Following a tribute in the London 2012 Olympics that was broadcast to the world, the NHS is encouraging its member trusts to do the same and expand globally in a bid aimed at funding health services in the United Kingdom. The idea originated in the Labour Party and is now gaining speed to expand the National Health Service beyond the UK’s borders. However, will this idea affect the costs and quality of care for current residents of the UK?
The government is supporting a recommendation for large private hospitals, such as the Great Ormond Street, Royal Marsden, and Guy’s and St. Thomas’. Following the model set by Moorfields Eye Hospital in London which has set up shop in Dubai, the UK hopes to emulate the success which Moorfields’ Dubai branch has seen since its establishment overseas in 2007.
Governmental officials say that these large hospitals and entities should utilize their profits derived from their private practices and use them to develop healthcare assets overseas. After the overseas operations are established, profits from the entity should be rerouted back to the NHS to fund ongoing improvements to the UK healthcare system.
The NHS aims to make itself a global leader in providing healthcare by marketing itself as a recognizable name worldwide. By setting up hospitals overseas, it can market its services and create a demand for it.
“The NHS will be bringing together the Department of Health, the UK Trade, the National Commission Board, and form an organization that will help healthcare providers in [the UK] and develop those skills and sell them abroad for the benefit of the patients in [the UK],” says Health Minister Anne Milton, a Member of Parliament of Britain. Any kind of profits will have to be redirected back to the benefit of NHS patients, in a scheme which Ms. Milton says is a, “Win-win.”
The government is currently eyeing hospitals and institutions with great international reputations, allowing for an easier uptake of the program. Once the program becomes more successful, the government should open it up to smaller private healthcare providers.
What’s unclear at the moment is exactly where the doctors and medical practitioners will be sourced from. There are two possibilities: The NHS could source the staff from their own current employees – after all, they are the world’s fifth largest employer. Alternatively, the NHS could source the staff internationally, which could also be feasible because of the vast number of readily available professionals around the world. However, there are possible negative effects of both methods of sourcing which need to be taken into consideration.
First, if the NHS proceeds with sourcing from existing NHS staff, skilled workers in the UK may be less readily available. With workers being asked to work abroad, there could be a premium added to their salary, as well as other fringe benefits which compensate workers for their move. In addition, as these workers will be a direct foreign representation of the organization itself, there is a high chance that highly skilled workers will be recruited to move overseas first. More skilled workers may also be more adept at adapting to challenging situations, further making them a target for recruitment overseas. However, this will draw the UK’s more skilled healthcare workers away from the UK system, potentially lowering the standard of care in the country. This also represents a costlier decision because of the need to incentivize doctors to go abroad by adding benefits to their compensation packages.
What if the NHS decides to hire internationally? The goal of the NHS is to export the “brand names” of the NHS that have international and esteemed reputations. As such, it could be contradictory to start a new branch with staff who do not previous history with the NHS in essential, and especially management, roles. It would make most sense for the NHS to at least fill higher level roles with skilled medical practitioners from the NHS in order to preserve the level of service. Moreover, an international hire may not inspire as much confidence in local patients who are seeking high quality international care based on the NHS brand name. Why would they need to go to the potentially more expensive NHS which features a local hire if they can receive the same type of treatment at a potentially lower cost? Furthermore, hiring the best doctors available locally in the oversea hospital’s area might cause issues for the local healthcare system, especially if there is already an ongoing shortage of doctors in the region. If the NHS doesn’t hire in the target area but still recruits internationally, it may still represent a higher cost because of relocation packages and expatriate salaries that they may need to attract international hires.
Will the costs of healthcare increase because of the expansion? As mentioned earlier, highly skilled workers may be incentivized to take up positions in the new hospital developments overseas. As such the ability to properly provision healthcare for the nation may be reduced if the NHS does not replenish or properly account for the departure of some of its staff. Moreover, the NHS has been widely reported to be experiencing a significant shortage of workers, despite being the world’s 5th largest employer. Shortages of nurses and doctors are, in some cases, extreme, as data from the Department of Health indicates that some family doctors may be responsible for as many as 9000 patients. A new development requiring skilled practice may hinder the system, preventing patients in the UK from having adequate access to much needed healthcare services.
The demand for medical practitioners is high in the UK. There is a general shortage for the medical field, vastly due to the amount of doctors leaving the UK for better packages worldwide. In a recent report by the Policy Research Programme in the Department of Health, UK doctors are being offered attractive benefits packages, better living standards, higher control of their work, and in places with better living conditions than the UK. This incentivizes many highly trained doctors to move abroad, resulting in a shortage of doctors able to provide important healthcare services. Some of the doctors surveyed also indicated that they were disillusioned by the NHS, stating that it was bureaucratic and limiting.
