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NHS Trying to Balance Costs and Care

In the midst of enacting QIPP (Quality, Innovation, Productivity and Prevention) policies, Britain’s National Health Service is en route to save £5.9 billion (US$ 9.23 billion) for the 2011-2012 financial year at the same time as some are protesting the effects that the cost-cutting measures will have on vulnerable members of society, and their levels of healthcare.

Britain’s government has been analyzing and implementing a number of ways to shave costs or reshape health services in efforts to streamline the NHS. QIPP efforts are intended to create £20 billion worth of savings, largely through efficiency measures, by 2015. The NHS has already saved some £2.5 billion (US$ 3.9 billion) between April and September 2011, putting them on track for their full yearly savings of £5.9 billion (US$ 9.23 billion) which mostly derives from reduced hospital care expenditure, but does include large savings on community services, mental health services and prescription drugs.

With medical care arising from hospitals services being one of the most expensive items on the healthcare budget and many hospitals facing dire financial straits, the government is attempting to retool the system through the Health Bill so that hospitals are not so heavily relied upon to provide treatment which they may be ill equipped to provide. Intentions are to place General Practitioners at the center of the system and place them in charge of purchasing healthcare services for patients.

However, as belts begin to tighten and proposals to redesign facets of the healthcare system begin to filter through, there are growing concerns from some quarters that the drive to cut costs and the plans to reorganize the health system may result in increased inequalities in the system, with some worried that vulnerable members of society may face great difficulties in procuring care.

One concern raised recently by some public health experts is that the increasing marketisation of the NHS will result in widely varied care throughout the country, resulting in health outcome disparities, especially for vulnerable socio-economic demographics and regions. This may be further exacerbated through pressures to cut costs and save money.

Others are more concerned with the growing need for extensive long term care for the elderly and disabled. At least half of the 2009-2010 healthcare budget was devoted to caring for older UK citizens, however this number is going to grow as the population continues to age. An earlier proposal, spearheaded by economist Andrew Dilnot, indicated that it was more effective and efficient, in terms of both cost and health outcomes, to treat older people through social care rather than acute healthcare in hospitals.

However, the proposed change would require greater funding for social care and financial assistance for older age patients. Dilnot’s proposal suggested raising the level of means-tested support and the introduction of a lifetime cap on how much money each individual would have to spend on adult social care, with the government picking up any extra costs over £35,000 (US$ 54,801); this would prevent the elderly from having to sell most of their possessions to pay for ongoing social care. However, while this proposal does dovetail nicely with the plan to reduce hospital services and spending, it does require a potentially greater outlay from the government on social care which may garner a more tepid response from politicians and treasury officials focused on austerity measures.

With a diverse group of parties touting the benefits of different courses of action, the issue may become increasingly contentious as the Health Bill comes closer to being fully enacted. However, with an increasingly sizable healthcare budget and growing economic uncertainties, it seems like not committing to some type of reform is one of the only unavailable options.

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OECD Report Compares Healthcare Systems

The Organization for Economic Cooperation and Development, which is celebrating its 50^th anniversary, recently released their Health at a Glance report for 2011, analyzing the performance of healthcare systems in OECD countries.

The Health at a Glance 2011 report, which is the 6^th edition of the OECD report, is largely based off of the data found in the OECD Health Data 2011 report and provides some of the most in-depth data for analyzing the differences between the varied healthcare systems present in OECD countries.

On the whole, countries that are part of the Organization for Economic Cooperation and Development (OECD) have seen great strides in positive health indicators over the 50 years that the OECD has been around. All 34 OECD countries enjoyed gains in life expectancy, which were in part due to great reductions in the mortality rates of all age groups.

Medical treatment has also come a long way throughout OECD countries, with many illnesses and diseases seeing reduced mortality rates. While cardiovascular diseases still remain the leading cause of death in OECD countries, the number of people dying within 30 days of having been admitted to hospitals has fallen to 4 percent in 2011. A number of different types of cancer have also seen increased survival rates, such as breast cancer and colorectal cancer, which saw improved 5-year survival rates throughout all countries.

In many of these cases, increases in survivability and reduced mortality rates for diseases and illnesses were largely the result of increased diagnostic and treatment capabilities, allowing ailments to be caught earlier and more effectively treated.

While the wealth of historical data from OECD countries demonstrated a number of positive health trends such as those noted above, it also highlighted a growing concern over the increasing number of chronic and lifestyle related diseases throughout OECD countries. Asthma, Diabetes and Obesity were all prominent issues for many OECD countries that the Health at a Glance report noted.

Asthma and Diabetes were two chronic illnesses that the report said should be dealt with differently throughout the OECD in order to avoid what the document detailed as avoidable admissions. The report noted that a greater focus should be put on primary care in dealing with Asthma, chronic obstructive pulmonary disease (COPD) and Diabetes, so that patients and healthcare systems can avoid unnecessary hospital admissions due to the diseases.

