Growing Trend Of Medical Tourism May Be An Alternative To Health Insurance

Post by Sharat on May 21, 2009 · Under Featured Articles, Self Help, insurance · Comment 

During the last US Presidential election both democratic candidates, the then Senator and current president, Barack Obama, and his democratic rival Hillary Clinton made health care in America a priority election issue,. Both candidates threw around large numbers number ranging in the tens of millions of numbers of middle class Americans who either lacked health insurance all together or were under insured.

Rapidly escalating health care costs have caused the uninsured and the companies that do offer health insurance for their employees to start considering options for treatment, which go beyond the scope of domestic borders, and are increasingly geared towards lower cost solutions in developing world countries such as India.

In fact some of the best hospitals in India are now competitive with or even exceed their rivals in the developed world in terms of safety and quality. One estimate, according to the Economist Newspaper suggests that Americans can save up to 85 per cent by looking at lower cost alternatives overseas, and that the number of ‘medical tourists’ would increase from under 1 million in 2007 to 10 million by 2012

McKinsey, a consultancy, has estimated that “medical tourism” could bring India an additional 50 billion-100 billion rupees ($1.1 billion-2.2 billion) in annual revenue by 2012, and the healthcare industry as a whole in The US could be deprived by as much as $160 billion in annual business by the global medical outsourcing business.

The coming boom is not viewed as boon universally however, critics suggest that a deluge of foreigners into emerging market healthcare systems will cause money and expertise to flow away from domestic state owned healthcare systems. Doctors currently employed by the state will move to the private sector which means that resources normally devoted to ordinary people will be lost. Others suggest that medical tourism is nothing more than a band aid which removes attention from the true nature of the problem in the developed world, the need to cuts costs and improve quality.

‘Medical tourism’ itself has been around since the dawn of civilization, the ancient Egyptians used to travel remote retreats for treatments for centuries and that practice has turned into what we know today as being ‘medical tourism’.

A report by professional services firm Deloitte reckons that approximately 150,000 Americans sought treatment overseas in 2006, with the majority doing so in Latin America and Asia. The number of Americans seeking treatment overseas in the following year increased fivefold and grew to an estimate 750,000 in 2007, and the report suggests that the number could reach as high as 6 million as soon as 2010.

The shift towards seeking lower cost alternatives with high quality health care providers in emerging markets such as India is hardly surprising given the economic downturn. In fact according to the Deloitte survey , 40 per cent of Americans are willing to travel if they can save 50 per cent or more on their health care expenditure.

Britain and Canada, both of whom operate nationalized health care systems have as a result suffered from overloaded healthcare systems, which have resulted in long waiting lists. In some cases patients who require an elective procedure need to wait between six to twelve months in the UK and Canada, which can cause the patient severe pain and other symptoms.

According to Prathap Reddy, cardiologist and founder of Indian hospital chain Apollo Hospitals, if a patient has to wait six months for a heart bypass, they may no longer need it anymore.

In 2003 according to the Economist, 50,000 UK citizens sought treatment overseas, and the trend seems to be following that of the US, with the Newspaper suggesting that by the end of this decade 200,000 will do so, creating a market worth a £886 million market.

India as a medical tourism destination is dwarfed by its much smaller rival Thailand, but it looks well equipped to compete for the business of providing health care to patients from OECD countries. There are on a macro level an extremely large number of highly qualified doctors, and a large number of Indian diasporas who may combine seeking treatment with visiting family. There are nearly 1.5 million people of Indian origin in Britain alone.

Harry Srivastava from the Confederation of Indian Industry says India has competency and is cost effective at every level of healthcare, from new drug discovery and testing to surgery, and the obvious solution for patients in the developed world is to outsource their medical requirements. Patients can save anywhere from between 50 to 75 per cent of the cost of treatment. A surgery which costs US$60,00 in the US could cost as little as US$6,000 in India.

Apollo Hospitals Dr. Reddy believes the big opportunity lies in what he calls “disease management “ Joint replacements, heart bypass and cataracts. Dr. Reddy also sees opportunities in elective treatments such as in-vitro fertilization and cosmetic surgery. India already posses a vibrant health tourism industry offering alternate medicine such as Ayurveda, yoga and massage.

Whatever the benefits, politically speaking it is hard for HMO’s or the NHS to be seen to be sending their patients to a third world country for treatment, and India as a destination still has an image problem compared to rivals such as Thailand despite launching an advertising campaign.

The poverty in India at times makes even its resident squeamish sometimes about the notion that foreigners can come to the country and obtain the best facilities whilst its own citizens lack even basic healthcare. Despite the macro numbers, India has only 51 doctors per 100,000 people, which compares with 279 per 100,000 in America.

Whatever the view, as an industry medical tourism, like its better known cousin software exports, will bring new money into the country, and finance a shift in allocation of resources which would only be beneficial to India’s poor. Though in the short run it has its issues some of which may be unpleasant, overwhelmingly in the long run, it will most certainly provide large benefits to patients, both the poor in India and the rich from overseas, and the trend is more the likely going to continue and grow.

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