Predicting future demand for medical tourism: Health tourism blog is moving to IMTJ

To keep things simple, this blog is moving to the IMTJ web site. You can find the Health Tourism Blog here, in future.

Here's an extract of the latest blog post on "Predicting future demand for medical tourism".

The latest data on hospital activity within the UK National Health Service provides a useful indicator of where future demand for medical tourism may lie. One of the advantages of the UK public health system is that with one provider....the NHS, and one payor....the NHS it means that an enormous amount of meaningful data can be captured about the state of the nation’s health, about demand for health services and about how the health profile of the population is changing.

Like many developed countries with established health systems, the UK is facing the challenge of meeting the needs of an ageing population at a time when there is massive pressure to reduce or put a hold on public spending, and in effect reduce expenditure on health services. All UK hospitals collect data in the same way (well almost...) and the data is collected centrally by the NHS.

The following data is taken from the recent report “Hospital Episode Statistics: Admitted Patient Care – England 2009/10”, published by the NHS Information Centre.

Take a look at how demand for NHS hospital services has changed over the last ten years. First let’s examine the age profile of patients admitted to UK hospitals:

In 2009/10 there were:

• 16,806,200 hospital stays, a 38 per cent rise on 1999/2000.
• 1,939,190 stays for patients aged 0 to 14; a 15 per cent rise on 1999/2000.
• 7,333,110 stays for patients aged 15 to 59; a 29 per cent rise on 1999/2000.
• 3,642,940 stays for patients aged 60 to 74; a 48 per cent rise on 1999/2000.
• 3,837,990 stays for patients aged 75 and over, a 66 per cent rise on 1999/2000.

Read the full article at IMTJ: Go to "Predicting future demand for medical tourism".

Comparing the costs of (accidental) medical tourism

Whereas much of the attention in the medical travel sector is focused on medical tourism (i.e. where the primary reason for travel is some form of surgery or treatment), a more established and mature market sector is the provision of healthcare services for the tourist or business traveller who falls ill when abroad.

The structure and maturity of this sector means that it is far easier to gather comparative data such as the cost of healthcare and actual treatment in different countries. Cost management is in the hands of the international insurers, the travel insurance companies and the assistance companies who negotiate prices with hospital providers worldwide.A recent analysis of travel insurance claims, published by the UK based travel insurer, Sainsbury’s Travel Insurance, provides an insight into the variation in hospital costs across the world and the rising trend in hospital costs.

According to their analysis:

• In 2009, a record number of people needed medical treatment whilst abroad.
• The most expensive country for inpatient hospital treatment was the United States, with the average hospital visit costing £6,000.
• The average cost of hospital treatment in a foreign country has climbed to £2,040 over the last 12 months, an increase of 6.25% year-on-year.
• The most significant increase in treatment costs were seen in Turkey (+10%), the USA (+10%) and Spain (+7.5%).
• Over the summer months (May to September), the most common reason for hospitalisation was gastroenteritis with the average bill for inpatient treatment amounting to £1,200.
• The most expensive hospital bills were for those who suffered a heart attack abroad, resulting in medical expenses that averaged £12,500.

It’s interesting that the international assistance companies who deal with these "accidental" medical tourists have shown little or no interest in entering the medical tourism business. They have everything in place to become the world’s number one facilitator and blow everyone else out of the market:

• They have a network of “approved” hospitals around the world.
• They facilitate treatment for thousands of international patients in foreign countries every day.
• They have call centres to deal with patient enquiries.
• They have extensive technology and systems to manage the patient process.
• They have people on the ground in major destinations who can provide local support.
• They have comparative data on treatment outcomes and comparative costs in hospitals around the world.

So, why haven’t companies like Europ Assistance, Mondial Assistance and AXA Assistance entered the medical tourism market and used their expertise to attain a dominant market position?

The answer is probably quite simple. The medical tourism market is just not big enough to be attractive to them, nor worth the hassle. Which is good news for the existing operators...but puts the medical tourism market opportunity in perspective compared to the long established international assistance market.