The report also raised concerns about the growing issue of obesity across many OECD countries. Out of the 34 OECD countries, in 19 of them more than 50 percent of adults are overweight or obese. This raises serious concerns as obesity is a risk factor in a large and varied number of health problems, many of which can end up developing into chronic conditions that require a large outlay of healthcare costs in the future.

In moving forward, healthcare stakeholders will be able to look at the data in the report to help them develop new initiatives that will help them tackle the most pressing issues for their countries. Despite the fact that many OECD countries have very different background factors that may influence the health indicators measured in the report, in many cases there may still be opportunities to explore measures that have worked in other countries to duplicate positive results.

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Cost of Care Rising as Insurers Trying to Provide Value for Money

As medical services grow more and more costly around the world, international private medical insurance providers are trying to ensure that their policies provide good value for money while maintaining high levels of benefits.

In many countries, including such places as the US and the UK, the cost of medical services has been rising throughout recent years. In the US, the S&P Healthcare Economic Composite index showed an annual growth rate of 5.11 percent for the fiscal year that ended in October, outstripping the 4.74 annual growth rate reported in September by a significant margin. S&P’s Healthcare Commercial Index, which takes into account only healthcare costs covered by commercial insurance, saw its fourth consecutive month of rising annual growth rates to arrive at 6.91 percent for the year ended October.

Across the pond in the UK, there are similar stories with healthcare company Bupa releasing a study that predicts the costs of cancer treatment will rise steadily in the future. The report Cancer Diagnosis and Treatment: A 2021 Perspective was aimed at trying to make predictions about the cost of treating cancer over the next 10 years. The results estimated that the cost of treating cancer will rise by approximately 62 percent, meaning that while cancer treatment for someone in 2010 may cost on average around £30,000 (US$46,487), it will cost £40,000 (US$62,007) on average by 2021.

With premium costs over the last decade being pushed up by almost 10 percent a year due to medical inflation, insurers globally are recognizing that while everyone may like policies with extraordinary benefits, cost is a point of consideration for many. As 2011 comes to an end, some international health insurance companies are beginning to introduce changes to services or flexibilities to payment structure and cost-sharing to ensure that customers get value for money while maintaining high levels of benefits.

International private medical insurance provider, MediCare International, has introduced new excess structures that clients may select if they so choose that give policy discounts of up to 50 percent. The new options allow for four levels of excesses, offering discounts that range from 10 percent, 20 percent, 35 percent and all the way to 50 percent depending on the selected size of co-payment.

Another company that is reevaluating their products is Allianz Worldwide Care, which has revealed that it is trailing a new system of medical evacuation. Typically, if a policyholder finds themselves in a situation which necessitates medical evacuation, they are put on an air ambulance and either transferred back to their home country, or to the nearest center of medical excellence, depending on the particulars of the policy. The new option for transport will transport medically stable policyholders on commercial flights while they are accompanied by one of Allianz’s own doctors.

Allianz Wordlwide Care’s Medical Director, Dr. Ulriche Sucher, explained that “Many of our corporate clients have employees working in remote regions within Eastern Europe, Asia, Africa and Latin America, where sparse medical facilities means a greater reliance on evacuation services following a medical emergency. Plus, advancements in medical treatments and medical specialism in specific countries means that sometimes patients need to be brought to another country to receive the care that they need. Added to this is the increase in natural disasters such as storms, earthquakes and floods which can result in people needing medical treatment at a time when the closest medical facilities may have been damaged,”

While air ambulances will still be used in cases where the policyholder is in an emergency situation which requires emergency evacuation to the nearest quality medical facility, the new medical escort service is expected to bring large cost savings with it, especially for large corporate clients. The service is expected to be introduced after a 12 month trial proves successful.

Companies Mentioned

Allianz

Allianz Group is one of the leading global services providers in insurance and asset management. With a worldwide network of 153,000 employees, the Allianz Group serves 75 million customers in over 70 countries. Allianz offers a wide variety of insurance products to both private and corporate customers, including motor, accident, general liability, fire and property, legal expenses, credit and travel insurance. Allianz provides life and health insurance products on individual and group basis. Allianz is the market leader in the German market and has a strong international presence in insurance.

MediCare International

With 25 years of providing expatriates top quality international health insurance, Medicare International has grown by ensuring quick and easy access to their services 24 hours a day. The company currently covers clients from 86 nationalities in 114 countries around the world.

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Maldives Enlists Allied Insurance for Universal Health Insurance

The Maldivian government will move forward on plans to engage in a public private partnership with Allied Insurance to provide universal health insurance in the island nation.

