
2010). There were 60,951 medical visitors in 2014 and 67,298 visitors in 2015 (Taiwan Tourism
Bureau, 2016), which shows an increasing trend.
Thailand, Singapore and Taiwan all have resources, leverage, and research value on medical
tourism, so this study focuses on these three locations and the researched objects are Chinese
consumers whoever went for medical tour in these three locations. The convenience sampling was
done at Guangzhou Baiyun International Airport and Shenzhen Baoan International Airport
between 19 March and 8 April in 2017. One hundred and fifty questionnaires were distributed
and 125 were retrieved. The response rate was 83.3%. After the questionnaires were retrieved,
those incomplete ones were removed. There were 16 invalid responses and 109 valid ones. The
valid response rate was 87.2%.
4.4. Questionnaire design

The scale of medical tourism is from Fetscherin and Stephano (2016), Lin and Huang (2012), C. H.
Lin et al. (2010), Moghavvemi et al. (2017), Zhang and Gao (2016), and Woo and Schwartz (2014),
tourism attraction is from Chiang and Wang (2016), and re-visit intention is from W. Y. Liu et al.
(2013). Likert six-point scale is used, one means strongly disagree and six indicates strongly agree.
In addition, demographic variables include gender, age, marriage status, educational background,
average monthly income (RMB), the destination of getting medical service, time(s) of participating
in the medical tour, and motive of going for medical tour.
5. Results and analysis
5.1. Reliability
This study distributed 32 pre-test questionnaires through wjx.com between 19 March and 8 April in
2017. All the respondents must have participated in medical tours. 32 responses were valid, and
the valid response rate was 100%. This study has three scales, including: medical tourism, tourism
Table 4. Weight and Ranking of Aspects

Thailand Singapore Taiwan Overall
(n = 22) (n = 42) (n = 45) (n = 109)
Average Ranking Average Ranking Average Ranking Average Ranking
Weight Weight Weight Weight
A 0.155 3 0.161 3 0.175 3 0.165 3
B 0.113 5 0.113 5 0.115 4 0.113 5
C 0.211 1 0.208 1 0.218 1 0.213 1
D 0.175 2 0.168 2 0.181 2 0.173 2
E 0.078 7 0.075 7 0.093 6 0.088 7
F 0.012 9 0.015 9 0.016 9 0.015 9
G 0.030 8 0.020 8 0.018 8 0.020 8
H 0.125 4 0.130 4 0.096 5 0.114 4
I 0.102 6 0.109 6 0.087 7 0.099 6
Note: Hospital Information and Facilities (A); Admission and Medical Services (B); Interactive Online Services (C);
External Activities (D); Medical Technique and Level (E); Commercial Environment (F); Marketing Communication (G);
Country Environment (H); Tourism Destination (I)
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attraction and re-visit intention. Medical tourism has nine sub-aspects: hospital information and
facilities, admission and medical services, interactive online services, external activities, medical
technique and level, marketing communication, country environment, and tourism destination and
the Cronbach’s α are 0.855, 0.919, 0.857, 0.808, 0.926, 0.793, 0.859 and 0.783, respectively, but
commercial environment only got one criterion, so there is no Cronbach’s α therein. The overall
Cronbach’s α of medical tourism and tourism attraction are 0.975 and 0.913, respectively. Re-visit
intention has two sub–aspects, including re-visit intention and recommendation intention. The
Cronbach’s α are 0.816 and 0.902, respectively, and the overall Cronbach’s α is 0.929. All in all, the
Table 5. Weight and Ranking of Criteria

