Discovering Medical Tourism

Recently I received two mails from European Entrepreneurs (one Deutch, one English) that are willing to open a medical tourism agency that were both wildly complaining about the lack of support of Asian Hospitals. What they were pointing out was the fact that hospitals were not willing to invest in their operations while these medical tourism facilitators were “working in the best interest of the hospitals”. To be honest, I find this idea totally exaggerated: a medical tourism agency is always hedging surgeries between a pool of more than 10 hospitals. Given the small volumes yielded, what do these medical tourism agency provide: 30 customers per hospital a year? Seriously, why should an hospital invest in your start up and not in another one with a real value proposition?

Tan Tok Seng to NUH: Let’s work together baby! You take the arms, I take the legs

Yet, even though these claims are too much, there is one point to put forward: hospitals could act as a regulating power for these medical tourism agencies. In fact, the industry is lacking standardization: hospitals are very different from each other and the incoming process always vary from a medical group to another resulting into an incompatibility of medical records system, filing system, reporting system…  plus, medical tourism agencies are often individuals that advice people to go to a certain hospital and take a commission for all the ground work. Yet, what about insurances? what about medical records transfer?

The critical investments that hospitals need to do is a common R&D program to ease up international patient management. Let s take Asian Hospitals: they will gain momentum (against Eastern Europe or South America) by creating a common process (as medical tourism operators will find it easier to work with them). Intercompatibility between hospitals is even more important in case of complications: for instance, one friend of mine got a motorbike accident while visiting Singapore last week (… poor guy, his knee is in shambles …).

He was transfered to Alexandra Hospital, a good but not world class hospital in Singapore where a first operation was performed. An Arthroscopy showed that the operation will be more complicated hence he was sent to Singapore’s best orthopedic clinic in Singapore @ Mount Elizabeth Hospital (a Parkway group hospital). These two hospitals are not belonging to the same group of hospital… This resulted in a messy outpatient management (my friend was still considered a patient of Alexandra Hospital two days after leaving) and the need to do again some examinations as Alexandra hospital was unable to provide the records in due time. A complication during an orthopedic surgery can always happen requiring the help of the adequate team of specialists but not necessarily belonging to the same hospital. If Alexandra and Mount Elizabeth had a common system for their international patient, my firend would not have gone through painful drills and tests for a second time in a week.

In an ideal world, hospitals in a specific place would create an association whereby each hospital will hold a speciality for international patients (hospital X for plastic surgery, Hospital Y for spinal cord surgery and hand surgery…) so that hospitals can assemble the best team of specialists in the aera and gain sizable know how while reaching important volumes. Let’s take Singapore: Mount Elizabeth could specialize in orthopedic surgery while Raffles Hospital could specialize in Cardiology, leading to only one interface and common marketing effort to attract international patients. The Singaporian Board of Tourism (STB) is already gearing towards this direction by creating its medical travel departement, yet this is a governement initiative more than an industrial association. The Public System is in fact working under two groups, but these groups are put at odds (competition should create better process) and are diconnected with Private Hospitals.

There are evident issues to this system (revenue sharing model? volume per speciality? profitability per operation?) … Readers what are your thoughts?

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!!

Whenever I see a medical tourism website I always confronted to the same problem. As medical tourism companies want to fulfill the desire of any potential customer, the latter companies are providing all kind of medical services. therefore on the same page I witness the fact that I can get a CABG as well as a BOTOX injection. What? Somebody is going to inject a bacteria in my heart? No, keep cool reader, it is just to illustrate the total lack of focus of medical tourism companies.

The direct consequence is that I don’t understand at all the recovery time needed for my operation and how to chain it with some tourism activities. There are no ready to go packages. Even though medical tourism is often a case to case problem, people cannot rasp with no clues what is going to happen during their trip. one can point out to the fact that a website will always provide us with some example, but it’s always the same one.

‘This is a story of a 50 year old man that has no insurace policies but desperately needs an angioplasty. Therefore he opts for a low cost solution in India, where the cost of an angioplasty is barely 7%. Wow! What a tradeoff! And thanks to the price differential he can travel with his wife in business class and stay 3 weeks in a 5 star hotel. Oh miracle! Great!’

