Ian Youngman looks at how the medical tourism sector has changed over the last five years. Is it doom and gloom for an industry that has failed to live up to expectations of entrepreneurs? Or are the lessons being learned and new approaches being applied to develop a sustainable business?
Whether you are new to medical tourism or someone who has been working hard for many years in this industry for little reward, you may have seen recent contradictory headlines such as these.
- One recent academic study warns of the “Myths of Global Medical Tourism” and suggests that medical tourism is far from entering the mainstream of healthcare. You may be asking, “Is it worth the effort?”
- A major conference is cheerleading that the industry is growing in leaps and bounds everywhere by around 25% a year and even the tiniest island can profit. So you may wonder, “Why isn’t my bank balance brimming over with gold as patients fight to get to my destination?”
Both views are of course…hopelessly wrong!
How the industry has changed
Working on my 800 page ‘MedicalTourism Facts and Figures 2014 ’ report, I looked back at the first one, completed six years ago.
It is half the size. Since then there has been a lot of very good national and international research, much of it overshadowed by lazy media quotes on reports from 2008 which illuminates the business now and in the future. So, we have learned a lot and there are many more figures and country information than there once were.
Sadly there are still many over-hyped claims. One leading country claimed a 220% increase in business from 2012 to 2013, which is frankly unbelievable, particularly since the figures were issued 3 months before the end of the year!
A conference organizer highlighted a survey that suggested that 3% of people are or would consider becoming medical tourists… 7 billion people in the world. So, this results in over 200 million medical tourists.
Back in 2008, the global estimate was four to five million medical tourist, and estimates now vary from five to seven million, with many experts saying that even six million is pushing the truth. Split that six million among one hudred plus countries targeting medical tourism, and the claims of ‘millions of medical tourists’ or ‘20% to 25 % growth every year’ look hollow.
Doom and gloom
The UK report on medical tourism was quite right to prick the bubble of over excited hype. And from a UK perspective, outbound medical tourism numbers over the last five years have not changed a great deal. After a peak, medical tourist numbers seem to have dropped and may continue to drop as price transparency in healthcare and price comparison sites encourage patients to find better value at home.
The report was from a UK perspective and ignored the many hundreds of thousands of medical tourists within Asia who would not consider going to Britain, Europe or America for any treatment.
Hype
The rah-rah merchants come out post conference with the usual “advertising puffery” about how terrible Obamacare is, how India is a major destination, how millions of uninsured Americans are ripe for the picking. They list the countries that have come to the conference to help them begin to get or increase the number of medical tourists globally. The hype continues.
In the USA, the idea is still that major insurance companies are going to incorporate medical tourism as an integral part of their offering. Talking to a US insurance specialist, he told me that not only had many insurers looked at and discounted international medical tourism, but that they and employers were not that fussed about domestic medical tourism. Both topics never even featured in recent Deloitte reports on US employers and US consumers. The US insurance specialist also divulged that many US insurance companies used to quite happily cover treatment outside the US for employees; but a mix of Obamacare and tax rules, plus local country insurance laws has made this a vanishing breed of policy.
Some of the countries mentioned as being excited about medical tourism, have such a tiny market that a couple of Boeing 747s would be too big to take all their medical tourists. Can we take seriously claims that Afghanistan is a medical tourism contender?
Within the industry, some continue to promote the same distorted message in 2013 as they did in 2008. And are still using the same 2008 and 2009 reports to justify exaggerated claims.
Winners
What is crystal clear from comparing my 2014 and 2008 reports is that some countries have stayed on top, others have reached a plateau, and others are declining; these made the mistake of assuming that they had to do little to do to stay on top.
Even the leading countries have to look at new markets, new opportunities and new ways to connect with potential customers. Some have started to use social media; any that ignore this trend will get a nasty shock five years down the line as communication moves to social and mobile from web and pc.
More than half of the top ten medical tourism destinations do not compete on price. They promote quality, real customer care, specialised knowledge and comfort with their culture. A few have started to promote luxury medical tourism… 6 or 7 star hotels being a world away from the “come to me for 70% saving” brigade.
Most, but not all of the leading countries that have succeeded in increasing business in both numbers and revenue have strong government support.
Losers
There are many ways to lose business to rivals. Some of my favourites are:
- Operate a medical visa system that put up barriers for a medical tourist to get into a country.
- Fill your hospitals with war wounded and refugees, and regard these as medical tourists.
- Charge medical tourists up to twice what locals pay.
- Suffer the business disruption resulting from riots, civil war or a major disaster.
- Offer low prices that get trebled when extras are charged for.
- Stop all advertising and marketing.
- Assume medical tourism conferences will bring you business.
Targeting
What has impressed me most with my latest research is that many have finally understood that the ‘six million Americans’ or ‘millions of Western Europeans’ once promised by industry proponents have not come, and will never come. So they must concentrate on targeting local countries or the diaspora.
Marketing
While some countries and businesses are using the latest marketing tools, far too many seem to ignore the changes of the last decade… expecting people to phone, or wait for days to get email replies, in an age when social media means people expect instant replies. And websites from the dark ages… you now get less than 2 seconds for a page or item to load before the customer moves on you and goes to a rival.
The lack of niche or targeted marketing by country, age, social group or even treatment by most websites is a recipe for failure. This is why specialist dental, fertility or cosmetic businesses often do well as they have a defined target, know who their customer is, and send the right message.
Culture
This is becoming the next “big thing” in medical tourism. Customers have to be comfortable with the culture not just of the country they are going to but the place they are being treated. This means having translators, special food, privacy and understanding of religions. Above all it is about how the doctors and nurses treat the patient. A medical tourist used to medical staff that talk to them, treat them as important customers and have respect will not repeat a visit to a hospital where the doctors talk at them, nurses ignore them and they are regarded as a “difficult patient”.
Numbers
When you drill down into actual numbers, some countries are doing well.
If you take the top ten combined, they account for three million of the six million medical tourists, and over the last five years their share of the total has risen from just over a third.
By contrast, taking the 15th to 30th biggest markets, together they do not have as many medical tourists as the top country.
When you compare medical tourism to other niches, volumes of travelers are below religious tourism, eco tourism, dark tourism, sports tourism and adventure tourism.
Where do we go next?
Medical tourism is splintering into regional, niche and specialist- a subject I have written much on.
A recent report on wellness tourism made the telling point to countries that they were spending huge sums trying to attract visitors from overseas, but not on domestic tourism markets that were responsible for double or treble the numbers of overseas visitors.
If cost and quality health comparison sites can allow customers within a country to compare prices, quality and comfort levels across the country and in nearby countries, then the medical tourism market could change overnight.
Some countries are fighting back and offering lower prices at home, particularly as medical price comparison sites increase in number, so fewer people will save money by going abroad.
Too many businesses are concentrating on geographical distance and forgetting that the real comparison with air travel is how long it takes to get from your home to your final destination – not airport to airport. I can get to Amsterdam quicker than I can get to London, but nobody is offering a simple way to compare the total costs and time between the two.
Just as the internet changed business forever, social media and the use of apps and peer reviews will change medical tourism. Peer reviews are something that medical tourism has yet to get its head around.
It has become a mature niche market that new players will find it harder and harder to enter and make any money.
As customers in their own countries can increasingly compare prices and hospitals on an app, then convincing people to go to another country moves the marketing goalposts from hype to convincing them that to do so is real value for money on price, quality and service levels. And once they are there, the hospital and all local services must deliver what they promised at the price they quoted.
So will the industry continue along the same old path or transform to deliver what its future customers will want? The next few years will tell.
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