Medical Tourism ramps up in China

Preparing for the 2008 Olympics in Beijing, China, is an occasion for increasing the capacity as well for "medical tourism" in general. There's plenty of business opportunity here for lower cost health care, for, say, California residents, abroad at prices substantially below those that health care plans in the US can offer on US soil.

This is a perfect example of a public health problem where "system thinking" is necessary. An attempted regulatory process to improve quality and to control costs in the US, based on a mental model of a passive world, executed in a "complex adaptive system", has exactly the opposite "unintended side-effect" of driving care and dollars abroad. There are long-lived assumptions of planners that are lagging well behind current actual events, so their "dashboards" are out-of-date. Plans that make sense if you put the problem boundary at the edge of the USA no longer make sense if the boundary is moved to the planet as a whole. Welcome to the 21st century!

It will be interesting to see how that plays out. So far, the USA unions have resisted what they see as "inferior" care abroad, but the US-based Joint Commission International has started accrediting foreign programs so those concerns may be alleviated, in which chase the price differential may determine the outcome. There is an interaction with US care, because if the Certificate of Need process in the US limits the growth of hospitals here, but doesn't stop them from expanding unboundedly abroad, then crowding here will tend to drive patients abroad.

There may be enough data available now to get past the hype and fantasy and see how fast this is really growing and what the 5-10 year projections look like. Systems dynamics models and simulation are probably required to make any credible projections at all in this active space.

A Google search on "medical tourism" turns up a number of sites that are already glad to offer "portal" services in arranging for lower-cost care abroad (after including air-fare and hotel accomodations.) See also "Medical Tourism Growing Worldwide."

Dec 12-16, 2006, Singapore hosted the first International Medical Travel Conference.

Ms Geraldine Chew, General Manager, Avail Corporation says, “This is the first global medical travel event in Asia. The event will not only provide an education platform for those who are already in the business of medical travel or going to embark on one, but healthcare providers, medical travel agencies and other parties will also have the opportunity to establish ties and clinch business deals through our exclusive networking sessions, one-on-one meetings and exhibitions.”

To help grow and develop this new industry, the conference will also witness the soft launch of the International Medical Travel Association. The association aims to bring together the international community of medical travel organisations, creating opportunities for networking, business development and knowledge sharing on best practices among members, and ultimately to protect and promote the rights of international medical travelers. The association, the idea of which has received widespread interest, will take the occasion of the conference with its many participants to hold its first general elections and discuss its role and contribution to the Medical Travel industry.

That travel association will complement IAMAT, tihe International Assciation for Medical Assistance to travellers, which helps people already travelling abroad locate medical care.

The question is, can US healthcare manage to lower its total cost, or will it go the same way as manufacturing and many service industries that have simply flowed abroad when the price differential became too great to resist? As the manufacturers said, it's hard to keep a business in the US paying $17.00 an hour when you can find workers abroad doing work just as good for $1.70 a day.

The concept that other countries could have care competitive with the USA is one that is difficult for doctors and hospitals in the USA to accept or find credible, but it was hard for General Motors to believe that some Japanese auto company would ever compete with it, let alone dethrone it from first place, so skepticism by providers of services is not a persuasive argument. In fact, lack of realistic planning for a growing medical tourism component of care for US citizens might lead to very poor policy decisions.

And, given that the US health care bill is over $1 trillion a year, larger than the Defense Department, even a 20% or 30% loss of business to rising competition abroad could make a sizable dent in the Gross Domestic Product.

For 50 million uninsured Americans, or even insured ones with increasingly large co-pays, there may not even be a choice - $55,000 in the USA for knee replacment they can get done in Singapore or Dehli for $4,000, by doctors trained at Johns Hopkins or Mass General,makes a pretty compelling icase if you only have $5,000 in the bank. As efforts ramp up to increase co-pay in the US, it will drive even more business abroad.