 Sorry, but besides angioplasty such examples are difficult to come with and this gives me no idea about what will happen after an IPL hair removal of my chest or after a dental bonding procedure. Besides Mednomad, a portal that gives Ok information about medical procedures, I understand nothing, absolutely nothing to medical trip organisation. It seems as if people were putting cardboards where is written: ‘please drop money and I ll get richer’. Many companies have come with personal assistance models when arriving at the airport of the city where is the hospital but this is not new. It has existed for years in the medical industry and is called incoming services.

So please, medical tourism companies, innovate. i desperately need to WYSIWYG my trip. Do you have any clues?

Let’s visit Bumrungrad through this video. You will then understand why I want to dig into the medical tourism business (sorry the video is a little bit dim)

Don’t play with the American administration. Michael Moore has investigated in Cuba thus violating the political ban on Cuba. A wicked ploy from a frail administration unable to admit well rounded criticism. Liberty of speech aiming at people suffering from a disrupted medical system… nonsense?

 

 

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…

In my previous post I was just observing a high increase of old people among the Singaporean population while hinting that this could force local authorities to revamp their hospital room offer in the future. Yet, I must admit I needed to do extensive research to get a better grasp on the Singaporean medical system.

In which ward was this Superhero? A, B1, B2, C?

In fact, the medical system is two fold: we have on one side the Public System (7 Public Hospitals + 6 specialised clinics) and on the other side Private hospitals (among which the Parkway’s hospitals). However the quality of the service is not only ventalited among hospitals (havoing one top class hospitals then mid class than low class) but even inside the hospitals. In fact, there is a system called ward class to classify the kind of services that one is entitled to. There are 4 classes, A, B1, B2 and C, A being the best (suites with all the confort and care you can imagine) while C is basic accomodation (5 beds dormitories) and basic care. Why such differences?

 These differences mainly come from the Philosophy of the Singaporean governmenent for whom Medical care is not based on equality but on equity. Every one should be able to access to care but in the same way every one can opt for the kind of care they want. In fact, not all the rich people are opting for Ward A: out of the 20% richest people in Singapore only 60% are going to A and B1 hospital (and conversly 3% of the 20% poorest people in Sg are going to ward As).

The social system is associating a compulsory saving system (Medisave) but there is still a co payment to make, so going to Ward A does not strictly depends on the amount one has on Medisave but on his will to get the best care and accomodation possible (there is a minimum threshold  that varies from one ward to another)

Hence, every hospital have to make sure it contains the right segmentation of wards. Rate of occupation in Public Hospitals are very high already (76%) but quite low for Private Hospitals (below 60% in general) as they have opted for the highest ward classes. Private Hospital really needs international patient to be profitable. In fact, a public hospital though run like a professional organisation is nonetheless a non profit (I mean officially speaking). The polical clout is way more sizable than any other subject, yet we can ask ourselves if the Singaporian medical system is equitable for all international visitors… (as usual check out for part 2!) 

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…

Phillippines is currentlyt the fifth medical tourism player in Asia lagging behind Singapopore, India, Thailand and Malaysia. However, the government is strongly stressing the importance of developing this sector as it is perceived as a strategic tourism niche for the years to come. The country indeed benefits from its position (midway to India, not far from Japan and Korea) and its culture (english speaking population) to lure many tourists

At the Hospital Queen Elizabeth it’s all thumbs up to climb the ladder

Yet, the medical sector is far from impressive when compared to top notch countries such as Singapore. The government is now strongly pushing for more private initiatives in the medical sector and better human resource development in cahoots with getting well trained doctors and surgeons in their hospitals, the country itself being threatened by overmigration (mostly towards the U.S.). Being a low income country is indeed not the main problem: when looking at Cuba or Sri Lanka we are confronted with excellent medical systems retaining excellent practitioners. When looking at those systems we had four key factors:

+ A compulsory community service through which any medical diploma led to servicing the public sector

+ Strong incentives aiming at keeping doctors.

+ The development of polyclinics.

+ The development of an independent pharmaceutical industry (Cuba developed its own vaccines and drugs)

 

Medical tourism only started two years ago, in 2005, but has already met sizable success. The overall income related to medical tourism was topping the 200 million USD threshold for the first year of operation (I didn’t find anything yet for 2006, but I imagine that this figure must have grown). In fact, at the fall of 2006, Philippines held its first medical tourism congress in Pasay City. I didn’t attend this Congress but I daresay it looked like an Allstar game, just by judging by the participants: Philippine Public Private Partnership ambassador, Philippine’s Health, the Trade and Industry Secretary and Presidential Committee on Health and Wellness Chairman, the Philippine Economic Zone Authority (PEZA), the Philippine Retirement Authority (PRA) Chairman… and the President himself. I guess that tourism in

Philippines is close knitted with medical tourism.

