Discovering Medical Tourism

Today, as always, I m ready for a rant. Why? Because I don t get certain points in medical tourism, for instance the notion of medical care offering. Two events happened in the last few days:

Hi! I am a medical tourism product on a website: I am slightly yellow and red, can you please find me?

+ a medical tourism entrepreneur stated that offering to the public all kind of cancer, orthopedic and cardiac treatments and surgeries for medical outsourcing was completely logical because of the long tail theory. This is absolutely nonsense for many obvious reasons:

a. not all procedures are fitting to a medical tourism model that implies relatively short stays (people don’t want to die in India far from everyone from what I know) and do not pose any problems when considerong air travel (as people know air transportation because of a difference in air pressure can cause Phlebitis as well as bruises after a heart or spine surgery for instance).

b. people need guidance and no clear cut specialisations mean no real medical ability in the eyes of many medical tourists that I have interviewed. What is the point in bringing up a catalogue with 349 references when I know that bearely 20 of the references will represent 80% of my business (the famed Pareto law). People can argue that internet advantage is to propose anything but I will counter argue that people needs first to undrestand how things are working. The more products one offers the less he is able to put up clear packages and to market them efficiently. I don t think that a list of 235 oncologic treatments with no content associated on a webpage is efficient.

The guy did not agree with me. Yet from what I have learned he only had 3 clients in 2007… Perhaps because his product mix is aweful?

+ Talking about product mix here is my second example. While travelling in Asia I came to discuss many times about Planet Hospital that thanks to its innovative products is making a lot of noise and refered as the market leader by big media outlets. However, all the interviewed hospital marketing manager had the same conclusion: Planet Hospital represented nothing for them. Namely Planet Hospital, despite its reputation, had peanuts bargaining power. How come? planet Hospital is proposing an extremly wide range of hospital and is playing a dumb game as people can opt for the hospital they prefer. Hospitals marketing managers made the following criticisms to Planet Hospital:

a. a too large pool of hospitals naturally scattered volumes and pushed people to be as much of a low cost seeker as they can. IN fact, many of planet hospital’s customers are just looking for bargains and hence are mre concerned by economic rationale than success rate and service quality

b. Planet hospital is not a marketing partner as they do not focus enough on the upsides of each hospitals and hasn’t been able to come up with a clear ranking of hospitals according to specialties. On the company’s website all hospitals seem to be inter exchangeable.

All in all, both example show that medical tourism suffers from one major problem: no marketing mind tried to put up an interesting product ix, it is still too much opportunistic and one sided. Hospitals seem to be despised by much actors and there is no clear cut marketing contribution between medical agencies and hospitals. We can even call this a rift.

No! Michael Moore is not in cahoots with DmT (Discovering-medical tourism)!

In fact, though we suppose he has gone by this blog to create his new movie called ‘Sicko’ (currently demonstrated in Cannes), Michael Moore is really focusing on the demand side. To quote his blog, “if people ask, we tell them Sicko is a comedy about 45 million people with no health care in the richest country on earth.” As per usual, Michael Moore has gone quite far with this movie, irking the Bush administration that tries to clampdown on him through litigation.

Michael Moore has dropped his latest bomb in Cannes

For instance, Michael Moore has visited some hospitals in Cuba where some rescuers of the 9/11 have found suitable care, theUS being too expensive ofr them and the government having poorly supported these heroes. The Bush administration therefore raised the problem of the embargo that should prevent Moore to shooting parts of his movie in Cuba. Yet, Farheneit one of previous movies has grossed more than 200 million US and won the Palme d’Or at the Cannes festival. We are talking about a famed and respected Bush basher, people will go to the theaters…

What else do we see in that movie? What we have been talking in this blog for several weeks, namely that besides the 45 million non insured Americans, the rest of the population is submitted to arbitrary decision from their insurance companies, leading to restrictive treatments or even elective treatments in the “authorized” hospitals. We have also several testimonials about insurance companies digging into legal details to break their insurance policies to gain profitability. US HEALTH is perhaps is a worse shape than the US ARMY.

Dear Mr Moore, if you read me, please let’s talk about how the world can help this systemic trauma of the US society, how medical tourism can offer a sustainable low cost solution instead of putting people in the streets under a heavy burden of debts…

Here comes the earthquake. 7.2 on Richter’s scale!

