If unemployment in the Western world climbs to record levels in the coming year, is this good news or bad news for the healthcare sector?
Some good news comes in a recent McKinsey analysis. According to McKinsey, in previous recessions, US consumers changed their their spending priorities rather than cutting all expenditure across the board. In discretionary areas of expenditure such as dining out, personal care products, and charitable donations fell. But expenditure on groceries, books, insurance, education and healthcare actually rose.
See the McKinsey analysis - Industry trends in recessions.
However.... compared to the 1990/91 and 2000/01 downturns what we are facing now could be much much worse. In the UK, there are early indications that discretionary expenditure on private education and, of more relevance, private self paid surgery is being affected.
It remains to be seen whether those with less money in their pockets will be attracted by low cost treatment abroad , and whether the credit crunch stimulates new demand for medical tourism.
The harsh reality may be somewhat different. BusinessWeek reports that "...in some medical tourism hotspots, formerly booming hospitals are seeing empty beds." The MD of Parkway Hospitals in Singapore, "expects the foreign patient numbers to stabilise after dropping 10 per cent".
Whether the credit crunch encourages more people to consider travelling abroad for treatment remains to be seen. People are short of cash, unable to borrow and are delaying expenditure on house purchases, cars and other major expenditures. Healthcare is not immune to this. Although in the last global recession, healthcare was less affected, the likelihood is that people who might have considered medical tourism may decide to postpone their expenditure.
Areas likely to be affected most are those “non-urgent”, discretionary treatments such as cosmetic surgery. In countries where medical tourism is influenced by waiting lists, patients may decide to hold out for free treatment in their own country rather than go for the paid for, immediate treatment available elsewhere. In the USA, the story may be different, as the financial crisis puts pressure on health insurers and employers to find ways to cut rising healthcare costs.
The simple answer is that no one knows yet how the financial crisis will affect medical tourism. But it’s best to be prepared.
So, here are our recommendations for marketing in a medical tourism downturn (....follow these and they will also pay off, if there’s an upturn).
And no apologies for giving the services of Treatment Abroad a plug!
1. Target your activities
There are many hospitals, clinics and medical tourism operators out there who don’t have a clearly defined service strategy. What service am I selling, into what markets and to what demographics? Now is the time to think this through, and identify very clearly your market niche.
2. Maximise your return on marketing investment
Measure your return on investment on all marketing activities. And invest in those that deliver results:
- Invest in the web, because it’s the one area of marketing expenditure where you can measure your return and control your budget easily.
- Use PR. It’s a low cost and effective way of promoting your services to patients in other countries. (Become a Treatment Abroad client and we’ll give you our free guide to generating PR coverage!)
- Take advantage of free web promotion. Send your news articles to Treatment Abroad (it’s a Google approved news feed for medical tourism – your news story will get indexed by Google within the hour, if published).
Turn more web enquiries and leads into paying patients and customers. If someone has bothered to complete an enquiry form for your service, then they have probably done the same for some of your competitors. Respond faster, and respond better with an informative, personalised and high quality response. (Become a Treatment Abroad client and we’ll give you our free guide to enquiry management!)
4. Generate referral business
Past patients are the one of the best sources of future patients. 20% of medical tourists who travel for treatment have been recommended by a friend or relative.
- Give a “Recommend a friend” discount voucher that your past patients can give to a friend or relative.
- Generate word of mouth recommendations by encouraging patients to contribute to reviews sites such as Medical Tourism Ratings and Reviews.
5. Be brave!
Don’t cut back your marketing budget. In a recession, the strong survive. Use the opportunity to take market share from competitors who are less well equipped, and ill prepared to deal with a downturn.
Don’t cut your prices because you think it will bring you more business. Think about where you can add value to your service offering to give yourself a competitive edge and concentrate on customer service and service quality.
Put the above into practice. Then, whether we see an upturn or a downturn.... you'll be on the winning side!