It is widely accepted that many patients are driven to consider travelling for treatment in another country by the cost savings that are on offer. But how important are price differentials? IMTJ Editor in Chief, Keith Pollard, asks what should be the real focus for healthcare providers seeking to attract medical tourists?
Take some time out of your day to take a look at the multitude of web sites aimed at the potential medical traveller, and the messages that they are using to attract business. The most common claim you will see is along the lines of: “come to us because we offer high quality and low cost”. Here’s a few examples from web sites:
- “the best results, the best treatments… at 70% less”.
- “safe treatments, lowest cost”.
- “a relatively cheap mommy makeover…. done by world-class surgeons”.
- “save up to 70% on cosmetic surgery”.
The Law of Business Balance
There’s a quote about value that I’ve used many times in my business career. It’s from John Ruskin, a 19th century English writer and philosopher. In business schools, it is known as “The Common Law of Business Balance”.
“It’s unwise to pay too much…but it’s worse to pay too little. When you pay too much, you lose a little money – that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying a little and getting a lot – it can’t be done. If you deal with the lowest bidder, it is well to add something for the risk you run. And if you do that, you will have enough to pay for something better.”
It is of particular relevance to the medical travel sector where many providers appear to contradict the “Law of Business Balance” in their marketing claims. Healthcare costs in some countries are, of course, much lower when compared to those in more developed healthcare economies. But can you realistically claim to deliver the highest quality of care for the lowest cost? And if you are pitching your service to the customer on the basis of low or lowest cost, what does that convey to the customer? As Ruskin says, “when you pay too little, you sometimes lose everything”. That’s one of the major issues faced by the medical travel sector, particularly in those market niches that are driven by low costs and higher volumes, such as dental treatment and cosmetic surgery.
Stories of “medical tourism gone wrong” plague the media in those target markets from where providers aim to attract patients – the patients who have gone abroad for a “boob job” or a “butt lift” or a “Hollywood smile” because they cannot afford surgery at home, who find that they haven’t added “something for the risk they run” and return home needing to spend even more on remedial treatment or surgery.
What comes first?
For someone who is considering travelling for treatment, the first consideration is not about price, although this may be the underlying driver for them to consider such a course. Price may influence the decision to travel abroad, but it is not a differentiator when it comes to choosing the destination, hospital, clinic or surgeon.
Nevertheless, many providers focus on price. No patient is going to travel for treatment unless they are 100% confident that they are in safe hands, that the provider can deliver the treatment outcome that they are seeking, that nothing is going to go wrong. And the more that they are convinced that is the case, the more they will be willing to pay.
In the UK, there is a London clinic that undertakes laser eye surgery to correct poor vision. It’s a private clinic, so patients are paying out of their own pockets. Nowadays, laser eye surgery is a fairly straightforward procedure with little risk of complications. But the concern for a patient will always be about whether it will work, or will it actually damage their eyesight. This clinic charges at least double the price of its competitors and it has a waiting list of patients who want to go there.
What’s the attraction? The answer is that the clinic monitors every patient it treats post-surgery, collects the data on outcomes, makes it public to prospective patients and demonstrates beyond doubt that for the patient it is worth “paying for something better”.
When price doesn’t matter (that much)
In some areas of medical travel, price is far less of an issue.
For highly complex treatments that may be life changing or life saving, high costs are inevitable, and patients (or those funding the treatment) may be far less influenced by price factors. Costs per patient may be US$100,000 or more for those who travel to countries such as the USA, UK and Germany for cancer treatment, heart surgery or other life threatening conditions. Such costs may sometimes be borne by corporate bodies, insurers or governments where budgets are tightly managed and purchasers are seeking to minimise cost whilst ensuring a positive outcome.
If a destination and its providers can convince the purchaser that they can match the quality of care available in a competing market, but at a lower cost, then patient flow will follow. The gradual shift of patient flow from the Gulf countries away from “traditional” destinations to healthcare providers in Asia such as in South Korea and Malaysia are clearly evidence of that.
So, bear in mind, Ruskin’s “Law of Business Balance” when considering your medical tourism strategy. Don’t focus on price. Make sure that you convince your patients that it is wise to “pay for something better”.