US Medical Tourism

More people are traveling abroad for medical procedures, often with the blessing of both their employer and insurance carrier. According to a recent report by Visa and Oxford Economics, the global medical tourism market totaled $439 billion in 2015 and will grow 25% annually over the next decade. That figure was subsequently revised downward to $50 billion, the International Medical Travel Journal notes, but it is still a significant market. Driving this trend are increasing access to high-quality care and services outside the U.S., lower costs, the chance to couple treatments with attractive destinations and availability of treatments and drugs not approved or available stateside.

While cost is just one reason people travel for care, it can be a compelling one if the foreign provider is reputable. Consider a knee replacement, for example. The procedure can cost anywhere from $35,000 to $60,000 in the U.S., but costs less than $23,000 in Costa Rica or India, according to The Fiscal Times. The most common procedures people travel for are heart surgery, cosmetic surgery and dentistry.

While the majority of medical tourists flock to the U.S. for care, Thailand, Singapore, German, South Korea and Spain are fast catching up, the report says. India is also a major destination for medical tourism, particularly for cardiac care. Understanding these travel patterns and the opportunities for attracting patients can provide a valuable added revenue stream for hospitals that position themselves in this market.

The Centers for Disease Control and Prevention estimates that up to 750,000U.S. residents travel abroad each year for medical care, a mere drop in the bucket compared with the nearly 37 million patient discharges from U.S. hospitals reported in 2011.

Diversified revenue stream

One might expect that states like Washington, which abuts British Columbia, would see substantial numbers of individuals crossing the border north for medical procedures. But Mary Kay Clunies-Ross, spokesman for the Washington State Hospital Association, says she hasn’t seen any significant impact on local hospitals.

“Some of our hospitals do get international patients, but that is usually in the context of seeking needed services from a specific program or provider (e.g., they might come to be treated at Fred Hutchison Cancer Research, or bring a child to Seattle Children’s Hospital for pediatric specialty care),” she writes in an email. “I don’t know of any international marketing campaign.”

Most U.S. hospitals haven’t figured out that medical tourism could be a revenue diversification strategy, and they’re too mired in the Affordable Care Act, PCORI reporting, managed care contracting and other obligations to promote themselves as a specialty surgery or magnet hospital destination, says Maria K. Todd, CEO of Mercury Advisory Group in Denver, CO, and an international consultant on healthcare business development. “They just don’t have the bandwidth to figure out how to do the marketing campaign and study the market and still do everything else they have to do.”

Todd, who wrote “Handbook of Medical Tourism and Program Development,” sees two categories of U.S. hospitals taking advantage of the travel-to-care trend: Academic medical centers (AMCs) and ambulatory surgery centers (ASCs). AMCs have excess capacity and some of the latest research and technology, but they need cases on which to train new doctors. Medicare alone doesn’t cover the cost of all of that training. As a result, many AMCs are using medical tourism as a diversification strategy to get different reimbursement sources into the mix,” Todd tells Healthcare Dive.

ASCs, on the other hand, are usually selling to price-sensitive customers, Todd says. She points to ASCs in rural areas that are looking for ways to compete with critical care hospitals. The federal government allows CAHs to charge 101% of what Medicare would pay a non-critical access hospital, so an ASC that’s outfitted for overnight beds and can cut the cost of a procedure, and is located near a moderate-priced motel, can bundle together a price-driven medical tourism package and market it to the public.

Brand appeal and cost transparency

Hospitals interested in creating a medical tourism revenue stream should build on what the facility already does well, such as hip replacements or cardiac artery bypass grafts, rather than add a service line or new staff, Todd says. Other critical factors include brand identification and destination.

“What doctors have not understood in America is how to brand themselves … and so it would be very hard for them to claim a medical tourism base, let’s say, in comparison with a doctor who’s a researcher who’s published at the Cleveland Clinic,” she says. “Brand in healthcare translates to trust … and people want to trust that where they get their healthcare is the best choice they could have made.”

Another thing holding hospitals back is determining case rate, says Todd. With CMS’ bundled case rate initiative, hospitals are having to learn how to bundle cases and that requires knowing the cost. But medical tourism is not a fee-for-service, line item percent of charges; “It’s 100% give me an estimate up front,” she explains. The only way to do that well is to define a case rate with contingency for outliers—for example, the rate for a stent procedure would cover three stents and any additional stents would cost $1,500 each.

