India is hoping to achieve a reputation for medical tourism on par with the one it has built as a global hub for it outsourcing. in the first part of this article last week, indian medical professionals took issue with perceptions abroad that “cheap” equated with low-quality treatments. the country, they say, is making significant strides and believes it has a healthcare value proposition that millions of people will find hard to resist.
Cardiac surgeon Devi Shetty doesn’t like the term medical tourism. “Medical care is something that is very stressful and people consider this under tremendous pressure,” he says.
“It is an event where people are scared of losing their lives. It may not be appropriate to call it tourism. Tourism is a different business altogether.”
Rana Mehta, executive director of PricewaterhouseCoopers India, agrees. “The tourism component is really very weak. most foreign patients come to India for chronic and serious medical treatment and I would call it medical value travel,” he says.
Ravi Aron, professor at the Johns Hopkins Carey Business School and a senior fellow at the Mack Center for Technological Innovation at Wharton, has yet another view.
“The world over it is known as the global healthcare delivery system,” he says.
Preetha Reddy, managing director of Apollo Hospitals, agrees with Mr Mehta.
“At Apollo Hospitals, we prefer to term this business opportunity as ‘medical value travel’ as people travel to our hospitals for serious life-threatening health conditions, which essentially need highly skilled doctors and medical infrastructure, and not mere minor treatments such as cosmetic enhancements, dental work or wellness which can be coupled with holidays, as the term ‘medical tourism’ implies.”
The multiplicity of names is accompanied by a wide range of numbers. the confusion was started by a McKinsey study called “Mapping the Market” in 2008. “Medical travel has captured the world’s attention and imagination,” it said. but it went on to explain that the McKinsey definition of a medical traveller was very different from what many others thought him or her to be.
The first to be knocked off were expats looking for healthcare in their country of stay. That accounted for 25-30% of the traditional medical tourist pool. then was the segment categorised under emergencies. These were ordinary tourists caught up in accidents. That eliminated another 30-35%. McKinsey estimated the remaining at “between 60,000 and 85,000 inpatients a year”, much lower than generally accepted numbers.
For instance, a 2008 Deloitte Center for Health Solutions report on “Medical Tourism: Consumers in Search of Value” put the number of Americans who had travelled abroad for medical care in 2007 at 750,000. McKinsey excludes “wellness” tourists (acupuncture, spas, yoga, aromatherapy and the like), patients from neighbouring countries, and outpatients _ those who don’t need to check into hospital.
The Deloitte report says India is stepping up the pace; the medical tourism sector is expected to grow 30% annually up to 2015. An update on the report says that the US recession is driving more people out of the country for healthcare; US outbound medical tourism is projected to increase 35% annually from 2010-12. “Medical tourism [today] represents the maturation of a cottage industry,” the report sums up.
Shushmul Maheshwari, chief executive of the Delhi-based business intelligence firm RNCOS, agrees that economic problems are driving more Americans abroad for healthcare.
“Under almost stagnant salary increments, the disposable income and saving considerations of US citizens are still well below the pre-crisis levels,” he says. “In this scenario, the low-cost treatment and nearly zero waiting time coupled with its proven track record offer convenient procedures for tourist arrivals from various geographical locations including the US.”
“Over the past few years, the medical tourism story has changed dramatically in India,” said a recent cover story in weekly business magazine BusinessWorld. “Not because the government has figured out the solution. but purely because of private enterprise _ with a few corporate hospitals, chemists and freelance agents all working in tandem to build a thriving ecosystem that educates, facilitates and ferries medical tourists from across the world.
“Last year, this ecosystem was responsible for about 600,000 patients travelling to India and spending $1 billion in getting treated here. (The numbers are industry estimates as the government does not have any official statistics.) Corporate hospitals such as Apollo, Fortis Hospital and Max as well as business associations estimate that the business is growing by 40% year-on-year.”
“India’s potential is huge,” says Mr Mehta of PwC. “Some 80% of foreign patients coming to India are from the neighbouring countries and from Iraq, Afghanistan, the former Soviet Union, etc, and now increasingly from Africa. but now with India proving itself as a credible provider of value healthcare, the western population ageing, and healthcare becoming more difficult there, I expect more people to come from the US and the UK.”
Mr Mehta says that some things went wrong with the earlier planning. “We expected most patients to come from the US and Europe. We expected people to come for cosmetic and regenerative treatment and this is where there is more potential for tourism. but the majority actually came for cardiac treatment, cancer treatment, knee replacement and other serious ailments. Therefore, tourism was not really of importance. We did not get the cost factor right.
“We thought that typically in India it costs one-tenth of that in the US, so we could cost at five times. but hospitals have not been able to charge very much. at present, with a foreign patient, there is around 20% more earning.”
Cost is, of course, being underplayed in the marketing efforts; this is why the word “cheap” rankles. “The patient is usually acutely aware of the difference in the sticker price for care,” says Mr Aron of Johns Hopkins. “There is no reason to draw attention to this.”
That’s an area where India enjoys an advantage over other countries too. According to the BusinessWorld report, a heart bypass surgery costs $144,000 in the US, $25,000 in Costa Rice, $24,000 in Thailand, $20,000 in Mexico, $13,500 in Singapore, and $8,500 in India. “The quality is excellent,” says Mr Maheshwari. in India, there is also less waiting time and personalised services.
Medical tourism is also taking shape as an industry, though there are some who feel that it will eventually fall in many buckets. (The recent FICCI-Yes Bank study talks of wellness tourism, health tourism) “There are more than 3,371 hospitals and around 750,000 registered medical practitioners,” says Mr Maheshwari.
Dr Shetty says it is easier to get loans these days. Indian companies are also taking over hospital chains in Asia _ Fortis has gone on a shopping spree, though it’s not been entirely successful _ and setting up front-ends in other countries for marketing purposes. Apollo has facilitation centres in Oman, Nigeria and the US. Max is present in Nigeria, Afghanistan, Bangladesh and Nepal.
Says Ms Reddy of Apollo: “There are several key players. Apollo Hospitals continues to attract the largest numbers of international patients followed by Max, Fortis and Workhardt.”
“Another opportunity that Indian operators are now seeing is that you don’t have to offer these healthcare services from India,” says Reuben Abraham of ISB. “For instance you can offer it from say, the Cayman Islands or the Bahamas. Ultimately, the innovation is in the process and as long as you can bring the same process innovation, even if the cost goes up a little as compared to offering it from India, it will still be a substantial saving for the patient.”
But what the budding sector will have to contend with is the Indian government. Take one example. With the intention of making things smoother, the government introduced a medical visa (M visa), which was faster and easier to get. in its wisdom, however, it added a peculiar clause _ “Foreigners coming on M visa will be required to get themselves registered mandatorily well within the period of 14 days of arrival with the concerned Foreigners Regional Registration Office.”
The end result: even patients who have to be carried into India on stretchers are coming on tourist visas. If the government wants medical tourism to be the next big thing, it has to put its house in order.
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