The role of governments in developing health tourism

In his Second Opinion column, Dr Constantine Constantinides from healthCare cybernetics looks at the differences between the roles of the state and governments in developing health tourism and what they can contribute to establishing a health tourism destination.

Health tourism development and promotion and State blessing, endorsement, support and commitment should go hand-in-hand. But it should be clear that “government” and “state” are not synonymous.

Governments (and Government Ministers) come and go, not infrequently, even before their term is up. States, on the other hand are permanent, at least, in most cases. In the context of health tourism, we should look to the state and not to governments. This is because the sustainability of health tourism relies on certainty and consistency. Governments are associated with government policies and politics which often change with a change in government.

The role of the State

Right from the beginning, it needs to be pointed out that the role of the State should not be that of the entrepreneur. And of course, the State should in no way compete against the private sector.

One role of the State is that of commercial diplomacy which in the case of health tourism refers to supporting the promotion of businesses and destinations. Diplomacy is the work of the State, and so is Commercial Diplomacy. This is why the State places commercial attachés at their embassies abroad.

Health tourism businesses and destinations feel they should always count on the State for diplomatic support. For example, the United Kingdom Foreign Ministry has officially declared the promotion of British firms as top foreign policy priority. Furthermore, countries should aim to study “economic statecraft”. And maybe countries can take a lesson from the USA which declared June 14 as “Global Economic Statecraft Day”. U.S. embassies around the world use this day to host over 160 events in over 125 countries to encourage connections between American businesses and foreign markets.

The State’s role in stakeholder concerted action initiatives

Development-related stakeholder concerted action initiatives such as development and promotion master plans and the founding of industry representative bodies must not be State creations and certainly, not State-led. Nevertheless, the private sector should be able to rely on State blessing, endorsement, support and commitment for these initiatives.

We should demand that the State be a supporting partner – rather than the leader. And the State should act as the guarantor” of consistency and continuity of the stakeholder concerted action initiatives.

The State, in its effort to demonstrate support and commitment, can co-fund initiatives associated with industry shaping and destination enhancement even if this needs to take the form of a Public Private Partnership (PPP).

What the State must not do
What the State must not do is play the role of entrepreneur. And, in the case of medical tourism, the State must not see medical tourism as a source of revenue for public sector hospitals. As if State intervention, aiming to regulate and legislate, is not enough, we even see governments regarding medical tourism opportunistically. Some Health Ministers think that the development of medical tourism can translate into revenue for public sector hospitals. With this in mind, these ministers aim to formulate regulation and legislation which will drive business to the public hospitals.

During economic recession, when these hospitals are struggling to fulfil their intended role with ever-smaller budgets medical tourism is seen, by some, as a solution. Of course, this is simplistic thinking and wrong and in practice, does not provide the hoped for financial solution.

With regards to medical tourism, the role of the State is to provide healthcare to its own citizens as part of a National Health System. The State should also ensure that the infrastructure is in place which will allow the private sector to develop medical tourism to address international patients. The government’s benefit should be in the form of taxes collected from private sector medical tourism activity. Nothing more… nothing less.

The State in destination creation

Creating contemporary health tourism destinations is to a large degree, about the private sector investing to develop the Industry (also known as “industry shaping”). But the State is also a decision-making and investment-making stakeholder. Consequently, the industry needs to have faith, trust and confidence that the State will “do its bit”. The private sector, before it invests, expects the State to demonstrate its approval, support and commitment. We expect the State to:

• Provide legislative and regulatory consistency and certainty.
• Contribute to infrastructure development.

Contemporary destination creation begins with industry and typically involves implementation of a 5-stage module project:

• Segmentation
• Integration
• Administration
• Development
• Promotion

Within this context, supportive governments interested in the development of health tourism – should put money where their mouth is by, at least, funding the first two steps of the project. Industry will then have the confidence and motivation to fund the other three.

Of course, after industry shaping which makes a destination integrated, efficient and competitive, the destination will need to undergo further development in the form of enhancement in order to develop competitive advantage. But this is a story for another day.