(n = 22) (n = 42) (n = 45) (n = 109)
A1 0.021 13 0.036 12 0.022 13 0.027 13
A2 0.006 22 0.011 21 0.007 21 0.009 20
A3 0.014 15 0.022 14 0.015 15 0.018 15
A4 0.062 9 0.051 10 0.057 10 0.055 10
A5 0.002 33 0.003 34 0.001 36 0.002 35
B1 0.018 14 0.021 16 0.020 14 0.020 14
B2 0.003 28 0.004 29 0.003 28 0.003 29
B3 0.053 10 0.059 9 0.064 8 0.059 8
B4 0.065 6 0.076 3 0.085 3 0.080 2
B5 0.076 5 0.062 6 0.081 5 0.075 5
B6 0.091 3 0.062 6 0.065 7 0.066 7
B7 0.050 11 0.038 11 0.043 11 0.042 11
B8 0.007 20 0.008 23 0.010 18 0.009 20
B9 0.025 12 0.023 13 0.032 12 0.029 12
B10 0.064 7 0.076 3 0.088 2 0.080 2
B11 0.098 2 0.068 5 0.072 6 0.073 6
C1 0.014 15 0.022 14 0.014 16 0.018 15
C2 0.001 37 0.004 29 0.002 30 0.003 29
C3 0.012 17 0.017 17 0.011 17 0.014 17
D1 0.011 18 0.017 17 0.009 20 0.013 18
D2 0.007 20 0.013 20 0.007 21 0.010 19
E1 0.001 37 0.001 39 0.002 30 0.001 38
E2 0.003 28 0.003 34 0.004 24 0.003 29
E3 0.003 28 0.002 37 0.003 28 0.002 35
E4 0.008 19 0.008 23 0.010 18 0.009 20
E5 0.003 28 0.004 29 0.004 24 0.004 27
E6 0.006 22 0.006 27 0.007 21 0.007 24
E7 0.101 1 0.088 1 0.099 1 0.094 1
E8 0.084 4 0.077 2 0.085 3 0.080 2
E9 0.064 7 0.061 8 0.060 9 0.060 8
F1 0.002 33 0.004 29 0.002 30 0.003 29
G1 0.004 26 0.005 28 0.002 30 0.003 29
(Continued)
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(n = 22) (n = 42) (n = 45) (n = 109)
G2 0.001 37 0.002 37 0.001 36 0.001 38
G3 0.002 33 0.003 34 0.001 36 0.002 35
H1 0.005 24 0.010 22 0.004 24 0.006 25
H2 0.004 26 0.008 23 0.001 36 0.004 27
H3 0.005 24 0.014 19 0.004 24 0.008 23
H4 0.000 40 0.001 39 0.000 40 0.001 38
I1 0.002 33 0.004 29 0.002 30 0.003 29
I2 0.003 28 0.008 23 0.002 30 0.005 26
Note: A1-Hospital contact information; A2-Hospital introduction; A3-Related information and service of Getting to the
hospital; A4-On-site pharmacy and prescription assistance; A5-Source of obtaining the related information about
medical tourism; B1-Billing information; B2-Appointment booking; B3-Availability of medications; B4-Safety of med-
ication quality; B5-Quality of medical treatment; B6-Service orientation of medical staff; B7-Waiting time for medical
treatment from time to first contact to real treatment; B8-Required treatment available here; B9-Quality of required
treatment; B10-Health evaluation; B11-High healthcare quality; C1-Interactive tools for online enquiries; C2-Pre-
admission consultations at a distance; C3-Medical records available via the Internet; D1-Referral services for inter-
national physicians; D2-Links to relevant agencies/tourist attractions; E1-Number of hospital and clinic beds; E2-
Accreditation by JCI which is a gold standard in hospital certifications worldwide; E3-State-of-the-art medical
equipment; E4-Accreditation of the medical facility; E5-Reputation of the hospital/facility; E6-Diversified medical
treatment; E7-Doctor’s expertise and reputation; E8-International certified doctors and staffs; E9-Advanced medical
treatment; F1-Good arrangement of the program and pick-up service; G1-e-Commercial marketing; G2-Clear contents
of medical tour pamphlets; G3-Multiple-language communication platform; H1-Overall positive country image; H2-
Safe to travel to the country; H3-Stable economy; H4-Perception of safety and security as related to culture and
political environment; I1-Popular tourist destination; I2-Attractiveness of the country as a tourist destination
Cronbach’s α in this study are all ≥0.7. According to the reliability standard by Wu (1990), the
scales of this study are with high reliability.
5.2. Demographic analysis

