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Industry News

While US politicians argue about how to make healthcare more accessible and affordable, many Americans have found their own solution going abroad for care.

Medical tourism is not a new phenomenon. But as costs soar in developed countries and emerging markets see a lucrative new source of revenue in offering high-quality medical services to overseas visitors, this small corner of the healthcare industry is growing rapidly.

While the downturn played a role in a slowdown in growth of about 14 per cent from 2007 to 2009, the industry is likely to expand at 35 per cent a year by 2010, according to a recent report from the Deloitte Centre for Health Solutions. By 2012, says Deloitte, it could account for more than 1.6m patients.

Meanwhile, the sector represents a growing chunk of business for many developing countries. In India, for example, the medical tourism sector is expected to grow by 30 per cent a year from 2009 to 2015, according to Deloitte. The Confederation for Indian Industry, in a joint report with McKinsey, has projected it could be worth $2bn (1.3bn) by 2012.

The motives that drive patients overseas vary. For those travelling from countries with public healthcare systems, such as the UK and Canada, foreign medical trips are often prompted by the desire to avoid long waiting times for procedures.

Technological advances also mean many more procedures can be handled on an outpatient basis, making them easier to be done far from home. These procedures largely dental and cosmetic tend to require high out-of-pocket payments, making the option of getting them done more cheaply overseas an attractive one.

Paul Keckley, executive director of the Deloitte Centre for Health Solutions, notes a high incidence of short-stay patients among those choosing medical tourism. Often a person could have a procedure the morning after they arrive and be back at work within three days. And if they extend that over a long weekend, it works pretty well.

Keckley identifies another group for whom medical tourism is appealing. People of Asian and Indian descent working in the US will combine a trip back home every one or two years with an elective procedure, he says.

However, the desire to save money is the biggest driver behind the rise in medical tourism in the west, where healthcare costs are rising fast, particularly in the US where it now accounts for about 18 per cent of national expenditure.

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Procedures conducted in India, Thailand or China can cost a fraction of what they would in US hospitals. Medical tourism offers savings of up to 70 per cent, even when travel expenses are included, something that becomes particularly attractive to people with high deductibles on their insurance plans.

US healthcare reform may not change this, says Renee-Marie Stephano, president of the Florida-based Medical Tourism Association. What we may find is a reduced number of uninsured, but an increased number of underinsured, with some sort of healthcare insurance coverage but when it comes to surgery, the policy will probably only cover a proportion of it.

Even for those with health insurance, deductibles and co-payments for surgery can run to $12,000, making a procedure costing, say, $6,000 in another country look attractive. And they get a trip along with it, says Stephano.

While patients have in the past made their own travel plans, new organisations are springing up to help them. One of the first established was PlanetHospital, which has been operating since 2002. It helps its clients book trips and offers an in-country support service that includes airport transfers, after-care arrangements, hospital liaisons and dispute mediation.

Others in the sector include WorldMedAssist, MedRetreat and BridgeHealth. While many of these companies started life serving individual clients, several are expanding their services to meet businesses demand. For as funding employee healthcare eats into profits, the market for medical tourism service providers may well be an increasingly corporate one.

Satori World Medical, a company that was launched last year, offers a one-stop shop with full medical and travel services. While many of its clients are individuals, it has designed its business model to accommodate companies, unions, trusts and municipalities.


Clearly healthcare costs are the biggest benefit costs for employers, says Steven Lash, Satori's president and chief executive. So we think there is a huge opportunity.

For companies with health reimbursement accounts benefit plans that reimburse employees for medical expenses using Satori's global network saves them between 40 per cent and 80 per cent on surgical procedures, says Lash, compared with the cost of having these performed domestically.

Established healthcare insurance providers are also recognising the potential savings of having overseas procedures. Several US health insurers have launched medical tourism divisions as part of their health benefit plans. Blue Cross of South Carolina, for example, has brought hospitals in Europe, Asia and Latin America into its network.

US states have also taken note of the cost-saving potential of medical tourism. While neither bill passed, attempts have been made in the states of West Virginia and Colorado to introduce legislation that would provide incentives for insurers to incorporate medical tourism in their health benefit plans.