The government had previously invited insurance companies to draw up plans for providing universal health insurance for the island and submit them to be considered for the partner position. The Maldivian Finance Ministry made the announcement that it was looking for private sector insurers to partner with in late October, prompting Sri Lanka Insurance, Amana Takaful and Allied Insurance to apply.

More recently, the Finance Ministry has announced that it will be partnering with Allied Insurance to provide universal health insurance to the populace, as it was the only company to finish the letter of expression.

The proposed system for the universal health insurance program is designed to be split 40/60, with the government holding 40 percent ownership in the scheme and the private insurance company, in this case Allied Insurance, holding the remaining 60 percent. The system is supposed to provide a wide array of benefits, including emergency treatments, both inpatient and outpatient treatment, prescribed medicines, therapeutic treatments and emergency evacuations within the Maldives. Also to be included will be overseas cover for any treatments that are not available locally.

In fulfilling its roll as the private sector partner, Allied Insurance will be handling billing from healthcare providers, processing claims and raising public awareness. The Maldivian government will pay the premium. The ministry’s Director General Saami Ageel said that they were still negotiating the costs of the insurance plan with Allied.

There is still much debate surrounding the implementation of the universal health insurance plan, and many things may change before the scheme gets underway. MPs are debating the 100 or so amendments that have been proposed, many of which could have a fundamental impact on how the scheme operates.

As the bill currently stands, workers are required to contribute 3.5 percent of their salaries towards the universal health insurance scheme, however, some MPs have already called for the scheme to be compulsory for both locals and expatriates in the Maldives. Other MPs have submitted amendments that would alter the amount of money contributed by the worker and others that would require the employer to contribute as well. Another proposed amendment would see the government pay all costs to cover the entire country under the scheme and do so through money raised by a tax on tobacco products.

There are reports that the universal health insurance scheme is supposed to begin being implemented in January of 2012, however this may depend largely on the content and number of amendments that have been proposed to the universal health insurance bill as more material changes to the proposed system may delay the start date.

Company Mentioned

Allied Insurance Company

The Allied Insurance Company was founded as a joint-venture between the Maldives’ State Trading Organization and the Commercial Union Assurance Company of the UK in 1985. In 1987 the STO bought back all shares from Commercial union Assurance and Allied Insurance now offers a wide range of general insurance products and life insurance in the Maldives.

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Report Finds Improvement in China Health Insurance Coverage

A new study out of the United States shows that action taken by the Chinese government over the past two decades to improve access to medical facilities may have in turn allowed overall health insurance coverage to increase throughout the country between 1997 and 2006, with particularly strident gains found in rural areas during this time.

The research was done by Brown University sociologist Susan Short and fellow alumnus Hongwei Xu, now at the University of Michigan, with the findings presented in the December issue of Health Affairs, a prominent medical policy journal. The study used data from the China Health and Nutrition Survey to analyze medical insurance coverage patterns in China over the past decade, with a particular focus on the diverging health behavior occurring among the country’s rural and urban inhabitants. China’s Health and Nutrition Survey tracks households across nine Chinese provinces that cumulatively represent over 40 percent of the country’s population, so the findings should be widely applicable to the country at large.

China’s rapid economic development over the past few decades has worked to lift millions of people out of poverty and improve the country’s overall health standards. This has manifested itself in an improved life expectancy at birth rate, which has risen from 69 years in 1990 to nearly 75 years by 2010 and a decrease in infant mortality, which declined from 37 per 1,000 live births in 1990 to 17 in 2009, amongst other favorable indicators. Despite this noted progress, however, many health issues in China remain unresolved. Chief amongst them are the large disparities that persist between the country’s more affluent urban dwellers and poor urban and rural inhabitants in terms of access to medical services and quality of care. Many among the poor have limited their use of medical services for purely financial reasons, since the costs of treating a serious illness could wipe out a family’s life savings. To address this problem, new insurance mechanisms are being implemented by the government to cover a significant portion of medical costs and to help lower the impact of high out-of-pocket payments.

Xu and Short’s report found that, overall, the number of Chinese citizens with some form of insurance policy increased moderately at the turn of the century, moving from 24 percent of the survey sample size in 1997 up to 28 percent by 2004. Over the past few years however the changes have been more dramatic, with insured individuals already representing 49 percent of all survey respondents by 2006. Moreover, since then, the gap between the rates of insured Chinese people between rural and urban areas has narrowed greatly. In the report, Xu and Short, both credit this as perhaps the most profound development occurring in Chinese healthcare over the past ten years, referring to the rise in rural health insurance coverage as “nothing short of dramatic.” While the predicted probability of having health insurance improved in China between 2004 and 2006 for all locations in the nine provinces studied, rural areas had the most to gain. Susan Short wrote that millions of rural Chinese residents have likely benefited from increased coverage options so far. “There’s been great concern about increasing inequality in China, and particularly urban-rural inequalities. This work shows that at least in one sphere, health insurance coverage, urban-rural inequality may be decreasing,” Short added.

