Healthcare Development & Architecture

Public-Private Partnerships for Sustainable Growth of Medical Tourism

Healthcare Development & Architecture

Medical tourism is a predominant niche market and of special interest within the tourism segment and the globalized health care service industry. This industry is being facilitated by the destinations’ government, private corporate sector involved in the medical-care and the tourism industry.

Surgery can be added to existing six “Ss” of tourism; sun, sand, sea, sex, safari and spirituality (Connell 2006). People have been for centuries travelling for health, healing and wellbeing to the ancient shrines and temples. Medical tourism is a billion dollar and fastest growing healthcare service industry worldwide, where patients travel overseas to other developing or developed countries for the enhancement or restoration of the individual’s health through medical intervention (Carrerra & Bridges 2006; Bookman & Bookman 2007; Herrick 2007; Ramírez de Arellano 2007; Healy 2009; Hopkins, Labonte, Runnels & Packer 2010).

People are becoming more aware of their health needs and wellbeing. Today a growing number of medical tourists from developed countries such as UK, USA, Australia, Canada and Europe are travelling abroad to developing countries (MacReady 2007) like India, Poland, Thailand, Mexico, Costa Rica and Malaysia, with the main objective of obtaining immediate health care, in terms of diagnostic treatment, non-invasive or invasive surgery combined with a vacation. This trend is spreading fast due to high insurance and surgical cost, long waiting lists, and non-availability of certain treatment due to regulation in developed countries and lack of medical treatment or facilities in developing poor countries. Thailand, India, Singapore or Mexico are among preferred options in terms of a value in cost, little to no waiting period, state-of-the-art medical treatment and facilities, qualified surgeons, English language proficiency, cultural affinity, exotic destinations, and above all international accreditation of the medical facilities and highly qualified medical professional doctors, nurses and hospital management support staff.

Thus growth of the medical tourism phenomenon is based on two factors: (a) the number of foreign medical tourists travelling and (b) the amount of revenue they generate in terms of foreign exchange. Medical tourism can play an important role in improving a country’s balance of payment position and foreign exchange reserve position. Tourism has become one of the world’s largest service sector industries with enormous potential for further growth; however, it is sensitive to external factors, like terrorism, natural disasters, SARS virus and SWINE flu which can cripple the local economy at destinations in the developing countries (Medhekar & Haq 2010). According to Carrerra and Bridges (2006) at the international level, the health and medical tourism industry including medical tourism is sustained by 617 million individuals with an annual growth rate of 3.9% annually and worth US$513 billion.

Medical tourism is an economic activity that involves trade in services from two distinct sectors of the economy: medicine and tourism (Bookman & Bookman 2007). According to Bookman and Bookman (2007), economic impact of medical tourism in developing countries is significant, as nearly 272,000 medical tourists visited India for complex medical procedures in 2007, bringing in US$ 656 million in foreign exchange earnings. Several Asian countries like Thailand, India, Malaysia and Singapore are dominant, and have sought to enter the market due to high-tech medical expertise and attractiveness of these countries (Connell 2006; Horowitz & Rosenweig 2007; Singh 2008; UNESCAP 2008). The growth of medical tourism can also be seen as an opportunity for regional innovation, regeneration, rejuvenation for economic development and growth in developing countries. Using medical tourism as an export-led growth strategy, many socio-economic challenges and problems faced by developing countries can be resolved, where there is decline in traditional industries.

This article suggests that public-private partnerships (PPP) will enhance the competitive advantage of the medical tourism industry. It will provide viable and alternative efficient and effective delivery of healthcare and medical tourism infrastructure facilities and value for money medical treatment to not only the foreign patients, but also to the local community, through collaboration and partnerships between the various key stake holders from the demand (medical tourists) and the supply side: Public sector (government at all levels and its departments, Government Business Enterprises), private hospitals and diagnostic clinics, pharmaceutical local community, business organizations and international medical service accrediting bodies, medical educational and research institutions along with World Medical Tourism Associations, World Tourism Organization (WTO), World Travel and Tourism Council (WTTC) and Asia Pacific Tourism Association (PATA).


