Medical Tourism: An Overview

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

March 19th, 2009

MBAA ± ABE Annual Conference Chicago, IL

Headlines« Hip surgery in India? Insurance may pay
MSNBC.com 6/30/2008

Americans look abroad to save on health care
AP 8/3/2008

South Korea seeks a place in a booming medical tourism market
International Herald Tribune 11/13/2008

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

I. Introduction From a US perspective, there are three general types of medical tourism patients traveling outside the US for care patients traveling to the US for care patients traveling within the US for care.

Today¶s focus will be patients traveling abroad for medical care.

The practice of traveling to obtain health care is known by several different names« medical tourism medial travel health tourism health travel global healthcare Medical or health travel are probably the most accurate terms. Medical tourism seems to be the most widely used term.

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

retrieved on March 1, 2009

A. Common Procedures:
- heart bypass/valve replacement/pacemaker/defibrillator - angioplasty with stent - spinal fusion - fertility treatments - hip replacement / resurfacing - knee replacement - lap bands/gastric bypass - laparoscopic surgeries (gall bladder, hysterectomy, etc.) - neuro-surgery - transplants - cancer procedures - cosmetic surgery - dental surgery

B. Destination countries:
Country Barbados Bermuda Brazil Chile China Costa Rica Czech Republic Egypt Ethiopia Hong Kong Hungary India Indonesia Israel Jordan JCI x x x x x x x x x x x x x PWOB Deloitte x x x

x x

x

x x x x

x x

Country Kingdom of Saudi Arabia Korea Lebanon Malaysia Mexico New Zealand Pakistan Panama Philippines Qatar Singapore South Africa Taiwan Thailand Turkey United Arab Emirates

JCI x x x x x x x x x x x x x

PWOB x x x x x x x x x x x

Deloitte x

x x

x x x x x

C. Statistics Sample Surgery Cost Comparison
USA Heart Bypass Heart Valve Replacement Angioplasty Hip Replacement Hysterectomy Knee Replacement Spinal Fusion $130,000 $160,000 $57,000 $43,000 $20,000 $40,000 $62,000 India $6,651-$9,300 $9,000 $4,988-$7,500 $5,800-$7,100 $2,300-$6,000 $6,200-$8,500 $4,500-$8,500 Thailand $11,000 $10,000 $13,000 $12,000 $4,500 $10,000 $7,000 Singapore $16,500 $12,500 $11,200 $9,200 $6,000 $11,100 $10,000 Costa Rica $24,000 $15,000 $9,000 $12,000 $4,000 $11,000 $25,000 Korea $34,150 $29,500 $19,600 $11,400 $12,700 $24,100 $3,311

Medical Tourism Association website 7/8/2008

In 2007, an estimated 750,000 Americans traveled abroad for medical care. Deloitte 2008 Survey of US HealthCare Consumers: - 39% would go abroad for care if they could save half the cost and be assured of quality - 3% have traveled outside the US for care - 27% may travel outside the US for care

The world market is - estimated at $60 billion in 2007 - estimated to grow to $100 billion by 2010. 35 countries serve around a million medical tourists each year.

II. Driving forces A. Four factors 1. Increasing economic importance of the health services sector - increased demand for healthcare - shortage of healthcare professionals - aging population - increasing medical costs - constrained public sector health budgets 2. International accrediting bodies - JCI, CCHSA, TAS, ACHSI

3. General Agreement on Trade in Services -Trade in health services takes many forms: insurance telemedicine hospital services medical tourism 4. Other factors - information / communication technologies - increased mobility - consumerism - access / wait times

B. International Accrediting Bodies: - Joint Commission International (JCI) -- US - Canadian Council on Health Services Accreditation (CCHSA) - Trent Accreditation Scheme (TAS) -- UK - Australian Council on Healthcare Standards International (ACHSI)

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

Brazil ± 13 JCI Malaysia ± 10 JCI Singapore ± 16 JCI China ± 3 JCI, 12 Trent Saudi Arabia ± 17 JCI, 4 CCHSA

C. General Agreement on Trade in Services The WTO GATS specifies 4 modes of supply with respect to services: Mode 1 ± Cross-Border Supply Mode 2 ± Consumption Abroad Mode 3 ± Commercial Presence Mode 4 ± Presence of Natural Persons Mode 2 is relevant for studying people traveling abroad for medical treatment.

GATS commitments for mode 2: - very few limitations on market access or national treatment have been placed on health services - commitments would pertain to whether a WTO member is prepared to allow its own nationals to go abroad for healthcare GATS does not imply that foreign patients must be treated the same as domestic patients.

Types of consumers abroad: - tourists who incidentally need medical care - retirees abroad - temporary / migrant workers - cross-border commuters - residents of multinational areas - travel specifically for medical care - price / insurance - access / wait times - anonymity - specialty services

III. Effects A. Potential Impacts - alleviate some health service issues in sending nation (wait times, access) - improved health infrastructure in receiving nation - dual healthcare market in receiving nation - crowd out local population - source of foreign currency, investment funds, and tax revenue for receiving nation

- developing nations harness comp. advantage -brain drain vs improved human capital - cost containment in sending nation - government policies - insurance

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

C. Government Promotion India¶s Ministry of Tourism provides financial assistance to attend global medical fairs to promote India (accredited). The Minister of Health and the Minister of Tourism in Barbados hosted the ³Caribbean Health and Wellness Tourism´ meeting in April 2008. Malaysia¶s Health Ministry is launching a special medical tourism website.

South Korea has revised immigration policy and regulations on joint ventures between local and foreign hospitals. The President of Tunisia has asked for an action plan focused on encouraging foreign patients to visit the country for medical treatment. Philippines Department of Tourism held a summit to lay the groundwork for making the nation a health and wellness destination. Yemen¶s Ministry of Health pays for certain treatments abroad.

D. US - International Partnerships: Cleveland Clinic ± Cleveland Clinic Abu Dhabi (2010) Columbia University Medical Center - partnered with Ben-Gurion University of the Negev: Medical School for International Health - affiliated American Hospital, Paris Florence Nightingale Hospital, Istanbul St. Luke¶s Medical Center, Philippines

Cornell Medical School - opened medical school in Qatar - research/advisory institute in Seoul Duke Medicine - partnered with NUS: Duke-NUS Medical Graduate School, Singapore Harvard Medicine - 50 programs in 30 countries - with Dubai Healthcare City is launching University Hospital

Johns Hopkins Hospital - ties in Japan, Singapore, India, UAE, Canada, Lebanon, Turkey, Ireland, Portugal, Chile, Panama Memorial Sloan Kettering Cancer Center - Hong Kong, Barcelona, Geneva, Athens, Sao Paulo, Seoul, Istanbul, Singapore, Philippines

University of Pittsburgh Medical Center - partnered to develop hospital in Palermo, Italy - medical center in Qatar - cancer center in Dublin

E. International Providers: Costa Rica ± CIMA Hospitals India ± Apollo Hospitals Philippines ± St. Luke¶s Medical Center Singapore ± National Cancer Center Thailand ± Bumrungrad Hospital UAE ± American Hospital

IV.Future Research destination country characteristics local health care market effects cross-subsidization logistics insurance portability implications public-private partnerships government promotion efforts

Comments? Questions?

Katherine M. Sauer University of Southern Indiana kmsauer1@usi.edu
March 19th, 2009 MBAA ± ABE Annual Conference Chicago, IL

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