Healthcare 2008
Health tourism: Flying abroad for treatment takes off
By Salamander Davoudi
Published: July 3 2008 02:56 | Last updated: July 3 2008 02:56
Where do you go if you want a sparkling white Hollywood smile for half the price? Savvy medical tourists are likely to say Hungary. What about hip and knee replacements? India or France.
Not so long ago travelling abroad for medical care was considered too risky. But attitudes are changing as more and more people choose to abandon their home countries and fly elsewhere for treatment.
A report this year by Deloitte, the consultancy, found that two in five Americans would consider travelling to a foreign country for a medical procedure if it cost half the US price and quality was at least equal.
Looking at the cost savings involved, it is easy to understand why. An aortic valve replacement costs more than $100,000 in the US, about $38,000 in Latin America and $12,000 in Asia.
A hip replacement can cost up to £15,000 ($29,845) in the UK, but is only £5,000 in Germany or £3,600 in India. An IVF package for infertility patients going to Turkey costs only £1,700.
“Globally nobody really knows how many health tourists there are,” says Keith Pollard, spokesman for Treatment Abroad, the operator of healthcare information sites.
“We know for the UK last year there were around 100,000 people going for some form of treatment as the primary reason for travel.”
The number of Britons going abroad for treatment has nearly doubled over the past two years, largely reflecting a big rise in dental tourists.
“About 40 per cent are dental patients. That has boomed due to a reduction in National Health Service dentistry and what you can actually get done on the NHS. The average spend is about £4,000 for what would have cost them £12,000 to £15,000 in the UK,” says Mr Pollard.
A study carried out by McKinsey, the consultancy, found that although medical travellers have different motives, the cheaper procedures and cosmetic operations represent only a small part of the market.
“Most of these people seek the world’s most advanced technology, better quality or quicker access to medical care,” according to the report, Mapping the Market for Medical Travel.
McKinsey estimates that the medical tourism market – excluding dentistry and including only those whose primary and explicit purpose in travelling is medical treatment as an inpatient in a foreign country – is very small, at around 60,000 to 85,000 people a year.
The Middle East is one of the biggest exporters of medical travellers, according to Paul Mango, director at McKinsey. “That will change over time, given the huge construction campaign under way there to build acute care capability and import medical competency,” he says.
Current barriers to market growth include a lack of transparency on quality, unclear malpractice jurisdiction, the unwillingness of large insurers to cover medical travel destinations in their networks, and the difficulty of travelling.
“If you pay them for treatment, you are in their jurisdiction. If you have a problem, you have to go to the local authorities or courts in that country for redress,” says Mr Mango.
“But in my experience there is zero quality difference between many of these hospitals and what you can get in a western developed economy.”
Patients are advised to check that the hospital they are to be treated in is accredited by the Joint Commission International, a division of the body that rates US hospitals.
It has so far accredited about 100 hospitals in 25 countries.
The future direction of the medical travel market has important ramifications for governments, employers and health insurers.
If US employers were willing to pay for a covered employee’s medical procedure of equivalent quality abroad it would significantly lower overall healthcare costs, say observers.
“If payers covered medical travel the potential US market would probably range from 500,000 to 700,000 patients a year, compared with 5,000 to 7,000 today. The savings might be in the order of $20bn,” according to the McKinsey report.
Mr Pollard says a health insurance product is being launched in the UK this year based on medical tourism. It will be the first of its kind.
“In the US, many of the insurers and healthcare plan managers are beginning to ship patients overseas to save on healthcare costs. In countries in South America and in Mexico, there are now purpose-built hospitals appearing to service the needs of US patients crossing the border,” says Mr Pollard.
According to the McKinsey report, 40 per cent of all medical travellers are seeking the world’s most advanced technologies and 32 per cent are seeking better care than they can get in their home countries and are often based in the developing world.
Copyright The Financial Times Limited 2008
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