Medical tourism statistics: Comparing apples with apples ....

At Treatment Abroad, we’ve recently completed some research into the medical tourism market for a third party. It’s been an interesting exercise and has really made us question some of the statistics that are quoted (and that often become accepted truth) about the number of medical tourists and the value of the market.

What is a medical tourist?
The first challenge in estimating market size is to be very clear about what a medical tourist actually is. He or she isn’t a tourist. It’s someone whose specific reason for travelling to another country is for medical treatment. It’s not someone who happens to fall ill and requires treatment when they are on holiday/vacation.

Yet many tourism organisations, government bodies, hospitals and clinics classify ailing holidaymakers as medical tourists. They are not.

The data from one destination that we examined claimed vast numbers of medical tourists but in the “small print” acknowledged that the vast majority of these happened to fall ill while visiting the country for other reasons, either business travel or holiday travel.

Another inflationary factor is the expatriate resident. Back in the 1990’s I was involved in the marketing of the Portland Hospital for Women and Children in London. We used to track hospital admissions by nationality of patient. Based on that analysis, the hospital was the biggest medical tourism destination in the world for American medical tourists..... or was it? Of course not. As the only private maternity hospital in London, it attracted a large number of American women whose families were based in or working in London. Did a single American woman fly across the Atlantic specifically to give birth or for gynaecological treatment in London? No, but we could have made it look like plane loads were arriving every month!

Comparing apples with apples
Before the dawn of computing, I studied statistics at college. What I learned about statistics is that you have to compare like with like. You compare apples with apples. But in medical tourism people compare apples with grapes, and oranges with lemons...... Let me explain....

Let’s agree that a medical tourist is someone who travels specifically for treatment in another country, And let’s also agree that medical tourism is a specific segment of the health tourism market which does not include travel to medical spas or wellness resorts or for non-invasive therapy. For the sake of clarity, we’ll exclude dental travel from medical tourism in this instance.

So John Smith jumps on a boat or a plane or a train or into a car and crosses a border into another country and has...an operation or an elective procedure. (Should we include patients who don’t stay overnight? There’s another discussion...).

Are we agreed on what a medical tourist is? Good. John Smith is a medical tourhst. He’s one medical tourist, isn’t he?

Well..... that depends where he goes.

In Country A (or in Hospital A), he counts as one medical tourist.

But in Country B (or Hospital B), he counts as 20 medical tourists.

20...am I mad? No.

This is how it works in Country B.

  • John Smith arrives in Country B. He visits the specialist, and the hospital raises an item of service bill for the visit. The hospital records him as one medical tourist treated.
  • The specialist sends him for an X Ray. The hospital raises an item of service bill for the visit. The hospital records him as another medical tourist treated.
  • The specialist sends him for some pre op blood tests. The hospital raises an item of service bill for the visit. The hospital records him as another medical tourist treated.
  • He has the operation. Bingo! Another medical tourist.
  • He collects some medication from the hospital pharmacy. Another medical tourist.
  • He has post op physiotherapy for ten days.... ten medical tourists.
  • And so it goes on.....

John Smith is one medical tourist but according to the hospital records he’s twenty or thirty or maybe even more. And this is good news for the marketing guys in the hospital and at the tourism board. They have some pretty impressive medical tourism statistics.

So, we can see that the medical tourism statistics quoted by some destinations are subject to “statistical error” but not the kind of statistical error I learnt about at college. In some cases this is error on a magnitude of ten fold or twenty fold or even more.

Take medical tourism statistics with a pinch (or sack) of salt
When you hear the latest claim of medical tourism numbers from a hospital or a medical tourism destination, take them with a pinch of salt (or perhaps a sack of salt). And do some basic “hospital” mathematics. If they’re claiming let’s say 200,000 medical tourists a year, ask them where they are putting all the patients.

Let’s put this number into perspective. The Royal National Orthopaedic Hospital in London is the largest specialist orthopaedic hospital in the UK. It’s a very busy and successful hospital. Last year, it admitted around 10,000 patients to its 220 beds. That’s around 45 patients per bed per year. So, 200,000 “real” medical tourists might need....4,400 beds....and hospital beds are hard to find in many countries.

So how do we fix the problem?

When the UK NHS publishes statistics on hospital performance (See Hospital Episode Statistics Online), every set of statistics it publishes has a “responsible statistician”. He’s the one who ensures that they’re comparing apples with apples.

Let’s appoint a “responsible statistician” for medical tourism. Any volunteers out there?

Light at the end of the medical tourism tunnel?

