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MedGenMed. 2007; 9(4): 33.
Published online Nov 13, 2007.
PMCID: PMC2234298

Medical Tourism: Globalization of the Healthcare Marketplace

Michael D. Horowitz, MD, MBA, FACS, Research Associate, Jeffrey A. Rosensweig, PhD, Associate Professor of International Business and Finance and Director, and Christopher A. Jones, DPhil, MSc, FRSM, Research Associate

Abstract

The citizens of many countries have long traveled to the United States and to the developed countries of Europe to seek the expertise and advanced technology available in leading medical centers. In the recent past, a trend known as medical tourism has emerged wherein citizens of highly developed countries choose to bypass care offered in their own communities and travel to less developed areas of the world to receive a wide variety of medical services. Medical tourism is becoming increasingly popular, and it is projected that as many as 750,000 Americans will seek offshore medical care in 2007. This phenomenon is driven by marketplace forces and occurs outside of the view and control of the organized healthcare system. Medical tourism presents important concerns and challenges as well as potential opportunities. This trend will have increasing impact on the healthcare landscape in industrialized and developing countries around the world.

Introduction

Medical tourism has captured the interest of the media. Articles, guidebooks, and broadcasts on medical tourism are being published and produced with increasing frequency.[112] A Google Internet search using the term “medical tourism” performed on July 29, 2007, returned 1,100,000 results – an increase of 300,000 in the preceding 62 days. Individual practitioners and medical organizations must be able to provide accurate information about this rapidly evolving trend. There is a compelling need for all parties involved in healthcare to become familiar with medical tourism and to understand the economic, social, political, and medical forces that are driving and shaping this phenomenon.

In medical tourism, citizens of highly developed nations bypass services offered in their own communities and travel to less developed areas of the world for medical care. Medical tourism is fundamentally different from the traditional model of international medical travel where patients generally journey from less developed nations to major medical centers in highly developed countries for medical treatment that is unavailable in their own communities. The term medical tourism does not accurately reflect the reality of the patient's situation or the advanced medical care provided in these destinations. Nevertheless, this phrase has come into general usage and it provides an unambiguous way of differentiating the recent phenomenon of medical tourism from the traditional model of international medical travel.

The Increasing Popularity of Medical Tourism

Although there are no verifiable statistics regarding the magnitude of medical tourism, the available information suggests that a substantial number of patients travel to developing nations for healthcare. In 2004, 1.2 million patients traveled to India for healthcare and 1.1 million medical tourists traveled to Thailand.[13,14] One source projects that 750,000 Americans will go offshore for medical services in 2007, with this number increasing to 6 million in 2010.[15] It is estimated that medical tourism to Asia could generate as much as $4.4 billion by 2012, with approximately half of this revenue going to India.[1,3] It has been estimated that the global medical tourism industry currently generates annual revenues up to $60 billion, with 20% annual growth.[4,16,17] However, another valuation suggests that the industry is somewhat smaller, with growth to $40 billion projected by 2010.[5]

Medical Tourism Destinations

The medical tourism marketplace consists of a growing number of countries competing for patients by offering a wide variety of medical, surgical, and dental services (Table 1). Many of these destinations boast modern facilities with advanced technology and appealing accommodations. A substantial number of the physicians in medical tourism destinations received postgraduate training in industrialized nations, have board certification (or equivalent), and may have practiced in the country where they completed their training. Medical tourists are presently traveling to faraway countries for cosmetic surgery, dental procedures, bariatric surgery, assisted reproductive technology, ophthalmologic care, orthopaedic surgery, cardiac surgery, organ and cellular transplantation, gender reassignment procedures, and even executive health evaluations (Table 2). A number of countries in Central and South America have developed strong reputations for cosmetic and plastic surgery, bariatric procedures, and dental care.[810] India, Malaysia, Singapore, and Thailand are well-established medical tourism destinations that have become popular for patients seeking cardiac surgery and orthopaedic surgery.[13,11,17] Medical services in India are particularly affordable, with prices as low as 10% of those in the United States.[2] Several highly developed nations including Belgium, Canada, Germany, Israel, and Italy are attracting foreign patients under the banner of medical tourism, offering sophisticated modern care with careful attention to patient preference, service, and satisfaction.