“With hospitals not knowing their case rates, you can’t do transparent quoting,” says Todd, who likens the situation to asking a grocer for the price of a loaf of bread and then waiting while somebody does a price check.

“The American population demands, if I’m going to fly to you, you need to tell me is this going to cost $7,000 or $17,000, and most American facilities are not prepared to do that on anything more than maybe a hip or a knee [replacement] or a lap band,” she says. “They’re not prepared for contingencies” such as an allergy to an anesthetic that could put the patient in intensive care.

Returning home

For patients who do choose to travel for care, whether abroad or within the U.S., there’s another thing to consider. Under the CPT code system, Medicare will pay for 90 days of post-operative care at no additional charge. That’s already bundled into the CPT code. But that could be a problem if the patient leaves the city where the procedure was done after a week or 10 days. That leaves the patient’s hometown doctor to provide the other 80 days of follow-up care, and some doctors are refusing to take patients back, according to Todd.

“Some of it is about greed, taking food off my table,” she says, noting the hometown doctor can only bill for evaluation and management, not the procedure itself. Physicians are also concerned that they could be blamed — and sued — for a complication they didn’t cause. With medical complications coverage at one of the leading medical travel insurance programs capped at $50,000, that’s far below the roughly $250,000 malpractice tort liability ceiling in most of the U.S., Todd says.

“You can blow through $50,000 on a case gone bad in no time flat,” she adds. “So if [people] go out of the country and they have a complication, yes, that complication insurance might kick in, but they might still charge the local doctor with the complication.”

Wellness Tourism Growth

Technavio analysts forecast the global wellness tourism market to grow at a staggering CAGR of close to 11% during the forecast period, according to their latest report.

The research study covers the present scenario and growth prospects of the globalwellness tourism market for 2016-2020. The report also segments the global wellness market by two types of tourism (domestic wellness tourism and international wellness tourism) in terms of expenditure.

Technavio analysts highlight the following four factors that are contributing to the growth of the global wellness tourism market:

  • Increased disposable income
  • Large number of chronic diseases
  • Growing consumer awareness
  • Rise in stress globally

Increased disposable income

Per capita disposable incomes exhibit low volatility in developed countries because of a spike in double-income households. This has directly boosted consumer purchasing power. The affordability of high-end products has also increased in developing countries. Higher disposable incomes in Pacific Rim countries such as Malaysia, Indonesia, and Vietnam are expected to drive market growth even further.

Amber Chourasia, a lead health and wellness analyst at Technavio, says, “The number of working women worldwide has increased considerably. In 2015, in the US, more than 57% of women were working. This is creating a financial boost in the overall income of households, enabling consumers to concentrate on essential as well as luxury wellness activities.”

Earlier, due to limited awareness, the preference for wellness tourism was very limited. However, with the rise in income level and increasing investments by vendors, the market has grown rapidly and will continue to grow at a steady pace during the forecast period.

Large number of chronic diseases

The increase in urbanization has led to sedentary lifestyles and unbalanced diets. This has given rise to a number of lifestyle or chronic diseases such as diabetes, high cholesterol, and obesity. In 2012, 29.1 million Americans had diabetes and was the seventh leading cause of deaths in the US in 2010.

“The prevalence of obesity has more than doubled worldwide between 1980 and 2014. Conditions of obesity and overweight used to be common in high-income countries, but are now on the rise in low- and middle-income countries as well, particularly in urban settings because of the increasing demand for fast food or junk food. This leads to lost work days and lower productivity. Nearly two-thirds of obesity-related cancers, which include rectum, colon, ovary, and womb cancers, occur in North America and Europe,” adds Amber.

Growing consumer awareness

More and more people worldwide are becoming aware of anti-aging measures to preserve their looks. This is a major driver for the market. Many men and women are undergoing facial aesthetic procedures for a youthful appearance. The US, Brazil, Mexico, China, India, France, Italy, and South Africa are some of the countries where the demand for facial aesthetics is increasing. The American Society for Aesthetic Plastic Surgery calculated that more than 11 million cosmetic surgical and nonsurgical procedures were performed in the US in 2013.