This expansion overseas will not affect the highly specialized private hospitals which have a well-recognized name brand – in fact it may be quite easy bring in profits as foreigners may be attracted to these brand names. However, whether smaller hospitals will be capable of following suit or willing to remains to be seen. Many hospitals in the UK are currently designed to be providing an essential service to the community and gearing them towards acting as for-profit multinational companies may cause them to lose focus on providing quality care within the UK. If managed poorly, the implementation of this program could cause shortages and cuts to existing services as hospitals direct their attentions and funds overseas. This could affect prices negatively for the patients they service locally in the UK. With the significant burden that many general practitioners already face – upwards of 3,000 patients per doctor, some even 9,000 – and in the middle of a large scale reorganization of the NHS, the main focus should be improving these services and ensuring that the new system provides the benefits its supposed to.
This leads to a discussion about the focus of the NHS – should this really be what they are redirecting resources towards? The NHS is asking for their hospitals and entities to redirect profits from private health practice to fund their international developments. While the NHS does provide quality services to UK citizens, waiting times for both scheduled treatment and A&E care are a serious problem due to a lack of beds and medical professionals.
Could this expansion affect healthcare costs and insurance premiums? There is a possibility this could happen if the private hospitals which are establishing hospitals overseas increase charges on private care in order to raise funds to start the overseas ventures. Similarly, if the overseas private hospital programs lead to increased brain-drain on UK doctors, it could drive up the costs of private care further. Both of these possibilities could have knock on effects on the private health insurance system in the UK, which is already trying to avoid large premium rises to avoid off putting customers.
Given the NHS budget freezes and cost savings put in place as part of QIPP (Quality, Innovation, Productivity and Prevention) policies in the UK, it is understandable that new sources of income are being investigated and considered. However, it is of the utmost importance that these efforts do not come at the expense of local capabilities, especially during the largest reorganization of the NHS system in years.
The rise of the middle class in East Asia is proving to be a boon for private healthcare providers. Kuala Lumpur based IHH illustrates this nicely. In their recent IPO, which was 132 times oversubscribed, IHH raised more than USD 2 billion and the shares climbed by more than 10% in the first few days of trading. The value of the company stands at around USD 8 billion. IHH is now the second largest hospital group on the planet, and the largest outside the USA.
Owned by Khazanah Nasional Bhd, a state owned investment arm, IHH tells a story of unprecedented growth. Khazanah started their move into the healthcare sector in 2005, when they bought a 13.2% stake in India’s largest private hospital group, Apollo Hospitals Enterprise. A string of acquisitions and investments in the following years have enabled IHH to build itself into the powerhouse that it is today, able to ride the wave of opportunity created by the growing economies of East Asia.
According to Frost & Sullivan, the market for healthcare in Asia Pacific region will grow by 8 % until at least 2015, and IHH already has plans to add another 3300 new beds and 17 hospital developments in China, Singapore, Malaysia and India, as well as expansion plans Turkey, Egypt and Lybia by the end of 2016.
The success of IHH has been largely due to their ability to fill the gap created by lagging national healthcare infrastructure and rising demand for quality medical services in countries like Indonesia and Malaysia. The strategic positioning of their Singapore based hospitals, all within a relatively short 3-4 hour flight from Malaysia, Indonesia, Vietnam, Myanmar and Bangladesh, has created a healthcare hub which IHH has been well positioned to exploit.
IHH is now applying their winning formula to expansion in other developing regions of the world. It recently bought a 60 percent stake in the owner of Turkey’s largest hospital group, Acibadem Saglik Hizmetleri & Ticaret AS, which it bought for $826 million. Turkey is conveniently situated within easy reach of Central and Eastern Europe, the Middle East and Africa, much like Singapore is to East Asia. IHH hopes to develop their Turkish operation into another global healthcare hub, alongside Singapore and Malaysia.
The growth of private healthcare, especially in the developing world, is certainly a good thing, providing top medical services to those who can afford it, and easing some of the burden on national healthcare systems by providing an alternative source of treatment and the associated networks of training and development facilities. IHH owns a private medical university and a nursing training centre in Malaysia. Private healthcare is also the incubator for new healthcare technologies and techniques, as public sector healthcare often doesn’t have the budget or the staff to invest in much other than proven technologies and treatments.
There is a downside to this success story though. The draw of shiny new hospitals, new technology, a better working environment and higher salaries is proving to be too much for many healthcare professionals to resist, and is causing a slow but steady exodus from the public health systems all over the world, from the poorest and most underdeveloped, to the wealthiest and most advanced, basically without exception. Patients in private healthcare enjoy the luxury of not having to wait for treatment, of being treated by doctors who are well paid, have had enough sleep and who have enough time in their day to carefully consider a patient’s diagnosis and treatment.
The state of public health services is not quite so utopian. Even in somewhere as developed as Hong Kong, the public Health Authority struggles to find staff, and is left with no choice but to require the staff it does have to work unsustainably long hours for pay which is well below the equivalent in the private sector. This situation is not only making it difficult to convince new personnel to work in the public sector, but also creates an environment that is prone to mistakes and accidents.