First you need an hospital

Bumrungrad International is perhaps the leading hospital in medical tourism. The Thailandese hospital offers 554 beds, 30 speciality centres, 900 medical specialists and over 800 nurses. It is Thailand’s first JCI-accredited hospital and serves more than one million patients yearly from 190 different countries.  The hospital reports that it has served 60000 patients form the US in 2006! The hospital features not only 5 star hotel services but also a genuine F&B center with the likes of McDonald and Starbucks just to quote some.

Then take a major US health-insurer with 1.3 million members

Shake it.

You’ll have BlueCross BlueShield of South Carolina forming an alliance thourgh Companion Global Healthcare with the private medical centre by which it will direct members interested in overseas medical treatment to Bumrungrad assisted by a US-based contact centre managed by World Access, a travel-insurance and international healthcare-assistance company.

The US in Thailand… A Mc Donald In Bumrungrad hospital

I really feel that this move could ultimately lead to medical outsourcing… In fact, the main problem with medical tourism is the lack of backing by national insurance programs with an important number of affiliates. Before this major move, only little networks were offering complementary insurances at  a low cost. Now, there is a genuine will to do whatever it takes to reduce the bill and to trigger it by gaining a critical volume. When looking at Bumrungrad we have the impression that sky is the limit…

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.  

Complaints are rising in the US because of the lack of price and quality informlation and health care.  A study from the National Center for Policy Analysis (NCPA) (february 2007) says the complainers are causing the problems they are so vexed about because unlike in other market qualitative information and transparen,t price are services that are available only if the end customer pays for it.

“The primary reason no one knows what doctors and hospitals charge prior to treatment is that they do not compete for patients based on price,” said NCPA President John Goodman, who co-authored the study. “When they don’t compete on price, it turns out they don’t compete on quality either. In a very real sense doctors and hospitals are not competing for patients at all.”

At the end of the day, hospitals have little stake when trying to lure patients. In fact, the orientation of a customer depends on a problem of convenience as an insurer will decide to send a customer to an hospital according to its localisation ans its belonging to the network. This game is hampering the development of the overall quality of healthcare services as insurers typically do not pay for many services that would lower overall health care cost and would improve the quality. 

The NCPA study lists down the following downfalls resulting from this lack of competition:

+ No Integrated Care:

+ Taking responsibility for the treatment of a patient’s case from beginning to end.

+ No Patient Education resulting in no self care:

+ No Telephone and E-Mail Consultations:

+ No Electronic Medical Records: 

All this downfalls can be perfectly adressed by medical tourism as international hospitals have to create genuine competitive advantages and online solutions in order to justify the outsourcing of the medical procedure. 

Selling the competitive advantages of a foreign hospital to make a difference as an insurer

When looking at Phillipines, actually 5th competitor among Asian medical tourism players, thlocal hospitals must find innovative solutions to compete with mega groups such as Sunway, Parkway or Fortis. What makes this study about the American Health particularly intersting is that the elements listed above are excellent leverage to make a difference for any hospital or for any medical service provider. 

In fact, even though the game played by insurers bypasses hospitals, insurers cannot dodge the competition between each other. If American hospitals cannot provide them competitive advantages to make a difference an Asian hospital could give an insurer a clear cut hedge if the latter decides to give credit to medical tourism strategie. Some insurers are now pondering over the fact of proposing medical tourism as an option, referring all the specific features of these foreign based hospitals as differentiating factors.

Here is a story I found in The West Australian a few days ago. It is one of these botched surgeries that destroys the credibility of medical tourism:

“Jasmine Sheldon, a 26-year-old mother of two is unable to lift her arms over her head and has suffered irreparable muscle damage to her chest after a botched breast enlargement during what she thought would be a luxury holiday in Thailand. Ms Sheldon said she had been considering breast implants for several years when a friend suggested she try a so-called medical holiday in Thailand where patients are promised an all-in-one luxury holiday and cosmetic surgery for a cheaper price than the cost of surgery in Australia.

“I woke up after the surgery and felt like I’d been hit but a bus. I was so sick. I couldn’t stop throwing up and no one in the hospital could understand English, I didn’t know what to do.” Ms Sheldon said she was in agony when she returned from the six-day trip in February and went to the emergency department with heart palpitations and high blood pressure. She eventually booked an urgent appointment with a local cosmetic surgeon when the pain did not subside.

The ordeal cost her more than $10,000. “

Super low cost Surgery: take out everything in one slice!