Vendors are continuously spreading awareness of the latest technologies in facial aesthetics, along with their benefits, by educating consumers through their websites, conferences, and advertisements in magazines. Owing to the increase in per capita income and economic development in emerging economies, especially India and China, people in these regions have started using the internet to compare the procedures and to learn about their merits and demerits.

Rise in stress globally

Untreated stress can often lead to anxiety, irritability or anger, lack of motivation or focus, restlessness, sadness, or depression. These factors weaken the immune system and exhaust the entire body physically as well as mentally, thereby having a major impact on the individual. This can also lead to behavioral changes such as angry outbursts, drug or alcohol abuse, over or under eating, social withdrawal, and tobacco use. Hence, this presents a huge opportunity for the providers of wellness activities.

Wellness Tourism Industry

Wellness Tourism is poised to grow to 500billion dollar industry.There are almost more than 100000 spas in the world.This industry is much bigger than Medical Tourism and increasing every year.In India Ayush department of Ministry of Health is putting lots of efforts to promote the wellness tourism.Following is the spending of top countries on Wellness Tourismdata

Medical Tourism Statistics

  • A 2013 MTA Medical Tourism Patient Survey found that Latin America and Asia are the two leading regions for medical travel.
  • A 2013 MTA Medical Tourism Patient Survey found that Mexico and India respectively have the highest demand for medical tourism.
  • Data from the Council for International Promotion of Costa Rica Medicine (PROMED) shows that in 2012, Costa Rica attracted nearly 50,000 medical tourists (mostly from the U.S. and Canada) and each one spent an average of $7,000. Close to half of these medical travelers were said to be dental, followed by orthopedics, weight loss surgeries, gynecology and plastic surgery. Medical tourism generated some $338 million in revenue for the country that year, PROMED reported.
  • Tourism Research Australia from the Australian Government reported that more than 10,000 medical tourism patients flew into the continent in 2013 pumping more than $26 million into the national economy.
  • According to the Indian High Commission, Indian hospitals received 18,000 Nigerians on medical visas in 2012, 47% of the Nigerians were in India to receive medical treatment and spent approximately $260 million USD.
  • In 2012 the Ministry of Public Health, Thailand and the Kasikorn Research Center found that 2,530,000 international patients traveled to Thailand for treatment, the top five nationalities were; Japan, U.S., UK, GCC and Australia. Revenues generated from medical tourism were approximately 4 Billion USD.
  • Mexico’s Secretary of Tourism said that almost 12 million international visitors arrived in Mexico in 2013, 6.5 million of the visitors were from the U.S.
  • According to the Medellin Healthcare Cluster, twenty-four percent of the international patients that visit the Medellin Health City in Medellin, Columbia are from the U.S.
  • The Korea Health Industry Development Institute reported in 2012 that 159,464 patients from 188 countries visited Korea in 2012, 32,503 of those patients were Chinese.
  • In the 2010 Statistics on International Patients in Korea Report showed that 81,789 foreign patients traveled to Korea, 32.4 percent came from the U.S. (4,829 were U.S. Army patients), 19.4 percent Chinese,16.8 percent Japanese and  7.7 percent Russian.
  • According to Rohini Sridhar, Chief Operating Officer of Apollo Hospitals, the number of international patients visiting the hospital has been witnessing an increase of 20 per cent every year. “We provide medical care for around 400 to 500 people from European countries, Malaysia, Singapore, Sri Lanka and the Middle East in a year,” she says.
  • A 2012 report from the Taiwan Ministry of Health and Welfare found that more than 60,000 patients traveled to Taiwan for healthcare the previous year, with 50 percent of patients coming from mainland China. The report also noted that the most popular procedure was a full health exam.
  • According to Alpen Capital Investment Banking, the United Arab Emirates’ medical tourism sector is growing strongly and reached $1.69 billion in 2013. Dubai Healthcare City (DHCC) is one of the largest healthcare tourist destinations in the region. According to DHCC, they handled approximately 500,000 patients in 2011, 20% of which were medical tourists.