This study used SPSS 21 for running the descriptive statistical analysis. As for gender, Thailand
is the more favorable destination for Chinese male consumers (54.5%), and Singapore, Taiwan
and the overall samples are more favorable for female consumers- 52.4%, 62.2%, 55.0%,
respectively. Regarding age, the majority of those who went to Thailand are between the
ages of 41 to 50 (36.4%). Those who went to Singapore, Taiwan and the overall samples are
mainly between the ages of 21 to 30–57.1%, 48.9%, 45.9%, respectively. To sum up, in this
sampling, those who ever went to Singapore and Taiwan for medical tour tent to be the
younger generation. Regarding marriage status, Chinese consumers going to Thailand,
Singapore, Taiwan and the overall samples are majorly married- 68.2%, 52.4%, 48.9%, 54.1%,
respectively. About the educational background, Chinese consumers going to Thailand are
majorly with a degree of college or high school or under (36.4% for both), whereas those
going to Singapore, Taiwan and the overall samples are majorly with a degree of college-
57.1%, 66.7%, 56.9%, respectively. The average monthly income (RMB) for those going to
Thailand, Singapore, Taiwan and the overall samples are mainly between 2,001 and 4,000–
50.0%, 40.5%, 51.1%, 46.8%, respectively. In this sampling, the majority chose to go to Taiwan
as the destination (41.3%). For time(s) of participating in the medical tour, most Chinese
consumers went to Thailand once (72.7%), and those going to Singapore, Taiwan and the
overall samples have been there for two or three times- 52.4%, 42.2%, 42.2%, respectively.
About the motive of going for medical tour, Chinese consumers going to Thailand are to treat
diseases and touring as well as health check and touring (36.4% for both). Those going to
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Figure 2. CFA of Medical

Tourism, Tourism Attraction Tourism
and Re-visit Intention (n = 109). Attraction
0.817***
Note: For easy reading, the Key
observational variables and Criteria of
residual items are not listed 0.325
Medical
here.
Tourism
Note: †p < 0.1; *p < 0.05; 0.661* Re-visit
** p < 0.01; *** p < 0.001
Intention
Table 6. Result of the Overall Samples’ Model Fit (n = 109)

Test Statistic Standard Result
Absolute Fit Indices χ2 The smaller, the better 108.855
χ2/df 1~5 1.76
GFI > 0.9/0.8 0.87
AGFI > 0.9/0.8 0.81
RMR < 0.08 0.08
SRMR < 0.08 0.07
RMSEA < 0.08 0.08
Incremental Fit Indices NFI > 0.9/0.8 0.80
NNFI (= TLI) > 0.9/0.8 0.87
CFI > 0.9/0.8 0.90
RFI > 0.9/0.8 0.75
IFI > 0.9/0.8 0.90
Parsimony Fit Indices PNFI > 0.5 0.64
PGFI > 0.5 0.59
Singapore, Taiwan and the overall samples are mainly for a health check and touring- 61.9%,
53.3%, 53.2%, respectively.
5.3. Analysis of aspects and criteria

This study employed Super Decisions (Windows 3.0 Beta) to analyze the weights of aspects and
criteria to learn the ranking. After the values of pairwise comparison were entered, this study first
checked if the C.I. (Consistency Index) value of each comparison matrix was less than 0.1 (Saaty,
1980) to reach the transitivity. Then, Super Decisions (Windows 3.0 Beta) was employed to get the
Unweighted Supermatrix, the Weighted Superrmatrix and the Limiting Supermatrix of each ques-
tionnaire. For easy reading, this study only shows the weights of Limiting Supermatrix which
represent the final results. At last, the Arithmetic Average Method was used for getting the
average weight and the ranking in the Limiting Supermatrix.
5.3.1. Aspects
Table 4 shows that those Chinese consumers going to Thailand, Singapore, Taiwan, and the overall
samples all value interactive online services (C), external activities (D), and hospital information
and facilities (A) the most. In other words, these three aspects are the most important key aspects.
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5.3.2. Criteria
According to Table 6, those Chinese consumers going to Thailand, Singapore, Taiwan, and the
overall samples all care most about hospital contact information (e.g., address, phone and email)
(A1), on-site pharmacy and prescription assistance (A4), availability of medications (B3), the safety
of medication quality (B4), quality of medical treatment (B5), service orientation of medical staff
(B6), waiting time for medical treatment from time to first contact to real treatment (B7), quality of
required treatment (B9), health evaluation (B10), high healthcare quality (e.g., ISO, NCQA, ESQA)
(B11), doctor’s expertise and reputation (E7), international certified doctors and staffs (E8), and
advanced medical treatment (E9), and their differences are just about the ranking. Meanwhile, all
of them weigh to doctor’s expertise and reputation (E7) the most.
5.4. Regression analysis