Medical tourism...lessons from the California gold rush

In 1848, gold was discovered in California by John Sutter, a German immigrant. News of the find spread rapidly and thousands arrived in search of their fortune. Prospectors came from across the USA, from Hawaii, Mexico, Chile, Peru and China. The California gold rush had begun. California’s output of gold rose from $5 million in 1848 to $40 million in 1849 and $55 million in 1851. But there wasn’t enough gold to go around....only a minority of gold miners made much money from the Californian Gold Rush...the best equipped, the best informed, the best organised and resourced.

Others also made money; the saloon owners (and brothel keepers!) who kept the prospectors entertained made a healthy profit, and so did the entrepreneurs and store owners who provided the supplies and tools that the prospectors needed (often at exorbitant prices).

Are there some parallels and some lessons here for those involved in the medical tourism gold rush?

The discovery of medical tourism gold....
Although the concept of travelling for treatment has been around for centuries, it was probably around 2005 when the medical tourism gold rush really took off; it still continues today and shows little sign of abating. News stories appeared around the world about a surge in medical tourism – patients travelling to save money on treatment costs (as opposed to seeking medical services and healthcare quality that were unavailable in their own country). The first prospectors appeared - medical tourism agents and facilitators, and overseas hospitals and clinics seeking their fortune in the world of medical tourism.

Word spreads, prospectors pursue the dream of medical tourism gold....
The tales of medical tourism gold began to multiply. Estimates of the number of medical tourists were in the hundreds of thousands, the millions, and then the tens of millions. Few medical tourism prospectors questioned the validity of these claims of the discovery of a rich vein of income or whether it was sustainable.

Those involved in the early gold rush exaggerated their successes, claiming massive finds (e.g. “one million medical tourists to....), encouraging others to join the frenzy. Healthcare providers in countries all over the world entered the race - Singapore, Malaysia, Korea, Jordan, the Philippines, Tunisia, Turkey, Eastern Europe, many of them backed by their tourism boards, health departments and government initiatives who saw medical tourism as a rich source of foreign currency.

....without thinking or understanding what’s really involved
New entrants pursued the dream without really thinking through their strategy and approach to the market. Some went into the market ill equipped; some went into the market without realising what it might cost to be successful; some went looking for medical tourism gold in completely the wrong place!

A community of medical tourism prospectors develops
As the number of medical tourism prospectors grew, others (the saloon keepers) arrived quickly to profit from this growing community, and store owners and tool suppliers appeared to guide the prospectors in their pursuit of gold.

The saloon owners arrived in the form of the associations and medical tourism conferences that make their money from membership fees and delegate fees. They provided a place where the prospectors could get together, but they also built on the hype, retelling stories of the latest discoveries and attracting more people to the medical tourism gold rush. Of course, the more people in the gold rush, the more people there are in the saloon, and the more money there is to be made by the saloon owner.

The entrepreneurs and store owners also arrived on the scene to provide the tools that the prospectors needed to mine medical tourism gold. Web sites like our own (Treatment Abroad) that link patients with providers, systems companies like Health Travel Technologies and e-Medsol that provide the systems to manage patients, and consultancies, strategists and advisers like Irving Stackpole and Vivek Shukla who help the prospectors to locate medical tourism gold came into being. Are these entrepreneurs and store owners (including my own Treatment Abroad "store") taking advantage of uninformed prospectors by providing poor quality services and products and overcharging for them. Or are they providing sensibly priced services and much needed tools that will bring long term success to those who use them wisely? Only time will tell.... and it will be the success of the prospectors who determine our success.

The gold runs out...or is harder to find and mine
As in the California gold rush, reality has failed to live up to expectations for many prospectors. Clinics, hospitals and facilitators are finding it harder to acquire patients and there’s a great deal of competition out there. Nevertheless, for many the gold rush mentality continues.

After the gold rush?
So, what’s the likely outcome of all this? What can we expect in the next stage of the medical tourism gold rush? In my next blog post, I’ll give some thought to who will strike gold and how will the industry develop.

The US healthcare reforms and medical tourism

Caroline Ratner at IMTJ has just published a summary of US reaction to the Obama healthcare reforms from the medical tourism sector, so I suppose I had better throw my comments into the mix.

First, let me stress that I am by no means the world expert on the US healthcare reforms! (Does one exist?) But I have been asked by the UK media recently to comment on the reforms and in particular to comparisons with the UK healthcare system. It’s been interesting to watch from afar how a nation is having to deal with both rising healthcare costs and demands for increased expenditure on healthcare.