President of the Hong Kong Doctors Union Henry Yeung Chiu-fat said many young doctors nowadays want easier jobs. Their preference for less stressful fields has exacerbated staffing problems. For example, becoming an ophthalmologist (eye doctor) is much more competitive with less-demanding on-call work than internal medicine or emergency room jobs.
Public hospitals In Malaysia, Thailand, China, India, UAE, South Africa, Australia, and even Europe have all been struggling with this issue, with some areas being so short of staff that they are having to close departments when a particular specialist is away for any reason.
While some of the problem can be alleviated by increased salaries and reform of health departments to be able to offer more flexibility to staff, there is another factor brought on by the rise in private medical services which could make the brain drain even worse.
The option for overseas treatment offered by a growing number of private medical insurance companies, as well as the relatively cheaper cost of treatment in developing countries, has created a massive growth in medical tourism. This lucrative market requires staff who are not only medically qualified, but who are also multi-lingual and culturally sensitive. This is a relatively unique demand of the private sector, since public sector hospitals treat a relatively small percentage of foreign language speakers.
This begs the question: If the unprecedented growth in international private health services continues, which it probably will (IHH alone are building 17 new hospitals), and the private sector continues to draw in much of the top talent in the medical industry, how will the public health services maintain a high standard of care, with fewer experienced personnel and many young doctors looking elsewhere for employment?
The crisis is very real, and there needs to be some serious thinking done on the part of the public health systems, especially those of developing countries. Stop gap measures will only work for so long, as human doctors and nurses will get tired and frustrated which can lead to them making potentially serious mistakes or quitting.
In China the problem is just as real, although slightly different. The private sector is still very small in comparison to public health system, instead, the problem China faces has to do with the urban – rural divide. China has recently spent more than USD 100 billion to try and bridge this gap, providing health insurance cover to 98% of rural Chinese, and ensuring access to improved primary healthcare facilities in a massive investment in rural infrastructure. While a large proportion of the rural population now have access to modern medical facilities, and are now more able to afford it, the State has still not been able to convince doctors and nursing staff to choose to work in more rural locations. Any career minded doctor in China would choose to work in one of the top tier city hospitals, where their case load will give them more interesting work with increased opportunity for career advancement, and where there are more opportunities for generating secondary income with some private practise on the side. In Shanghai alone 9 new hospitals are being built, which will all need to be staffed. A position in the rural areas is definitely not on the average Chinese doctor’s wish list, and the State faces some serious challenges in encouraging doctors to fill rural postings.
Unless creative solutions can be put in place, it seems that staffing issues in the public sector only going to increase around the world. With so many nations now facing economic turmoil, a significant increase in public health spending is not going to be easily managed. While investing more money into public health spending and salaries may alleviate the problem, other factors are involved in many cases.
What is certain is that all this bodes very well for the private healthcare industry. Being able to obtain first class medical care is going to become more dependent on whether patients are covered by private health insurance, and the public systems could decide, as the NHS in the UK and the Health Services Executive in Ireland have, to use the private sector to take some of the burden of healthcare off of public sector facilities. Add to all these factors the ageing world population, and it looks like the ideal environment for further growth in the private healthcare industry.
The largest challenge facing private healthcare providers may end up being that of finding and keeping their staff. Inevitable rises in salaries due to industry competition, are sure to be a major factor in the profitability and affordability of private healthcare. However, medical care will still be a necessity for everyone, and with a growing middle class in many developing parts of the world, an increasing number of people will be willing and able to pay for quality care.
The Emirate of Dubai is reaffirming their commitment to medical tourism by increasing cooperation between public and private healthcare operators through a new national development initiative.
Last week, the Crown Prince of Dubai, Shaikh Hamdan bin Mohammed bin Rashid Al Maktoum, called a meeting with top officials from various government and private sector bodies to discuss the Dubai Health Authority’s (DHA) new initiative on medical tourism and what could be done to fast-track development and promotion efforts going forward. The Dubai government wants to establish the city as both a regional and global hub for medical tourism in order to further diversify the local economy away from natural resource extraction. If successful, new healthcare facilities targeting foreign patients could also work to lift local health standards and create more investment and job opportunities at home. The crown prince made it clear at the meeting that Dubai’s healthcare sector needed a unified approach going forward to overcome previous inter-departmental squabbling and muddled promotional efforts, which have resulted in many citizens leaving the emirate and heading overseas for medical treatment. A lack of cooperation between state and private sector players has been cited by industry analysts as a key impediment to further developing the Dubai medical tourism sector in the past.
Read the rest of the Dubai Ramps Up Medical Tourism Effort and Health Insurance article
2011 was a banner year for Malaysia’s medical tourism industry and with inbound numbers growing at a similar pace this year, the country look set to challenge Asia’s other attractive health travel destinations for supremacy in a lucrative global marketplace.