This study tested the Confirmatory Factor Analysis (CFA) by AMOS 24 and then examined the
hypotheses. With the analysis by ANP, it is learned that there are 13 key criteria (A1, A4, B3, B4, B5,
B6, B7, B9, B10, B11, E7, E8, and E9). Accordingly, this study made the criteria of the same aspect
into a group, and took the mean as the observational variable, and then ran the analysis. In
addition, Figure 2 shows: (1) The key criteria of medical tourism are significantly positively to
tourism attraction and re-visit intention which means H1 and H2 are supported; (2) Tourism
attraction has no influence on re-visit intention which means H3 is not supported.
This study also organized the model fit of overall samples as shown in Table 6. According to the
recommended indicator value proposed by Bagozzi and Yi (1988), Hair et al. (1998), and Jöreskog
and Sörbom (1989), only the relative fit index (RFI) is close to the standard value, and others all
reach the standard. Thus, the model fit for this study is good.
6. Conclusion
6.1. Key aspects

Chinese consumers going to Thailand, Singapore, Taiwan and the overall samples all more value
the interactive online services (C), external activities (D), and hospital information and facilities (A).
Based on this result, when engaging in medical tour, Chinese consumers pay more attention to
before-and-after communication, such as online communication, to learn the essential parts of the
tour, such as the risk of surgeries or the process of procedures, to decrease their insecurity.
Moreover, when going for medical tour, Chinese consumers prefer combining medical service
with touring. For example, they like to enjoy the local attractions and customs during the period
when they have spare time. Chinese medical tourists also attach importance on relevant informa-
tion about medical tour program, such as addresses, phone numbers and emails, and would like to
know if the service providers have advanced complementary equipment to increase their sense of
security and meet the needs of their medical requirements.
6.2. Key criteria

The key criteria (A1, A4, B3, B4, B5, B6, B7, B9, B10, B11, E7, E8, and E9) that Chinese consumers
going to Thailand, Singapore, Taiwan and the overall samples value the most are all the same, and
only the rankings are different. At first, hospital contact information (e.g., address, phone and
email) (A1) and on-site pharmacy and prescription assistance (A4) mean Chinese consumers
attach importance on if hospitals can provide accurate and detailed contact information or have
good supporting system among departments (such as convenience for getting medication or
medication description) in order to increase the sense of security. In addition, availability of
medications (B3), the safety of medication quality (B4), quality of medical treatment (B5), service
orientation of medical staff (B6), waiting time for medical treatment from time to first contact to
real treatment (B7), quality of required treatment (B9), health evaluation (B10), and high health-
care quality (e.g., ISO, NCQA, ESQA) (B11) indicate that Chinese consumers highly consider the
safety and effectiveness of the medication (such as having side effects or good control over the
health issues), high quality of medical treatment and care, people-oriented service, length of
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waiting time and accurate health assessment to ensure themselves to have healthy and secured
medical service. Furthermore, doctor’s expertise and reputation (E7), international certified doctors
and staffs (E8), and advanced medical treatment (E9) mean that the Chinese consumers highly
care whether the medical tour can reach the outcome they expect; for example, when getting
cosmetic medical treatment, consumers hope the attending doctors are internationally certified,
with good techniques and reputation to ensure and increase the treatment success rate.
6.3. Relationship among key criteria of medical tourism, Tourism attraction, and re-visit
intention
The key criteria of medical tourism (A1, A4, B3, B4, B5, B6, B7, B9, B10, B11, E7, E8, and E9) have a
significant positive influence on tourism attraction and re-visit intention. Based on this ground, this
study suggests that relevant business involving in medical tourism should improve and perfect
their information system. They can reveal their information, such as working address, phone
number, emails, on the website or social medial platforms to improve their approachability and
accuracy. Moreover, it is suggested that relevant industries should purchase medication from large
international or well-known pharmaceutical companies to improve the medication quality and
effectiveness. Furthermore, for guaranteeing the safety and effectiveness, this study suggests
hiring internationally certified, highly professional and well-reputed doctors and staff. This study
also proposes the relevant business in the medical tourism sector: (1) To train and select medical
personnel with high service orientation to make the consumers feel well-cared, (2) To set on-site
pharmacies and provide prescription assistance, such as medication counselling, to make it con-
venient to get and use medication for consumers, (3) To provide consulting service online to reduce
the waiting time from first contact to real treatment, and (4) To carry out high-standard quality
care service and provide precise and accurate health assessment in order to create a medical
service with high competitiveness and consumer-friendliness.
6.4. Relationship between tourism attraction and re-visit intention

