Medical tourism remains a small but growing industry
December 27, 2011
by Joanna Padovano, Reporter
This article originally appeared in the December 2011 issue of DOTmed Business News
In 2007, Jonathan Reeder of Houston, Texas, received some troubling news after a routine exam. The results came back that his prostate numbers were too high—an early warning sign of cancer. His troubles didn’t end there. “I was between insurances and I couldn’t afford to pay full-fare for prostate removal,” recalls the now 68-year-old dentist.
Rather than delay the procedure and possibly put his health at risk, Reeder explored his options. He learned about WorldMed Assist, a medical travel facilitator, contacted the company and became a medical tourist. He made his arrangements and then headed to India, where he had his prostate successfully removed at the Apollo Hospital in Jubilee Hills, Hyderabad.
“It was a very positive experience . . . they treated me very well,” Reeder says, mentioning that he stayed in the presidential suite—the best accommodations in the hospital. His trip lasted about a week, during which time he was even able to do some sightseeing. He spent approximately $15,000 overall, 50 percent of what he would have spent in the United States, he estimates.
After returning home, Reeder received follow-up care from his local urologist. “I now have insurance, but if I were faced with the same set of circumstances, I wouldn’t hesitate [to do it again],” he says, referring to his experience with medical travel.
Background and statistics
As mentioned on the Medical Tourism Association website, millions of people travel abroad each year for medical care. Scott Edelstein, a health care counselor with the law firm Squire, Sanders and Dempsey, forecasts that the value of global medical tourism will increase from 60 billion dollars in 2006 to 100 billion dollars in 2012, the MTA website says.
There are three main types of medical tourism; outbound, inbound and intrabound. Outbound includes Americans, like Reeder, who travel to another country to receive medical care. Inbound refers to foreigners who come to the United States for medical care. Intrabound, also referred to as domestic medical tourism, is used to describe Americans who travel to a different state for medical care.
As stated in a July 2011 Euromonitor International market report, “Global Medical Tourism Briefing: A Fast Growing Niche Market,” medical tourism accounts for less than 1 percent of the global tourism expenditure, although that amount is expected to grow in the coming years due to hikes in health care costs and an aging population.
The Deloitte Center for Health Solutions predicts that approximately 1.6 million Americans will travel outside the country for medical care in 2012, with an anticipated yearly growth of 35 percent. The growth, according to Deloitte, could be the result of several factors, including an increased sophistication of medical tourism operations, demand for cosmetic surgery, and access to low-cost global transportation. The firm forecasts that inbound medical travel will experience slower growth that should total approximately 561,000 medical tourists by 2017.
According to Deloitte, the American Medical Association has established a number of medical tourism guidelines, such as “medical care outside the U.S. should be voluntary” and “coverage for travel outside the U.S. for care must include the costs of follow-up care upon return.” These guidelines are meant to be adhered to by employers, insurance companies, and other facilitators of medical travel outside of the U.S.
Advantages and disadvantages
“The pros include the ability to receive affordable, quality medical treatment, especially for those that don’t have insurance,” Michelle Grant, travel and tourism research manager for Euromonitor International tells DOTmed News in an email. “In some cases, people travel to receive treatments that aren’t available at home or to avoid long lines.”
Wouter Hoeberechts, CEO of WorldMed Assist says medical tourists typically save anywhere from 40 to 90 percent of what their medical procedure would cost at home.
“If they’re not saving at least $5,000, it’s not worth doing,” says Rudy Rupak, president and CEO of PlanetHospital, another facilitator of medical travel.
One of the cons of medical tourism is that it’s difficult to fully evaluate the quality of care, says Grant. “Other [cons] include logistical issues, lack of follow-up support and care, uncertainty over malpractice issues and crowding out of domestic patients,” she adds.
Another disadvantage of medical tourism—perhaps one of the biggest—is the simple fact that many people prefer to be in close proximity to family and friends when they are unwell. Medical procedures are already stressful events without the added anxiety of being in an unfamiliar place far from home.
