Economics & Investments

Role and Contribution of Medical Tourism toward Indian Economy: A Relative Study of the Prominent Participants in Hospital and Hospitality

Economics & Investments

India today has copious opportunities to compete with developed nations and build a quality healthcare system of its own. This paper accentuates the prospects of medical tourism as a ”cost-effective” means of private medical care for patients needing surgical and other forms of specialized treatment.

This escalation is facilitated by the corporate and hospitality sectors involved in medical care. There is also an unvarying effort taken up by corporate hospitals to support medical tourism to its fullest. Patrons across India look forward to high-end medical facilities with value-added or coordinated services.

These coordinated services are offered by the hospitality sector to diversify tourism products, from general travel and tourism, and ensure quality and enhance customer satisfaction in South India. Hence, the paper attempts to understand the role and contribution of medical tourism toward building the Indian economy.

1. Introduction

Travel is a global phenomenon. In the past few years, the travel and tourism industry has been taken by storm due to its vulnerable nature. Addressing its mounting challenges, the travel industry remains a vital economic sector with significant potential for global growth and development, particularly within emerging countries (Woodman, J., 2007).

The demands and expectations of travelers who are endlessly in search of different experiences, adventures and lifestyles which pave the way for various concepts that define paradigms in the tourism arena are constantly in flux. Attention is given to new frontiers for meeting the demands. India has been offering varied niches to its tourists and, to a large extent, shares a comparatively competitive edge.

This emerging sector offers an array of travel services, benchmarking India at a global level through products including adventure, wildlife, historical monuments, culture and heritage, nature and pilgrimage. Medical tourism is a promising concept and a growing phenomenon meeting the need of the hour (Theobald, F.,T., 1998).

India, to a large extent, has also been branded for its wellness and surgical competency. Medical patrons across India look forward to high-end medical facilities with value-added or coordinated services.

Medical patrons across India look forward to high-end medical facilities with value-added or coordinated services.

Coordinated services are offered by the hospitality sector to diversify tourism products from the general travel and tourism arena. Coordinated services can also be termed as an all-inclusive package offered by travel facilitators to the medical tourist who wants transportation, transfers, medical treatment, holidaying, leisure and all allied services (Gan, Lydia, James & Frederick, R., 2011).

Medical tourism is backed by corporate hospitals offering high-end medical services and an effective healthcare network with the hospitality sector. Private hospitals have gone one step ahead in commercializing their services through high-end sophistication in the international market.

Medical tourism is a rapidly budding sector in the global market, which is now actively developed by both public and private tourism sectors and healthcare organizations. Increased foreign arrivals in India have compelled stakeholders to consider tourism at a much higher level. The following graph reflects foreign arrivals in India before 2010.

2. Review of Literature

Existing medical tourism promises tremendous growth and synergy for taking the healthcare segment global while making it easily accessible. The literature reflects upon various aspects and areas of medical tourism. This imminent arena covers the prospects of medical tourism, emerging trends and the future of upcoming healthcare hubs.

Bookman & Bookman, in their book, discussed western patients who are increasingly traveling to developing countries for healthcare where they are offered the best skills and facilities that cater to their needs.

This international trade of medical services has huge economic potential for developing countries and serious implications for healthcare across the globe. It is successful only in countries with economic and political advantages that enable them to navigate around international and domestic obstacles to trade in medical services.

Brotman, Billie, Ann (2010), examines factors demanding sophisticated medical treatments offered by private hospitals operating in India. The article classifies three types of medical tourism: Outbound, Inbound and Intra bound. Increased profitability and positive growth trends by private hospital chains can be attributed to rising domestic income levels within India.

Cooperman, S. (2007), builds upon the search for quality healthcare at discounted prices in foreign hospitals which offer proficient services and state-of-the-art facilities including complete luxury suites, on-call concierges and personal chauffeurs.

Today, India, Thailand, Singapore and Hong Kong are popular medical travel destinations. For negotiating in the world of discount medical care, an entire industry of middlemen has emerged. Though the options are seemingly endless, buyers ought to beware.

Melani, G., focuses on medical tourism growth in Colorado. The author claims that healthcare providers are expanding on medical tourism by attracting more patients to the state. Medical tourism also helps employers reduce medical expenses while offering employees a wider range of treatment.

Carlson, G., and Greeley, H., highlight issues in macro-environment that affect historic relationships that have existed between hospitals and their medical staffs. Rising costs, deteriorating relationships, unexplained variations in clinical outcomes, transparency in healthcare outcomes, medical tourism, competition between hospitals and physicians, and reluctance by facilities and physicians to change are among the issues challenging the sustainability of the current business model.

This article highlights barriers to maintaining traditional relationships and concludes with strategies to preserve and strengthen them between physicians and hospitals.

Horowitz, Michael, D., and Rosensweig, Jeffrey, A., accentuate on tourist travel outside their country for surgical reasons. A changing scenario was found in medical tourism that involved the traditional form of international healthcare where patients typically voyage from less-developed nations to highly developed countries for advanced medical treatment.