Tourism attraction has no influence on re-visit intention, which is consistent with the study results
by Kuo et al. (2010) and Yang, Yang, et al. (2015). This study reckons that the reasons might be the
specialness of industry, and the intention of receiving medical service as the main purpose and
touring as the complementariness; that is, the priority of the medical tour consumers is still to seek
if their medical needs can be fulfilled, such as cosmetic surgery, premium health check. Therefore,
if their medical demands are not provided, the consumers would not like to go to that destination
for touring again, even though the tourism attraction is very strong.
6.5. Contribution
Concerning the academic gap, few past studies discuss the key factors that influence consumers to
engage in medical tour. This study constructs the evaluation framework by literature review and
expert interview, and discusses the key aspects and key criteria. Furthermore, this study found that
few studies have integrated the key factors, tourism attraction and re-visit intention in a study. In
this study, it is proved that the key criteria of medical tourism have a significant positive relation
with tourism attraction and re-visit intention. Most past studies show that tourism attraction has a
significant positive relation with re-visit intention (C. Y. Chang et al., 2015; Kuo & Wu, 2014; Lin &
Ku, 2009; Y. L. Liu et al., 2012; Liu & Hsiao, 2012; Liu & Lo, 2010; Teller & Alexander, 2014; Vigolo,
2015), but this study has found that they show no significant positive relation with each other.
Moreover, from a practice perspective, the relevant industry in the medical tourism sector can take
the key criteria by this study to implement improvements and set up business strategies.
6.6. Limitation and future research

Due to the limitation of manpower, material resources and time, the locations for the survey were
only at China’s Guangzhou Baiyun International Airport and Shenzhen Baoan International Airport.
What is more, the respondents were limited to a specific group, which only could be the Chinese
consumers who ever participated in medical tours in Thailand, Singapore and Taiwan, so the
number of retrieved questionnaires is not that large. Based on this ground, it is suggested that
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future researches can prolong sampling time to increase the number of samples. In addition, the
locations in this study only limit to Thailand, Singapore and Taiwan, so it is suggested that future
researches can expand the sampling countries (e.g., South Korea or India) and compare their
differences. Also, future researches can further explore the relation between medical tourism and
other variables (e.g., income or satisfaction level).
Funding Chang, C. C., Lin, H. H., Wu, H. Y., & Chang, H. Y. (2016).
The authors received no direct funding for this research. The empirical research of store image, service qual-
ity, product innovation, and customer’s perceived
Author details value to repurchase intention: The case of “Yingge
Jen-Hung Wang1 Ceramic Old Street”. American Society of Business
E-mail: kingwang@mail.nkuht.edu.tw and Behavioral Sciences, 23(1), 101–111. doi: 24dfa-
E-mail: doraemonponpon@hotmail.com cacd11e8beb8cd0b4bf3ded066d.pdf.
ORCID ID: http://orcid.org/0000-0003-1654-4953 Chang, C. Y., Chen, C. L., & Hsieh, W. F. (2015). Effect of
Hang Feng2 sport tourism attraction on revisit intention - A case
E-mail: b15091100133@cityu.edu.mo study of the Sun Moon Lake Bikeway. Journal of
You Wu2 Exercise and Health Research, 4(1), 48–65.
E-mail: 125782927@qq.com doi: 10.29505/JEHR
1
Graduate Institute of Hospitality Management, National Chang, K. S., Chang, L. J., Lin, Y. S., Chien, H. C., & Lin, L. Y.
Kaohsiung University of Hospitality and Tourism, (2013). Promoting international medical tourism
Kaohsiung, Taiwan. transformation and innovation strategies in Taiwan -
2
Faculty of Business (FOB), City University of Macau, A case study of a local hospital in central Taiwan.
Macau, China. Sports and Tourism Research, 2(2), 8–21.
doi: 10.6198/Sports.2013.2(2)2.
Citation information Che, T., Peng, Z., Lim, K. H., & Hua, Z. (2015). Antecedents
Cite this article as: Exploring key factors of medical tour- of consumers’ intention to revisit an online group-
ism and its relation with tourism attraction and re-visit buying website: A transaction cost perspective.
intention, Jen-Hung Wang, Hang Feng & You Wu, Cogent Information & Management, 52(5), 588–598. https://
Social Sciences (2020), 6: 1746108. doi.org/10.1016/j.im.2015.04.004
Chen, C. H., Wu, S. K., & Pan, K. Y. (2015). The construction
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Appendix 1. Aspects, Criteria, and Literature Sources (Preliminary Framework)
Aspect Source Criteria Source

