Uncover The Cost of Medical Tourism
Healthcare providers are recognizing the significant impact of
patient revenue from patients seeking alternative treatment overseas
in what is known as 'medical tourism'.
Most medical tourists are seeking more affordable surgery, both
medically necessary as well as elective. Reports of heart bypass
surgery performed in India at a cost of $15,000. compared to $150,000
in the USA. In general terms, such high end surgery performed in
countries such as certain services in Asia, Eastern Europe , Middle
Eastern or Latin America can be priced at around 10-30% of local
In terms of the the total revenue of the healthcare industry, revenue
lost to medical tourism may seem insignificant. However, such trends
tend to start small, and the impact multiplied and unevenly distributed.
Every medical tourist dollar lost can translate to as much as ten
dollars of revenue loss to a local provider.
Contract outsourcing of manufacturing and information technology
services to low cost countries is now big business. Concerns that
similar growth may occur in medical toursim is cause for concern
for local healthcare industries.
Most services sought offshore are provided by small specialist
health businesses, such that the growth impact of procedures performed
by these providers will likely have significant impact on a small
percentage of the industry. Thus the impact of medical tourism is
not evenly spread.
Many healthcare providers are formulating plans to address the
issue of medical tourism and have begun to take preventative action.
Analysis of the future industry impact of this trend is essential
to stem adverse impacts on local providers, which will in turn reduce
services provided to local populations.
Medical tourism could be seen as an opportunity, rather than a
threat. No matter what strategic action is taken, access to the
right information, the right business intelligence can help divert
negative impacts into positive outcomes.
The Value Proposition of Medical Tourism
Business intelligence can help make this trend an opportunity,
through value propositions focused on:
- Cost - competing against services in Asian,
Eastern European, Middle Eastern or Latin American countries
- Availability of Services - patients in Canada
and Western Europe can wait a year or more for some surgeries
- Quality - individual facilities in tourist
destinations are meeting expectations of quality standards set
by payers, purchasers, patients, politicians and governmental
agencies in the United States. In addition, hospitals in Singapore
are developing impressive research and ancillary service infrastructures
to support the medical tourism patients
- Luxury -medical tourism industry is developing
a luxury experience for patients in an effort to shield patients
from some of the realities of the destination country. This includes
air transport from airports direct to hospitals and developing
medical facilities close to the point of patient arrival.
The primary motive of offshore providers is revenue. Several health
plans are offering a medical tourism option as a way to improve
their value to their customers.
Responding to the Threat
In responding to the threat of medical toursim we must work within
the healthcare servcies framework to divert potential medical tourists
back to local options.
There are four types of Healthcare services, it is essential to
select the most appropriate response to the challenge medical tourism
- Major Healthcare Events - the primary target
for medical tourism – in-patient surgeries such as heart
surgeries, hip replacements, neurosurgery, cancer surgeries. Some
outpatient surgeries [major dental surgery, cosmetic surgery etc]
are also being provided. This is in stark contrast to the emergence
of offshore manufacturing which clustered around small components
- Minor Healthcare Events - outpatient surgeries
are not a primary target for medical tours. The return on investment,
as well as the risk and time away does not justify the overhead
associated with the treatment event.
- Chronic Healthcare Relationships - chronic
disease management involving long, protracted, expensive relationships
with healthcare providers are not a major target for medical tourism.
- Intimate Healthcare Relationships - relationships
between patients and primary care physicians as well as professional
staff [PAs, NPs, RNs, etc.] are cumulatively built from multiple
small contact events. Events such as checkups, immunizations,
routine and some focused visits contribute a significant portion
of healthcare providers’ revenue streams and connect providers
with the community. These are of no interest to medical tourism
Fighting Back Using Business Intelligence
Business responses to the challenge of Medical Tourism require
business intelligence to not only survive, but to also increase
global healthcare services.
Typical defensive responses include:
- Playing up the potential health risks to the patient - diseases
are more prevalent in developing nations.