Historically, location has been one of the defining factors over access to healthcare and cover in China. Xu and Short’s analysis confirmed that the levels and trends regarding health insurance cover have been markedly different depending on whether the survey respondents were living in urban or rural areas in China at the time of the poll. The report found that coverage rates in rural villages fell from 1997 to 2000, while at the same time, the country’s suburbs, cities and towns observed no such change. It was during this period, the report notes, that the Beijing government’s new rural insurance system was still in undergoing its pilot phase and had not yet begun providing financial subsidies outside of a few select rural communities. After 2000 however, the level of health insurance coverage in rural areas rose sharply, from 17.9 percent in 2004 to 51 percent of all survey respondents by 2006, almost tripling the insurance penetration rate in the process. Survey data showed that coverage rates also rose quite significantly in smaller towns and suburbs at the same time, but changed little in China’s now burgeoning cities.

This remarkable rise in rural coverage rates has, according to the study, coincided with improved efforts by the Chinese government to develop more robust insurance initiatives and greater subsidies for the country’s rural inhabitants. “It is especially impressive to see this pattern in data such as these, that follow the same individuals over time,” Short said, adding that the changes now apparent in rural village coverage rates are surprising. “We are witnessing real change in many people’s lives in the way that urban, and especially rural, individuals experience health insurance coverage.”

Despite the considerable increase in individual coverage that has occurred throughout China, the report notes that many disparities between rural and urban consumers still persist, particularly as it concerns reimbursement rates and overall quality of care. Xu and Short’s analysis determined that urban residents in China continue to receive greater compensation on both their inpatient and outpatient claims, than their insured contemporaries from rural areas. However, the authors noted that these results should be interpreted with some caution due to a considerable number of incomplete self-reported reimbursement rates in the dataset. In his conclusion, Hongwei Xu, remarked that considerable progress has been made in the Chinese insurance industry. “The findings from this research highlight the recovery in health insurance coverage in general, and more importantly the significant reduction in the rural-urban inequality in the coverage in particular, largely due to the great efforts by the Chinese government, in a quite short time period,” Xu said, adding that the advantage insured urban residents continue to hold over insured rural residents, shows that more work needs to done. “On the other hand, the suggestive finding of continued rural disadvantage in terms of health insurance benefits suggests we should not overestimate the success of the policy interventions.”

China’s healthcare system going forward must tackle these challenges and more to continue to improve the quality of health care for the population at large. If insurers, both local and international, can work to effectively match the insurance demands of the Chinese people, cover against holes in the social safety net, and further encourage people to invest their considerable savings back into the market, they can share in this potential prosperity as well.

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Medical Tourism Becoming Popular Among China’s Middle Class

The number of Mainland Chinese citizens choosing to venture abroad for medical treatment has increased significantly in recent years in conjunction with the overall rising affluence and geo-mobility of the nation’s emerging middle class population. However, while most outbound health tourists are driven by the skyrocketing healthcare costs occurring in their home countries; Chinese consumers have been motivated by other factors.

Traditionally it has been the rising healthcare costs in mature largely-western economies, combined with the falling costs of global travel and communication, which have encouraged private citizens to voyage overseas for more cost effective destinations when seeking health and wellbeing services. As part of this development, world class healthcare facilities have been establishing themselves all across the world, providing international clients, who are seeking alternative healthcare solutions to what is available in their home countries, with many more treatment options at competitive prices.

In China however, domestic healthcare costs have not been the principal motivator for health tourism. Outbound Mainland Chinese clients have tended to have high-middle to upper class income levels and are instead going abroad to receive a quality of service, care and discretion not widely available in their home country. Overall, China’s rapid development into the world’s second largest economy over the past few decades has generated with it a huge number of people wealthy enough to demand the highest quality of care available worldwide and pursue a multitude of elective medical procedures if need be. The country’s healthcare system has not ascended in tow during that period, and while base treatment costs have remained cheap by some global standards, the range in services provided is too narrow for many patients and service quality varies considerably based on region. International healthcare providers have found that these Chinese consumers are among the most willing to pay top dollar for quality services and privacy, and healthcare providers are tailoring their services to better cater to Chinese consumer needs. Realizing this huge market potential, some medical tourist organizations in countries like South Korea and the US have established specialized Chinese-speaking healthcare operations to accommodate Chinese patients exclusively.

According to the Beijing Medical Doctor Association, the most popular destinations for Mainland Chinese medical tourists over the past few years have been Japan, South Korea, Singapore, Hong Kong and the US. These locations have proven popular not for the comparative cost of treatment (India, Thailand and Malaysia remain the most attractive in that regard) but for their exacting healthcare standards and the other, more conventional high-brow shopping and tourist attractions they can provide for Chinese consumers outside of their hospitals.