Hospital Information and Moghavvemi et al. (2017) Hospital contact Moghavvemi et al. (2017)
Facilities information (e.g.,
address, phone and
email)
Hospital statement of
purpose (e.g., mission or
vision)
Photos or videos featuring
the hospital facilities and
technology
Getting to the hospital:
Ground transportation
arrangements (e.g., pick-
up from airports or home)
Travel arrangements/
bookings
Entry visa assistance
Partnerships with travel
agents or hotels
Patient privacy
information
Patient’s rights and
obligations
Patient feedback (e.g.,
testimonials and survey
results)
On-site language
interpretation services
Food arrangements
specific to international
patients
On-site pharmacy and
prescription assistance
On-site facilities for
patients’ companions (e.
g., family lounge,
accommodation within
facility, etc.)
Off-site accommodation
arrangements for
patients’ companions and
outpatients
Ratio of patients and Singh (2013)
medical staff
Privatisation of facilities
Availability of advanced Woo & Schwartz (2014)
or qualified medical
instruments used for
treatment
Hospital facilities such as
rooms and other spaces
(Continued)
Page 21 of 26
https://doi.org/10.1080/23311886.2020.1746108
(Continued)
Recreation facilities for
patient’s family
Recreation facilities for
patients in the hospital
Recommendation from Wongkit & McKercher
family and friends (2016)
Recommendation from
others
On newspaper and Lin et al. (2010)
magazines
From experts
On the internet
On television
From relatives and friends
State-of-the-art medical Fetscherin & Stephano
equipment (2016)
Accreditation of the
medical facility (e.g., JCI,
ISQUA)
Reputation of the
hospital/facility
Admission and Medical Moghavvemi et al. (2017) Billing information Moghavvem i et al. (2017)
Services
Health insurance
accepted (incl. affiliated
insurers)
Payment information and
facilities (e.g., credit cards
accepted)
Foreign currency
exchange information
and facilities
Inpatient
accommodation
Medical specialties/areas
of excellence
Medical staff descriptions
Appointment booking
Post-discharge
arrangements
Type of speciality services Singh (2013)
Fluency of medical staff
in English
Availability of
medications
Safety of medication
quality
Quality of medical Woo & Schwartz (2014)
treatment
Availability of treatment if
complication or side
effects occurs
Medical staff’s ability to
communicate in patient’s
own language
(Continued)
Page 22 of 26
https://doi.org/10.1080/23311886.2020.1746108
Service orientation of
medical staff
Availability of translators
in the hospital
Waiting time for medical
treatment from time to
first contact to real
treatment
Required treatment Wongkit & McKercher
available here (2016)
Quality of required
treatment
Availability of follow up
service
Availability of post- Lin & Huang (2012)
treatment service
Premium medical
equipment
Advanced medical
treatment
Excellent medical care
Short waiting time for
treatment
Health assessment
Diversified medical
treatment
Doctor’s training Fetscherin & Stephano
(2016)
Doctor’s expertise
High healthcare quality
indicators (e.g., low
infection rate)
Reputation of doctors
High quality standards (e.
g., ISO, NCQA, ESQA)
High quality of care
International certified
doctors
Internationally certified
staff
International educated
doctors
Friendliness of staff and
doctors
Interactive Online Moghavvemi et al. (2017) Interactive tools for Moghavvemi et al. (2017)
Services online enquiries
Pre-admission
consultations at a
distance (online or by
phone)
Medical records available
via the Internet
Links to online forums for
patient feedback and
(Continued)
Page 23 of 26
https://doi.org/10.1080/23311886.2020.1746108
(Continued)
social
networking (e.g., Twitter
and Facebook)
Links to additional online
venues for information
generated by or about
the hospital (e.g.,
YouTube and blogs)
External Activities Healthcare joint ventures,
international affiliations
and overseas referral
networks with other
hospitals
Referral services for
international physicians
(via teleconference,
online enquiries or phone)
Links to relevant
agencies/tourist
attractions
Technical Items Site map present
Site-wide search tool
present
Availability of alternative
language options for the
website (besides English)
Website accessibility for
people with sensorial
disabilities
Live (no broken) web links
Medical Technique and Zhang & Gao (2016) Number of hospitals and Zhang & Gao (2016)
Level clinics
Number of hospital and
clinic beds
Number of doctors
Medical training of staff Singh (2013)
Licensure of medical staff
Doctor’s degree, Woo & Schwartz (2014)
certification and
reputation
Accreditation by JCI (Joint
Commission
International) which is a
gold standard in hospital
certifications worldwide
Medical Tourism Costs Fetscherin & Stephano Low cost of treatment Fetscherin & Stephano
(2015) (2016)
Lower healthcare costs
Low cost of
accommodation
Low costs to travel
Affordability of airfares
Commercial Environment Lin & Huang (2012) Convenient Lin & Huang (2012)
transportation
Reasonable cost
Good catering service
(Continued)
Page 24 of 26
https://doi.org/10.1080/23311886.2020.1746108
Good arrangement of the

