CrossBorder Medical Tourism: A Typology and Implications for the Public and Private Medical Care Sec

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Cross-Border Medical Tourism A Typology and
Implications for the Public and Private Medical
Care Sectors in the South-East Asian Region

• Kai-Lit Phua, PhD FLMI
• Associate Professor
• School of Med and Health Sciences
• Monash University (Sunway Campus)

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Biographical details

• Kai-Lit Phua received his BA (cum laude) in
  Public Health Population Studies from the
  University of Rochester and his PhD in Sociology
  (medical sociology) from Johns Hopkins
  University. He also holds professional
  qualifications from the insurance industry.
• Prior to joining academia, he worked as a
  research statistician for the Maryland Department
  of Health and Mental Hygiene and as an Assistant
  Manager for the Managed Care Department of a
  leading insurance company in Singapore.
• He was awarded an Asian Public Intellectual
  Senior Fellowship by the Nippon Foundation in
  2003.

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Lecture Objectives

• Definition of Cross-Border Medical Tourism
• GATS and trade in medical services
• Typology of medical tourism
• Hypotheses for further research
• Possible impact on the home country
• Possible impact on the host country

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What is Cross-Border Medical Tourism?

• Medical care of short term foreign visitors whose
  primary purpose for the visit is to seek medical
  treatment
• In other words, the seeking of medical care in
  foreign countries

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WTOs General Agreement on Trade in Services
(GATS)

• WTOs four modes of trade in services
• (i) Consumption abroad
• e.g. cross-border medical tourism
• (ii) Commercial presence
• e.g. foreign investment in medical care
  sector
• (iii) Presence of natural persons
• e.g. foreign doctor who arrives to treat
  local
• patients on a voluntary or paid basis
• (iv) Cross-border supply
• e.g. cross-border telemedicine
• (teleconsultation, remote surgery etc)

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A Typology of Cross-Border Medical Tourism
(Consumption Abroad)

• Price-sensitive medical tourism
• Quality-sensitive medical tourism
• Note that medical tourism is not a new
  phenomenon e.g. Third World elites have sought
  medical care in Australia, Britain, France, USA
  etc (quality-sensitive medical tourism resulting
  in higher cost overseas treatment)
• Whats new is ordinary people from more
  developed countries seeking care in less
  developed countries because of large price
  differentials e.g. American seeking medical care
  in Thailand (price-sensitive medical tourism
  resulting in lower cost overseas treatment)

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A Comparison of Price-Sensitive
Quality-Sensitive Medical Tourism
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Medical Tourism in SEAsia and in South Asia

• Main destinations are Thailand, India Singapore
• Lesser destinations are Malaysia and the
  Philippines
• In 2006 (full citations are listed in my paper),
• Thailand 1,200,000 medical tourists
• (One hospital in Bangkok treats 400,000
• medical tourists per year)
• India 600,000 (Indian embassies give out M
  visas
• valid for 1 year)
• Singapore 374,000
• (Medical tourists and other foreigners
  make up 60 of
• the patients of one major private sector
  medical
• corporation in Singapore)
• Malaysia 292,000
• (Earnings in 2006 RM 204 million.
  Expected earnings
• in 2010 US1 billion or RM 380 million)

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What Can Account for the Growth in Medical
Tourism?

• Malaysian health policy expert Dr Chee Heng Leng
• (Asia Research Institute, NUS) argues that
• This is a side effect of the commodification of
  medical care
• Commodification
• Product standardization
• Market expansion
• Active marketing of medical care to consumers

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Characteristics of Medical Tourists

• Quality-sensitive medical tourists
• Affluent people e.g. wealthy citizens
• Ruling elites e.g. Myanmar army Generals
  seeking medical care in more developed SEAsian
  countries
• Price-sensitive medical tourists
• Middle class people who are reasonably
  well-informed about foreign countries and which
  foreign medical centers to go to

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Kinds of Medical Treatment Likely to be Sought
Overseas