For medical centres in emerging markets, the willingness of western patients to consider having procedures done overseas has not gone unnoticed. In countries such as India, Thailand, the Philippines and Mexico, the number of internationally accredited hospitals is rising rapidly, while institutions such as Bumrungrad Hospital in Thailand or Apollo Hospitals in India are gaining global reputations for high-quality healthcare.

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And as governments eye a lucrative new source of foreign exchange, they invest in world-class infrastructure to boost the health tourism industry. The hope is this will trickle down to improved health services for its citizens.

Export organisations as well as the ministries of health and tourism are looking at this as a huge opportunity to generate revenue for their countries and to improve the delivery of healthcare services, says Stephano. They're seeing international accreditation benefits everyone. It raises healthcare standards and increases competition, which raises the bar even in the public sector.

In South Korea, the government has launched a public-private initiative designed to do just this. The Council for Korea Medicine Overseas Promotion was established in 2007 to develop world-class healthcare infrastructure and to promote Korean healthcare to international patients.

We've also seen a collaboration of healthcare providers within countries, the creation of healthcare clusters and competitors putting their competition aside to promote a destination, says Stephano. So it really comes down to a comparison of countries in the offerings.

Of course, for many, the idea of travelling to India or Mexico for a medical procedure remains a stretch. Worries about whether malpractice claims could be upheld also contribute to the reluctance of some to get treatment outside their own country.

In the context of global healthcare systems, the medical tourism industry remains what Keckley calls rounding error. However, as medical costs in mature markets continue to soar and demand rises for elective procedures such as cosmetic and dental surgery, medical tourism is rapidly evolving into a high-quality healthcare service sector.

There are companies that are building out new business models to support medical tourism, says Keckley. This is not a one-off.

Body beautiful: In Rio, medical tourism is cosmetic

Quick fix: In Brazil, there is little stigma attached to plastic surgery

There are any number of good reasons to visit Rio de Janeiro: the beautiful scenery, the fabulous beaches in the city and nearby, the welcoming people, the vibrant nightlife and, while you're there, how about a quick liposuction or breast implant? asks Jonathan Wheatley.

Medical tourism rarely combines medical procedures and tourism quite as literally as it does in Brazil. People usually come for two weeks, says Dr Alexandre Barbosa, one of about 4,000 registered plastic surgeons in the country. They see the sights for a week, do the surgery and a week later go home.

Dr Barbosa repeats a claim heard often in Brazil: that its plastic surgery is among the best in the world, along with its dentistry and much of the rest of its private-sector medical services in stark contrast to the conditions in much of the public health sector.

Plastic surgery has a particular place in the national culture. There is no shame attached to undergoing quick fixes for purely aesthetic reasons. While some may laugh at ageing politicians whose faces have been botoxed into a fixed grimace, few attach any stigma to the kind of crafting designed to keep the nation's bodies looking young and beautiful, especially as so many Brazilians spend as much time as possible showing them off on the beach.

It is hard to say how many plastic surgeries are carried out in Brazil. Raul Kury, spokesperson for the Brazilian Society of Plastic Surgery, reports 616,287 procedures last year almost a third of them carried out on men.

Dr Barbosa says the true number is probably double that amount, and that no figures are available for the number of people coming from overseas. In his own clinic in So Paulo, he receives at least one international visitor a week, though he says these are long-term clients, rather than medical tourists.


People don't publicise the numbers because it's not seen as ethical to advertise for foreign business, he says. But take a look on the internet and you'll find plenty of people advertising.

Indeed, a plethora of websites will readily set you up for surgery and accommodation, usually in Rio, although business is also booming in north-eastern cities such as Recife and Fortaleza.

The most common procedures are liposuction and breast implants. Liposuction will cost you between R$5,000 ($2,900) and R$8,000 on average, and implants R$6,000-R$10,000.

Prices are low enough to attract custom from lower-income earners making their way up the Brazilian social scale. Dr Barbosa says there are finance plans available to split the cost into monthly payments. There's even a monthly magazine, Plastica & Beleza, to keep the public informed of the latest trends.

Financial Times-

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