program and pick-up
service
Custom-made service
Marketing e-Commercial marketing

Communication
Clear contents of medical

tour pamphlets
Multiple-language
communication platform
Country Environment Fetscherin & Stephano Stable exchange rate Fetscherin & Stephano
(2016) (2016)
Low corruption
Cultural similarity
Overall positive country

image
Language similarity
Safe to travel to country
Stable economy
Image of Korea Woo & Schwartz (2014)
Perception of safety and

security as related to
culture and political
environment
Tourism Destination Popular tourist Fetscherin & Stephano

destination (2016)
Exotic tourist destination
Weather conditions
Attractiveness of the
country as a tourist
destination
Many cultural and natural

attractions
Source: This study
Page 25 of 26
https://doi.org/10.1080/23311886.2020.1746108
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Spending Levels Spending Trends Delivery System Quality Performance and Access

2. Hospital Operating Expenses

30 Health Policy Commission

75th percentile: Inpatient

$0 60% worse Composite 60% better

case mix-adjusted discharge*

delivery and patient safety. We examined performance by Median

Massachusetts hospitals across select indicators of quality: 60% above

care measures. For each measure of hospital quality, certain

2013 Annual Cost Trends Report 31

strategies are hospitals pursuing to reduce their operat-

Differences in the level of payments made to hospitals by 9 9

ation in commercial prices paid to Massachusetts hospitals.2,3

32 Health Policy Commission

Procurement and supply chain management

2013 Annual Cost Trends Report 33

This impacts operating expenses over time as hospitals 100

limited market leverage receive lower rates of commercial

performance and competitiveness.

34 Health Policy Commission

5 Global Health Exchange Inc. Applying Supply Chain Best Practices

6 Dominy M, O’Daffer E. Supply Chain Consultants and Outsourcing

9 Institute for Healthcare Improvement. Innovation Series: Going

10 Rodak S. 4 Common Mistakes of Hospitals Implementing Lean

15 Robinson J. Hospitals Respond to Medicare Payment Shortfalls by

17 Medicare Payment Advisory Commission. Report to the Congress:

2013 Annual Cost Trends Report 35

A Conceptual Model of Medical Tourism Service Supply Chain

Received: September 2019

To cite this article:

Figure 1. The triangulation process used in this study

2.1. Literature Review

2.2. In-Depth Interviews

2.3. Expert Evaluations

Expert title Institution

3. A Conceptual Model of Medical Tourism Service Supply Chain

Figure 2. Proposed MTSSC model

3.1. Service Design

3.2. Customer Relationship Management

3.3. Demand Management

3.4. Capacity and Resource Management

3.5. Supplier Relationship Management

3.6. Service Delivery Management

3.7. Service Recovery Management

4. Expert Evaluations of the Proposed Model

Figure 3. Second version of the proposed MTSSC model

5. Conclusion and Further Research

Declaration of Conflicting Interests

Tenth Development Plan of Turkey (2018). http://www.sbb.gov.tr/wp-content/uploads/2018/11/Onuncu-Kalk

Journal of Industrial Engineering and Management, 2020 (www.jiem.org)

Adoption of Hospital Information System (HIS) in Malaysian Public

* Corresponding author. Tel.:+607-453-3842.

2. Hospital Information System (HIS)

2.1. Components of HIS in Malaysian Public Hospitals

2.2. HIS Benefits and Issues

2.3. Technology Acceptance/Adoption Theories

Table 1. Research Sites and Research Samplings of Quantitative Study

Total 73 Total 83 Total 73

3.1. Descriptions of Measurements

Table 2. Descriptions of Measurements

Table 3. Respondent’s Demographic

Gender Male 75 67.2

Dependent (I) TYPE (J) TYPE Mean Std. Error Sig.