The number of outbound Chinese medical tourists has increased from just a few thousand at the start of the decade to nearly 60,000 annual travelers in 2010. An aging population and rising individual incomes have increased the demand for medical and healthcare products and services throughout the country in that time. According to data released from China’s Ministry of Health, Mainland citizens aged 60 or above accounted for about 13.3 percent of the country’s total population in 2010, a considerable increase on the 10.3 percent reported 10 years ago. At the same time, the disposable income of urban Chinese residents has climbed roughly threefold between 2000 and 2010 to CNY19,109 (US$3,000).

These broad socioeconomic trends have been reflected in the types of medical treatment Chinese consumers are choosing to receive abroad. According to the Shanghai Medical Tourism Products and Promotion Platform, anti-aging therapy, cancer screening, high-end diagnostics, and treatment and care for chronic diseases have become the most common type of procedure sought out by China’s medical tourists. For those who want to venture abroad for treatment but haven’t yet: language barriers, lack of private health insurance coverage and cost concerns were cited as the principal obstacles to partaking in overseas medical treatment.

There is one other medical tourism factor that has become quite unique to Chinese health travelers and that is the wave of expectant mothers leaving the mainland to give birth in a foreign country, a practice now widely known as maternity tourism. For Chinese nationals there are a number of reasons to give birth outside of the People’s Republic, the country’s notorious population control legislation, or “One Child Policy,” being the chief among them. Under the policy’s complicated rules, only couples that belong to ethnic minorities or those coming from one-child families themselves (and certain other specialized scenarios) are allowed to have second children. The PRC government also grants local authorities considerable leeway in how they enforce the policy and this can result in severe fines or physical punishment for Chinese couples who defy the rules. In Guangzhou for example, the fines associated with having a second child can exceed CNY180,000 (US$ 27,450), a prohibitive expense for most of the region’s inhabitants. As a result, Mainland Chinese couples who are seeking siblings for their children, or the all-important male heir, are deciding to go abroad to give birth rather than risk fines or further punishment from their local governments.

Hong Kong has proven to be the most popular destination for expecting Mainland Chinese mothers so far. While the city-state is now officially part of the PRC, it is exempted from the Mainland government’s population control policies and children born within its borders are ensured Hong Kong residency, and all the rights to local social services that entails. In 2010, however, Hong Kong’s medical facilities were put under serious duress when 40,648 Mainland mothers gave birth to children in city hospitals, roughly 46 percent of the city’s 88,000 total for the year. This has resulted in legislation written by Hong Kong’s food and health secretary earlier this year, which will cap the number of non-residents allowed to give birth in the city to 34,000 in 2012 and beyond. With no end to Mainland China’s population controls in sight, maternity tourism will no doubt continue to be an issue, but one that can hopefully be ameliorated by the accompanying demand by Chinese clients for more advanced and expensive international healthcare.

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Is the Latin America Health Insurance Market in Good Shape?

In recent weeks there has been a wave of news from within the international Health insurance industry revealing that Latin America is causing a host of issues for Health Insurance companies.

The leading causes of concern are primarily fraudulent claims being submitted under plans, and massive overcharging by healthcare providers for individuals seeking treatment who are in possession of medical insurance coverage. Both these issues are leading to increased health insurance loss ratios for most companies providing policies to the region, and is placing the continued viability of international health insurance for LatAm in doubt.

This is especially concerning considering the fact that Latin America has weathered the global economic downturn in a fairly robust manner. Brazil, for instance, as a key market for many international insurance companies and a major emerging BRIC economy should present high growth opportunities for insurers.

Despite the perceived opportunities in the Latin American health insurance market insurers are increasingly wary of the region and are slowly beginning to pull out of these markets. One such insurance company planning to leave LatAm is Nordic, the health insurance brand of Europæiske Rejseforsikring A/S; Nordic has revealed that it plans to cease the sale of NHC Americas Health Insurance products.

The company is also moving towards a complete withdrawal from Latin America, and will no longer sell NHC products through Agents or Brokers located in the region.

The move has surprised many industry insiders as it has been known that Latin America was one of Nordic’s biggest markets, and the company was well placed to capitalize on the expansive economic growth of the region over the near term future.

However, Nordic sources have revealed that this withdrawal from the LatAm health insurance market was instigated after an extensive internal review, and is being conducted in order for the company to consolidate its positions in other markets, with Asia being a key focus.

Unlike the recent announcement regarding the complete shutdown of Aviva Global LifeCare Health Insurance products, Nordic has stated that policyholders currently enrolled on an NHC Americas health insurance plan will still be able to renew their policies going forward, and that the plan will be serviced in accordance with existing policy terms.

This means that in contrast to Aviva, Nordic will not completely disable its NHC Americas business, but rather stop the sale of any NHC Americas products to new customers. As such, existing NHC Americas policyholders will be able to receive continuing coverage for any medical conditions they may have developed while on their health insurance plan.

