The Patient Abroad: An Exploration of the Motivations and Impact of Medical Tourism
Rachel Howard, associate director of the Research Partnership
Approximately 11 million people were medical tourists in 2013, generating a market worth over $50 billion. While obtaining accurate data is challenging, estimates suggest the global medical tourism market is expanding by 25% each year.
Having grown up in the UK, where high-quality healthcare is available to all through the National Health Service, I hadn't given the concept of medical tourism a great deal of thought before I moved to Asia. It would simply not have occurred to me to seek healthcare overseas for any other reason than if I happened to fall ill while traveling.
I first became aware of the concept when reading rumors that Zimbabwe's President Robert Mugabe was being treated in one of Singapore's exclusive private hospitals – which happened to be just down the road from my apartment at the time. This led to much discussion among my peers about how much it would cost to be a medical tourist in Singapore. "High end" patients can expect to accrue bills of thousands of dollars. The most expensive "hospitel" (hospital hotel) penthouse suite (not room) in Singapore costs over $8,000 per night – and it does not include the additional costs of medical treatment. This particular establishment anticipates that at least half of its "guests" (not patients) will come from overseas.
For patients like President Mugabe, the motivation to seek treatment overseas in countries such as Singapore is clear–they have the means to pay for healthcare of a far higher quality than is available even in the best private clinics in their home country.
Singapore is also a particularly popular medical tourism destination for affluent Indonesians because of its proximity to that country. Once again, there is a relative quality differential when compared to what is available to them at home. This year Singapore expects to receive more than one million foreign patients, the majority from Indonesia. Interestingly, an Indonesian newspaper recently noted a growing trend for the obituaries posted in its pages to cite the hospital in which the patient passed away. This indicates that there is a prestige factor in being treated at a top overseas hospital.
Other Asian markets have pursued a different medical tourism strategy, profiting from differences in the cost of healthcare between countries. In the battle to attract medical tourists from overseas, these countries are positioning themselves as offering relatively high-quality, low-cost healthcare, often in a particular niche type of treatment or procedure. It is increasingly common for people to travel to Thailand for cosmetic dental veneers, to India for laser eye surgery or to South Korea for a plastic surgery procedure, for example. Here the motivation of the tourist is the opposite of those described above. It is to get a bargain when compared to the cost in their home country.
Outside of the Asian context, a similar phenomenon can be found in the Americas, where US citizens are increasingly crossing the border to access healthcare in Mexico or even traveling further south to access Colombia's elite private medical facilities for a fraction of the price they would pay at home. Weight-loss surgery is a particularly popular medical tourism choice, as these procedures are typically outside of the remit of US insurance plans, and out-of-pocket payments are much lower in Latin America. For healthcare that is covered by insurance, some insurers have recently attempted to leverage the medical tourism trend by launching pilot programs which link up with non-US hospitals to provide treatment, thereby reducing the cost of treatment and improving their margins.
Turkey, another growing medical tourism destination, is uniquely positioned within the market in that it attracts tourists from the European Union and US due to its comparatively low-cost healthcare, while also appealing to affluent citizens of troubled neighboring Middle Eastern countries such as Syria by offering relatively high-quality healthcare they lack access to domestically.
Sensing opportunity for further economic growth, medical tourism destinations are expanding their ambitions, with many pursuing aggressive strategies to attract patients in an increasingly competitive marketplace. For example, while South Korea's plastic surgery industry is a global success story, with the nation boasting the highest per capita number of plastic surgeons worldwide, there is a drive to move beyond plastic surgery tourism into other therapy areas, such as oncology. Turkey benefits from a Turkish Airlines initiative to support patients visiting Turkey for medical purposes by providing these individuals with discounted, flexible airfares and excess luggage allowances.
However, barriers to medical tourism inevitably remain. Logistically, it's a hassle – especially when illness is involved. It isn't an option in acute situations, and some patients are simply too sick to travel. Fears about quality and safety of healthcare in other markets hold back some tourists, particularly those seeking a bargain. Aftercare and follow-up care are also a challenge – particularly if a chronic disease is involved. Hence medical tourism has become most popular for planned, optional, one-off procedures (as per the earlier examples of aesthetics and weight loss).
Nevertheless in some emerging markets medical tourism already has a significant impact and is something we need to consider when exploring the opportunities different markets offer for pharma. In Singapore, for example, medical tourism extends the value of its pharmaceutical market beyond that of its local population, making it relatively more important for manufacturers of high-cost drugs than a simple glance at its population size might suggest.
Looking to the future, as travel gets easier and the world becomes progressively more digitally entwined and interconnected, it might be that some of the remaining barriers currently holding back even more widespread medical tourism can be overcome. Technological innovation in the form of e-health, telemedicine and online pharmacies may make follow-up care and repeat prescriptions more straightforward. Improved and globally recognized quality controls and accreditations, plus access to online reviews from fellow medical tourists, may help ease some patients' lingering concerns about safety and quality of the care they can expect to receive abroad. Perhaps in some markets the influx of affluent international patients will price all but the most affluent local population out of private healthcare in their own country.
The patient journey within a single healthcare system may become less predictable, posing a number of pertinent questions about how the pharmaceutical industry approaches marketing and "beyond the pill" patient support initiatives. Taking this a step further, as global healthcare borders become increasingly blurred, the internationally mobile patient may become a standard patient segment considered in healthcare market research.
Rachel Howard is associate director of the Research Partnership.