Medical tourism in India is picking up momentum, as more patients from neighbouring countries travel to India for cost effective procedures provided by experienced medical professionals. However, to address the emerging market segment of patients from Europe driven by long wait times for procedures and patients from the US struggling with high cost of care, the Indian healthcare sector needs a makeover. Outsourcing one’s heart surgery to India is a far more complicated decision than shipping software development to India.
A look at the numbers
There have been recent reports in the media that have quoted various experts projecting revenue ranging from $ 2 billion to $ 20 billion for India from medical tourism by the year 2020.Let’s look at some numbers to put this in perspective. One of the best managed healthcare groups in India with about 6000 beds has revenue of about $ 125 million. However going with these numbers, it would require about 60,000 beds, to reach $1.25 billion revenue and 12, 00,000 beds to obtain a revenue of $25 billion exclusively from healthcare services.
Let us look at some of the actual numbers from the tourism industry as well. The numbers may be a little dated but this is what it looks like. In 2003, about 2,726,000 tourists visited India and the revenue from the same was $3.5 billion .Well, if that many relatives of patients (about 3 million) travel to India that would be another $3.5 billion from tourism services. Despite questionable projections, the fact remains that medical tourism in India is a growing trend.
Segmentation of the patient population
Currently the bulk of the patients come to India from neighboring countries such as Bangladesh, Pakistan, other Asian countries, Africa and the Middle East. In many cases the driver for cross border care is a question of quality of care than cost it self. The high quality of care that is provided in India is simply not available in some of the neighboring countries.
The second segment is the segment of patients sponsored by the governments for treatment abroad by countries such as Middle East and Africa. For those governments, India is relatively cost effective option compared to Europe or the US. Private patients (not sponsored) from these countries looks at India as value for money option vis a vis Europe and US. Moreover post 9/11 there has been a dramatic drop in patients from Middle East to the US.
The market segment that the Indian healthcare industry is now targeting is the patient population from Europe and the US. There are several patients of Indian origin residing in UK and US, who are already using the services of hospitals in India, when they are on vacation etc. Apart from this there have been the widely publicized cases of patients from the US and Australia.
True, these countries do have an increasing senior population and the healthcare systems are facing challenges. Even though it is economically viable for some of these governments to officially bless shipping of patients abroad, it is the political viability of such a decision that may need to be worked on. Would a political party in power in Europe/US would want to face the next election as the pioneer of shipping patients to “third world countries”?
Healthcare management executives may want to recognize that a strategy that works for attracting patients from Bangladesh may not work for patients from Britain, since the expectations and drivers are different. The industry think tank may want to devise niche strategies to tap into each of these segments.
Competition
What is a good reason for an average senior citizen in the US to fly 18 -20 hours to get his hip replaced/resurfaced? Obviously if he/she is not covered by insurance and cannot afford the same in US he has to look at options. What if this can be done in Mexico or Costa Rica at comparable rate and a shorter flight?
A look at the numbers
There have been recent reports in the media that have quoted various experts projecting revenue ranging from $ 2 billion to $ 20 billion for India from medical tourism by the year 2020.Let’s look at some numbers to put this in perspective. One of the best managed healthcare groups in India with about 6000 beds has revenue of about $ 125 million. However going with these numbers, it would require about 60,000 beds, to reach $1.25 billion revenue and 12, 00,000 beds to obtain a revenue of $25 billion exclusively from healthcare services.
Let us look at some of the actual numbers from the tourism industry as well. The numbers may be a little dated but this is what it looks like. In 2003, about 2,726,000 tourists visited India and the revenue from the same was $3.5 billion .Well, if that many relatives of patients (about 3 million) travel to India that would be another $3.5 billion from tourism services. Despite questionable projections, the fact remains that medical tourism in India is a growing trend.
Segmentation of the patient population
Currently the bulk of the patients come to India from neighboring countries such as Bangladesh, Pakistan, other Asian countries, Africa and the Middle East. In many cases the driver for cross border care is a question of quality of care than cost it self. The high quality of care that is provided in India is simply not available in some of the neighboring countries.
The second segment is the segment of patients sponsored by the governments for treatment abroad by countries such as Middle East and Africa. For those governments, India is relatively cost effective option compared to Europe or the US. Private patients (not sponsored) from these countries looks at India as value for money option vis a vis Europe and US. Moreover post 9/11 there has been a dramatic drop in patients from Middle East to the US.
The market segment that the Indian healthcare industry is now targeting is the patient population from Europe and the US. There are several patients of Indian origin residing in UK and US, who are already using the services of hospitals in India, when they are on vacation etc. Apart from this there have been the widely publicized cases of patients from the US and Australia.
True, these countries do have an increasing senior population and the healthcare systems are facing challenges. Even though it is economically viable for some of these governments to officially bless shipping of patients abroad, it is the political viability of such a decision that may need to be worked on. Would a political party in power in Europe/US would want to face the next election as the pioneer of shipping patients to “third world countries”?
Healthcare management executives may want to recognize that a strategy that works for attracting patients from Bangladesh may not work for patients from Britain, since the expectations and drivers are different. The industry think tank may want to devise niche strategies to tap into each of these segments.
