Ian Youngman from IMTJ highlights the confusion in the medical tourism sector about what the business is all about. Back to front marketing, a focus on low cost, and misguided business strategy has meant that many businesses have been and gone. Learning from the travel trade, embracing marketing not sales and focusing on the customer experience might just turn things around.
The popular image of medical tourism is of someone flying to a distant country for low cost surgery. Many agencies, hospitals and countries are basing their business model and marketing strategy on this premise, hoping that thousands of Americans and Europeans are seeking cheap surgery in distant places.
I believe this is a myth. The majority of long-distance medical travel seems to be for cosmetic surgery, dental work, fertility treatment and very rare diseases. Most medical travel (meaning for elective surgery) is short-distance. For elective surgery, long-distance travel is rare.
If medical tourism businesses were in the travel trade, many would be out of business in a few months. We have already seen a high attrition rate in medical tourism intermediaries/agencies with medical tourism businesses starting up and disappearing within their first couple of years in business. When you visit some of the medical travel related forums where people are asking basic questions about how to do business in medical travel, this is perhaps not surprising. Most travel agents and tour operators know that while long-haul travel is one part of the business, short-haul travel is usually a bigger slice. For many hotels the main part of their business is people from within their own country, or even country/state/region.
When we argue whether or not Americans prefer overseas or domestic medical tourism, we can get confused. For a Texan, Mexico is nearer then New York. For Canadians, hopping over the US border may be easier than going to another Canadian province. The distances involved confuse us too. If the USA was 52 countries, or the 27 European Union countries merged into one new country, the “United States of Europe”, it would be easier to understand. The distances across the US are huge, the travel time between most EU countries is very short; we still think of vast countries like China as one simple place, despite there being massive cultural and wealth differences between regions within China.
International…or domestic medical tourism?
We have also become confused about international versus domestic medical tourism. The US is the easiest one to understand, but even in the UK you see people going from Scotland to London, or London to Cornwall. Many people in the medical travel business travel regularly between countries, but you are not typical. The average person spends most of the time in their own village/ town/city. Globally, over 90% of the population has never left their own region, let alone their country.
So where am I going with this?
US employers have often commented on now hard it is to get an employee to travel out of their own city, let alone out of their state, for cost-saving surgery and as for going to a foreign country… it’s “out of the question”. But on the other hand across Europe and the US, we have high numbers who cross their local border for dental or medical treatment. We need to get away from the mindset that medical travel is just country-to-country, as for many ordinary people cross-border means leaving their state or region.
I think we as an industry have got it back to front. We talk about the cost saving, but find that many medical tourists travel to expensive destinations. We talk about high quality, but quality comparisons within countries are as wide as between countries. We talk about holidays and beaches, when for most dental or cosmetic operations you will be too fragile afterwards to enjoy the sights, or sunbathing will ruin what you have had done.
Back to front marketing…
Much medical tourism marketing and advertising makes me cringe. Not just because it is badly written in mangled badly translated prose, but that it is all about how wonderful the country/hospital/doctors are. It is back to front marketing, devise a product, seek to advertise it, and then try to find customers that fit that market.
As any marketing professional knows, you first find out what the customer wants and needs, how much they will pay, what competitors offer, and then design the product /service. So why does medical tourism continue to ignore these basics? Partly because it has been misled by self appointed experts on what the demand is, what customers want, and that cost is the only thing that matters.
Back to my tourism scenario…..Particularly in the current climate, a huge proportion of holidaymakers stay in their own country, with probably less travelling to nearby countries and even fewer on a long-distance trip. But the analogy is not perfect as what holiday makers often want is to experience foreign culture and experiment. Now… this view this may bring criticism, but I feel that the last thing that someone wanting a new hip, new teeth or heart surgery is to “experiment” in a foreign country with a foreign culture.
The inverted pyramid model
Here is a simplified model of medical tourism; for any medical or health treatment there is in effect an inverted pyramid. The vast majority of people want to be treated in their own town or city. Fewer will travel within their own state/region. Fewer still will travel far afield within their own country, or across a nearby border. Even fewer will go to a slightly further away country, and then as distance/travel time increases then the numbers decrease. A complex version of this model would add in culture and cultural differences, such as language, heritage, ethnicity; as well as income and age.
My belief is that many in medical tourism, by concentrating almost exclusively on the point of the pyramid, are totally missing the market. Many hospitals in Asia, despite what they say about wanting Europeans or Americans, do in fact realise that the vast majority of their medical tourism business comes from within their own country, or nearby countries.