The rising costs and increased sophistication of medical treatment coupled with the continued progress, or ‘flattening’, of the global economy is encouraging many people to look abroad for more comprehensive and affordable healthcare options, a practice now widely known as medical tourism. These macroeconomic factors combined with the falling costs of international travel and communication has seen world class healthcare facilities set up all over the world and auction their services in competitive consumer markets appropriately. International clients looking for alternative healthcare options to what is available in their home countries now have access to many different services worldwide at competitive prices. Asian and Latin America countries have proven to be the most attractive medical tourism destinations so far, as many popular but costly treatments, including transplants and cosmetic surgery procedures, can cost a fraction of the price that they would do in the West, with the added opportunity to avoid lengthy treatment lines in public healthcare systems as well. The ease, affordability and efficiency of pursuing international medical tourism options is something to be considered for patients seeking to fully evaluate their future health procedures.
The medical tourism industry in South East Asia has grown at a brisk pace, with the region’s annual private healthcare revenues projected to surpass US$100 billion by year-end 2012. Asian governments and private healthcare groups in countries like India, Singapore, and Thailand in particular have been at the forefront of the medical travel marketplace, investing heavily in their healthcare and transportation infrastructure over the past few decades to meet this rising global demand for easily accessible high-class medical treatment at globally competitive prices. Countries such as Taiwan, South Korea and the Philippines are themselves not far behind and have taken the initiative recently to improve their performance in the international medical tourism market.
New figures released this past week show that the medical tourism industry in Malaysia has itself progressed admirably in recent years. Compiled medical receipts from foreign patients reveal that inbound medical tourism spending to Malaysia surpassed RM 509.77 million (US$168.7 million) in 2011, with 578,403 international clients using local health facilities throughout the year. These numbers were well above initial projections of RM 431 million (US$142 million) in revenue from 400,000 medical tourists, and were also up considerably from 2010’s statistics, when 392,956 foreign patients visited Malaysia. Demand for high quality medical treatment has rebounded in the aftermath the global economic crisis, and the country now hopes to establish itself among the top players in the Asia Pacific region. In comparison to some of its Southeast Asian neighbors however, Malaysia still has quite a ways to go still to compete in the medical tourism sector. At present 3 countries, Thailand, Singapore and India, control around 90 percent of the market between them, and attract over 1.5 million, 720,000 and 730,000 foreign patients per year respectively.
The Malaysian government has long recognized the need to close this gap and launched a separate agency, the Malaysia Healthcare Travel Council (MHTC), in 2009 to promote and develop the local medical tourism industry in order to better position Malaysia in the regional health travel market. The MHTC has been tasked with fostering greater public-private sector healthcare collaboration and formulating a unified international promotion strategy for the country’s 41 internationally accredited hospitals and 8 ambulatory care centers. To do this, the agency has been given greater access and ability to collate local health industry data. Medical tourism receipts for example are now collected separately from tourist receipts, which are tabulated by the Malaysian Tourism Ministry.
Using this data, MHTC Chief Dr Mary Wong Lai Lin revealed to local media recently that Penang had accounted for the highest share of foreign medical revenue in the past year with 49 percent of combined foreign patient revenue, followed then by hospitals within the Klang Valley (21 percent) and finally Malacca (10 percent). The country that accounts for the largest share of these medical tourists meanwhile has continued to be Indonesia, due to the country’s close proximity and accessibility to Malaysia. It is believed however that the Indonesian government has become irked at this exodus and is now looking at ways to improve their own healthcare system to better cater to their population and keep them there. According to Dr Lin, going forward the MHTC plan to focus on attracting more clients from Bangladesh, China, Japan, the Middle East and other peripheral Asia Pacific nations, in a bid to further develop Malaysia’s international brand. To do this, the country also needs to diversify their medical services offering to cater to foreign patient health demands and industry trends. Medical tourists tend to seek very specialized medical treatments when visiting Malaysia, including cardiac, orthopaedic, oncology and in-vitro fertilization procedures. An increasing number are also coming for elective procedures like cosmetic surgery and dental treatment as well.
While Malaysia’s medical tourism industry will of course remain driven by the performance of its private medical sector, the MHTC serves as a focal point for prospective overseas clients and will use its position to raise Malaysia’s medical tourism profile internationally. Malaysia sees itself as a country that can provide high-quality, safe and affordable healthcare care for a wide variety of tourists. Through this new agency, the government ultimately hopes to encourage the private healthcare sector to invest more in attracting overseas clients, and plans to support them further by resolving policy and administrative issues affecting medical travel, including fast-track immigration clearance, visa applications and more. Having taken note of the progress so far, the MHTC forecast 2012 revenue from medical tourism to hit RM548 million (US$181.4 million) from the 600,000 foreign patients expected to visit Malaysia this year. If they can continue to build upon their strong growth momentum, Malaysia could indeed become a real force in the Asian medical tourism market.
Fresh media reports out of the UAE this week indicate that the region’s burgeoning medical tourism market may be curtailed by ongoing healthcare capacity problems, regulatory issues and other market forces.
The United Arab Emirates is the largest medical tourism market in the Middle East, drawing an estimated 4.3 million people to the country each year for healthcare and wellness services. An article in Dubai-based English language journal, the National, this week asserts that while the private healthcare sector has done a good job in promoting the UAE as an attractive international medical tourism hub so far, the market’s existing medical infrastructure may not be ready to handle a further influx of tourists.Read the rest of the Health Tourism in UAE Keeps Up article.
