Measuring the ROI from medical tourism promotion

Spending money on medical tourism promotion is easy; measuring how well it’s spent is much more difficult.

Across the globe, many countries have been lured by the attraction of medical tourism gold, believing it to offer a rich source of income for the country’s economy. Estimates of the size of the medical tourism market have varied wildly, from $5 billion to close to $500 billion. The truth is that no one actually knows how big the market is. Based on the data that IMTJ collects, we reckon it’s somewhere between $15 billion and $50 billion.

Whatever the true size of the market, some governments around the world have invested heavily in promoting their country as a medical tourism destination. Sometimes the funding goes direct to hospitals and clinics through subsidising marketing activity (as in Turkey); sometimes much of the funding is invested through a government sponsored body, such as in Malaysia through the Malaysia Healthcare Travel Council. In some countries, this money has been spent wisely; elsewhere, much of it has been spent without thinking through where and how it might be best spent and what might deliver the best return on the investment.

Return on investment needs to be measured

At the most basic level, if a government spends public money, then it needs to be answerable to its tax payers and electors… which means the return on investment needs to be measured. But measuring the return on medical tourism investment is not easy. The first challenge is tracking the flow of international patients into a destination and accounting for their expenditure. Few countries have solved this problem. Hence, we see a plethora of confusing and conflicting statistics emanating from different sources in the one country. Let’s take Turkey as an example. Turkey has published various data on medical tourism volume and value. For example:

  • According to the Turkish Statistical Institute (TurkStat), health tourism revenue in Turkey increased by 12% to $700 million in 2016.
  • The Association of Health Strategies and Social Policies (SASOMER) claims that Turkey gets 1.1 million health and medical tourists, with a value of $2.3 to 3 billion.
  • The Turkish Healthcare Travel Council claims that Turkey attracted 746,000 medical tourists in 2016 and generated $5.8 billion in revenue.

So…. for Turkey, the estimates in annual revenue vary from $700 million to $5.8 billion… depending on who is publishing the data. Which figure makes sense? Realistically, the data from the Turkish Statistical Institute is probably a more accurate measure of value.

Is Korea leading the way in measuring ROI on medical tourism?

Last week, I attended Medical Korea 2017, The 8th Global Healthcare & Medical Tourism Conference, held in Seoul. Korea has invested heavily in promoting its services to the world, mainly through the Korea Health Industry Development Institute (KHIDI). It has done a better job than most countries in tracking international patient flows. According to KHIDI, international patient numbers have grown from 60,000 in 2009 to 364,000 in 2016. Data is collected from participating hospitals and clinics and compiled centrally.

One of the most insightful presentations at the conference, was by Professor Jin Ki Nam, from Yonsei University. The Professor has taken on the task of trying to measure the return on investment which KHIDI has made in promoting medical tourism to the regions and cities of Korea. Each region and city submits requests for funding for medical tourism promotion to KHIDI. So, KHIDI can track both expenditure and the return on investment – the number and value of patients going to that city or region.

Professor Jin Ki Nam has analysed the number and value of patients by city and region, and the investment that KHIDI has made in each city and region. He has then calculated a ROI. For example, he estimates that in 2015, Seoul/Gangseo-gu delivered a return of $101 in patient income for each dollar invested by the central and provincial government. In contrast, the return in the Gyeonggi province fell to $19.

The analysis is not perfect. Other factors may of course impact on the ROI. How and where the promotional money is spent will of course have an influence on the return.

Nevertheless, the research has raised some pertinent questions for the Korean government:

  • Should every city and region be investing in medical tourism?
  • Where can the government get the best ROI?
  • How is the diversion of healthcare resources within a province impacting on the local population’s access to healthcare?

Other countries should learn from the approach that Korea has taken. Spending money on medical tourism promotion is easy; measuring how well it’s spent is much more difficult.

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Keith Pollard
As Editor in Chief of International Medical Travel Journal (IMTJ) and a Healthcare Consultant for LaingBuisson, Keith Pollard is one of Europe’s leading experts on private healthcare, medical tourism and cross border healthcare, providing consultancy and research services, and attending and contributing to major conferences across the world on the subject. He has been involved in private healthcare, medical travel and cross border healthcare since the 1990s. His career has embraced the management of private hospitals in the UK, research and feasibility studies for healthcare ventures, the marketing and business development aspects of healthcare and medical travel and publishing, research and consultancy on cross border healthcare.