This kind of stories is an instant killer for the industry and must be taken into account. This kind of malpractices can occur anywhere when seeking for a cheap procedure. Indeed, the marketing ploy used by countless agencies is cost first. But there is a vast array of other components that brings qualitative difference: luxuoury hotels, top quality hospital. Seeking for the absolute low cost is a dardevil attitude. The two essential components that should animate choices are:

• JICT accreditations
• Tele consultation prior to the medical trip

Medical tourism service seekers must be quality driven or the industry will collapse quickly with a wild uproar of complaints caused by careless customers. Indeed as noticed by the author of this article, Jasmine Sheldon has decided to opt for medical tourism mainly because of its price and it seems that she has sought for one of the cheapest solutions available.

Tourism Quality has been a well documented matter for the last several years. However, before getting started we should ponder over the notion of quality. Tourism Quality has three components that must be sustained through:

(1) internal customer satisfaction

(2) external customer satisfaction

(3) the efficiency of processes

Satisfaction implies that we must translate subjectivity to objectivity. Expectations vary widely from one customer to another. Controlling these various factors should help extending the life time value of a customer that is calculated as follows (Christopher, 1998):

Life time value = average transaction value x yearly frequency of purchase x customer life expectancy

Hence, we should make sure that the purchasing act is repeated and that the level of satisfaction is sufficient and the level of disturbance low enough to arouse a long life expectancy per customer.This LTV should be factored in the Consumer Value Equation (CVE): 

Value = (Results produced for the customer + Process quality)/(Price to the customer + Costs of acquiring the services)

Quality ‘inn’ Medical Tourism: How to reach the stars?

Looking at medical tourism, how can this niche maximize value?

The results produced for the consumer are very important: it is a mix of preventive care that will trim down their risk of catching a decease for instance plus the opportunity to visit new and exotic places highly valued by tourism specialists and by collective imagination. The cachet of Thailand or of Bali by itself deems a psychological high price tag.

The process must flow: the value perceived of this flow will be conditioned by the quality of the incoming services provided by the medical tourism agency.

On the other side, medical tourism achieves an interesting benefit automatically: cost cutting! As we have seen it several times already, the expenses linked to the medical procedure are slashed, and easily covers additional costs generated by tourism activities.

All in all, getting a hedge on medical tourism Value will consist in providing the best incoming services possible.  We also have to take notice on the sustainability of these services and understand that the customer is part of the process and therefore that any improvement in the delivery service must be accepted by him.

The long tail has been a hot potato among internet theorists. This concept created by Chris Anderson was first designed to explain how the internet could help to increase profitability ob marginal products. For instance if we talk about books, an internet retailler such as Amazon is able to have millions of books in their catalogs while a few thousands of them are making 80 per cent of the sales for brick and mortar distribution channels.  The last 20% accounts for million of references that are hardly directly available directly in a classical book store. However, the little costs offered by the internet business model (huge storage facilities, JIT (Just in Time) supply management…) make it economically viable to sell these last 20%. (note: the long tail approach is indeed an inverted Pareto law, the 20 prevailling over the 80%!)

What is the long tail approach in terms of medical procedure?

We could take a close eye on rare medical needs. Looking at the US population we know that approximately 8% of the population suffers from rare health conditions representing a list of 6000 health conditions, all representing niches compared to mainstream activities. Hospitals on the other side are not able to store the medical competencies to tackle these rare health issues (medical technology, rare decease specialists…). An hospital if not able to answer demand will advise a patient to go to another hospital. However, the reactivity of this chain is long (themedian time for rare condition diagnosis is 6 months but the average time over 3 years!) and depends on information available. In fact not that many doctors are aware of all the rare conditions while on the other side getting to know the specialists that could cure this condition can be dificult.

There is perhaps also a double wrong side of the curve effect: rare condition specialists are difficult to find as information about these rare conditions are scattered and discrete. The internet despite increasing the information available is lacking plateforms that will structure the inofrmation flow for all (technical and non technical information seekers). Some initiatives for profesional exist though such as the website Mymedwork where specialists gather in communities to exchange medical information (a more qualified community website than Facebook in a word…)

On the wrong side of the curve: rare conditions…

Medical tourism by pooling a vast number of hospitals is also pooling a vast number of specialists able to tackle a series of rare disease. The catalog of medical procedures is directly available and the time of response only depends on the abaility of the medical tourism agency to tie up quickly with the appropriate medical specialists. Though 80% of the existing medical procedures are available in a brick and mortar hospital, a click and mortar hospital(namely an hospital selling its services through internet) is the only type of hospital able to cover the spectrum of the medical services.