The push to turn South Korea into Asia’s premier medical tourism hub is beginning to deliver sizeable returns, as more foreign travelers visit the country to get high-quality medical treatment and plastic surgery. New statistics released by the Bank of Korea reveal that inbound medical tourism revenue exceeded outbound healthcare expenditure for the first time ever last year.
According to a Bank of Korea report, South Korea’s medical tourism sector posted a record US$115.6 million in income for 2011. This represented the country’s first ever annual medical travel surplus, as the inbound income surpassed local resident’s overseas spending on medical treatment, which amounted to US$109.1 million last year.
The South Korean government has earmarked international medical tourism as a key part of the country’s overall economic plan going forward. In 2009 the government embarked on an aggressive marketing campaign, called ‘Medical Korea,’ which has worked to promote the country’s medical facilities overseas as a new reason for international travelers to visit the country. During this time, the government has also been working with private healthcare groups in the country to implement a national registry system, specialized medical treatment visas, and a 24/7 medical call center for foreign patients to contact in case of emergency or misunderstanding.
The government’s decision to prioritize medical tourism development has begun to reap dividends. According to Korea Health Industry Development Institute (KHIDI), 81,789 foreign patients visited Korea for some kind of medical treatment in 2010, a 36 percent increase on 2009, with total revenue from treatment nearly doubling as well. The Ministry recorded 7,901 inbound foreign patients in 2007, 27,480 in 2008 and then up to 60,200 in 2009. Foreign patients are now visiting South Korea for a wider range of treatments as well. While in the past Korea was primarily seen as a destination for elective cosmetic surgery procedures, an increasing number of foreign patients are now seeking more serious surgery and medical treatment in the country’s advanced healthcare facilities. According to the KHIDI, 9,993 foreign patients with such demands sought treatment in Korea last year, equating to 12 percent of all inbound medical tourists, and spent US$49 million between them, or more than half of foreign tourists’ net outlay. The KHIDI noted that oriental medicine, gynaecology and orthopaedics have also grown in popularity among foreign patients in Korea. Most medical tourists are now coming from China or Japan. The Korean Embassy in China issued 1073 medical tourist visas in 2011, up by over 300 percent from a year earlier.
Overall income from medical tourism has nearly doubled in the past five years as well. In 2006, when the Bank of Korea first began collecting the related industry data, medical tourism income stood at just US$59 million. The figure then rose at a steady pace, moving from US$68 million in 2007 to US$70 million in 2008, US$83 million in 2009 and then up to US$89.5 million in 2010. Meanwhile, the money spent overseas by Koreans for treatment during this period fell from around US$119 million in 2006 to US$109 million last year. The government data is based on details provided by incoming travelers and credit card purchase information.
Both the number of foreign medical tourists visiting Korea and their expenses has seen a sharp rise in the past few years. At this pace, the Bank of Korea estimated that as many as 400,000 foreign patients could visit Korea annually by 2018, brining with them an added income of US$1.34 billion.
Despite this considerable progress, it should be noted that South Korea still lags behind many of its Asian neighbors in medical tourism development. India, Singapore and Thailand, for example, managed to attract 730,000, 720,000 and 1.5 million overseas patients in 2010 respectively. Although the quality and pricing of Korea’s medical services are comparable to its continental rivals, the global awareness of their services remains quite low. Critics cite the previous lack of national focus and regulatory support as key impediments, which lead to a lack of control over health outcomes and service quality for foreigners. The South Korean government wants the total number of foreign patients in the country to surpass 300,000 annually by 2015. To do this they have initiated several medical tourism reforms that are designed to cut red tape and become more foreigner friendly, all while guaranteeing patients’ rights to best international standards.
Last year legislation was passed which gives foreign patients the right to seek compensation if they become a victim of medical malpractice in South Korea. Previously there was no compensation standard for non-resident malpractice victims, which was a strong disincentive for potential foreign medical tourists. The South Korean government established a mutual aid association, comprised of Korean hospitals and clinics, to implement this initiative. The association collects medical tourism surcharges and uses the pooled funds to compensate foreign patients when claims arise. Through this new national body, the government will work to further encourage the private sector to invest more in attracting overseas healthcare clients. While many Korean healthcare groups recognize medical tourism as a vital growth industry, many of the country’s hospitals have not yet set up the appropriate medical care infrastructure expected by many foreigners. Compared to other international medical tourism markets, the lack of foreign language capability amongst many Korean healthcare providers remains a concern. The government announced plans to address this issue by increasing training for medical translators and by expanding the services of the national healthcare call center.
Asia’s medical tourism industry is set to grow, with a forecast value of US$100 billion annually by the end of 2012. The extensive development of the global macro economy combined with falling costs for travel and communication has enabled world-class healthcare facilities to establish themselves all around the world and auction their services appropriately. International clients who are now seeking alternative healthcare solutions to what is available in their home countries at competitive prices are now presented with so many opportunities. If South Korea wants to become a major player in this market, and surpass Singapore, Thailand and India, these reforms represent a decent start.