Carrerra and Bridges (2006) have distinguished, defined and conceptualized the two terms medical tourism and health tourism. (Carrerra & Bridges 2006) specified that under “health tourism, mobility applies to both patients and providers in recognition of the psychic benefits gained by medical professionals in participating in medical mission” (p.450). Health Tourism is defined by Carrerra and Bridges (2006) as “the organized travel outside one’s local environment for the maintenance, enhancement or restoration of the individual wellbeing in mind and body”.

A subset of this is medical tourism. Medical Tourism on the other hand is defined as “the organized travel outside one’s natural healthcare jurisdiction for the enhancement or restoration of the individual’s health through medical intervention” (p.449). Medical Tourism, can also be defined as “a phenomenon where a patient travels with or without a companion outside his /her country of residence, to another country internationally for medical treatment which could be risky and invasive and involves complex surgical procedures with the use of highly specialized medical equipment, technology and experienced surgeons, for the improvement of overall physical health and quality of life, combined with a vacation at an exotic destination” (Medhekar 2010, p.10).

Medical tourism is a macro-niche consisting of three main categories of treatment: non-invasive, diagnostic and invasive. Within these three categories are various micro-niche specialized treatments and surgeries for example: dental, eye, cancer, spinal-fusion, cardiac, cosmetic, reproductive and orthopedic.


The Ministry of Public Affairs in British Columbia (1999) defines PPP in the following terms: Public-Private Partnerships (PPPs) are arrangements between government and private sector entities for the purpose of providing investment in public infrastructure, community facilities and related services. Such partnerships are characterized by the sharing of investment, risk, responsibility and reward between the partners (cited in Schaeffer & Loveridge 2002, p.170).

PPP accounts for a very diverse range of cooperative or collaborative efforts. PPP can also be defined as cooperation and collaboration between the public sector enterprise, government (central, state and local), and the private sector for planning and implementing public and private sector medical tourism related infrastructure initiatives such as health, education, transport and communication for industries success (Medhekar 2005).

Partnerships are essential for planning, implementing and managing federal, state and local government tourism related infrastructure investment initiatives for sustainable economic growth and development of a particular industry in a region. Sustainable PPP in medical and health tourism involves sharing of responsibilities, planning, accreditation of medical facilities and qualifications, service quality, product innovation, promotion, packaging, trade expos and marketing, undertaking financial risks, insurance, accountability and implementing various health and medical tourism packages (Medhekar 2010).

The Key stakeholders in tourism management according to (Weaver & Lawton, 2006) are the host communities and government, tourism industry, universities and educational institutions, NGO’s and the tourist (p.3). Cooperation and collaboration between the key state holders (see Table 1) from the demand and supply side is essential in case of medical tourism to be sustainable.

Over the last decade, India has transformed into one of the most popular tourism destinations in the world, largely as a result of the government’s international “Incredible India” campaign with the private sector followed by “Global Health Destination” campaign by organizing international medical tourism trade expos (GOI 2003; GOI 2008). India is ranked second to Thailand in the world, based on a two year study by Deloitte International Healthcare research unit (TravelBiz 2009; IMT 2009).

The study states that the key reasons for developed countries patients to visit India are low cost, absence of waiting list, best quality treatment with state of the art medical technology, international accreditation with Joint Commission International (Ramanna 2008; JCI 2010). It is important for the governments of various countries involved in medical tourism to have a re-look at their existing tourism policy in general and medical tourism policy in particular, and have a Public-Private Partnership (PPP) approach for its sustainability, with a view to attract sizeable private investment in this emerging health service sector export, position the country to promote certain regions as a health and medical tourism destination to locals and foreigners alike in niche areas of treatment and surgery.

Moreover, it can be argued that for sustainable long term growth of medical tourism industry in an efficient and effective manner public and private sector partnerships is essential between the various key stake holders from the supply side for providing on one hand attractive, safe, secure medical facilities and surgical procedures which are accredited, efficient, effective, equitable and good quality of health care service to the medical tourists, and on the other hand, a medical tourism industry this is economical, socially responsible and environmentally sustainable.