An efficient medical tourism e tailler could be the appropriate click and mortar hospital solution because of its ability to pool a vast number of hospitals in different countries where the technology used are sometimes exclusive to one hospital (for instance some practices done at the Parkway hospital in Singapore)… Nevertheless the medical tourism websites only focus on basic medical procedures, on cosmetic surgery (mammaplasty, rhinoplasty etc etc)

As of now it remains to be seen if the market opportunity contained in these 20% ofrare medical procedures could generate an appropriate engine, namely a medical tourism website that will focus on offering the largest number of medical services possible.

It is a new paradigm: a qualitative approach and not cost based… We will try to further dig into this subject by doing a better market sizing…

The Blue Ridge example seems to be an isolated one but as Lyn Fox, executive Vice Director of Sales at Global Healthcare choice has stated it in an interview for  the employee benefit plan review, the whole is waiting for one S&P500 company to opt for a medical tourism incentive formula to have a huge tidal wave of US companies jumping on the bandwagon. Mercer Human Resources is for instance rumored to draft one stop shop medical tourism solutions for three major S&P 500 companies for mid 2007.

Corporate Cultures and medical tourism

When a company is opting for medical tourism, the company is making two strategic moves:

+ They send their employees overseas during a longer period than usual

+ They provide service to an employee through a medical tourism agency that will make all the required arrangements to combine a tourist activity with the medical process.

However, the relation of trust is very engaging for any employee as conversely is the bold approach of the company. Medical tourism is a genuine social revolution for any company considering it. At this seed stage, a company using medical tourism solutions is relying on:

a. A hard nose will to innovate - make a difference and create buzz by all means

b. A dedication to entrust employees with responsibilities (they make the decision to go overseas not the company) - a paternalist approach?

c. A desire to control costs while still keeping its social duties (medical does not hinder health care but provide another solution) - boost profits from top management to basic workforce

I  just have described a mere shock of civilization. This is nothing compared to the revolution that happened while investigating the cultural gap on medical matters between Asia and our western conception.

This revolution happened in a casual way. I had a luncheon after a seminar in Malaysia where I talked with an overweighted American that has a diabetic condition hence many health troubles. He was in Malaysia for pure business purposes as he is currently living in the U.S., in Sacramento. We were talking about several topics from the evolution of the stock market in Singapore to the development of the agribusiness in Vietnam. however, he happened to tell me that he will have a specific surgery in two days and that he was really delighted of doing it in Asia.

Delighted to face a surgery in Asia? How come? In my eyes, the U.S. were far better in terms of medical practices, after surgery care and so many other parameters. I didn’t understand why the hell this man would come to Malaysia for a surgery, and more importantly an important one (valve replacement). He ran down with me the list of reasons that led him to this strange decision:

Waiting lists: the waiting list for him in the U.S. was extremly long and he would have to go through increasing pain for nothing. He was willing to pay for an opportunity to trim this time

The price itself: while such an operation could cost up to 150000 USD for an uninsured American in the U.S., it would only cost up to 15000 USD in Malaysia (and according to him a paltry 8000 USD in India at Maxhealthcare hospitals). The cost differnetial is indeed very important

The rate of success: in the U.S., the rate of success is lower for such an operation than in Malaysia: 96% against 99% according to him. It was less risky therefore to perform overseas than in the U.S. but what about care after surgery?

Post operation rehabilitation: he was staying in Malaysia after the surgery in what looked like a great tropical resort, the kind of sceneries we can admire in postcards. He could have stayed home in Sacramento for his rehab but considering the fact that the cost of transportation is already beared by the operation and the low cost per day of this resort, he was feeling more at ease by staying in Malaysia. He was even planning to later go to Borneo before finally going back home.

These women will attend my new found friend and not American nurses…

I couldn’t phrase it at that time but I had in front of me the first case of medical toursim:

Best medical practices - Low cost solutions - Wide variety of exotic tourism activities

I was really amazed, it was a perfect matrix. but I was quite unsatisfied by the implied meaning contained in the wording medical toursim: how come we could qualify medical tourism “toursim” as it mainly stems from medical activities. I was feeling quite odd therefore I decided to discuss this matter with Serge Fabre, a relative but also an expert in the tourism industry as he was involved as a leading manager in several companies…