Starting January 1st 2012, visitors from Mainland China are allowed to travel to nearby Taiwan for the express purpose of medical tourism. The first application made by Chinese travelers seeking medical treatment has already been submitted to Taiwan’s National Immigration Agency and many more are now expected to come throughout the year to take advantage of the cross-strait healthcare advantages made available through this new initiative.
In the past, Mainland Chinese tourists bound for Taiwan were not allowed to officially declare that they would be visiting the Asian island nation solely for medical tourism reasons. Those who sought health checkups or elective surgery while already visiting the country would only have access to certain medical treatment as part of their individual or group travel itineraries. This system however didn’t work in practice and lead to widespread confusion with Chinese travelers using Taiwanese hospitals and clinics surreptitiously during their stay anyway, often overwhelming local medical facilities and immigration officials in the process. Taiwan’s private hospitals and clinics meanwhile want to capitalize on the business opportunity these Mainland Chinese patients present and instead are finding an increasing number of these clients travelling further afield to Malaysia, Singapore or the USA for expensive medical treatment.
In addressing these demands, the Taiwanese government announced on December 30th, 2011 that they had revised the country’s immigration rules specifically regarding permits for people arriving from Mainland China. Under the new rules, beginning in 2012, Chinese nationals can legally enter Taiwan specifically for the purpose of having health checkups, elective or non-urgent surgery, and cosmetic surgery procedures. These Mainland Chinese tourists are allowed to stay in Taiwan for up to 15 days, which includes a three day shopping and tourism allocation, in addition to their medical treatment days. Taiwanese private medical facilities that are qualified to provide these services meanwhile can apply to the National Immigration Agency (NIA) for visas on behalf of their prospective Chinese patients. According to Taiwanese officials, these applications will be given top priority for processing by the NIA and will take around five business days to review and approve, with potentially life-threatening cases put on a 4 hour fast track.
The response to this development has certainly been quick, with the first medical tourist visa from Mainland China filed only a day after the initiative came into force on January 1st. According to the NIA, the first cross-border medical tourist application was submitted by Shin Kong Wu Ho-Su Memorial Hospital. The Taipei-based hospital plans to host a 26-member group from the Chinese province of Liaoning in February. The first group of medical-visa tourists from Mainland China, composed of presidents from large domestic hospitals and officials from local governments, is expected to undergo several advanced health screening programs and learn more about Taiwan’s specific health checkups and cosmetic surgery practices during their expected six-day trip. How Shin Kong Wu Ho-Su Memorial Hospital’s premier medical tourist group fare could offer some interesting insights about the Taiwanese medical tourism industry going forward. There are currently over 30 hospitals and clinics in Taiwan with the appropriate qualifications to submit visa applications for and host medical tourists from Mainland China. These Taiwanese medical facilities include the National Taiwan University Hospital, Kaohsiung Medical University Chung-Ho Memorial, Cathay General, China Medical College Hospital and Taipei Veteran’s General Hospital, with many more small-scale hospitals and cosmetic surgery clinics expected to be added to the list of qualified institutions soon.
In addition to medical-visa revisions for local hospitals, the Taiwanese government is looking to invest in specialized medical zones near the country’s international airports to attract even more prospective medical tourists. Four of these zones are currently in development and are projected to pull in 40,000 tourists per annum once completed. Taiwan’s government is ultimately banking on these facilities, together with the country’s state-of-the-art health service technologies and low treatment costs, to take business away from the likes of India and Thailand.
Making Taiwan’s healthcare industry more attractive to international clientele within Asia’s highly competitive medical tourism market has become a priority for the national government. With a relatively modest 85,000 medical tourists visiting their facilities in 2011, Taiwan’s government and healthcare providers have had to take a more proactive and coordinated approach to recognize and develop areas of the international medical tourism market that they can more readily capitalize upon. One of these market segments is of course Mainland China, where Taiwan has an advantage over its regional competitors through shared language, similar culture and shorter travel distance. 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. Compared with China, Taiwan can provide higher quality medical services at more modest prices. Checkup fees for example are about NT$40,000 (US$1,320) in Taiwan, which is cheaper than the NT$60,000 (US$2,000) required on average in mainland China.
While the mass of emerging middle class Mainland Chinese clients definitely presents profound opportunities for international healthcare providers, this group can also come with certain drawbacks as well. One factor that has become quite unique to Mainland Chinese health travelers has been the wave of expectant mothers leaving the country solely to give birth in a foreign country, a practice known as maternity tourism. Hong Kong has so far proven to be the most popular destination for expecting Mainland Chinese mothers. While the prosperous city-state is of course now part of the PRC, following the handover in 1997, it has been exempted from the Mainland government’s population control policies (the one child policy). What’s more, children born within HK’s borders are ensured local residency, and all accompanying rights to local social services. In 2010 this resulted in Hong Kong’s hospitals and maternity wards birthing 40,648 Mainland babies, almost half of the city’s 88,000 total births for the year. This has now resulted in legislation from Hong Kong’s government that will cap the number of non-residents allowed to give birth in the city to 34,000 per annum, starting in 2012. With Mainland China’s population controls likely to continue, maternity tourism will no doubt continue to be an issue for Hong Kong, but one that can hopefully be ameliorated by the accompanying demand by Mainland Chinese clients for more advanced medical treatment options, both at home and abroad.