- Physical strain of travelling to provider destination - travel
takes a lot out of a person, even if he or she is well.
- Insecurity of the unknown facility - the healthcare facilities
are an unknown element for most patients.
- Financial risks - some insurance plans will cover the main surgery
event but the normal follow-up to that event or complications
that may arise. The net result could be a larger bill than if
the procedure was done by a local provider.
Choosing a defensive stance requires a significant amount of evidence
in the form of business intelligence. Creating doubt in the competition
demands an organization to support the claimed quality differentials.
This requires measures of patient safety, infection rates, clinical
and administrative efficiency, recovery rates to demonstrate superior
service distinct from that of the overseas competition. Like business
intelligence is also required on the competition, a difficult task
Playing the same game by distinguising your service as an alternative
destination that offers respected, well-known healthcare facilities
and the special competencies of the provider. This may include specialist
research, patient education, level of service and luxurious accommodations
that still highlight high standards of clinical professionalism.
To support this response, information on an organization’s
clinical competencies, provider capabilities, operational activities
and patient opinions is required. Key evidence of a unique selling
proposition that positions your services to patients, purchasers,
payers and employees can distinguish your business as a special
destination for healthcare services. Reference to such data should
be embedded in every promotional situation.
A positive hybrid alternative is to partner with medical tourism
providers. The tactics employed by remote destinations, such as
a leading healthcare research infrastructure, adds credibility to
your business and secures a secure channel to outsource some of
your surgery to global destinations. Since surgery is typically
a strategic component of most healthcare organizations, this is
a highly risky move; the financial return must more than outweigh
any negative local impact. A more comfortable alternative may be
to outsource semi-strategic functions [radiology interpretations].
Managing a medical tourism partnership requires a wide range of
business intelligence measures, including:
- Clinical indicators for both firms in the partnershi
- Information on both healthcare services and non-healthcare services
- Financial measures - to measure success and conform to regulatory
and accreditation requirements of the respective sets of authorities.
- Databases will need to be conformed or reconciled to provide
an accurate comparison of the metrics used to monitor success
and/or correct deficiencies.
Patient Relationship Management
The strongest trend in healthcare is in the need for chronic care
relating to conditions such as diabetes, cancer, high cholesterol
and depression. These chronic healthcare relationships provide an
opportunity to replace lost surgery revenue with a focus on patient
relationships surrounding these major chronic conditions.
This may be only an interim window of opportunity as global travel
and communications form closer and tighter bridges between populations.
This will make remote management of such conditions easier and affordable.
Cementing strong long-term patient relationships is an essential
step toward retaining profitable patients and service lines.
Patient relationships management and patient retention and growth
strategies require information:
- Clinical data - patient registries, clinical operations, clinical
outcomes measurements, clinical quality indicators
- Administrative and financial data - performance trends, efficiency
measures, and access metrics) in order to be successful.
This data must be:
- Sourced from various locations - hospital systems,
clinical systems, financial systems
- Combined across different operating models
- hospitals, primary care clinics, specialty practices, laboratories,
- Distributed to a broad range of users - provider
executives, payer/purchaser executives, managers and analysts)
to improve and maintain performance.
At present, medical tourism represents only a small segment of
the healthcare industry. However, it is rapidly gaining awareness
and acceptance with purchasers, payers, travel agencies and political
interests across the globe. The potential revenue impact on local
specialist healthcare providers [those that provide major surgeries]
can be significant and is likely to become more so in the near future.
There are positive ways in which businesses can respond to this
challenge. Using business intelligence to gain full insight into
the costs, revenues and impact of current and future forces, affected
healthcare providers can plan a bold and profitable strategy to
retain their profitable patients and grow revenues from their existing
services. They also can identify opportunities for new services
that are growing alongside the trend of medical tourism, in effect
substituting lost income streams with new streams that are less
vulnerable to offshore outsourcing.
Whichever business response is decided upon, the key to the decision
making is in gaining access to and in-depth analysis of medical
sector information using business intelligence tools.
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