In fact the type of customer it can bring is extremely varied going from Asian retirees in maxi real Estate programs for ageing populations or American uninsured workers looking for a combination of cheap treatment and English speaking environment.

Quoting the president: “Cost is competitive and quality is high. Filipino professionals can serve the world right here at home, as we provide more jobs downstream and cut down poverty”

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…

Ayuveda is an ancestral series of medecinal techniques coming from

India. The term is coming from ayus meaning life and veda which points to knowledge, therefore ayurveda is the “knowledge of life”. This term couldn’t be as meaningful with the recent evolution of research two examples can be pointed out.

Many companies are rushing into the Ashwagandha business. Ashwagandha is an herb used in Ayurveda coming from the Indian medicinal plant withania somnifera. Researches have proved that is genuine effects on fertility troubles or to alleviate symptoms associated with arthritis or even to treat memory loss. There are many developments in

Japan in order to fully understand the causes of these effects on the human body, as researchers wonder how this medicinal mixture could have so many effects.

Ganesha is very knowledgable indeed

Triphala is also gathering a lot interest as studies have proved that this medical formulation could act like an anticancer agent (according to researcher it could target cells in tumors while sparing normal cells). Triphala even looks like a miracle cure as other research led to observe that it provides protection against both gastrointestinal and hemopoetic death Ayurveda is now a new found field of research for researchers: while studying Triphala, researchers have come with the observation that the cytocide effect could be due the action of gallic acid and that its induced anti stress effect is due to its anti oxidant properties.

These discoveries come as a relief as ayurveda use to be the object of many deviant practices due to the inability of certain practitioners to come out with well mastered dosing leading to a high level of metals and minerals in their mixtures causing toxicity. Auyurveda was heavily dented when the journal of the American Medical Association discovered that 20% of the Ayurvedic preparations made in

South Asia contained high levels of toxic heavy metal such as the famed arsenic. This sudden peak of interest should help to perfectly understand the underlying chemical effects of each component of the ayurvedic preparations and furthermore perhaps lead to normative practices.

Radioactive miracle cures… perhaps not a good idea after all

However, I really wonder if the toxic metals are not generating the positive medical effects also. We should remember in the history of mankind that one example of toxic cure was devised. After seeing that radium could cure some cancers some people tried to devise special cosmetic cures. The most famous one was called fontaine de jouvence: it was a water tank where radium was dissolved in water. This item was widely diffused in the thirties from a therapy invented at the Plombieres les bains spa in France. Some con man further digged into that breach by inventing some creams that could cure cancer (like the company Tho Radia whose motto was: “Stay old if you want”) or even weight losing belts. The short term effect was a skin rejuvenation indeed, the long term effect was a series of natural disasters (skin cancers among others)… Yet, radium was expensive hence its dosing was not that important.  However there is no official statistics on the consequences of he use of radioactive products

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.  

Finally the medical tourism map is working! It is still in its infancy so keep an eye on it

The newest features is a list of hospitals and spas in Asia. It will be gradually completed by articles specially dedicated to the latter during my future trips in Asia. I think I am going to fly to Singapore in mid June… You can access this page thanks to the toolbar in the header…

Tomorrow we’ll talk about online medical resources. but now it is the first of May and as you know, people just want to go out on this particular day…

The European Union is now taking a close look to the evolution of the medical tourism industry. In fact, MPs at the European Parliament considers the patient safety as part of their responsibilities, hence, on Tuesday 27 February, European Health Commissioner Markos Kyprianou officially discussed new health strategy to counter balance the will of patients to fly out of Europe to find better medical services.

With regard to patient mobility, he said that his department was currently examining the responses to the consultation exercise on health services and that the Commission initiative was based on the need to consolidate legal security, following various Court judgments which stated that the rules of free movement also applied to health care.

The Commission discussed the possible creation of centres of excellence for the treatment of particular illnesses on the European Territory in order to propose specific answers to rare condition treatment seekers as well as to better the output and the productivity of certain medical centers. Specialisation of centers is indeed a productivist thinking yet it remains to be seen if this is the best solution available.

Going to Poland to get your teeth fixed: a European Union approved move?