Competition
What is a good reason for an average senior citizen in the US to fly 18 -20 hours to get his hip replaced/resurfaced? Obviously if he/she is not covered by insurance and cannot afford the same in US he has to look at options. What if this can be done in Mexico or Costa Rica at comparable rate and a shorter flight?
I am not an expert of the patient flow patterns to competitor locations such as Hong Kong, Singapore, SouthAfrica, Costa Rica, Mexico, the Caribbean and emerging destinations such as Dubai. According to studies, there has been differentiation in the services provided at these destinations..
South Africa draws several cosmetic surgery patients, especially from Europe, and several South African clinics offer packages that include personal assistants, visits with trained therapists, trips to top beauty salons, post-operative care in luxury hotels and safaris or other vacation incentives. Because the South African rand has such a long-standing low rate on the foreign-exchange market, medical tourism packages there tend to be perpetual bargains as well. Bangkok Phuket Hospital is the premier place to go for sex-change surgery. In fact, that is one of the top 10 procedures for which patients visit Thailand.
Argentina ranks high for plastic surgery, and Hungary draws large numbers of patients from Western Europe and the U.S. for high-quality cosmetic and dental procedures that cost half of what they would in Germany and America. Dubai--a destination already known as a luxury vacation paradise--is scheduled to open the Dubai Healthcare City by 2010. Situated on the Red Sea, this clinic will be the largest international medical center between Europe and Southeast Asia.
The Indian healthcare industry needs to examine the factors that have made these medical tourism destinations popular.
Challenges
There are definitely areas for improvement as the Indian healthcare industry starts marketing services to newer patient segments. A key difference in healthcare services in India, unlike the IT sector is the critical role the government has to play to utilize medical tourism opportunity to its best. Some of the areas for improvement, to make India a global healthcare destination are:
Image makeover
Despite the success of India in the IT market, perception of India in the eyes of the target audience has to change dramatically. The predominant image of India the average senior citizen in Europe (who is a target customer) has in his mind is picture of pre Independence India. To transform those images and present an image of India where he can trust Indian surgeons with his heart, face, and hip joints is a challenge. (outsourcing your heart surgery is a lot different from outsourcing software code!!) To the average senior citizen in the US, it is more of a challenge, since to many, India is still a land of snake charmers, and cows in traffic, “in a land far far away”… The predominant barrier to attracting patients from the developed world is transforming this perception.
Perception of Quality of Care
Though one may argue against this, an average patient half a world away perceives the quality of care based on the perception of the country’s image as a whole. The patients may have a hard time comprehending that the quality of care in India can be comparable to the US. One way to get over this is for hospitals to follow international healthcare accreditation standards. Would a patient be willing to trust his heart, kidneys, and hips and face if there is an iota of doubt regarding quality of care? (this segment of high yielding procedures is where the Indian medical tourism market is looking forward to for better profits) In fact, there have been cases of plastic surgery gone bad, particularly from Mexican clinics in the days before anyone figured out what a gold mine cheap, high-quality care could be for the developing countries.
Scalability of Healthcare Infrastructure –several questions
The first question that comes to my mind is whether India can scale up to address the increasing patient mass. Does India have enough specialists and super specialists? What is the reality on the ground with regard to paramedical staff? How is the attrition among nurses due to demand abroad? The other question is the sheer number of beds and physical healthcare infrastructure and the support network required. On a different note, from a social perspective, would there be enough doctors and infrastructure left to treat the not so “profitable” Indian patient? What is the mechanism for international patients who seek legal redressal for service gone bad? How long would it take for resolving the same in India? Is the Indian legal infrastructure geared up to handle healthcare specific issues in a speedy manner? I am sure these questions are being asked.
Role of the government
To make the model scalable the government of India will have to work in tandem with the private sector in several critical areas. Some of the areas where government needs to act are:
Medical Education
A key factor for providing competitive care in India revolves around adequate supply of medical manpower. Though there is an oversupply of medical graduates in the country, the supply of specialists with post graduate education may be a concern as more hospitals start to address medical tourism. Moreover a nursing shortage is imminent in India as overseas recruiting for nurses increases as a result of the nursing shortages in US and Europe. It is high time that the government really looked hard at the demand supply situation of human resources in the healthcare sector and recalibrated the supply of specialists and paramedicals in the country. This would mean changes to policies on post graduate medical education, nursing education etc.
Infrastructure
Unlike the IT sector that is not heavily dependent on surface transport, quality of healthcare service can be limited by traffic and hartals. The last thing the fledgling medical tourism industry in India wants is bad press on a couple of foreign patients in ambulances that were stuck in traffic for several hours due to a political party’s rally.
From airports, and high ways, hassle free environments for patients’ relatives, efficient law and order and judiciary reforms, there is quite a bit where improvements can and needs to be made on the support infrastructure to make medical tourism work well in India.
Privacy of Patient Information
One area that is understated in discussions around healthcare services in India is confidentiality of patient data and regulations related to privacy and security of patient data in India. A good start would be to adopt HIPAA and other privacy standards in India.
Role of IT standards
Finally, adopting and adapting of Information technology systems and standards that are in vogue in the developed world would be required to ease the administrative processes involved in cross border care and integration with the medical records in the country of origin.
2 comments:
Nice post! You have said it very well. Keep going.
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