• 1. Quality-sensitive medical tourism
• sophisticated services e.g. open heart
  surgery
• 2. Price-sensitive medical tourism
• Non-urgent medical procedures such as hip
  replacement or knee replacement surgery, cosmetic
  surgery, dental surgery, gender reassignment
  surgery
• Other possibilities organ transplants
  (transplant tourism)
• Medical procedures that do not require
• an extensive period of treatment or extensive
• followup

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Favored Destinations and Treatment Sites

• Destination Countries with these
• characteristics
• Ranked high in terms of perceived
• medical care quality
• Major languages such as English,
• Spanish, French etc are widely spoken
• Foreign visitors feel welcome and safe
• Politically stable with a relatively high
• standard of living
• Easy to fly to

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Favored Destinations and Treatment Sites

• Treatment sites (hospitals or medical
• centers) that are
• Accredited by the accreditation agency of
• the medical tourists own home country
  Owned by the medical tourists own home
• country health care corporations
• World-renowned e.g. Mayo Clinic in
• Rochester, Minnesota, USA
• Staffed by doctors with credentials from
• the medical tourists own country

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Motivations (besides perceived higher quality
or lower cost)
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Motivation of Less Costly Care

• For many medical tourists, ........ the
  real attraction is price. The cost of surgery in
  India, Thailand or South Africa can be one-tenth
  of what it is in the United States or Western
  Europe, and sometimes even less. A heart-valve
  replacement that would cost 200,000 or more in
  the U.S., for example, goes for 10,000 in
  India--and that includes round-trip airfare and a
  brief vacation package. Similarly, a metal-free
  dental bridge worth 5,500 in the U.S. costs 500
  in India, a knee replacement in Thailand with six
  days of physical therapy costs about one-fifth of
  what it would in the States, and Lasik eye
  surgery worth 3,700 in the U.S. is available in
  many other countries for only 730. Cosmetic
  surgery savings are even greater A full facelift
  that would cost 20,000 in the U.S. runs about
  1,250 in South Africa.
• B. Hutchinson Medical Tourism Growing
  Worldwide
• http//www.udel.edu/PR/UDaily/2005/mar/
  tourism072505.html

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Organisation and Financing of Trips Overseas

• By individual patients and their families using
  personal savings/borrowed money
• By self-insured employers eager to reduce the
  cost of health care generated by their employees
• By insurance companies or administrators of
  national health care systems who realise that
  costs can be reduced by having enrollees treated
  overseas
• By cultural brokers such as tour operators,
  agents and others who work with overseas
  hospitals and foreign health care providers
• By public agencies set up by governments to
  promote medical tourism e.g. Singapore Medicine
  and National Committee for the Promotion of
  Health Tourism in Malaysia

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Possible Impact on the Health Care Industry in
the Home Country

• In high cost countries like the USA, there may be
  a significant reduction in demand for particular
  medical procedures
• If so, health care providers such as hospitals
  and specialists will be forced to react e.g.
  health care corporations may open up branches
  overseas specialists may go overseas to seek
  patients to treat

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Possible Impact on the Health Care Industry in
the Host Country

• 1. An influx of medical tourists into a host
  country is equivalent to an increase in the
  demand for higher end medical services. This
  implies higher prices for local people (in the
  short run).
• 2. May accelerate movements of health personnel
  e.g. from poorer countries to more developed
  countries in SE Asia from the public sector to
  the private sector from less lucrative medical
  specialties to more lucrative specialties (e.g.
  general surgery to plastic surgery)
• 3. May further distort the allocation of health
  care resources (more devoted to tertiary care)

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Possible Impact on the Health Care Industry in
the Host Country

• . initial observations suggest that medical
  tourism dampens external migration but worsens
  internal migration it does not augur well for
  the health care of patients who depend largely on
  the public sector for their services as the end
  result does not contribute to the retention of
  well-qualified professionals in the public sector
  service.
• Dr. Manuel Dayrit, World Health
  Organization

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The End

• Thank you