“Medical travel is not for everybody,” says Hoeberechts. “Traveling for care, whether that’s internationally or domestically, will always be for the smaller minority of patients.”
Medical tourism trends
According to Hoeberechts, there are three major trends currently taking place within the medical tourism industry. “One is softening of the market on the consumer side; [another] is a pretty rapid growth of the market on the corporate side; and finally, a rise of domestic medical travel,” he says.
PlanetHospital—which was recently acquired by Global Health Voyager—has observed that an increasing amount of their clientele consists of people who are struggling financially.
“In many cases, we are their health insurance because they can’t afford to pay medical premiums while unemployed, or they can’t even pay their COBRA premiums while unemployed,” says Rupak. “The other trend, of course, is that we are getting a lot of doctors who are coming to us and are saying, ‘Help us with patient acquisitions,’ and we’re starting to look at that very seriously.” He adds that PlanetHospital is also being approached by more employers who are interested in learning about the benefits of medical tourism.
Popular procedures and destinations
Three of the most popular procedures performed on medical tourists are those involving orthopedics, spine and heart, says Hoeberechts. Less common procedures include transplants, general surgery and cancer care, among others. “Any [procedure] where people can save a couple thousand of dollars is a good candidate to be done abroad,” he says, explaining that the obvious exception would be any type of emergency situation.
Hoeberechts says that the most popular destinations Americans travel to for medical tourism are Mexico, Costa Rica, Western Europe and Asia. When foreigners come to the United States for medical care, it is usually not for financial reasons. “The logic of foreigners coming to the U.S. is different,” he says. “They’re not about cost-savings; they’re about very high quality. Typically, it’s the wealthier patients that come from abroad to the U.S.”
How insurance companies are involved
Medical tourism is not just an option for those without health insurance. Some insurance companies have begun implementing plans that include medical travel as a way for both employers and employees to save money.
Aetna, for example, offers a domestic medical travel program that allows members to use a regional center designated by the insurance company. “Aetna chooses these facilities based on quality and cost measures, at rates that provide savings both to the member and the plan sponsor,” Richard Feifer, Aetna’s national medical director for national accounts tells DOTmed News in an email. “A number of members have taken advantage of this program.”
Feifer explains that Aetna’s domestic medical tourism plan includes travel and lodging for members and a companion. Popular medical procedures covered by the program include back surgery, joint replacement and coronary artery bypass. “These are fairly common procedures where patient needs are fairly consistent, and there are straightforward ways of providing care and ensuring high quality outcomes,” he says. Currently, Aetna is not actively involved in international medical tourism.
Swiss Re, a global reinsurance company, is also taking part in medical tourism. “We actually started looking at this product back in 2008,” says Matt Leming, the company’s vice president and sales leader of the medical expense group. “At that point, it was still a very nascent industry and frankly, it still is—at least within the domestic U.S. marketplace.”
Leming says the industry initially catered primarily to individuals who were either uninsured or under insured. Now, he says, medical travel has expanded into the employer market. “Three years ago the interest was pretty low,” he says, referring to the amount of employers who wanted to take advantage of medical tourism. “The interest has grown considerably year-over-year as it’s reported more in the news . . . employers are looking for ways to save money and this is an option.”
Medical travel booking for the future
According to Leming, if health care costs remain high, there will continue to be a market for both domestic and international medical tourism. “It’s an alternative that employers will have to consider if they’re going to maintain benefit plans for their employees,” he says. “As long as—at least internationally—the quality of care remains high and the cost relatively less than what it would be here, there’s certainly going be a marketplace for it.”
“Medical tourism is expected to grow as populations in developed countries age and health care costs continue to increase,” says Grant, who mentions that health care reform may also lead to an increased interest in medical tourism. “With so many more insured people, costs of health care and insurance are likely to increase due to higher demand. This may also cause shortages in doctors, which would increase waiting times. As a result, more Americans may be willing to travel abroad to receive treatment.”
Whether medical tourism maintains a steady growth, or changes in economic climates and health care coverage force a detour, one thing is guaranteed to stay the same—there will continue to be a marked lack of interest in seeing vacation photos.
