Discovering Medical Tourism

This morning, I made my little trip through some websites to get news about the medical tourism industry and noticed that the Health Business Blog by David Williams was talking a paper called Medical Tourism: Implications for Participants in the US Health Care System backed by his two companies (MedPharma Partners LLC, a health care and life sciences consulting firm and MedTripInfo.com).

The paper is pretty optimistic about medical tourism, something that is perfectly understandable as it is both companies core market. What is interesting is the fact that David Williams is a former consultant (BCG, LEK) hence he has a systemic view on the whole industry. Let’s take a close look at what he is saying:

Here are their predictions:

A. US health insurers will start to provide coverage for medical tourism in 2008. Mini-med plans and small employers -not big health plans and blue chip companies– will lead the way.

My take: I feel it is true to a certain extent. Indeed, some US insurers have made some noise in Thailand and Singapore with medical tourism authorities and are to launch tehir new products begining 2008. Small initiatives were made by entreprneurs but you need a strong financial power to have a sustainable model. in fact, the problem with these insurance models are the adverse selecton effect and the high risk of failure (the medical travel insurance’s population are not the best insurable commodities often, though this is a different game if we are talking about corporate insurances). I ll say ok for B2B, not yet for B2C.

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B. State governments will begin to embrace medical tourism by 2010.

My take:This will be limited to a few States. Some States will bodly show their teeth as they feel they cannot acknowledge their structural problems fearing some social ruckus. Some States will certainly pave the way when 10 S&P 500 will have implemented their medical travel solutions. All in all, it’s corporate America! Still, medical travel?? What are we talking about: heavy surgery abroad or dental and cosmetic surgery? For the latter I still think it will be a taboo even though it is the real core market…

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C. Opposition to medical tourism by US physicians will be relatively modest.

My take:their two main points is to say that 25% of the US physicians are foreign born plus that medicine is a global profession. This is a little bit too easy. It is not because you are foreign born that you will feel confident sending someone looking for an angiography to india! It is not because you know some experts in neurosciences from Singapore that you will encourage someone to have an arthroscopy in Sinigapore! Actually, what medical tourism needs is a clean track record to convince doctors. A doctor will always look for what he feels is best for his patient and even though medical travel can be a last chance solution, it is not yet seen as the BEST solution

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D. Medical tourism won’t have a major, direct impact on US health care costs, but the secondary impact will be substantial.

My take:I really like what they are saying! Their idea is to point out the fact that medical travel can only help trimming a very small chunk of the US medical bill (a max of 5% of every American decides to go abroad to have heavy surgery). The secondary impat aims at the wake up call that could happen if people start shifting towards Asian and South American Hospitals. Practices will be bettered, gain of productivity substantial and new binary practices (such as telemedicine) enhanced. Viva Medical Tourism.

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To me, this last point is really interesting. It reminds me the theories of creative destruction by Schumpeter that considers competition as a way to “creatively destroy”: from the shambles of a concept or company can surface a better product/concept/operation… In the same way, the US medical industry needs to shake up: 12% increase per year on corporate medical costs is ludicrious, most notably in a period when some mid sized US companies are looking for a new breath of life or just praying to get absorbed. Yet, the main problem is that medical travel is seen as something easy to operate and to enforce while it is not, and the sector itself must endure a hearsh competition from the US hospitals to thrive and find the appropriate business model and marketing messages… The creative destruction hence goes both ways as today, medical travel agencies are not able to attract an important number of customers and must mend their way if they want to be ready for the major changes predicted by MedTripInfo. 

The White Paper can be downloaded here!!

A few days ago I remembered one very trite fact. Before 1965, Singapore was still part of the Third World and quickly positionned itself as one of its leaders. I read about an innovative public management with highly paid top public servants many public private collaborations, an efficient central planning. But what really shocked me was that in 1965 the average  age in Singapore was 18,8 years old, while now it’s 32,7. Now, the demographic transition is well consumed as Singapore will have 1/4 of its population beyond 60 year old in 2030!

The Tan Toc Seng hospital - A new fashionable hangout for old people?

This ageing population is posing huge problems as Singapore hasn’t yet adjust to the high health cost implied. In fact today; Singapore has an extremly low private health expenditure barely toping the 2,5% of GDP against Mamoth expenditures such as in the UK 17,8% in 2004 or Australia 34,2%. Even though this is mainly due to the little amount of second opinion requested, the welfare system(that is not equalitarian but socially oriented) or even the small number of hypocondriac people (compared to some European countries), this small figure is stemming from a healthy population. This figure should indeed soar up to 5% by 2030, exactly the same figure  than in 1965.

All in all, Singapore has been viewed for years by the World Health Organisation as the 5th or 6th best medical system in the world. The central planning is perfectly channeling its demographic evolution while promoting the expansion of medical tourism activities (Singapore is expecting 1 million medical tourists per year in a short horizon). The number of beds should grow as the City  State establish itself as the best medica hub in the World but is gearing towards a bicaphal approach: geryatrics and the outsourcing of general medical procedures… Not exactly the same thing…

The last days were extremely interesting for me. I was really wandering in the medical tourism jungle, checking which definitions people had in mind. I remember writing the ‘About this website’ page a week ago and I was so unsatisfied by this page that I decided to shelve it and rewrite it later. 

