Wed 15 Aug 2007
Lost in a Pond: global medical tourism actors
Posted by raphael encaoua under Low cost surgery, Hospital marketing
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.
August 17th, 2007 at 7:40 am
Raphael,
this post is just amazing. Based on the previous posting, I think this is more of what I was looking for when I asked where do you see the problem in the existing model.
Personally I do believe that this industry has miles to go before the optimum model can be discovered.
And its interesting to note the hospitals’ view on the facilitators. I don’t think we get to hear enough about them. The news media constantly asks them about their view on Medical tourism but never about the facilitators. Developing a mix of niche treatments is going to be very important.
But the caveat that American medical tourism facilitators are facing is with regards to the litigation involved with overseas treatment. Having consulted a number of attorneys and medical professional, one of the most important ways a facilitator can reduce liability is through providing as many options and products as possible and then letting the customer make the choice. Since facilitators are not medical professionals they cannot recommend hospital A over B or they cannot recommend surgeon A over B. Referrals and recommendations are a danger zone.
thanks for the posting,
would like to hear your side of it.
August 19th, 2007 at 7:44 pm
Thanks for your extremely relevant comment.
IN fact, you are perfectly right about the strategy that consists to offer more to reduce liability… Still I look it in another way. To illustrate my thinking let me use an example:
We have Hospital A, B, C and D on the market.
They are doing speciality X,Y,Z and have for each a certain series of operations. The success rates for these operations are
Hospital A: X1: 87%, X2: 94%, Y1: 97%, Y2:88%, Z none
Hospital B: X1: 97%, X2: 99%, Y1: 92%, Y2:81%, Z1: 89%, Z2: 84%
Hospital A: X1: 86%, X2: 90%, Y1: 87%, Y2:78%, Z1: 82%, Z2: 81%
Hospital A: X1: 88%, X2: 91%, Y1: 91%, Y2:81%, Z1: 81%, Z2: 82%
What kind of conclusion can stem from this example?
–> X is well performed by Hospital B but under performed by A,C and D.
–> Y1 is well performed by hospital A, but not by B,C,D while no hospital performs well Y2.
–> Z is a natural disaster
What should one do?
When below 90%, we namely have 1 patient out of 10 going into trouble so structurally complaints are representing more than 10% of our sales.
The real liability resides in product mix and success rates, namely medical facilitators doing their homework and understanding what hospitals can and can’t.
If I am running my own medical tourism company I will adjust my product mix to these datas:
Here is my brochure.
Specialty X
for X1, X2 our prefered provider is B, yet A,C,D are available
Specialty Y
Y1 is best performed in hospital A. You can still go to B,C,D
What happens: I have privileged contacts with A and B, I can negotiate lower prices thanks to higher volumes, I have a lower failure probability, I discarded an important cause for failure
And I discard the rest. Because the worst liability in fact is having a high probability of failure. As proven by some economic events such as Russia depreciating its money in 1998, there is no probability 0. The American context must make people think that it s a safe bet to propose diversity, but I really think it dangerous
August 21st, 2007 at 5:16 am
hmm….. this is a great example.
And I have contemplated using this model; promote hospitals and the surgeries they are best at and have a higher success rate.
The interesting element is that a higher probability of success does not mean that there is no probability of failure. Hence even if I focus on the hospital or surgeon with the best success rate, there is an element of failure.
So the question becomes should I just focus on one or two hospitals or give the consumer as much choice as possible?
The point I’m trying to make is that, hospitals might not like facilitators because facilitators are not necessarily working with only one hospital and this only adds more competition for the hospital but at the same time, the facilitator has to be concerned with a number of elements and their top priority is the local customer (not to say that it isnt for the hospital).
So would hospitals be more willing to work closely with the facilitator if they develop an exclusive agreement?
What would exclusivity entail?
(p.s. I made posted a comment earlier but it didn’t appear, something wrong?)
August 21st, 2007 at 6:48 pm
The theory of insurance is based upon reducing probability of bankrupcy, and they achieve it by better pooling people looking for insurances. As everybody knows it s easier to be insured when you re healthy than when you re not.
If you re a medical travel agency, you re looking to make money but I think that your first focus should be not to file for bankrupcy. Even if you give choice to people, someone who really had a botched operation will go into litigation. Ok you won in courts thanks to the astute trick of offering to the customer CHOICE. but what about PR?
NY POST - 12/08/08.
” Ms X went on a trip to Thailand for cosmetic surgery with MEDPATIENTS. Her operation was botched and she needed to pay three time the initial amount budgeted for the surgery to get it repaired, MEDPATIENTS doing nothing to help her out as they feel that their responsability is not directly involved. Ms X sued MEDPATIENTS and lost the case thanks to a legal loophole. She is now in dire straights and her boobs looked like a booby trap”
I think MEDPATIENTS will have a hard time finding patients ever thanks to this PR disaster. In fact, the whole US medical industry and the media wandering around is just waiting for this tidbit. They don t want people to fly overseas as they don t want to mend the syetm. The system is good as it is. Surgeons in the US are extremly well paid (I have some good studies by the OECD that compare the wages of doctors and surgeons among developped countries, the results are stunning).