Several MPs, like German Social Democrat Dagmar Roth-Behrendt, have called for the future regulation to cover issues such as: information for patients, the quality of care and providers, centres of excellence, compulsory exchange of experiences and directions on patient average waiting time before treatment (this being a touchy issue as waiting times vary from one illness to another)

Another intersting point was raised during this session by French (yes!) UMP MEP Françoise Grossetête. She warned of discrimination that could arise with mobility: in fact, people don’t all have the same access to information, nor the same ability to move to receive treatment or benefit from the services of a particular recognised professional. A possible answer to this concern is to institutionalize health information and officilaly sponsor mobility to guarentee better access to saefty. If medical tourism is not exactly the model promoted through these discussions, the European Union is now really seeing medical travel that could be a move against a system where insurance companies forced patients to go where treatment is cheapest.

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.

According to a nationwide survey of 1000 adults conducted by Opinion Research Corp, Americans spend twice as much time researching car and computer purchases than they do in selecting a doctor, and 6 in 10 say they probably wouldn’t change their ways even if price and quality information on healthcare providers was readily available. It looks that the convenience factor is predominant yet one can wonder if this convenience is not correlated with the implicit message sent by the word doctor.

I am a huge fan of some consumer behaviour theories one of these being the famous ELM model (Elaboration Likelihood model) by Richard E. Petty and John T. Cacioppo:

 

A simple chart done by one of my friends at HEC to explain the ELM model

According to the ELM model one can take two routes when facing a decision problem: the central one which is rationale and the peripheral one which is affective. The  most important underlying concpet is the involvement of an individual when making his decision.

The model defines the elaboration likelihood (EL) of the communication situation as the probability of message- or issue-relevant thought occuring in the consumer’s head. From the consumer’s point of view, it is about engaging or not in extensive issue-relevant thinking to evaluate an issue. According to the ELM model, the involvement or elaboration likelihood (EL) conditions choice in the following way:

+ When the EL is high, the central route should be particularly effective.

+ When the EL is low, the peripheral route should be better.

Medical tourism to gain credibility and striking power should be able to take the central route hence rationalize the decision process by identifying (or creating) key factors to be evaluated by someone opting for the appropriate surgery practice. The involvement is in fact low when talking about surgery knowing that the final decision is normally handled by a professional and there is little need (besides cost) to jump from one specialist to another. The medical service is indeed a long term involvement on which there is only one element that pressures us to decide: trust. And trust is on the peripheral route… Plus the peripheral route is a bumpy one as changing doctor is a stress factor that is added to the primary and ultimate anxiogene factor: the surgery itself.

 Opting for another route thanks to medical tourism communicating through the tourism angle

Medical tourism revamp the central route by introducing new factors to be rationnaly evaluated such as: medical follow up through the trip, intrinsic quality of tourism services… Decision making will not only take into account the trust we have on a system but the rationale evaluation of the various benefits brought by medical tourism. Hospital accreditations, incentive programs proposed by companies or monospecialisation (best hospital for appendicetomy for instance…) can only help to opt for the central route… 

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.

As i was flopping around to find some interesting devices to add to this website I finally came to the point that we needed a map. Indeed, medical tourism besides being a blur complex is also a series of places to be known that can be:

+ Hospitals

+ Spa and wellness centers

+ Well known Medical sites (such as in France the city of Lourdes)

As you can see this feature has been included in the column on the right side and we gradually be filled up. In this column I will locate some key spots briefly describe them and eventually write some articles about the latter on this very website that I will connect to the icon. I think it is a good way to get a better grasp on the whole industry.

Following our tour of medicasts now let’s take a look on the evolution of tourism videocasts and podcasts. I have surfed on the net in order to find some of the new podcast players indulging in the tourism business and came out with three of them:

Podibus (http://www.podibus.com/). This website offers to download videos of reputed tourist places in France, for instance a free video of the chateau de Versailles (40 minutes!) or a video tour of the Versailles’ garden (2 euros). The website is planning to launch on the 26 oppof april a guided visit of the Chateau de Chenonceau in 11 languages (45 minutes for 3 euros). A quite interesting manner to buy a postcard or prepare ourselves for the trip at the Chateau!

Pocket Vox (www.pocketvox.com) is way more international as it podcasts tours of cities spreading from  Marrakesh to St Petersbourg. These visits last for one hour and a half and price at 5 euros.