The two companies, Aviva and Nordic, could not have handled the “shut down” of their respective plans in a more contrasting manner. Nordic, unlike Aviva, has shown its commitment to policyholders and has displayed its intent to provide high quality on-going services to members who may have developed serious medical conditions while enrolled on their health insurance plan. Aviva, on the other hand, has shown a complete disregard for the impact of its actions on its clients.

While the Aviva Global LifeCare plans may have been loss making for the company, the position they have placed themselves in by simply ceasing to operate these products could do major damage to the perception of “safeness” which IPMI policies offer on a global level. Facing a similar position, Nordic has elected to stand by its existing customers who may have otherwise faced a difficult proposition in obtaining continuing coverage for this region.

Nordic will not force policyholders off plans which are already in place. This key distinction over the manner in which Aviva is treating existing members is a major insight into the duality displayed by many major Global health insurance providers in the modern age. For the international insurance industry to grow, consumers must have trust in the company they are working with, in that the protection they are purchasing is often intended to provide their medical coverage for the rest of their life. While Aviva may have had a negative impact on the perceived trust levels clients have towards their insurer, Nordic has proven that at least some international insurance companies do care about the people they are protecting, and that these insurers are committed to protecting customers over the long haul.

At present it is still unclear why NHC has made this startling decision. Market Analysts suspect that one of the major contributing factors is due to the company’s Claims Ratio in the LatAm region; future claims development in Latin America for NHC was viewed by insiders as potentially unsustainable.

While the news will undoubtedly come as a blow for individuals in Latin American countries due to the high quality and coverage levels associated with the NHC Americas policy, the fact the Nordic remains committed to continuing service of existing customers will be welcomed by many.

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India’s Medical Tourism Sector Keeps Growing

India’s private healthcare industry, which features an abundance of specialist hospital facilities, an extensive network of healthcare providers and highly trained staff, has become one of the preeminent destinations for travelers seeking cost-effective medical treatment from all over the world, a practice widely known as medical tourism. According to a new study released by India’s commerce chamber, the country’s medical tourism sector will remain competitive amongst its South Asian rivals, attracting an increasing number of international clients and providing a considerable boost to the national economy.

Last week, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) published a report titled ‘Emerging Trends in Domestic Medical Tourism Sector,’ which estimated that over 3.2 million medical tourists could arrive in India by 2015. Currently the country’s private hospitals and specialist clinics are serving around 850,000 foreign patients annually, with a market valuation of Rs45 billion (US$980 million). India has been able to maintain a strategic advantage over its neighbors in providing essential resources like world-class medical technology, infrastructure and a skilled medical workforce. The country’s leading private healthcare groups, including Fortis Healthcare and Apollo Hospitals, are expecting to nearly double their foreign patient intake in the next few years. Assocham calculated that if the country’s medical tourism industry continues along at the current 40 percent compounded annual growth rate, the market would be worth around Rs108 billion (US$2.4 billion) by 2015 with an inflow of over 3 million health travelers. “The rapid growth will not only earn foreign exchange but will also give a huge boost to the country’s health sector,” the study claimed.

According to Assocham, India’s ability to quickly develop top-tier specialist healthcare facilities for in demand therapeutic sectors like cardiology, joint replacement, orthopedic surgery, organ transplants and more, has been a critical in attracting foreign patients. The industry’s ability to keep treatment prices low across the board has enabled Indian hospitals to target a wide spectrum of international clientele from all corners of the world. A hip replacement in India costs on average only around US$9,000 versus US$43,000 in the United States (without insurance) or US$12,000 in Singapore. The largest proportion of medical tourists choosing India as their destination are coming from the Middle East, followed by Americans, Western Europeans and then citizens from nearby countries including Bangladesh, Nepal, Pakistan and others.

D.S. Rawat, Secretary General of Assocham, confirmed that the prevailing high cost of medical treatment in other industrialized countries was encouraging more people to consider cost-effective alternative destinations for care. “High quality medical care at a fraction of a price people would traditionally pay in developed countries is the basic reason behind this surge in number of patients flocking to India for treatment purposes,” Rawat remarked.

The Assocham report identifies the states of Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, West Bengal and New Delhi as the key emerging medical destinations in India, each with a sufficient number of private hospitals and clinics that target medical tourists. Cosmetic procedures such as facelifts, botox treatment, tummy tucks, eye and dental care have so far proven the most sought after treatments by foreign patients.

Furthermore, the availability of distinctive holistic medicinal services in India, such as yoga, meditation, ayurveda and allopathy, present further treatment and tourist opportunities that are difficult to match in other countries. Ayurveda and spa tourism have become increasingly popular among both domestic travelers and foreign tourists as people look towards natural systems of treatments instead of conventional medical procedures for certain ailments. The western states of Goa, Kerala, and Rajasthan have emerged as the most popular destination for ayurveda and spa treatment resources.

