How do governments balance the sometimes conflicting interests of a medical tourism program with the needs of a public healthcare system? Can an investment in medical tourism deliver economic benefits without drawing needed resources away from domestic patient care? Hakki Sunar considers the issues.
Within the global tourism industry, medical tourism is increasingly being perceived as a fresh source of foreign exchange income for countries through the encouragement of cross-border patient flows. The main drivers of growth in the medical tourism industry have been discussed many times at industry conferences, events and in academic publications. Part of the reason for this is the positive contribution of medical tourism into the current accounts and trade balances of nations, particularly in the case of emerging market economies.
On the other hand, it can be argued that extensive investment in a nation’s medical tourism industry may subsequently have negative effects on the public healthcare system of these nations. These arise from the pressure for the transfer of resources and emphasis from public healthcare services to private (for-profit) systems and the movement of highly skilled medical staff from public to private healthcare facilities. Ironically, in recent years, we have seen more and more emerging market countries that have affordable public healthcare systems, but at the same time are willing to invest in global medical tourism activities. Healthcare services indicators of these emerging market countries (especially the ones with affordable public healthcare systems) generally highlight capacity shortages and challenges in the long run. Policy makers in emerging markets are faced with a dilemma: whether to invest limited resources in public healthcare systems or in medical tourism development..
Experience in emerging markets
The experience of emerging markets that have established a good balance between driving a medical tourism sector and their own public healthcare systems suggests that success comes from detailed long term planning. As a result of concerns over equity and affordability in public healthcare entitlement, national governments in many emerging markets have been reluctant to give direct support to private medical tourism investments in the past. But if we look at the development of medical tourism in successful destinations, we can clearly see that the real leap forward in medical tourism was actually made possible by the support of governments at some point.
In Singapore and Malaysia, the healthcare systems were previously mixed between public and private sectors. In both countries, people generally had access to affordable healthcare. However, future projections for the healthcare systems indicated limitations and governments in both countries considered medical tourism as a solution. Their timing was mostly based on financial downturns. On the back of extensive long-term healthcare reforms, today both countries enjoy success in medical tourism driven by government incentives and initiatives. In Thailand, another successful player in the market, the government provides incentives for the development of medical tourism. Similarly, in other emerging markets such as Brazil, Costa Rica, Mexico, Turkey, India, Korea, Israel and Hungary we can see government incentive programs for the development of a medical tourism industry. These emerging markets initially experienced capacity shortfalls in their healthcare systems at some point in the past, But their medical tourism incentive did not compromise their existing medical care entitlements (both for high quality medical staff and treatment options). This is the essence of implementing a successful incentive program for regional and global medical tourism.
A focus on quality rather than low cost
It is important to note that the government incentives outlined above aim to promote high quality medical care within the global market. Thus, many of the incentive programs are created to create global awareness for the “quality” of medical care rather than the promotion of low priced medical care. If we look at the growth of medical tourism in these emerging markets, a considerable amount of progress is apparent, especially after the implementation of incentives by various government organizations.
Government incentives and encouragement constitute an essential part of medical tourism development in emerging markets. However, equitable healthcare entitlement remains the most important issue from a government’s point of view. Government bodies must undertake detailed long term planning before they propose any healthcare reforms to encourage medical tourism and the private healthcare sector alongside it. It is possible that increased foreign exchange earnings may later be used for funding the country’s own public healthcare system. But such a smooth transition in the overall healthcare system is only possible with the utmost transparency and long-term commitment. It is no surprise to see governments come under pressure for driving medical tourism development programs to the detriment of their national public healthcare system. The more optimistic view for such programs is that the proceeds of medical tourism will improve the current account balance of the overall economy.
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