Cityspeak (http://www.cityspeak.com/) is focusing on three cities Paris, London and Rome with a real in depth approach. However, the prices are way above the former services as an audio podcast (let’s call it tourcast!) costs above 17,80 euros. We can wonder if this service is profitable…

 All in all we have a service that is marketable and for which people are ready to pay for! So what about combining medicatss and podcasts and see whether or not people are ready to pay. Indeed the implicit value for a user is not the same:

+ for a medicast: get rational information about medical practices. Objective: get to be more acquainted with some practices

+ for a tourcast: visit a place, prepare a holiday. Objective: be enticing enough to spur imagination

+ for a meditourcast: prepare ourselves to a surgery or light intervention. Objectives: get informed about the hospital where te surgery will be performed

… We hence took out pleasure from the equation by mixing both approaches. Is a meditourcast a potential source of revenue from this point of view? Yes, if people are ready to pay a premium to be reassured. Yet, it is conflicting with the duty of a medcial tourism agency whose purpose is to male a travel easier from a practical and psychological point of view

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

Medical tourism is a thorny commercial product because of a confidence crisis between the customer and the foreign based doctors or surgeons. How could we thwart this major issue?

 Best of both Worlds by Planet Hospital - a tailor made solution to ease up the fear of US medical tourism customers 

Planet hospital is proposing through their best of both world program an innovative solution: this company has observed that an US hospital is directly and indirectly way too expensive, due to the cost of the facilities and the insurances that must be held  in order to perform. An hospital in the eyes of Planet Hospital is an uneeded intermediairy, a third man who weights too much on the final bill.

Best of both Worlds has convened a series of doctors and surgeon performing in the US and tie them up with the company’s customers. Besides doing pre and post op check ups and follow ups in the US, these surgeons will eventually perform the heavy surgery on the patient assisted by top tier surgeons from Asia IN the various asian hospitals. A really clever solution, that however bear a cost but allows a real follow up throughout the medical procedure something that medical tourism agencies pain toi achieve.

Neverthess, there is two major hurdles to this business model:

a. the limited coverage of the territory by this program (Planet Hospital actually started this program in California and starts scratching the surface of other  federal states)

b. the deal flow: considerong the natural limitation of the number of US surgeons available for this program and the number of days necessary to perform a surgery overseas, the maximum capcity of this system is quickly reached even though the process is regulated by a precise yield management tool (however difficult to implement considering the fact that the schedules of a surgeon is a mix between long and short term planned surgeries)

All in all, a very interesting business model that is however limited and too demanding and tends to comfort people on their understanding of the medical tourism phenomenon. Best of both Worlds is turning a blind eye on the real problems of medical tourism such as the cognitive interpretation of ‘Surgery in India’, ‘Surgery in Singapore’.

Planet Hospital has positionned themselves as a serious operator in the medical tourism industry, however they perhaps tend, like many other companies, to focus too much on the medical side and therefore stress upon the causes of defiance expressed by US customers.

The press releases throughout the world about medical tourism are often quoting one example. I would like to also talk about it: the Blue Ridge Paper Factory study case!

Blue Ridge Paper Products is a manufacturing firm in Canton North Carolina, with 2,100 workers. In 1999, while the company’s health care costs were increasing at 18 percent a year,

Blue Ridge was bought by a venture capital firm. As part of the company’s transition to a 45 percent employee stock ownership program, the union agreed to a 15 percent wage cut and seven-year wage freeze. However, between 2000 and 2006, employee healthcare costs for the company rose over 75% to a staggering 24 million USD.  

An innovative policy derived from a voluntarist corporate culture

The relative weight of the healthcare benefit system was denting profit growth and slowing down recruiting processes.

 

Blue Ridge had to find a way to trim down healthcare costs that were rocket soaring. The company did so by launching for instance a diabete management program that waived copays on medicine. However in 2005 the healthcare cost was still increasing by 3,5% therefore Blue Ridge visited overseas hospitals and worked with IndUSHealth to find more cost cutting solutions.

 

The latter company produced a DVD encouraging people to go to

India in order to perform their surgery. By doing so, employees will get a 100% reimbursement plus travel expenses for themselves and a companion and the employee can receive up to 25% of the savings garnered fro; the outsourcing. For instance, one of their employees in 2006 decided to remove his gallstones and have his rotator fixed. The company will save about 80000 USD on both surgeries while the employee will receive a 10000 USD bonus for the trouble. 

How can one decently say no?