India’s healthcare providers however cannot afford to rest on their laurels as they will soon face tough competition for medical tourists internationally. National governments and private companies in other South Asian countries, such as Malaysia, Singapore, and Thailand, have been quick to recognize this lucrative marketplace and have been investing heavily in their healthcare infrastructure to meet the global demand for quality-assured medical care together with highly trained medical specialists and the latest advancements in medical technology. Countries such as Taiwan and South Korea are not far behind and have also taken measures recently to improve their performance in the international private healthcare market. Assocham also warns that countries further a field such as Australia, Belgium, Cuba, Costa Rica, Hungary, Greece, Poland and South Africa are also working hard to promote their healthcare facilities worldwide and could pose a threat to their client base in the long term.

In order to combat intense competition from other countries and maintain India’s preeminent position in the world medical tourism market, Assocham has proposed developing 10 dedicated public-private ‘health cities’ throughout the country to both increase operational capacity for patients and encourage high-caliber healthcare professionals to work in the system. “This will not only help India secure a bigger share of the market but will also encourage reverse brain drain by attracting non-resident Indian doctors and experts settled abroad,” D.S. Rawat explained. India’s commerce chamber further argued that both central and state governments would need to play an active role in promoting the country’s medical tourism facilities abroad and to ultimately help construct and invest in these facilities. While similarly ambitious proposals for medical cities have been made before, Assocham hope the numbers presented in their report could finally push both the government and private investors into action.

Companies Mentioned

Fortis Healthcare

Fortis Healthcare Limited, founded in 1999, is a leading healthcare provider with a network of 46 hospitals, satellite centers and heart command centers in India. The company also offers diagnostic, travel, IT and financial services through it’s’ wholly owned operation Religare Enterprises Limited.

Apollo Hospitals Group

Apollo Hospitals is the largest healthcare provider in Asia, third largest in the world. The company operates 53 hospitals, a total capacity of 8500 beds, across Asia. The company also offers medical consultancy and pharmacy services. Apollo Hospitals was founded in 1983 and is based in Chennai, India

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South Korea Medical Tourism Reforms

Foreign patients who are being treated at South Korean healthcare facilities will soon be able to receive guaranteed compensation from the government in the event of medical malpractice. Korean hospitals will also be allowed to sell pharmaceuticals directly to foreign patients, circumventing the previous referral process, and outside medical staff visiting South Korea for training purposes will become eligible to participate in clinical procedures and research. These are all part of the Korean Ministry of Health and Welfare’s updated medical tourism guidelines, announced earlier this month.

Since 2009, the Korean government was embarked on an aggressive marketing strategy to promote medical tourism overseas as a new reason for international travelers to come to South Korea. According to the Ministry of Health and Welfare, 81,789 tourists came to the country for medical reasons in 2010, with cosmetic procedures proving particularly popular. This represents a 36 percent increase on the previous year’s totals with total revenue from treatment on foreign patients nearly doubling as well. The Ministry recorded 7,901 foreign patients in 2007, 27,480 in 2008 and up to 60,201 in 2009.

Despite this continued growth, South Korea lags behind many of its Asia Pacific neighbors in the medical tourism field. Thailand, Singapore and India, for example, managed last year to attract 1.5 million, 720,000 and 730,000 foreign patients respectively. Although the Korean Medical Association claims the country can offer a high level quality of medical service at comparable prices to its continental rivals, the global awareness and brand image of Korean healthcare facilities remains low. Critics within the country’s medical tourism sector, point out that there has been no unified governance over this important industry and little regulatory support. This has led to a lack of standardization and little control over health outcomes for foreigners. Current national law has also been overtly restrictive, rationing a maximum 5 percent of total bed capacity to non-citizens and previously preventing domestic hospitals from operating on a for-profit basis.

By 2015, the South Korean government wants the total number of foreign patients receiving treatment in the country to surpass 300,000 annually. To do this they have initiated broad-based medical tourism reforms that aim to cut the red tape, becoming more foreigner-friendly, and all while guaranteeing patients’ rights.

Starting in 2012, foreign patients will be eligible to seek compensation if they become victims of medical malpractice in South Korea. At present, there are no proper compensation standards or systems set up for non-resident malpractice victims. Korean hospitals and clinics have been reluctant in the past to pay higher subscription rates for insurance and this had been a source of tension driving away potential foreign business. To implement these new initiatives, the government plan to establish a mutual aid association, comprised of participating Korean hospitals and clinics, which will collect a surcharge on the fees these medical facilities charge foreign patients. The association will then use the pooled funds to compensate foreign patients when claims arise. The Ministry of Health will head the heretofore unnamed association on a temporary basis until the full compensation and legal mechanisms for the body are completed.