Speedy international travel is another factor. If clogged emergency rooms in Los Angeles mean a 12 hour wait for service, it might be faster to take a cab to LAX and a 747 to Singapore and get service there. On a larger time scale, if elective surgery takes months to schedule in the US or Canada, and under a week to schedule abroad, another market segment may take the path of least resistance.

A few weeks ago a friend of mine had a broken arm set, and another had an abdominal pain checked out in Emergency rooms in the US, and were each billed $6,000 for 6 hours. If I had to pay that out of pocket I'd consider temporarily splinting the arm and flying to Beijing to get it done for $1,000 plane fare and $500 hospital and doctor costs, using the passport that the US now requires everyone to have anyway who leaves the US, even to go to Canada or Mexico. (one more barrier to travel removed as an unexpected side-effect of anti-terrorist policies.)

The price differential keeps going up, the quality differential keeps going down, and the other hurdles such as arrangements, passport, or ability to find someone else who's gone abroad are all dropping. There will be horror stories, but there are horror stories here too. Obviously there will be a learning-curve and ramp-up or shake-down, but the trend is clear. The more the burden of cost is shifted to consumers (patients) in the USA, the more they're going to shop around on the Web and ask why they are not going abroad to the same places they trust to build their electronics and cars.

Sooner or later, some state like California is going to make such travel one of the cafeteria plan options and encourage people to do it, and this will take off. If business gets large enough and constant enough, someone will start "medical 747 service" from LAX to Beijing or Singapore, with specially outfitted 747's that have medical staff and a small operating theater on-board and that do all the preliminary exam work on the way across the ocean, removing yet one more hurdle.

The real question seems to me is whether international hospital chains will move into this niche and make it very easy for patients to pick from a cafeteria of pre-qualified hospitals, some in the US and some abroad, under the same third-party coverage. If that happens, stand-alone hospitals in the USA that have no correspondent hospital abroad will be at yet a new disadvantage for survival.

Here's the news from Beijing this morning.

Hospitals gear up to treat foreign visitors
By Zhang Feng (China Daily Online)
Updated: 2007-01-05 10:49

Beijing doctors treating foreign patients during the 2008 Olympics will be required to speak English and also write prescriptions, medical records, and costs list in both Chinese and English.

The move is part of a plan by the Beijing local health authority to boost the city's health services and make them more visitor-friendly during the Games.

More than 20 hospitals in Beijing, which include the People's Liberation Army General Hospital and the China-Japan Friendship Hospital, have been selected as special foreign treatment centers during the 2008 Games.

These hospitals are rated the best in the capital and will continue to import better medical equipment, improve service standards, and enhance staff training in the lead up to 2008, according to Jin Dapeng, director of Beijing Health Bureau.

All doctors and staff at these hospitals will learn English and other languages in order to better communicate with foreign clients. Multi-lingual first-aid volunteers will also be recruited.

The Health Bureau will collaborate with banks to ensure foreign patients can use international credit cards in the hospitals.

Foreign patients can also enjoy traditional Chinese medical services, such as acupuncture, massage, and herbal medicines.

The improved health network will include a response plan for public health emergencies, disease prevention and control systems, better medical treatment and health monitoring and widespread public health information.

"Our goal is to ensure that there would be no outbreak of serious epidemics, no big public health accidents. We must have the ability to quickly control them if they appear," Jin said.

He said systems would be set up to ensure every injured or ill person is given timely first aid and treatment.

Beijing's emergency medical aid center will upgrade its global positioning system used for ambulances. The Health Bureau will cooperate with the aviation department to provide air rescue services during the Games.

Jin said a food safety monitoring system covering all Olympic Games' districts and counties will also be set up this year. Food and drinking water in the Olympic village, stadiums, hotels and restaurants will be strictly monitored.

He said a reporting and emergency response system covering intestinal and respiratory diseases has been established and will be continuously strengthened to prevent infectious diseases.

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