Is Medical Tourism Set to Explode?

The merry month of May brought two interesting articles on medical tourism, the first from the Tier One strategy consulting firm McKinsey entitled Mapping the Market for Medical Travel. The second, an excellent article in the May issue of Fast Company. Both reports were very well-researched and written providing unique perspectives on medical tourism.

McKinsey Highlights:

• Market today is only 60-85,000 consumers worldwide. McKinsey uses a very strict definition for medical tourist including only those that travel some distance for care.
• 40% seek the most advanced treatment, often traveling to the US. Roughly 75% of these medical tourists come from two regions, Middle East and Latin America.
• 32% are looking for better quality of care and typically travel from developing countries.
• 15% seek faster care for medically necessary procedures.
• 9% seek lower costs for medically necessary procedures. In this category, 99% of the medical tourists originate from the US.

Barriers:

• Incorporating medical tourism options as part of payer network.
• Establishing common, universal metrics to assess quality of outcomes.
• Addressing continuity of care/follow-on treatment.
• Overcoming inconvenience of travel

Market Potential:

• $10,000. differential in cost is the tipping point. An aortic valve replacement in the US costs in excess of $100,000. In Asia, average cost at an international hospital is $12,000, providing plenty of opportunity for shared savings.
• If payers jump onto bandwagon (and it appears they are), potential number of US medical tourists could jump 100x to over 500,000 consumers/year.

Fast Company Highlights:
Less focused on metrics, article looked closely at the success of Thailand’s Bumrungrad Hospital, expanding upon its interview with the hospital’s former marketing director, Ruben Toral. Toral, a North Carolina native joined Bumrungrad in 2001 and was instrumental in helping this hospital double patient flow to 430,000 by 2006. Toral has gone on to start MedNet Asia, a software start-up to assist payers doing business with Asian hospitals.

What was particularly interesting about this article was the number of quotes from various corners, including payers (UnitedHealth Group), large providers (former head of Harvard Medical International), employer (Blue Ridge Paper Products) and a union (AFL-CIO rep.) to name a few. This provided a more qualitative view of the market, its potential, where it may be headed, what we might see in the future, e.g., payers sharing cost savings with consumers should the consumer elect to go overseas for treatment, and of course barriers.

Closing Comments:
Though there is a lot of talk about medical tourism, it is still just talk. Until it becomes far easier for the average US consumer to evaluate, choose and engage with an offshore medical institution, the market will not take-off. Sure, there are plenty of intermediaries in the market today willing to help arrange your travel to some foreign destination for that surgery you need, but trying to determine who is reputable and can be trusted is not all that easy. (Do what I did – Google “medical tourism”. You’ll get some 2.3M hits – not an easy ask wading through that list, even with the paid ads to find a reputable firm to go with!).

From the Fast Company article, though, it certainly appears that payers (and their employer customers) are looking very closely at medical tourism to control costs and may well lead the effort to provide consumers with these tools for evaluating options, including providing a list of pre-screened facilities and assisting them with their travel arrangements.

There is also the significant issue regarding continuity of care. I have yet to see any clear, established models that insure such continuity after discharge from an offshore hospital. Is there a role here for a consumer’s PHR? Maybe so.

Using their PHR, a consumer could share their US-based records with an offshore surgeon in advance, use the PHR (if the capabilities exist) for secure communication with that physician and likewise, upon discharge, the offshore hospital could then upload directly to the consumer’s PHR their complete digital records from the procedure for sharing with their care providers back home. (Note, many of these offshore facilities use state-of-the-art HIT. For example, Bumrungrad Hospital in Thailand, one of the leaders in medical tourism deployed their home-grown EMR, Global 2000, seven years ago. Microsoft purchased Global 2000 last year and its now part of Amalga.)

On thing in clear, change will come. It is now more a matter of where (which procedures), when (just how fast it will take-off) and what will be the broader ramifications to the traditional healthcare market in the US. As a doctor recently wrote in an editorial about New England grocer Hannaford’s move (with Aetna’s assistance) to provide employees incentives to have knee and hip surgeries done in Singapore, this is but a canary in the coal mine.