It’s acknowledged that the USA is one of the most expensive healthcare systems in the world, spending 15.3% of the nation's GDP on healthcare (WHO statistics). This compares to around 8.2% of GDP for the UK and similar for other European countries. Despite the high expenditure, the USA gets atrocious value for money out of what it spends.

Take a look at these comparisons:










The UK spends less than half the amount per capita compared to the USA, but provides a similar number of doctors, more nurses and more beds per 10,000 citizens. Not bad value for the taxpayer's money.

Despite these facts......in the healthcare reform debate in the US, the UK NHS has been used as an example of “how not to do it” and at one point those campaigning against the reforms launched a series of television adverts using “tragic” stories from Britain's National Health Service to contest Barack Obama's plans. The reality of the UK NHS is rather different... it works pretty well most of the time and it costs the nation half of what the US spends (as a percentage of GDP). If .......you were a US politician and could wave a magic wand which would transform the US healthcare system overnight to an NHS system of universal healthcare, free (in most cases) at the point of delivery, AND it would cost the country half the money....what would you do. It’s a no brainer. But there are no magic wands.

The perception of the NHS overseas is very different to the experience of the NHS within the UK Here’s a couple of recent, typical quotes from US industry commentators on medical tourism and the US healthcare reforms:

• “People from UK and Canada is (sic) not looking for treatment outside their countries because of being denied of healthcare insurance or financial constraints, it is because of high cost of care and extensive waiting times for elective surgeries”
• “ (the reforms) will also potentially create long waiting times for medical procedures which will create situations like in Canada and the UK, where patients travel outside their country because of long queues for important surgeries.

Note the references to the long queues and extensive waiting times in the UK. This kind of uninformed and factually incorrect comment does little for the credibility of the medical tourism industry. It’s political dogma.

Here are the hard facts on UK waiting lists:

• The average NHS waiting time from referral to treatment is around 8 weeks. It’s often much shorter.
• Anyone suspected of having cancer has the legal right to wait no more than 2 weeks to see a specialist
• Anyone referred for elective procedures has the legal right to start treatment within 18 weeks
• If there is a significant waiting list in your local area, you have the right to exercise patient choice and go to another hospital anywhere else in the country to avoid the wait. (internal medical tourism). You can also compare outcome data, infection rates and many other data online through NHS Choices
• If you have a serious and life threatening problem, there’s virtually no waiting list. That’s why I’ve only ever met one British heart surgery patient who has gone abroad for treatment. Despite this, I’m regularly amazed by overseas providers or consultancy companies who call me to discuss their plans for attracting British patients overseas for major surgery such as heart bypass.

And here’s some recent “real life” experience.

• The Web Communications Manager at my company recently celebrated the birth of his first child. Unfortunately, the birth was at 27 weeks so it has not been easy for him or his wife. The child has been in paediatric intensive care for some weeks in a local hospital, and has recently been transferred to Great Ormond Street Hospital in London for heart surgery. Is he happy with the NHS care?....Yes. Has it cost him a penny?.... No.
• My wife has a recurrent inflammatory problem at the back of her eye. She has regular assessments at the local NHS eye unit, and recently went for a minor procedure. It was urgent, so she didn’t have to wait. She went to the brand new eye state of the art NHS eye unit at Stoke Mandeville Hospital. How long did she wait?..... a week or so. How much did she pay?..... Nothing?

Are British patients flooding overseas for treatment because of “long queues” and “extensive waiting times”? No. The majority of UK medical tourists are not patients requiring elective surgery that they can’t get or will not wait for on the NHS. The reality of healthcare is that patients want affordable (or free) treatment close to home, or within their country. Before they even consider going abroad for treatment, they explore all the avenues for treatment within their own country.The NHS has its faults, of course, but no system is perfect. And would I swap our NHS for the current US model? No, I couldn’t afford it..... either as an individual or as an employer!

So, will the Obama healthcare reforms lead to a massive surge in medical tourism, as some have suggested? No.

Medical tourism will continue to grow as more patients become aware of the possibility of low cost treatment abroad. But we should never forget that what every patient wants is affordable healthcare on their own doorstep.....and travelling for treatment is for many a last resort.