For many of those running medical tourism businesses, what they are doing is like running a travel agency but only offering long-haul holidays, or like running a second hand car dealership but only selling Porsches. Many hospitals and clinics too are guilty of only concentrating on far away medical travellers. There is some indication that longer running agencies, and an increasing number of medical establishments, are beginning to understand that their real target market is anybody not living locally.
The real culprits in concentrating so hard on long-haul markets, and often only targeting certain source countries, are the destinations themselves. They do this, partly out of ignorance, or based on poor research or believing what they hear at numerous conferences, without questioning the data or the underlying motives of those who benefit from “bigging up” the industry. Exaggerated forecasts and over optimistic predictions have done little for the image of medical tourism or for those market entrants who have followed this guidance.
Be a radio mast
My advice (which does not come with a massive consultancy fee!) is that all hospitals, clinics and agencies should pretend they are a radio mast. From it, circles of radio waves emanate. The further away a listener (the patient) is the harder it is to hear you, and the less relevant your views and news are to them. So your business model should be first the local market, then domestic medical tourism, then regional medical tourism and only finally to full long-haul international medical tourism. Think of how the customer really chooses healthcare, and abandon “vanity publishing” to get them to change their needs and wants to what you offer.
Much of medical tourism exists in a bubble. We have had riots in Egypt, Thailand and Tunisia; swine flu in Mexico; terrorism attacks in India, and natural disasters in various countries with officials in major countries recommending that non-essential trips to these countries should be avoided. What has been the reaction of the medical tourism sector? Nothing. I have yet to see a website that makes any reference to these problems. Look at airline or tour operator websites and press statements and they provide detailed information or offer alternatives to customers. Perhaps medical tourism intermediaries and hospitals have privately warned customers, but all I seem to see is total blindness. Even when rioters raged through a hospital, a medical tourism promotion body was effectively saying, “Don’t worry what you see on television, it is safe here.” And where were the national and international associations when members needed advice or the public needed a statement?
Cost, quality and the customer experience
Moving on to cost saving…… The US, Singapore, UK, Germany and Switzerland are typical of major destinations that are not the cheapest in the world, they sell on quality. So with several major destinations selling on quality, why do we equate medical tourism with dramatic cost saving?
Health systems and doctors under pressure find it easy to attack medical tourism with stories of botched surgery and poor care. Undoubtedly, some of the cheapest surgery is not top quality, but look at any country and you can dig up stories of incompetence. Ignoring the negative stories as a mere nuisance misses the point. Medical tourism may focus on lower cost, but the message has to be of lower price for an equivalent or better quality of care than you can get at home.
Retailers everywhere may focus on price competition, but in retail and tourism the brighter minds focus on the overall customer experience. This is where some in medical tourism are getting it right, but many more are getting it very wrong. The average American and Western European customer is now used to getting a good customer care experience. They may pay for cheap food and clothes and expect a lower standard of service than for the more expensive equivalent, but they still expect the product to be fit for purpose. So, for medical tourism, even when the price is lower, the customer still expects excellent care and after-care, and this base level of care may be well above what locals expect and get. People do get scared of very cheap prices. You can sell surgery at 20% or 25% less than at home, but when you offer it at 75-80% lower, the customer simply does not believe they will get safe surgery. It’s not credible. Bottom price implies bottom quality. You can wave all the accreditations in the world at them but it will not remove the fear of something that looks too cheap. This lack of “credibility” in huge savings is a key reason why US businesses have not bought into medical tourism in a big way; they do not trust massive savings. So, my argument is – and I expect it will provoke a response – that medical tourism has got its pricing badly wrong. Setting prices for any product or service is tricky, but there is plenty of marketing science on setting price points; lowering prices does not itself increase long-term sales. Any business can increase short-term sales by cutting prices below the competition, but if medical tourism wants long-term profitable business, it cannot exist by putting low cost above everything else. Putting it simply, much of medical tourism has not optimized the price-point at which the customer will buy and the organization can make money
Embrace marketing not sales
Sadly, this brings me back to the bubble. Dealing with crises, getting the price and target markets right, and pushing the right customer buttons are not new. Across the globe, many retail and tourism and insurance businesses have found answers to these problems. Is it because so many people in the business have a medical background rather than a service business one, that they struggle on trying to learn from scratch rather than seek to adapt what retailers, tour operators, hotels and the food industry have learnt over the last century?
If medical tourism businesses want to prosper, rather than scrape a living, they need to benchmark against the best businesses in other service industries. I know it is difficult moving from a background where the obedient patient does what the all-knowing doctor tells them, to one where agencies, doctors, hospitals are really patient focused and base price, product and service on real customer needs. But if this industry is to move forward, it has to rapidly evolve a service orientation that embraces marketing rather than sales.
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