Exclusivity agreement? Why not? but divided as I proposed according to specialty and types of operations. Don t give too much to one hospital as you will rely heavily upon it.
Bargaining power is two sided…
September 21st, 2007 at 9:39 am
Wow, that’s really interesting- I’ve never thought too much about medical tourism before, but I can see it taking off as a trend (or at least an upper and upper middle class trend).
What do you propose for a product IX?
Cheers,
Marie
alijor.blogspot.com
October 4th, 2007 at 1:15 am
product IX? Mmm I m lost?
Medical Tourism is a trend but I feel that we should overhaul things. Why people are keeping talking about medical tourism when actually it is medical travel. The title of this website is a paradox: discovering medical tourism is hinting at the fact that medical tourism has yet to be discovered by someone as it is an illusionary paradigm massively rejected by the medical ccommunity.
Close your eyes.
If i say tropical tourism what do you see: a cocunut with a straw on the beach.
If i say medical tourism what do you see: a guy with a perfusion on the beach.
It is strange as people are not making any efforts to explain the underlying problem. Blogs are popping up to promote places but not ponder over how things can go…
So what is product IX? And what is a product?
November 18th, 2007 at 6:55 pm
I would agree with most of the assessments above concerning medical tourism; however, I would like to point out several facts concerning the medical tourism business that have left out. I would disagree that “medical tourism” is a trend. In fact, it has a history that goes back to the ancient Romans and has been a well-established business in the US for many years. The fact remains that persons will travel for a variety of reasons to seek medical (and/or) dental care for various reasons. The so-called “medical tourism” phenomenon is nothing new to the Republic of Colombia. Colombia has been serving medical tourist long before it became so popular in the media mainstream. The same goes for the United States who has served the international community for many years; however, the post 9-11 days in large part cut back this market due to the more demanding requirements to obtain temporary visas. This reason, though, is second to the runaway costs (and increasing numbers of medically indigent persons) that have spawned the many medical tourism provides in the USA.
First Care Colombia, unlike those other companies mentioned above, partners with leading clinics throughout Colombia and does indeed have the specialized surgeons for those procedures that make sense when one has to travel. Although, what seems to annoy person is that person are traveling outside of the USA. Many persons we speak to have traveled within the USA to have procedures/testing done. Some have flown all day with connecting flights which almost rivals the flying time to Colombia.
The reality, though, of medical tourism is that persons are driven to seek medical care outside of the USA and Canada for economic reasons; however, they expect the same level of care that they would get at home at “full fare.” Many clinics are able to provide this level of care and give the savings that under/non insured person need to have access to medical care that they would otherwise be denied.
The future for medical tourism is bright. Experts put the industry at 10 billion dollars in the year 2009. That of course includes all of the providers including the USA. I DO agree that “mom-and-pop” providers sending persons everywhere and specializing in nothing have pretty much seen the limits of growth. Mostly because the medical tourism business has matured (and will continue) to do so. Let us not forget that Blue Cross/Shield of South Carolina inked a deal with Thailand earlier this year. Leading insurance companies have “touched base” with us a well. It’s a big leap to bring medical tourism into the mainstream, though. However, for those serious companies and clinics time is on the side of medical tourism as long as the so-called medical-care crisis continues.
First Care Colombia
More Care Less Cost
www.firstcarecolombia.com
(954) 636-7353
November 19th, 2007 at 9:38 am
The following is taken from the Forbes magazine article August, 2007 where Steve Forbes is loooking at medical tourism as a business model:
“…A fast-growing phenomenon–”medical tourism,” which will be a $40 billion industry by 2010–is showing how we can “solve” the health care financing crisis.
More and more Americans are choosing to go abroad for elective and/or major surgeries. What entrepreneurs began more than a decade ago by constructing world-class facilities to lure patients from the U.S. and around the world into traveling for cosmetic surgery has now blossomed into freshly built foreign hospitals offering a wide array of other types of medical procedures. India, Thailand and Singapore are among the countries heavily involved. Panama and others are just entering this arena….” Open-Heart Surgery–90% off Forbes, August, 2007 by Steve Forbes
The Indian medical providers have taken this and are getting every ounce of “hay” that they can from this. Medical tourism in India may reach 1 billion dollars this year; however, the problem with travelling to India is travelling to India. The hospital has cows outside of it. They have the second highest AIDS in the world!
I kinda like what the late reply said: “what’s got eveyone p.o’d is that people are going out of the USA. Hey, man they sent the factory work overseas (cuz it’s cheaper), they sent the service center work overseas (cuz it’s cheaper) now they’re sending the medical work overseas (cuz it cheaper).
Medical tourism is here to stay. If for no other reason: $10,000,000,000 per year!!!!!!!!
March 22nd, 2008 at 7:22 am
I couldn’t understand some parts of this article , but I guess I just need to check some more resources regarding this, because it sounds interesting.