This article originally appeared in the December 2011 issue of DOTmed Business News
In 2007, Jonathan Reeder of Houston, Texas, received some troubling news after a routine exam. The results came back that his prostate numbers were too high—an early warning sign of cancer. His troubles didn’t end there. “I was between insurances and I couldn’t afford to pay full-fare for prostate removal,” recalls the now 68-year-old dentist.
Rather than delay the procedure and possibly put his health at risk, Reeder explored his options. He learned about WorldMed Assist, a medical travel facilitator, contacted the company and became a medical tourist. He made his arrangements and then headed to India, where he had his prostate successfully removed at the Apollo Hospital in Jubilee Hills, Hyderabad.
“It was a very positive experience . . . they treated me very well,” Reeder says, mentioning that he stayed in the presidential suite—the best accommodations in the hospital. His trip lasted about a week, during which time he was even able to do some sightseeing. He spent approximately $15,000 overall, 50 percent of what he would have spent in the United States, he estimates.
After returning home, Reeder received follow-up care from his local urologist. “I now have insurance, but if I were faced with the same set of circumstances, I wouldn’t hesitate [to do it again],” he says, referring to his experience with medical travel.
Background and statistics
As mentioned on the Medical Tourism Association website, millions of people travel abroad each year for medical care. Scott Edelstein, a health care counselor with the law firm Squire, Sanders and Dempsey, forecasts that the value of global medical tourism will increase from 60 billion dollars in 2006 to 100 billion dollars in 2012, the MTA website says.
There are three main types of medical tourism; outbound, inbound and intrabound. Outbound includes Americans, like Reeder, who travel to another country to receive medical care. Inbound refers to foreigners who come to the United States for medical care. Intrabound, also referred to as domestic medical tourism, is used to describe Americans who travel to a different state for medical care.
As stated in a July 2011 Euromonitor International market report, “Global Medical Tourism Briefing: A Fast Growing Niche Market,” medical tourism accounts for less than 1 percent of the global tourism expenditure, although that amount is expected to grow in the coming years due to hikes in health care costs and an aging population.
The Deloitte Center for Health Solutions predicts that approximately 1.6 million Americans will travel outside the country for medical care in 2012, with an anticipated yearly growth of 35 percent. The growth, according to Deloitte, could be the result of several factors, including an increased sophistication of medical tourism operations, demand for cosmetic surgery, and access to low-cost global transportation. The firm forecasts that inbound medical travel will experience slower growth that should total approximately 561,000 medical tourists by 2017.
According to Deloitte, the American Medical Association has established a number of medical tourism guidelines, such as “medical care outside the U.S. should be voluntary” and “coverage for travel outside the U.S. for care must include the costs of follow-up care upon return.” These guidelines are meant to be adhered to by employers, insurance companies, and other facilitators of medical travel outside of the U.S.
Advantages and disadvantages
“The pros include the ability to receive affordable, quality medical treatment, especially for those that don’t have insurance,” Michelle Grant, travel and tourism research manager for Euromonitor International tells DOTmed News in an email. “In some cases, people travel to receive treatments that aren’t available at home or to avoid long lines.”
Wouter Hoeberechts, CEO of WorldMed Assist says medical tourists typically save anywhere from 40 to 90 percent of what their medical procedure would cost at home.
“If they’re not saving at least $5,000, it’s not worth doing,” says Rudy Rupak, president and CEO of PlanetHospital, another facilitator of medical travel.
One of the cons of medical tourism is that it’s difficult to fully evaluate the quality of care, says Grant. “Other [cons] include logistical issues, lack of follow-up support and care, uncertainty over malpractice issues and crowding out of domestic patients,” she adds.
Another disadvantage of medical tourism—perhaps one of the biggest—is the simple fact that many people prefer to be in close proximity to family and friends when they are unwell. Medical procedures are already stressful events without the added anxiety of being in an unfamiliar place far from home.
“Medical travel is not for everybody,” says Hoeberechts. “Traveling for care, whether that’s internationally or domestically, will always be for the smaller minority of patients.”