Table 1
Medical Tourism Destinations*
Table 2
Procedures for Which Patients Pursue Medical Tourism*

The Global Healthcare Marketplace

The international healthcare marketplace emerged in the late 19th century when patients from less developed parts of the world with the necessary resources to do so began to travel to major medical centers in Europe and the United States to have diagnostic evaluation and treatment that was unavailable in their own countries. The situation is very different in the medical tourism model, where patients from highly developed nations travel to less developed countries, bypassing medical care that is offered in their own community but is inaccessible or undesirable to them. Medical tourists would prefer to have major surgery in their hometown hospital or regional referral center if they felt that was a feasible or reasonable option. However, these patients feel pressed to balance their health needs against other considerations, and medical concerns may be subordinated to other issues. Modern technology enables potential medical tourists to investigate and arrange healthcare anywhere in the world from their home computer directly or with the advice and assistance of a medical tourism agency.

For patients from highly industrialized nations, the primary reason to have medical services in less developed countries is attractively low cost. Such cost-conscious patients choose to accept the inconvenience and uncertainties of offshore healthcare to obtain service at prices they can more comfortably afford.[14,11,12] The opportunity to conserve limited financial resources and protect the equity in their home mollifies their uncertainties. A patient from the United States is likely to be a middle class adult requiring elective surgical care who has no health insurance or who has inadequate coverage. Milstein and Smith[19] describe these patients as “middle-income Americans evading impoverishment by expensive, medically necessary operations….” The other group pursuing medical tourism are people seeking cosmetic surgery, dental reconstruction, fertility treatment, gender reassignment procedures, and other treatments not covered by health insurance. The common feature in both groups is that their resources are adequate to purchase healthcare in low-cost medical tourism destinations but insufficient for them to comfortably have the same services in their local market.

For patients from countries where a governmental healthcare system controls access to services, the major reason to choose offshore medical care is to circumvent delays associated with long waiting lists.[20] National health programs do not typically pay for cosmetic surgery and similar type services; therefore, patients from Canada and the United Kingdom desiring these procedures pursue medical tourism for the same economic reasons as those from the United States.

Patients also travel to offshore medical destinations to have procedures that are not widely available in their own countries. For example, stem cell therapy for any one of a number of problems may be unavailable or restricted in industrialized countries but may be much more available in the medical tourism marketplace.[7,21] Some patients, particularly those undergoing plastic surgery, sex change procedures, and drug rehabilitation, choose to go to medical tourism destinations because they are more confident that their privacy and confidentiality will be protected in a faraway setting. Finally, some patients have medical care abroad for the opportunity to travel to exotic locations and vacation in affordable luxurious surroundings. Although medical tourism agents and travel professionals may promote the “tourism” aspect of offshore care, the recreational value of travel has decreasing importance to patients with complex, serious medical problems.

The primary reason that medical centers in developing countries are able to provide healthcare services inexpensively is directly related to the nation's economic status. Indeed, the prices charged for medical care in a destination country generally correlate with that nation's per capita gross domestic product, which is a proxy for income levels. Accordingly, the charges for healthcare services are appropriate for the level of economic development in which the services are provided. Low administrative and medicolegal expenses for overseas practitioners also contribute to the affordability of offshore medical care. For example, the professional liability insurance premium for a surgeon in India is 4% of that for a surgeon in New York.[1]

An important consideration in medical tourism is the potential impact on the residents of destination countries. Mattoo and Rathindran[22] suggest that revenue generated by developing countries providing medical services to foreign patients creates opportunities to improve the access and quality of care available to the citizens of these countries. Bookman and Bookman[23] emphasize that the government of destination countries must implement and enforce appropriate macroeconomic redistributive policies to ensure that the local residents of these nations actually realize the potential benefits of the medical tourism industry. Chinai and Goswami[24] have expressed concerns that medical tourism may seriously undermine the care of local residents by adversely impacting workforce distribution.

Quality and Safety in Medical Tourism

Faced with the choice of many medical institutions in diverse countries, medical tourists may find it very difficult to identify well-trained physicians and modern hospitals that consistently provide high-quality care. Some medical tourism agents, particularly those with backgrounds in healthcare, may be a helpful resource for patients in making appropriate choices. Accreditation by the Joint Commission International, which has accredited more than 125 facilities in 24 countries, and/or the International Organization of Standardization may provide a useful point of reference for patients selecting offshore medical facilities.[25]

Concerns have been voiced regarding the risk of complications resulting from travel and vacation activities in the postoperative period.[26] The management of postoperative complications that occur after a patient returns from an offshore medical facility, and the consequent costs of this care, are difficult issues that remain unresolved.[17,26]