Following my outpourings on the “Outlook for Medical Tourism in 2010”, I am pleased to say that I’ve received some positive feedback (always a good thing.... I’ll keep on blogging!). And some reassurance that I am not alone in my view of the medical tourism world.

In particular, one of the long established medical tourism facilitators told me “how it was” in 2009 and how they think it might be in 2010. It’s refreshing to hear someone be open and upfront about their business experiences in medical tourism and the challenges that are facing people in the business.

I’d like to share some of these comments with others in the medical tourism world. Here is what it was really like in 2009 for one medical tourism business, a business that is well established, well run, and isn’t a “one man and his dog” outfit. I’m going to respect their confidentiality and not name the company concerned.

The view from the marketplace

Here’s what our medical tourism facilitator had to say about 2009:

“We have dabbled in the elective surgery market and have come to the same conclusions as you.... that to continue in this sector we would need to consolidate and concentrate on niche or rather more specialist sectors. Otherwise, we are finding ourselves becoming a "Jack of all trades and Master of none".

Last year was a really bad year. We were very busy with enquiries, but our conversion rate was disappointing and for those that did convert, the average spend was down. We have put the conversion problems down to a 50/50 mix of:

  1. Recession - people not spending, or when they are travelling for treatment, they are spending less.
  2. Competition - it seems in the last 18 months that every person in Europe, with a spare room and who knows a dentist, has jumped on the medical tourism bandwagon.

Another factor that has not helped is the pound sterling rate against other currencies, especially the Euro; this has meant a 20% increase in costs and prices. This does not only apply to the treatment cost but the patient stay while they are away. (Hotel rates are more expensive, eating out is more expensive etc.) The effect has been significant. Our patient numbers fell by 30% in 2009 and the average spend per patient dropped by 25%.”

So, a difficult time for this medical tourism business. But it is not unique. Some dental clinics in Europe have been relating similar experiences. One major implant centre in Budapest has reported overseas patient numbers down by more than 20% and a similar 25% fall in average spend per patient.

Do these experiences reflect the reality of the medical tourism business in recession?

Lies, damned lies and statistics?
The UK is one country where we count stuff. We have an Office for National Statistics and they employ around 4,000 civil servants who count stuff...including medical travellers. At Treatment Abroad, we do our bit to keep the civil servants in jobs by buying the data that they produce – specifically, the International Passenger Survey (IPS), a survey of a random sample of passengers entering and leaving the UK by air, sea or the Channel Tunnel. The IPS attempts to identify the number of people both travelling into the UK and out of the UK where the prime reason for travel is medical treatment (as opposed to business or a holiday).

Now.... you need to take these statistics with a very large pinch of salt. Statistics contain statistical errors and the smaller the sample, the bigger the risk of the error.

Here is a graph of IPS data showing outbound medical travellers from the UK from 2002 to 2009 (projected from 3rd quarter statistics). The sample size in this data is small - the number of actual travellers interviewed in each quarter who stated that their prime reason for travel was medical is around 50 to 100. So, there is room for wide variations in the data!

But, it may well be a reflection of the actual trends in UK medical tourism and for 2009 may indeed reflect the experiences of many in the marketplace who have seen the number of medical tourists in decline over the last 18 months or so, since the credit crunch hit.

Light at the end of the tunnel?
Our medical tourism facilitator quoted above has a more positive outlook for the future:

"We have already seen an increase in booking numbers for dentistry in 2010. January is already 100% up on January 2009 (and nearly the same number as in 2008, so something is starting to change.”

With some good news on the economic horizon in the UK, we may be seeing an increase in consumer confidence. House prices are increasing, and we have seen a return to economic growth, albeit not as good as many would have hoped. We wait to see what the effect may be on unemployment. But, like many industries, medical tourism follows the trends in the economy as a whole. Medical tourism is not immune to recession and certainly is not flourishing in it.

The way forward.. focus and think niche
Back to our medical tourism facilitator, who is planning the strategy for 2010:

“Our progress for 2010 will be to expand the dentistry further and concentrate more on the cosmetic surgery. We had taken a step back on cosmetic surgery in 2009, due to the difficult climate and similar to your (Keith Pollard’s) points about offering too much, we have recognised that rather than be a "Jack of all trades.....", we need to have a separate department. Having the same staff switching between the two products (dentistry and cosmetic surgery) does not really work.”

And our medical tourism facilitator concludes with a message for all in the industry:

“I totally concur with the conclusions of your article, and recognise that this medical tourism industry is not as simple and as great as people have made out. Only the companies that keep adapting and recognise the importance of focusing and having the correct resources to manage a particular sector of this industry will survive or be commercially viable.”