60(a) Medical Tourism in India Strategy for Its(1)

7/31/2019 60(a) Medical Tourism in India Strategy for Its(1)

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EXECUTIVE SUMMARY

The Medical Tourism Industry in India is poised to be the next big success

story after software. According to a Mckinsey-CII study the market size is

es timated to be Rs.5000-10000 Crores by 2012. The key competi tive

advantages of India in medical tourism stem from the following: low cost

a dv an ta ge , s tr on g r ep ut at io n i n t he a dv an ce d h ea lt hc ar e s eg men t

(cardiovascular surgery, organ transplants, eye surgery) and the diversity of

touris t dest inat ions avai lable in the country. The key concerns facing the

industry include: absence of government ini t iat ive, lack of a coordinated

effort to promote the industry, no accreditat ion mechanism for hospitals

and the lack of uniform pricing policies and standards across hospitals.

To rea l ize the indus trys fu ll potentia l, a coordina ted effort f rom the

various players government, private players and the associated sectors is

very essential. The government should help in instituting an accreditation

mechanism and device polic ies to faci l ita te pr iva te investment in the

sec tor. An apex body should be formed for the indus t ry in the l ines of

NASSCOM1 and should focu s on building the Indian Brand across theworld and promote inter-sectoral cooperat ion. The private sector for i ts

part, sh ould invest mo re in infrastructure,

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INTRODUCTION

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1 INTRODUCTION

Medical Tourism refers to movement of consumers to the country providing

the serv ice for d iagnos is and t rea tment. Dur ing the past few years, the

number of people going out of thei r home count ry to consume heal th

services has significantly increased. The size of this market is estimated to

be $40 billion based on a Saudi Rep ort in 2000. Du ring the past four years,

the market grew a t a whopping ra te of 20-30% and i s expected to grow

further. Considering this growth the current market size is estimated to be

$100 billion.

Medical Tourism industry offers tremendous potential for the developing

countries because of their low-cost advantage. The advantages of medical

to uri sm in clud e imp rov emen t in ex po rt ea rn in gs a nd h ea lth ca re

infras tructure . No doubt a lo t of count ries India , Thai land, Malays ia ,

Singapore, South Africa, Cuba, Jordan and Lithuania are f ight ing for a

share of the market. In order to realize the full potential of the industry, it

i s imp era ti ve f or th es e co un tri es to dev elo p a stra te gic p lan f or

coordinating various industry players the medical practi t ioners, pr ivate

hospitals, policy makers, hotels, trans portation services and tour op erators.

This report presents the strategy that needs to be implemented by India, one

of the key destinat ions for Medical tourism, in order to achieve industry-

leadership.

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MEDICAL TOURISM AS AN INDUSTRY

Medical tourism can be broadly defined as provision of cost effect ive

pri vate medical care in collaboration with th e tourism industry for patients

needing surgical and other forms of specialized treatment. This process is

being facilitated by the corporate sector involved in medical care as well as

the tourism industry - both private and public.

I n ma ny d ev el op in g c ou nt ri es i t i s b ei ng a ct iv el y p ro mo te d b y t he

governments offic ia l policy. Indias Nat ional Heal th policy 2002, for

example, says: To capitalise on the comparative cost advantage enjoyed by

domestic heal th faci l i t ies in the secondary and ter t iary sector, the policy

wi ll encourage the supply of serv ices to pa tien ts of fore ign or ig in on

paymen t. The render ing of su ch services on paymen t in foreign exchange

will be treated as deemed exports and will be made eligible for all fiscal

incentives ex tended to expor t earn ings . The formula tion draws f rom

recommendations that the corporate sector has been making in India and

speci fical ly f rom the Pol icy Framework for Reforms in Heal th Care,

drafted by the prime minister s Advisory Council on Trade and Industry,

headed by Mukesh Ambani and Kumaramangalam Birla.

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OVERVIEW OFMEDICAL TOURISM IN

GLOBAL SCENARIO

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2.Overview Of Medical Tourism In Global Scenario

Countries from where people head for India are UK, Bangaladesh, Oman,

Sr iLanka , Indones ia, Maur it ius , Nigeria , Kenya, and Pakis tan e tc . The

international patients can make decision by looking at the following table,

which shows charges against the type of surgery.

Cost Table

Procedure Charges (US $)Category US INDIAHeart Surgery

Bone marrow transplant

Liver transplant

Orthopaedic Surgery

Cataract Surgery

30,000

250,000

300,000

20,000

2,000

8000

69,000

69,000

6,000

1,250

India offers a real good cost advantage over the western countr ies . This

cost factor becomes very important while formulating schemes to attract the

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Indian diaspora as they generally compare the relat ive costs before going

for treatment.