Government of India (2003) budget for the first time announced to support trade in private sector medical tourism, and promoting India to developed countries as a world class-high-tech healing destination for low cost medical treatment and procedures. Combining tourism with world-class medical expertise became a government policy in 2003, when the Finance Minister, in his budget speech called for India to become a “Medical Tourism Hub” (PC 2007).

Various international medical tourism accreditation bodies such as: International Society of Quality in Health Care (ISQUAH) has approved India’s accreditation process along with National Accreditation Board for Hospitals (NABH) certification body, of the Indian Government. Further, Joint Commission international to date have accredited 17 hospitals in India. Indian National Health Policy, which was drafted by Prime Minister’s advisory council on Trade and Industry, states that, “the treatment of foreign patients/expatriates is legally an “export” and the same is eligible for all fiscal incentives extended to export earnings” (GOI 2003).

Government of India and the various State level governments in India have also realized the positive economic and social benefit of medical tourism on the economy. Since the eleventh five year plan the government has promoted India as a “Global Health Destination” (GOI 2008), providing world class-high-tech medical treatment at low cost. Various policy initiatives were introduced to make medical tourism a development strategy.

For example, since 2003, special medical tourism visa (M-Visa), along with Medical Escort Visa (MX) for an accompanying relative travelling with the patient to India for medical care was introduced, 100% foreign direct investment in medical infrastructure, research and development, fiscal incentives for businesses involved in medical service export sector, government sponsored annual international medical tourism trade expos, promoting pharmaceutical stem cell medical research, well developed internet online-medical tourism websites and above all emphasis on JCI accreditation for quality control (PC 2007; GOI 2008), to build confidence in the potential medical tourists to ensure standards regarding the quality of hospitals, health care and medical ethics.

In the state of Maharashtra, Maharashtra Travel and Tourism Council, Federation of Indian Chambers of Commerce and Industry, along with private and public hospitals in Maharashtra, Medical Tourism Cooperation of Maharashtra in collaboration with FICCI have formed partnership, “to deliver value for money health care with human touch” to foreigners in Mumbai (MTCM 2010).

Further, leading private hospitals in the medical tourism sectors are Fortis and Apollo who have formed partnership with Johns Hopkins Medicine International, and the Wockhardt Group, which is affiliated with Harvard Medical International, who manage a total of 26 hospitals across the subcontinent. These hospitals are actively seeking foreign partners to promote medical tourism to collaborate and cooperate with tour operators such as Thomas Cook and others in the hospitality and resort business and accrediting bodies (JCI 2010: Sengupta & Nundy 2005).


Thus PPP at national, regional and international level between all key stake holders is essential for sustainable growth and development of medical tourism industry. Global partnerships and certification and accreditation by international accrediting bodies such as JCI, which is the most widely, accepted medical tourism industry benchmark, besides other global bodies such as Confederation of Indian industries (CII) accreditation for hospitals and India British Standards Institute (IBSI) are equally essential.

Accreditation guarantees and determines the quality of global health care and reputation of the medical institution and their medical professionals which is valued by the international medical tourists. It is important to have PPP also between the key supply side stake holders in medical tourism industry such as government, private sector healthcare industry, global accrediting bodies, medical-educational institutions, including travel industry together with other niche tourism segments, with can be packaged with medical tourism such as health, cultural, safari and historical, and other spiritual tourism types of retreats for patients if doctor and health permits.

Global PPP and accreditation is very essential for overcoming barriers by patient to medical tourism, rights of the patient and their families build confidence in the quality of surgical service, protection from infection and to gain a credible reputation due to the increased demand for medical tourism, where world is soon becoming our hospital.


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About the Author

Anita Medhekar is a Senior Lecturer in Economics at CQUniversity, Rockhampton campus, Australia. Her key teaching and research interests are in the areas of macro and macro economics, economics of developing countries, economics for business, international trade, and economics of the Asia-Pacific, health economics, tourism economics, medical tourism, privatization, public finance and policy.

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