Every time I have a debate about medical tourism, people portray this industry as an unethical way of making money using the despair of people who can’t afford surgery in their country, plus a dangerous production system with all the infamous stories of botched mammoplasty or rhinoplasty.

Yesterday during a dinner, I tried to argue with a cardiologist that medical tourism is not boiling down to low cost procedures but is a wider access to unknown techniques perfectly mastered in Asia. These techniques range from ayurveda to tsubo chiatsu to Lasik surgery etc etc. I acknowledge the cost differential (we were talking about angioplasty) but for me, he was focusing on a non sustainable medical tourism. 

I am using the words ‘non sustainable’ because I feel that the existing business models of medical tourism are all one shot models:

+ heavy medical procedures motivated by a low cost effect or long waiting lists

+ no follow up stemming from the procedure + no customer relationship management approach. 

It is a run and gun approach that certainly has people smearing about the association of words ‘medical tourism’. But again there is hardly any tourism implied by this method> I have pinned this idea as medical travel. Let’s call it INDUSTRIAL medical tourism (as an input -output chained process)

 Yet, this is definitely not the vision I have about medical tourism. NOT AT ALL !

To me, medical tourism in Asia is an open window leading to the best healthcare procedures in the world, innovative techniques to solve rare condition techniques, the best preventive care solutions, unheard of manipulative therapies plus an opportunity to enjoy a tourism experience and so forth. Perhaps my definition is wrong but this is what medical tourism sounds to me. One could argue that I am speaking about health tourism…

Medical and Health Tourism as we define it as a longer life expectancy and a higher volume than the classical model

When considering biological methods such as herbalism or manipulative techniques such as psychotherapeutic postural integration or ayurveda are we only talking about health? These techniques are a genuine front end to medical procedures so how can they be restrained to mere health procedures… Medical tourism must be a sustainable experience and therefore must entice repeated visits: diversifying methods, proposing long term follow up (using tools such as the PRM we have previously reviewed) 

Here is my real first tentative definition of Medical Tourism, that we will call from now on Medical and Health Tourism: 

 ‘ an experience of medical and healthcare techniques culturally connected to a specific place or technically knitted to an hospital for preventive, aesthetic or curative needs ’ 

Experimenting these techniques boils to an exploratory approach that is tied up with traditional tourism (going from one place to another to try out a technique etc etc) but with the particularity of positively affecting our body  Talking about how angioplasty could cost only 10000 USD is definitely not the goal of this blog.   

Discovering medical tourism is going to take a major u turn. In order to carry out a clearer perspective on what we consider medical and health tourism is we will from now on stress upon THIS definition of medical tourism by digging into health and medical procedures specific to Asia and all the techniques that can make medical tourism a sustainable tourism.  

There has been a sprawling development of medical centers in Asia but more specifically of aesthetical centers with the need of bringing differentiated quality to potential customers. The practice of cosmetic has proved to be very profitable stirring the proliferation of smaller centers whose practitioners pose as real cosmetic surgeonseven though in a country such as Phiklippines seven years of residency education at a reputable hospital are needed to pretend such a thing.

Creating barriers of entry is a new challenge for aesthetic centers. There are several ways of upgrading the quality of a center:

+ recruiting seasoned surgeons

+ showing dedication to care, prevention and decease treatment, the primary functions of doctor in an aesthetic center

+ using breakthrough technology 

The Aesthetic and Dermatology Center that has opened in March 2007 in Manilla is a perfect example of this upward trend through the use of new technologies to complement the surgery such as Aesthera, a machine used for hair removal and skin rejuvenation or the LPG machine (named after its designer, French engineer Louis Paul Guitay) to prepare the body before liposuction, or to contour the body after the procedure. This example put forward the high degree of penetration of new technology; innovation is an important differentiation factor of medical procedures in Asia as some treatments are approved and available in Asian hospitals months before their actual diffusion in the US and in The UK

The new paradigm … not the old woman!

Defining a new paradigm

The Health industry is gaining foothold on the Medical industry as a new paradigm surfaces. In fact, the new trend is not to wait to get sick or spend on chronic care but get to grip with our pitfalls at an early stage through medical screening. Indeed, Medical check ups appears as the real centerpiece of this new paradigm. However,  the cost of an extensive medical check up is extremly high in the US and some parts of the check up are not available in some hospitals. On the other hand when looking at Asian Hospitals we find that the top JICT accredited hospitals are well equiped to treat demands of extensive check ups and offers a real cost differential.

Hence, Medical tourism should focus in a near future on light medical procedures such as Medical Check ups to open the total array of services connected to medical tourism. Medical check ups appears as the stepping stone of the industry, but how?