The Response to Medical Tourism

The medical community in developed countries has started to recognize medical tourism as a real phenomenon that involves the profession, practitioners, and patients. Peer-reviewed medical and health journals began publishing papers on this topic in 2006.[16,17,19,22] Medical organizations have addressed medical tourism in articles and other documents posted on their Web sites.[26] The United States Senate Special Committee on Aging held hearings on the issue of medical tourism in June 2006 and called for a task force of experts to explore the impact and safety of lower-cost healthcare abroad.[19,27]

The insurance industry has become an active participant in medical tourism. In several states, Blue Cross Blue Shield sells insurance policies that enable or encourage patients to have expensive surgical procedures at low-cost offshore medical facilities.[3,5,6,12] In an effort to reduce the financial burden of employee healthcare, several fortune 500 corporations are evaluating the feasibility of outsourcing expensive medical procedures to offshore healthcare destinations.[6] Insurance provider networks are currently being expanded to include physicians around the globe, and it is anticipated that within a decade a majority of large employers' health plans will include offshore medical centers.[6]

Insurance companies are able to use a portion of their substantial savings to offer incentives to beneficiaries willing to have care in medical tourism destinations, including waiving deductible and out-of-pocket health expenses and paying for travel for the patient and even a family member. A particularly interesting response to the migration of patients to offshore healthcare destinations is that some US medical facilities are now accepting referrals from medical tourism agencies and providing highly discounted services to American patients.[6]

In nations that have long waiting lists for certain procedures, medical tourism provides a mechanism to clear backlogs by sending patients to foreign countries without expanding local capacity.[1] Currently, the British National Health System is sending patients to nearby countries for this purpose, and more distant medical tourism destinations may be used in the future.[1] Although this idea has not been explored, there may be novel opportunities to use low-cost offshore medical destinations to provide care for unfunded low-income patients while simultaneously relieving the burden on domestic healthcare facilities and philanthropic organizations.

The Continuing Evolution of Medical Tourism

The medical tourism industry is fueled and driven by patients who feel disenfranchised by the healthcare system in their home country. These informed patients shop outside the organized medical system to find services that are affordable, timely, or simply available. Millstein and Smith[19] emphasize that the flight of American patients to foreign destinations for lifesaving operations is a symptom of an affordability problem that is symbolically important and must be addressed by physician leaders. These leaders must recognize that patients, like all consumers, will search for providers who offer them maximal value, and medical tourism is an explicit declaration about what patients value most. Physicians and hospitals in medical tourism destinations recognize that they must provide high-quality care to develop a sustainable competitive advantage in the international marketplace. In an article on medical tourism in Time, Princeton University healthcare economist Uwe Reinhardt stated: “This has the potential of doing to the US health-care system what the Japanese auto industry did to American carmakers.”[2] It is increasingly apparent that medical tourism is changing the healthcare landscape in industrialized and developing countries around the world, and there is every reason to believe that this trend will continue to evolve.

Notes

Note

Dr. Horowitz had full access to all of the materials and information used in this study and takes responsibility for the integrity of the analysis thereof.

Study concept and design: Horowitz

Acquisition of materials and information: Horowitz, Jones

Analysis and interpretation of information: Horowitz, Rosensweig, Jones

Drafting of the manuscript: Horowitz

Critical revision of the manuscript for important intellectual content: Horowitz, Rosensweig, Jones

Administrative, technical or material support: Horowitz

Study supervision: Horowitz

Footnotes

Reader Comments on: Medical Tourism: Globalization of the Healthcare Marketplace See reader comments on this article and provide your own.

Readers are encouraged to respond to the author at ude.yrome.sub@ztiworoH_leahciM or to Paul Blumenthal, MD, Deputy Editor of MedGenMed, for the editor's eyes only or for possible publication as an actual Letter in MedGenMed via email: ude.drofnats@nemulbp

Contributor Information

Michael D. Horowitz, Global Perspectives Program, Goizueta Business School, Emory University, Atlanta, Georgia Author's email: ude.yrome.sub@ztiworoH_leahciM.

Jeffrey A. Rosensweig, Global Perspectives Program, Goizueta Business School, Emory University, Atlanta, Georgia.

Christopher A. Jones, Department of Health Policy and Management, Bloomberg School of Public Health, Johns Hopkins University, Baltimore, Maryland.

References

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