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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 options.

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 poses.

  • 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 manufacturing.
  • 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 firms.

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.

Defensive Strategies

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 to achieve.

Offensive Strategies

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.

Global Collaboration

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:

  1. Sourced from various locations - hospital systems, clinical systems, financial systems
  2. Combined across different operating models - hospitals, primary care clinics, specialty practices, laboratories, and
  3. Distributed to a broad range of users - provider executives, payer/purchaser executives, managers and analysts) to improve and maintain performance.

 

Summary

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.

Next: Regional Health Information Organisations [RHIOs]

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