Medical tourism trends
According to Hoeberechts, there are three major trends currently taking place within the medical tourism industry. “One is softening of the market on the consumer side; [another] is a pretty rapid growth of the market on the corporate side; and finally, a rise of domestic medical travel,” he says.
PlanetHospital—which was recently acquired by Global Health Voyager—has observed that an increasing amount of their clientele consists of people who are struggling financially.
“In many cases, we are their health insurance because they can’t afford to pay medical premiums while unemployed, or they can’t even pay their COBRA premiums while unemployed,” says Rupak. “The other trend, of course, is that we are getting a lot of doctors who are coming to us and are saying, ‘Help us with patient acquisitions,’ and we’re starting to look at that very seriously.” He adds that PlanetHospital is also being approached by more employers who are interested in learning about the benefits of medical tourism.
Popular procedures and destinations
Three of the most popular procedures performed on medical tourists are those involving orthopedics, spine and heart, says Hoeberechts. Less common procedures include transplants, general surgery and cancer care, among others. “Any [procedure] where people can save a couple thousand of dollars is a good candidate to be done abroad,” he says, explaining that the obvious exception would be any type of emergency situation.
Hoeberechts says that the most popular destinations Americans travel to for medical tourism are Mexico, Costa Rica, Western Europe and Asia. When foreigners come to the United States for medical care, it is usually not for financial reasons. “The logic of foreigners coming to the U.S. is different,” he says. “They’re not about cost-savings; they’re about very high quality. Typically, it’s the wealthier patients that come from abroad to the U.S.”
How insurance companies are involved
Medical tourism is not just an option for those without health insurance. Some insurance companies have begun implementing plans that include medical travel as a way for both employers and employees to save money.
Aetna, for example, offers a domestic medical travel program that allows members to use a regional center designated by the insurance company. “Aetna chooses these facilities based on quality and cost measures, at rates that provide savings both to the member and the plan sponsor,” Richard Feifer, Aetna’s national medical director for national accounts tells DOTmed News in an email. “A number of members have taken advantage of this program.”
Feifer explains that Aetna’s domestic medical tourism plan includes travel and lodging for members and a companion. Popular medical procedures covered by the program include back surgery, joint replacement and coronary artery bypass. “These are fairly common procedures where patient needs are fairly consistent, and there are straightforward ways of providing care and ensuring high quality outcomes,” he says. Currently, Aetna is not actively involved in international medical tourism.
Swiss Re, a global reinsurance company, is also taking part in medical tourism. “We actually started looking at this product back in 2008,” says Matt Leming, the company’s vice president and sales leader of the medical expense group. “At that point, it was still a very nascent industry and frankly, it still is—at least within the domestic U.S. marketplace.”
Leming says the industry initially catered primarily to individuals who were either uninsured or under insured. Now, he says, medical travel has expanded into the employer market. “Three years ago the interest was pretty low,” he says, referring to the amount of employers who wanted to take advantage of medical tourism. “The interest has grown considerably year-over-year as it’s reported more in the news . . . employers are looking for ways to save money and this is an option.”
Medical travel booking for the future
According to Leming, if health care costs remain high, there will continue to be a market for both domestic and international medical tourism. “It’s an alternative that employers will have to consider if they’re going to maintain benefit plans for their employees,” he says. “As long as—at least internationally—the quality of care remains high and the cost relatively less than what it would be here, there’s certainly going be a marketplace for it.”
“Medical tourism is expected to grow as populations in developed countries age and health care costs continue to increase,” says Grant, who mentions that health care reform may also lead to an increased interest in medical tourism. “With so many more insured people, costs of health care and insurance are likely to increase due to higher demand. This may also cause shortages in doctors, which would increase waiting times. As a result, more Americans may be willing to travel abroad to receive treatment.”
Whether medical tourism maintains a steady growth, or changes in economic climates and health care coverage force a detour, one thing is guaranteed to stay the same—there will continue to be a marked lack of interest in seeing vacation photos.
This article originally appeared in the December 2011 issue of DOTmed Business News