We know how difficult it is to measure medical tourism flows. e.g. How many patients travel from Country A to Country B for treatment? But if you’re planning your medical travel strategy you need to know what each medical traveller is worth.
I’ve written a great deal about the problems of measurement in medical travel. The market is described in many ways – medical tourism, medical travel, health tourism, cross-border healthcare and global healthcare – creating confusion in definition which leads to wildly differing estimates of market size. Few countries have a standardised approach to the collection of data on medical travel, where data are collected from healthcare providers in a structured way and data validation takes place.
The medical tourism numbers game
Some countries count individual patient interactions with hospitals and clinics, rather than unique patient episodes, others include foreign patients (those who carry a foreign passport) who are resident expatriates in the country of treatment as medical travellers. Holiday makers who fall ill during their vacation and require treatment are sometimes added, and some include international business travellers who fall ill during their business trip and require treatment. Some destinations also include in their medical tourism statistics those who travel for wellness and spa tourism. So, if you’re a hospital or clinic, a government or cluster trying to estimate the potential for attracting patients from a source market, you’re faced with some challenges.
Calculating the value of a medical tourist
Let’s say you’ve managed to make a reasonable guesstimate of the number of patients that might travel to your country/city/region for treatment. What is each medical traveller worth to your organisation and to the local economy? What’s the spend on treatment and on additional services such as accommodation, local travel, tourism, restaurants and shopping?
LaingBuisson has recently conducted various studies internally and for clients into the volume and value of medical travel. Let me share some of our insight. The treatment value varies, of course, according to the nature of the medical traveller and is going to depend on a number of factors:
- The complexity of the treatment.
- The length of stay in hospital.
- Local prices for surgery, drugs, consumables and related healthcare services.
The related economic value will also be driven by several factors:
- Whether the medical tourist travels alone or with relatives and friends.
- The length of stay of the patient and companions in the destination.
- Whether they undertake any tourism activities.
- The type of accommodation that they choose.
- Their socio-economic group and propensity to spend on additional services.
- Whether the patient is self-funding or funded by a government, an insurer or an employer.
In LaingBuisson’s estimates of the global value of medical travel (currently US$15 billion to US$20 billion, pre-Covid), we compile estimates of patient flows from country to country and the average treatment spend per patient. Some of this insight comes from data published by governments; some of it is gathered from our own research. The key factor influencing treatment value is complexity.
- Government/employer sponsored patients seeking the expertise provided within the healthcare systems of countries such as the UK, Germany and the USA , often need treatment for complex diseases such as cancer and cardiac disease. The average spend on treatment by such a patient in the UK is around US$50,000, but many will exceed US$100,000 on one visit. The primary source markets are the Gulf states where the majority are government sponsored.
- The 2017-18 USCIPP survey of inbound international patient travel to the USA covers 50 of the USA’s major hospitals. In 2017-18, it recorded 57,190 international patients and a gross hospital revenue of US$2.0 billion. That’s an average revenue per patient of US$35,000. The top source countries for unique patients were Canada, China and Mexico.
- In 2017, according to the Korean Ministry of Health and Welfare, 321,574 medical tourists visited South Korea generating revenue of US$806.2 million. That’s an average revenue per patient of US$2,500. China was the primary source market.
- In 2017, according to the Malaysian Malaysian Ministry of Finance, one million medical tourists visited the country, generating revenue of US$314 million. That’s an average revenue per patient of US$314. Indonesia was the primary source market.
So… treatment revenue per patient varies a great deal across the globe.
What about economic value?
The additional economic value of medical tourism is often the forgotten piece in the jigsaw. In many markets, the additional spend by medical travellers on services that support their treatment is rarely calculated and often ignored. But for many destinations it represents a significant share of the benefit derived from medical travel.
- Based on work that we conducted in the past with Visit London, we estimated that the non-treatment spend by international patients and their companions represented an additional 97% of the revenue generated from hospital treatment.
- Reports from some of the GCC countries state that around 30% of government expenditure on treatment abroad funds the treatment; the remaining 70% funds the flights and accommodation for patients and their companions during their medical trip.
- The Malaysia government data on medical travellers estimates that the spend on non-related healthcare expenditures such as transportation, accommodation and tourism activities is three times the amount spent on actual treatment.
- In research that we undertook into Chinese medical travellers, we estimated that the non-related healthcare expenditure represented an additional 104% of the treatment cost.
So, what’s a medical tourist worth?
Clearly, it’s a lot more than many people think, if you take into account the additional economic benefit to the destination. The more complex the treatment, the longer the stay and the more companions that travel, the greater the economic benefit.