The most sought-out destinations for Medicare today are developing nations, offering advanced medical treatments. There are potentially two categories: working class adults who require elective surgery, but have no health insurance and patients who want procedures not covered by insurance, such as cosmetic surgery, dental reconstruction, gender reassignment operations, or fertility treatment.

Also, most importantly, a faraway country provides privacy and confidentiality for patients undergoing plastic surgery or sex-change procedures.

…Medical tourism represents a major challenge for healthcare delivery in the United States and offers an opportunity to integrate and improve the system globally.

Nakra, Prema, discusses the significance of medical tourism in the western healthcare delivery system. Medical tourism represents a major challenge for healthcare delivery in the United States and offers an opportunity to integrate and improve the system globally.

Highlighting impacts of healthcare and education reconciliation serve U.S. healthcare providers with an estimation of the potential effects of increased coverage, operational capacity and procedures for handling the millions of people seeking medical care. It finds that recruiting foreign-born physicians and nursing staff to the United States will be more challenging as medical tourism grows.

Sack, C., Scherag, A., Lütkes, P., Günther, W., Jöckel, K., H., and Holtmann, G. (2011), reveal that countries where hospitals are undergoing mandatory or voluntary accreditation are more acceptable because formal licensing influences quality of care and patient satisfaction. The article states the relationship between patient satisfaction and accreditation status.

Cooperman, Stephanie, addresses the search for quality healthcare at discounted prices in foreign hospitals which offer proficient services in state-of-the-art facilities with complete luxury suites, on-call concierges and personal chauffeurs.

Today, India, Thailand, Singapore and Hong Kong are popular medical travel destinations. Oswald, S., and Clewett, J., comment on key policy recommendations and operational implications for stakeholders involved in delivering health services in fragile states and difficult environments.

Their paper highlights several key principles for policymakers and implementers to improve the delivery of health services. Develop accountability mechanisms and to facilitate an appropriate mix of aid modalities; thereby, focusing on health systems as a whole.

3. Concept of the Study

Healthcare is a booming component of the Indian economy. Increasing health awareness coupled with a rise in the standard of living has led to increases in demand for quality healthcare services. Thus, research focuses on the prospects of the hospitality sector considering four prominent cities of South India and, thereby, increasing the visibility of India on the global map as a medical tourism hub.

4. Need of the Study

India offers world-class healthcare that costs substantially less than that in developed countries, using the same technology delivered by competent specialists attaining similar success rates. Indian hospitals do not face problems with technical skills because they are acquired through education and training, but difficulty lies in leveraging the soft skills of employees.

Soft skills are one of the underlying principles that trademark a hospital for professionalism and excellent customer service. There is also a need to identify the role of various stakeholders in promoting healthcare and building the Indian economy.

Further, the necessity is toward creation of an effective environment and network; thereby, building professional competency through healthcare managers. Considering all these factors is imperative to undertaking the present study of various independent variables impacting the growth of medical tourism in South India.

5. Research Methodology

Research includes two broad segments of data collection. The primary data was gathered through structured questionnaires and interviews from the service provider and medical tourist. Secondary data was gathered from research centers, universities, management institutes, books, journals, magazines, travel guides, travelogues and monographs.

6. Objectives

Research was conducted with the following objectives:

  • To establish the relationship between quality and standardization norms and the demand for medical tourism in South India.
  • To recognize the balance between quality of assured and coordinated services allied with the hospitality sector.

7. Hypotheses

The following study reveals consequent hypotheses, which were tested respectively.

  • H1 Significant role upon quality and standardization norms and demand for medical tourism.
  • H1 Significant relationship between coordinated service and the images portrayed in the international market.

8. Sampling Technique

Non-probability samplings are techniques — namely judgmental – that select items deliberately; since the choice concerning the items remains supreme.

9. Sample Distribution

10. Testing of Hypotheses

H1 significant role upon quality and standardization norms and demand for medical tourism.


Analysis represents no difference in the importance of various parameters of quality assurance among medical tourism destinations. The above analysis projects the p-value, which is more than 5 percent and, hence, there are no significant differences in the factors for quality assurance among locations, and the null Hypotheses are accepted.

H1 Significant relationship between coordinated service and the brand image portrayed in the international market.


Analysis corresponds to significant differences in the perception of poor networks affecting the accessibility of coordinated services among locations; hence, the null Hypotheses could be rejected. There were no significant differences in the perception of other factors affecting the accessibility of coordinated services among locations and, hence, the null Hypotheses are accepted.

The following analysis is carried out after a thorough investigation at popular hospitals in South India to determine various factors in the healthcare sector.

Reason for South India as a Healthcare Destination


Medical tourists gave equal importance to cost and healthcare advancements, as hospital authorities reveal. The above analysis shows that 46.7 percent of the sample grade-cost to be a significant factor and the healthcare advancements are graded as 53.3 percent.

Specialized Treatments Offered


The above analysis shows that the most frequent forms of medical treatment were “major surgeries,” which made up 51.1 percent, followed by “minor surgeries” with 35.5 percent. Also, 13.3 percent opted for alternative treatments. The “major surgeries” include organ transplants, cardiac surgeries, and hip/ knee replacement.

