Medical tourism and healthcare

The term Medical Tourism has emerged from the practice of citizens of the industrialised nations such as USA, UK, Western Europe and from the Mid East Region and other wealthy nations travelling to other nations to receive a variety of medical and healthcare services.

The continuous rise in costs for the same services in their homelands coupled with long waiting lists has propelled these people to seek treatment and also take on the role of tourists, vacationing and sightseeing in the recipient countries in conjunction with medical treatment.

Lower cost of the treatment and the leisure package including the air fare in comparison to the cost of treatment back home has fuelled the growth of this industry.

Also the Mid East citizens who traditionally went to USA and Europe now increasingly seek treatment in Asia and the Far East.

An overview

As per current estimates, the business of medical tourism is worth over Dollars 20 billion and growing at an annual rate of 10 to 15 per cent.

The rising cost of healthcare in places like USA, UK and Europe etc. and the rapid development of healthcare industry in the developing world and availability and affordability of air access has fuelled this growth.

It is estimated that India receives medical tourism in dollar terms in excess of 7 to 800 million.

Medical services commonly sought include, dental, surgical procedures, cosmetic repairs and enhancements and other procedures such as orthopaedic work, cataract surgery, liposuction etc.

Sri Lanka like India now with their world class medical facilities is in a position to provide all these services at a fraction of the cost in developed nations. Indeed at a lesser cost one can have the same treatment, plus airfare and leisure package and yet end up with savings.

Also post 9/11, Arabs who went to USA and Europe now travel east to India and Far East and this business can be channelled to Sri Lanka too.

Operational and Marketing Modalities

The medical-care product like all time related assets is a highly perishable commodity. The hospital bed, the equipment time, the service staff time all perish with real time. The revenue opportunity cost or EMR (expected marginal revenue) of these services on a given day is equal to the probability of the use of these perishable assets on that day.

This enables the hospitals to use both cost based pricing as well as EMR based pricing. Property Management Systems will enable hospitals to make inventory of all assets including the rooms and also record the data on utilization.

The data created will enable the hospital to forecast use of all the facilities in future and accordingly price the product.

Inventory utilised for medical tourism can be priced based on the originating country costs (Costs tabulated below). Thus in effect by using the revenue opportunity cost hospitals will be able to give better prices to the local patients by supplementing the income with medical tours patients. Such pricing can be deemed project of corporate social responsibility of the hospital.

Through referrals, agents, general sales agents, E-commerce the hospital and the tour operator would be able to secure patients seeking treatment and hospitality in Sri Lanka.

Based on the medical history of the patient and the needed treatment, the cost including the leisure component can be computed and sent to the agent/hospital/GSA as the case may be. Standard packages such as medical checks with leisure component also should be made available, priced for both online and offline marketing.

Joint Commission International (JCI)

Hospitals in many recipient countries have JCI accreditation.

There are 8 hospitals accredited in India, 11 hospitals in Singapore and 3 in Thailand. The mission of JCI is to continuously improve the safety and quality of care in the international community through the provision of education and consultation services and international accreditation.

Comparative Costs

The following tables provide comparative costs in generating countries and receiving countries Singapore and India. The figures are approximate and in US Dollars. (See table)

The figures given above were obtained prior to the recent depreciation of the dollar against other currencies and thus would be higher Sri Lanka with its plant of top quality hospitals and Medical Professionals is well placed to attract these medical tourists from the west as well as from Middle East, and it is heartening to note that United Holidays and Durdens Hospital have taken the initiative to tap into this market segment.