Through this new united national body, the government hopes to further encourage the private healthcare sector to invest more in attracting overseas clients, and plans to support them further through necessary immigration policy adjustments. The Korean state agencies eventually plan to relax visa rules, enabling prospective foreign patients to skip complicated administrative procedures and gain entry to the country more easily. The multifaceted pharmaceutical system will also be streamlined for overseas clients. Foreign patients will be able and encouraged to purchase their medications directly through their hospital or clinic, without having to refer their prescriptions to a pharmacy instead.

Regulations involving the future construction of accommodation facilities at hospitals will also be amended to encourage development. While many Korean healthcare professionals recognize medical tourism as a vital growth industry, many hospitals in the country have not set up the medical care infrastructures expected by foreigners, and this needs to addressed quickly. Foreign healthcare professionals, staff and consultants, will also be allowed to treat patients and participate in research.

Other plans to keep improving the quality of medical tourism services available in South Korea involve broadening the country’s communications services. Compared to other international medical markets, the lack of foreign language capability among many Korean healthcare providers remains a primary concern. The government announced plans to tackle this problem by increasing training for medical translators and through expanding the services of the national health call center. In addition, foreign patients will be encouraged to interact and give feedback through a comprehensive annual survey that will aim to identify systemic problems within the Korean healthcare system earlier. The introduction of an easy-to-follow star ratings system for domestic clinics and hospitals, is also being discussed.

The forecast for the Asian medical tourism industry is bright, with an estimated total value of US$100 billion projected annually by 2012. The substantial development of the global economy coupled with the falling costs of travel and communication has enabled world class healthcare practices to establish themselves all around the world. International clients seeking alternative healthcare solutions to what is available in their home countries at competitive prices now are presented with many opportunities. If South Korea wants to become a major player in this lucrative industry these reforms represent a decent start.

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ExpatHealth.org International Health Round-Up – June 2011

June saw an E. coli outbreak in Europe and a fresh round of bird flu cases in Egypt, as well as the release of insightful research on both medical error and dengue fever. A key theme across health issues remains weighing the long-term benefits of preventative care (or systemic reform) against up-front costs. That the United States showed the highest error rate among seven developed nations does nothing to enhance the rep of its notoriously cost-inefficient health system – worth bearing in mind as the debate over health reform heats up once more.

Here are some of the top international health stories of the past 30 days:

E. coli ravages Europe

The top story in June was undoubtedly a deadly E. coli outbreak in Germany. Cases were initially reported in May but escalated sharply in June – as of June 28 around 4,000 people had been sickened and total fatalities stood near 50. German authorities identified bean and seed sprouts as the vehicle for the outbreak. While the number of new cases reported in Germany continues to decline (the total is still rising as a result of delayed reporting), late June brought the emergence of 8 cases in France. These too were linked to consumption of raw sprouts. French and German authorities are in the process of determining whether the bacteria had a common source.

For the latest on this story, click here.

USA and Australia show highest medical error rates

Patients who received poorly coordinated medical care or were unable to afford basic medical costs were much more likely to report errors in their medication or treatment, according to a study published in the International Journal of Medical Practice. Researchers from the USA and Australia used data from the Commonwealth Fund International Health Policy Survey to identify the key risk factors behind the errors reported by patients from Canada, USA, the Netherlands, UK, Germany, Australia and New Zealand. 11% of the 11,910 people surveyed said they had suffered a medication or medical error in the last two years. Patients in the USA and Australia reported the highest rates of medical/medication error: 13%. Germany and the UK reported the lowest at 9%.

For more on this story, click here.

WHO finds dengue fever costly as it is deadly

The World Health Organization (WHO) released its latest Dengue Bulletin (PDF Link), a special issue devoted to 10 studies on the cost of dengue fever and various prevention strategies. In an age where many diseases are on the decline dengue continues to pose a serious health threat all over the world. In Brazil, for example, the number of cases increased 6.2% and deaths 12% from 1999-2009. Dengue fever is a mosquito-borne virus common in tropical climates, including popular expat destinations such as India, Thailand and Malaysia. Studies estimate the annual cost of treating it to be in the hundreds of millions of dollars in the latter two countries. For India the figure is in the billions.

For more on this story, click here.

5 new cases of avian influenza in Egypt

WHO reported 5 new cases of avian influenza (or “bird flu”) in Egypt, 3 of which were fatal. The cases were scattered across the country, and are believed to have resulted from exposure to infected poultry. They were confirmed by the Egyptian Central Public Health Laboratory. To date the country has seen 149 cases and 51 deaths from the disease. While avian influenza poses little threat to tourists visiting Egypt on holiday, a spike in cases would do nothing for the country’s image. Revenues from tourism were down 46% in the first quarter of 2011 in the wake of the recent revolution.

For more on this story, click here.

Be sure to check back on this space for more updates in July.

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