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.
Turkey may finally be realizing its potential as an important international healthcare center. Annual revenue for the Turkish medical tourism industry is expected to pass US$5 billion within 5 years, as the country’s modern hospital and spa facilities begin to attract a growing number of foreign patients who are seeking cost-effective medical treatment from all over the world.
The rising healthcare costs in developed Western countries coupled with the continued progress and flattening of the global economy has encouraged many people to now venture abroad for more cost effective destinations when seeking medical treatment, a practice now widely known as medical tourism. These macroeconomic factors combined with the falling costs of travel and communication have enabled world class healthcare facilities to establish themselves all around the world. International clients seeking alternative healthcare solutions to what is available in their home countries are now presented with many opportunities at competitive prices. Popular locations for medical travel include countries in South East Asia and Latin America, where many surgery procedures, including transplants and cosmetic procedures, cost a fraction of the price they would do in North America or Western Europe, and usually can offer shorter waiting times for treatment overall as well. The convenience and efficiency of pursuing international medical tourism options is something to be considered for patients seeking to fully evaluate their future health procedures.
According to a recent study conducted by the Turkish Statistical Institute and the Central Bank, the number of tourists coming to the country specifically for healthcare and wellbeing purposes has risen consistently over the past few years. In 2003 there were 103,400 tourists that received medical treatment in Turkey, spending an estimated US$91 million in the process. That number then increased to 162,480 tourists spending US$282 million in 2008 although it fell slightly in 2009 to 132,680 medical tourists at US$225 million. The latest estimates for 2010 are at around 165,000 tourists, which would now rank Turkey as the tenth most popular health tourism destination in the world. Inbound medical tourists have largely hailed from Germany, the Netherlands, France and the Balkans, which are all areas with a large Turkish Diaspora. There was also a noted increase in patients hailing from the Middle East, who have begun to prefer Turkey to Europe. Among these reported foreign patients, around 94 percent were treated in private facilities where the eye, brain surgery, orthopedic and cardiology departments attracted the largest number of patients.
The growth in Turkey’s medical tourism sector has been driven primarily by the comparative price advantages it holds over several key neighboring healthcare markets. In Turkey, fees for certain medical procedures can range from one-half to potentially as little as one-fifth the price in Europe and other industrialized countries. For example, the average price for a heart valve replacement in Turkey is $16,950 while it costs US$58,250 in the United States, US$25,000 in the UK and US$47,794 in Switzerland. In addition to this cost advantage, Turkey’s prime geographical location between Europe, the Middle East and Asia is a convenience, making it more accessible to a wide range of potential travelers. Furthermore, as a European Union candidate, the country has been forced to upgrade its health system to meet EU standards and now features high-quality hospital infrastructure with an abundance of well-trained staff well versed in a number of foreign languages. All of this combined with favorable US dollar exchange rates, suitable climactic conditions, and bountiful tourist attractions, add up to make Turkey a medical tourism destination with considerable potential
Turkey’s private healthcare industry has worked hard in the past decade to capitalize on this international medical tourism market potential, particularly in the provinces of Istanbul, Kayseri, Adana and Gaziantep, which attract the largest number of foreign patients. Turkey now hosts 556 private hospitals, each competing feverishly with one another for foreign clients. Furthermore, the national government has plans to upgrade a share of the country’s 833 publicly-run hospitals to accommodate foreign patients as well. International investors are also becoming aware of this opportunity and looking to invest in the country’s private healthcare market. Parkway Holdings, Fortis Healthcare International and Life Healthcare Group are among the top international hospital chains interested in establishing a presence in Turkey.
Despite these promising growth indicators, Turkey’s medical tourism industry still has several challenges to overcome if it wishes to compete amongst the world’s most popular medical tourism destinations, like India or Malaysia. Industry analysts have cited a lack of cooperation between state and private sector players as a key impediment to further developing the medical tourism sector. Without a more integrated national approach, Turkey has been unable to either effectively market its prime medical assets abroad or improve upon the number of qualified healthcare professionals working in the system at present. Another disadvantage Turkey currently faces is with its cumbersome legal system. Foreign patients generally have little legal recourse in Turkey. As it stands, it is incredibly difficult to win a lawsuit for medical malpractice under Turkish law. The protracted legal process usually required to conduct a case leaves many plaintiffs out of pocket even if they win damages. Visa requirements can further complicate matters and present further logistical and expense issues if the plaintiff is forced to leave a country before their case is concluded. In the rare case that a plaintiff has succeeded, compensation has been relatively minimal. These issues need to be resolved because Turkey’s international healthcare business continues to grow; more questions about the regulation of medical tourism in the country are sure to arise. Turkey’s medical tourism market is currently worth around US$500 million, but its potential is far greater.
