The slumbering giant of medical travel?

Where do you think the international patients' centre shown above is? Singapore? Thailand? Malaysia? India? Korea?

Read on to find out...

This week’s International Medical Travel Journal covers a recent announcement by the UK Department of Health (See: Liberated UK hospitals to attract medical tourists) that it plans to remove the cap on the proportion of income that NHS hospitals can earn from private surgery. NHS hospitals are allowed to treat private patients (both domestic and international patients) in addition to their primary responsibility for serving the needs of the UK public.

Many NHS hospitals have private patient wards or dedicated units which benefit from their location close to the extensive clinical resources and medical technology which are available with an NHS general or teaching hospital. These are well supported by private patients but these NHS units have been restricted in terms of their revenue potential; across the UK, NHS hospitals were not allowed to generate more than 2% of their income from private paying patients. Some individual hospitals were allowed to generate a much greater proportion but were still limited in their revenue earning potential.

At medical tourism conferences around the world, the UK gets barely a mention. Yet it ranks in the top ten destination countries in terms of medical tourist numbers and probably in the top five in terms of revenue generated (Source: Team Tourism Consulting 2010). London continues to attract high value medical travellers seeking expertise and quality rather than the lowest prices. The average treatment cost for these patients is around £20,000, and for individual patients it can be much more. London also benefits significantly from the related expenditure of these medical travellers e.g. accommodation for friends and family during these extended patient stays.

Private patient facilities at leading London teaching hospitals such as Moorfields Eye Hospital, Great Ormond Street Children's Hospital, Royal Brompton & Harefield Hospitals, Kings College Hospital, Royal Marsden Hospital, and Guy’s & St Thomas’ Hospital have always been attractive to international patients and they compete with other international centres of excellence in countries such as the USA and Germany . Indeed, these NHS private patient facilities earn more from international private patients (medical tourists) than they do from UK private patients.

The Harris International Patient Centre at Great Ormond Street (pictured above) is a good example. The Centre has 130 staff, working with over 170 clinicians in Great Ormond Street Children's Hospital. It’s bigger than most international patient departments serving “medical tourists” that you would find anywhere in the world. And it’s very busy. But, until now Great Ormond Street and similar NHS run international patient facilities have been limited by the private patient income cap.

That is about to change... London “the slumbering giant of medical travel” may wake up to some of the newly emerging opportunities presented by the international patient market:
  • The London hospitals mentioned above have a long and impressive track record in attracting international patients.

  • They were involved in medical tourism long before the term was invented.

  • And they are able to provide quality and prices that will be attractive to many emerging source markets for medical travel. For example, if US derived medical tourism does eventually take off, and American patients can make significant savings by travelling to London for major surgery (not far short of those available in Singapore or Thailand), would London be an attractive option? Same language (...almost), same culture (...almost).

This American who travelled to Wales for surgery may be the start of a growing trend....

Change in UK regulations may reduce infertility tourism

One factor that can affect any aspect of medical travel and medical tourism is that the market sector can be a victim of its own success. Constantine Constantinides has highlighted this previously in his IMTJ article “Medical Tourism and the West's Revenge”, arguing that in effect the success of medical travel is self limiting.

How can this success be self limiting?

Where overseas treatment becomes an attractive option for patients, domestic providers and governments may react to this trend by becoming more competitive (e.g. by reducing prices for local treatment) or by removing the causes and drivers for medical travel (e.g. by changing local regualtion of a treatment). Thus, the more patients travel abroad for treatment, the greater will be the reaction within the domestic market and a “balance of trade” will be reached.

An excellent example of this phenomenon is this week’s announcement by the Human Fertilisation and Embryology Authority (HFEA) that it intends to conduct a consultation over changes to the rules governing egg and sperm donation in the UK. There has been a significant shortage of egg and sperm donors in the UK due to the restrictions on the payments that can be made to donors. The £250 maximum "compensation" payment for both men and women donors has meant that demand for donor eggs and sperm has far exceeded supply. Waiting lists can be as long as two to three years for those patients eligible for NHS treatment.

The removal of donor anonymity has also been a contributing factor to the reluctance of donors to come forward. According to the most recent HFEA statistics (2008), only 1,184 women donated eggs and there were only 396 new sperm donors in 2008. Around 2,000 babies a year are born in the UK using donated eggs, sperm or embryos. As a result, we have seen an increasing number of UK couples seeking infertility treatment abroad; it has been one of the fastest growing areas of medical tourism. (For the background see “New research paper provides insight into infertility tourism”). The response from the HFEA to the increasing number of infertile couples going abroad is therefore to consider how to reduce this ...... by increasing the payments and incentives to egg and sperm donors, AND thus increasing the supply of eggs and sperm. Payments may increase to £1,000 plus.

It’s unlikely that the changes will have any immediate effect on the market sector. No decisions will be made until the end of the HFEA public consultation next year. The three-month public consultation will not start until January 2011 and the HFEA is expected to be subsumed into the UK’s Care Quality Commission as a result of the UK public expenditure cuts. But there’s a clear warning here for those involved in medical tourism businesses and the medical travel sector. Don’t put all of your eggs in one basket..... Or more seriously, be aware that any segment of the medical tourism market may be limited by its own success when domestic providers and governments seek to reverse the trend.