Does health tourism need special legislation? …for its development and promotion

At the very start, it needs to be pointed out that the “development, provision and promotion of services, in the context of Health Tourism” (which includes Medical Tourism), does not require Sector-specific Legislation.

As it is, the development, promotion and offering of services is happening – totally legally.

Health Tourism is about Health-related services and travel – both of which are already adequately regulated.

I also want to point out that none of the successful Health Tourism Destinations started out by first formulating Legislation (and very few have any, even today).

The role of legislation …to remove rather than introduce obstacles

Of course, where we may need some purpose-specific legislation, is when current legislation obstructs – or does not adequately encourage – development.

Any National Regulation or Legislation should be “enabling” – aiming to facilitate and empower the private sector.

I urge politicians not to legislate for the sake of “regulating” and in the process, stifle innovation and development (through senseless and counter-productive bureaucracy).
In the context of Health Tourism, the primary objective of legislation should be to “enable” rather than to “regulate”.

“Enabling Legislation” can of course, be introduced to beat the competition.
This, though, needs to be considered with much care and thought – because it can backfire.

For example, we have seen in the relaxation of rules and regulations – in certain countries – pertaining to Assisted Reproduction.

Other examples include the permitting of medical practices banned in other countries, such as experimental treatments and the performing of transplant surgery with “bought” organs.

Often, government intervention (in the form of regulation and legislation) is a poorly-veiled reactive initiative to protect vested “influential” interests (usually, interests of politically connected incumbents).

I have witnessed instances where new “enabling” legislation was opposed by entrenched incumbents (fearing disruption to their lucrative business by new entrants).

Reality has taught us that incumbents often have powerful connections – which are used to enforce and retain market-distorting and anti-competitive practices.

Some examples of helpful legislation

Legislation permitting “change of use”

Several countries today have an abundance of “legacy”, redundant and under-occupied facilities (mainly, in the tourism and hospitality sectors).

In practice, simply scrapping these is either not feasible or not desirable.

So the dilemma and conundrum arises: “what to do with them?”

Of course, the simple and obvious answer is to “re-purpose” them (change of use).

And, often, the idea is to find a way to allow these facilities to offer health-related services.

But, as one can imagine, wanting to repurpose a facility can run into legal obstacles.

We are seeing this scenario being played out in several European countries with “legacy facilities”.

This is where new, “law-modifying” legislation is required.

From “In-patient Treatment” to “Day Case”

In some countries, certain cases which traditionally required “hospitalization” (in-patient treatment”) treating these on a “day case” basis is “illegal”.

Of course, this is an absurdity in the law – and an example where the law does not follow the progress in Medical Science and Technology.

Nevertheless, and not surprisingly, some private hospitals (which earn part of their profits by providing “hotel accommodation”) are opposed to the scrapping of this antiquated law.

But in the end, logic and the demands of the “informed” market will prevail – although it may still require protracted lobbying and political will.

Health Tourism Visas

“Ease of Entry” to a Health Tourism Destination is a big “make or break” issue.

The increase in cross-border terrorism and illegal immigration is more and more reversing the trend in international travel liberalization.

Some Medical Tourism “destinations” have addressed this by legislating the issuing of Medical Tourism Visas (although, countries such as India, are having second thoughts).

Subsidizing Medical Tourism

Turkey is one country which is providing “cash” incentives (a set sum for each International Patient treated) to encourage the growth of Medical Tourism.

And Turkey, is also subsidizing the Certification and Accreditation of Hospitals and Clinics which aim to attract international patients.

Greece is another country which has legislated the provision of incentives (in various forms) to encourage “investment and development” – which though not explicitly for Medical Tourism or Health Tourism – can, nevertheless, be used for such purposes.

Overcoming “Zoning Restrictions”

Not infrequently, plans for new Health Tourism Development, which objectively “makes sense”, run up against existing zoning restrictions.

We just hope that enlightened politicians step in to resolve impasses.

Over-regulation in Europe

The author of the article ends with the message: now is the time to begin removing self-inflicted barriers to job creation and service innovation.

Surprisingly – and against all logic – in Europe (where the need for job creation and innovation is more pressing), the current tendency is to do the opposite – through over-regulation.