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.
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
This past week, Malaysia became the latest Southeast Asian country to announce plans to further develop its private hospital network in an attempt to better compete in the lucrative global medical tourism industry.
Skyrocketing healthcare costs in developed Western countries coupled with the continued progress of the global economy has encouraged many people to now venture abroad to more cost effective destinations when seeking medical treatment, a practice known as medical tourism. These macroeconomic factors combined with the falling costs of travel and communication has enabled world class healthcare facilities to establish themselves all around the world. International clients seeking alternative healthcare solutions to what is available in their home countries are now presented with many opportunities at competitive prices. Popular locations for medical travel include countries in South East Asia and Latin America, where many surgery procedures, including transplants and cosmetic procedures, cost a fraction of the price they would do in North America or Western Europe and usually can offer shorter waiting times for treatment as well. The convenience and efficiency of pursuing international medical tourism options is something to be considered for patients seeking to fully evaluate their future health procedures.
South Asia’s medical tourism industry in particular has grown at a remarkable pace, with an estimated total value of US$100 billion projected annually by 2012. National governments and private enterprise in countries, such as India, 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.
The medical tourism industry in Malaysia has progressed admirably in recent years from 75,000 foreign patients in 2001 to 297,000 in 2006, and the country now hopes to establish itself among the elite players in the region. Demand for high quality healthcare is rebounding following the global economic crisis and last year Malaysia claimed to have attracted 392,956 healthcare tourists to their facilities. In comparison to some of its Asia Pacific neighbors however, the country has a long way to go in the medical tourism field. Thailand, Singapore and India, for example, capture around 90 percent of the market and last year managed to attract 1.5 million, 720,000 and 730,000 foreign patients respectively. India’s medical tourism facilities in particular have become such a significant player that US President Barack Obama singled them out as a threat to his planned healthcare reform law.
Malaysia’s Ministry of Health has recognized the need for improvement and recently added seven hospitals and eight more ambulatory-care facilities to its existing private healthcare facility network. The country now features over 35 different private healthcare facilities accredited to handle foreign patients, including Gleneagles Hospital Kuala Lumpur, International Specialist Eye Centre and Penang Adventist Hospital. To become accredited, the Malaysian government has a lengthy set of clinical health indices a private facility must pass. The process takes up to two years for new hospitals and expenses incurred while receiving accreditation are compensated. The Ministry of Health wants all unaccredited private hospitals to become certified by the end of 2011.
Malaysian Health Minister Seri Liow Tong Lai has always made patient safety the chief priority of the Malaysian healthcare system in guiding many of its quality improvement activities in recent years. Malaysia has been a strong advocate of the World Health Organization’s World Alliance for Patient Safety and was one of the earliest signatories when the decree passed in May 2006. The health minister explained that it was the government’s wish to see all specialist hospitals fully equipped with proper facilities and personnel and that the updated criteria for selecting private hospitals “will ensure that Malaysia can offer a range of services at affordable prices. These include healthcare screening; complex treatments such as cardiothoracic, hand and microsurgery; and post-treatment such as physiotherapy.” The minister added that competition in the region for affluent health tourists was only going to grow, “Singapore, Thailand and India have captured a large portion of the healthcare travel industry in this region. Countries like Indonesia, South Korea and the Philippines are also looking at venturing into this industry in a big way,” he said.
Within the next five years the Health Ministry also plans to increase the number of cardiothoracic, urology and neurosurgeons serving in the general hospitals throughout the country. This will be done through increasing the number sponsored places for university places as well as through importation of foreign surgeons on a contract basis.
To spearhead the promotion and development efforts of the medical tourism industry the Malay government launched the Malaysia Healthcare Travel Council (MHTC) in 2009. The MHTC is tasked with facilitating greater public-private collaboration and formulating international promotion strategies for the 35 internationally accredited medical tourism hospitals currently licensed in the country. While the medical tourism industry will remain driven by the robust private medical sector, the MHTC will serve as the focal point for overseas clients and use its position to hopefully raise Malaysia’s medical tourism profile internationally as a country that provides high-quality, safe and affordable care for all comers. 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 by resolving policy and administrative impediments affecting healthcare travel, such as fast-track immigration clearance, visa applications and more.
According to a new research report from RNCOS, the Malaysian medical tourism industry’s revenue is projected to grow 16 percent annually between 2011 and 2014. The increased number of medical travelers has opened up many new opportunities for additional medical and tourist operations in the country as well. So far Malaysia has proved willing to meet this demand with pronounced investment, remarkable human resources and further market liberalization. Additional attempts to assure would-be clients of the high quality and safety standards of the nation’s private medical facilities will only help their profile in the lucrative global medical tourism industry.