“Minor surgeries” include dental treatments, cosmetic and scans and investigations. Alternative treatments were preferred compared to wellness and rejuvenation. The most popular destination for alternative treatments in South India was Kerala.

Factors Considered for Quality Assurance


The most important factors perceived by hospitals for quality assurance were physicians’ credentials, followed by global competency and accreditations. Online communities (word-of-mouth) and affiliations were also moderately important.

Result of Cross Tabulation Test

Table 6.43.3 – Table showing Result of Anova Test


There were significant differences in the perception of the importance of affiliations of hospitals for quality assurance among locations. Affiliations were perceived to be significantly more important for hospitals in Bangalore and Kerala than in Chennai and Hyderabad. There were no significant differences in the perception of importance of other factors for quality assurance among locations.

11. Outcomes of the Study

The study foresees certain challenges facing healthcare organizations in South India. An integrated pedagogy in the management of quality and productivity, and between quality and technology is one of the crucial challenges for South India.

Experts deem that upgrading quality leads to a productivity increase. Healthcare administrators are frequently misled to spend enormous amounts of money without any care for continuous improvements.

An additional challenge facing South India is the recent management concerns regarding quality, cost and competitiveness. It is imperative that a hospital with a poor current status must improve rapidly for its survival.

Hospitals with a superior status must improve in order to preserve their competitive edge. A hospital, which is average, must improve to prevent its status from regressing to poor and to make it superior.

Total service and quality control are business management philosophies applied to healthcare organizations in South India. They are sustained by numerous directorial processes including quality control teams and policy developments.

Policy development is when management works together to focus resources on achieving customer satisfaction for patients and other customers (Juran, J.M., and Godfrey, A.B., 1999). Application of quality control systems is a vital aspect that hospitals in South India cannot disregard.

12. General Findings

  • Overall perception of the quality of assured and coordinated services was high and positively correlated. Further, analysis confirms that the overall perception of the quality of service of assured services is significantly higher than the overall perception of the quality of coordinated services.
  • Research affirms significant differences in the overall perception of service quality offered and overall level of satisfaction with associated and coordinated services among locations.
  • Importance of different parameters of quality assurance among various medical tourism destinations reveals that patrons considered a physician’s credentials as the predominant factor in assuring quality compared with hospital accreditation and affiliations.
  • The study also confirms the most important factors perceived by hospitals for quality assurance to be physicians’ credentials, global competency and accreditations.
  • Coordinated services including travel assistance, language translators, post-operative care and insurance assistance are facilitated by the hospitals to differentiate from competitors.

13. Suggestions

Stakeholders and other intermediaries can mull over the following suggestions for building professional competency and better healthcare management. A new paradigm in the healthcare segment gives a broader space for government to play the role of facilitator with effective trade policies to ensure a seamless value chain.

  • The policymakers need to focus on Indian healthcare businesses that are receiving medical tourists from developing countries who travel for proficient procedures with cost and surgical competency being a prime focus.
  • The administrative authorities should undertake capacity building programs to train in the medical tourism framework.
  • South Indian healthcare segments can also focus on alternative forms of treatments like ayurveda, unani and siddha to tap potential global markets; thereby, creating a niche for itself.
  • Homogeneity in medical aspirants and heterogeneity in medical service demands would be challenging for South India from the healthcare provider’s perspective.
  • The private hospitals can network with the international embassies to influence the government and tap into funded medical tourists by globalizing its healthcare services.
  • Exhibitions, trade fairs and associations with international bodies can be a mode to enhance medical tourism.
  • The healthcare segments can thrive efficiently if hospital managers are directly implicated in promoting services globally, leaving no space for further ambiguity in the minds of medical aspirants.

14. Scope for Further Research

Medical tourism can be transversely diagnosed to foster its prospects by changing market expectations. The complexity of international rules and norms influence the medical tourist’s decision to travel abroad for treatment and can provide perspectives for further research.

15. Conclusion

Medical tourism has drastically changed through the divergent role played by stakeholders over the years. Augmented competition has pulled various other stakeholders into the trade. Principally, policymakers, community and other private participants have played noteworthy roles in globalizing South Indian healthcare systems.

Proficiency in delivering healthcare services and lesser perplexity in the healthcare network can enhance the capacity building process. Quality and standard assurance are prime parameters in benchmarking medical hubs to prosper.

The South Indian metros have largely outreached into developed countries and have benchmarked themselves with amplified goodwill and globally competitive brand images. Equally challenging is the cultural and regulatory barriers which can affect significantly the healthcare globalization in Southern India.

About the Author

Dr. Bindi Varghese is an assistant professor in the Department of Tourism Studies at Christ University. In the past 11 years, she has served as an academician at various colleges in Bangalore, India. Dr. Varghese is passionate about research and actively associated with various reputed journals.

She is the editor of ATNA, an in-house journal at Christ University. Dr. Varghese is involved in a major research project funded by the university and has authored a number of articles that have been published in international journals.

She is a frequent participant in various conferences and seminars and is an active member of the Indian Tourism Congress and Kerala Development Society.

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