Healthy Budget table

Heart Surgery Costs $ 30,000 ( Rs 14.4 lakhs) in the

US, But Indian Hospitals charge Rs 4

Lakh.Orthopedic Surgery

In th e w es t, t he e xp en se c om es t o

$20,000(Rs 9.6 lakh). The package in

India costs one third of that amount.Cataract Surgery $20,000 is the price for surgery in the

US. In India, i t comes to just $500Liver Transplant The cost comes to a whopping

$300,000 abroad while Indian super

specialty h ospitals perform the

operation for

Global Medical Tourism

Country

No of

Foreigners

treated last

year

From

Money

Earned

Strengths

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THAILAND

600,000

US, UK $470 m

Cosmetic

surgery,

Organ

transplants,

Dental

treatment,

Joint

replacements

JORDAN

126,000

Middle East

$600 m

Organtransplants,

Fertilitytreatment,

Cardiac care

INDIA

100,000

Middle East,

Bangaladesh,

UK,

Developing

countries

N.A

Cardiac care,

Joint

Replacements,

Lasik

MALAYSIA

85,000

US, Japan,

Developing

countries

$40 m

Cosmetic

surgery

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SOUTH

AFRICA

50,000

US, UK

N.A

Cosmetic

surgery, Las ik.

Dental treatment

Treatment Costs ($)*

Procedure

US

INDIA

SOUTH

AFRICA

THAILAND

Facelift

8000-20,000

10,000- 20,000

1,252

2,682

Hi p

replacement

17,000

2,500

6,671

N.A

Open heart

surgery

150,000

5,000- 10,000

13,333

7,500

Eye (Lasik) 3,100 7,000 2,166 730

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Medical Travelers Clusters

The first is made up of the Americans

The second major group - the British

The third big group of medical travelers comes from the Middle

East

The last group of medical travelers from a motley lot

OUTSOURCING

Outsourcing of logistics has changed over the years we have seen business

models adapted to meet the needs of the buyer. Hospital major areas l ike

house keeping , Food and Beverage, Len in, d iagnos ti cs l abs, med ical

equipment, ambulatory services etc are outsourced. Hospital focuses on

core activity of patient care.

Medical Business Process Outsourcing includes Medical coding, Bil ling,

Claims Processing, Transcription etc.

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Global Economic and Logistic Trends .

Global Economic

Change

Changing Business

Logistics practices

New Pres sures

*Rapid growth in

business services

and high-tech

manufacturing

*Rapid growth in

international Trade

*Co mp eti ti on o n th e

basi s of cost, quality

and time.

*Outsourcing for th e

c oo rd in at io n o f t hr ee

flows: Goods,

Information and Funds

* Ge og ra ph ic s pr ea d o f

production.

*Just i n t ime Inven to ry

Management.

*Gre at er s en siti vi ty to

transit/delivery times.

*Cost competition

*Customers are often part

of large supply chains.

2.1Benefits of Medical Tourism

Tangible

Foreign exchange earrings which enable economic wealth of nation

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Cost Advantage in Tariff over the Developed countries

Improve information sharing

Increase in efficiency of patient care process, cutting edge treatment.

Improvement in hospital supply chain efficiency

Strategic al l iances with business partners within and outside the

country

Technology and Knowledge Transfer

Better logistics performance both in internal and external

Creation of employment opportunities in the industry Better utilization of Infrastructure and skilled manpower

Opportunity for development in Infrastructure in Health, Tourism and

Travel.

Economies of scale.

Connectivity with air, road, rail and information and communication

industries

Clustering of medical Travelers

Health opportunities for foreign patients may lead to better standards

at home.

Scope for Research and Development to offer comprehensive medical

solutions.

Intangible

International acceptance of country as a global healthcare provider

Social and cross cultural experience

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International customer relations

Global Marketing and Medical Trade relations

Brand image of nation as world-class healthcare destination.

Competitive advantage

Better coordination among the partners i .e. hospital and hospitality

industry.

Public and Private Partnerships

Patient satisfaction

2 .3 I s India prepared for globa l medical touri sm

boom?

In recent years, India is being seen as an important player in the globally

growing "Medical Tourism", which is projected as a new segment in travel

and healthcare business. The former Indian finance minister Jaswant Singh

envisaged to make India a "Global health destination" and the budget tabled

by him included gover nment policy for collaboration between th e available

medical expertise in the country and tourism industry.

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In simple words, medical tourism provides state-of-the-art private medical

care in collaboration with tourism industry to patients from other countries

a t h ighly compe ti ti ve p ri ce when compared to those p reva lent i n t he

western countr ies . The CII- McKinsey report mentions that the medical

tourism market has been growing at the rate of 15 per cent for past f ive

years and by 2012, Rs 10,000 crore will be added to revenues of the private

player s. Globally, medical tourism is said to be USD 40 billion industry

and analysis available project that people from Afro-Asian countries spend

as much as USD 20 billion every year on healthcare services from outside

their countries.

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Foremost, amongst the current pr iva te p layers , in medica l tour ism are

hospi ta l s in the Apol lo chain . Main dest ina t ions a re Delh i, Mumbai ,

Chennai, Bangalore and Hyderabad. These cities have private hospitals with

medical expertise that can offer world class healthcare that costs one fifth

to one ten th of the cos t in US or Europe depending on the in tervent ion

required.

In add it ion to above des tina tions, t he coun try has many c it ie s w ith

advanced medica l faci l it ies making India , a count ry wi th t remendous

potential to capitalise on to increase its earnings to more than USD 1

billion annually and create hundreds of thousands new jobs in many

sectors. This projection excludes earnings from other products included in

the wellness tourism meant for rejuvenation of body and mind, eg herbaltherapy, naturopathy, yoga, aromatherapy, reiki, music therapy which does

not require advanced medical expertise.

India is relat ively new entrant into this f ield and i t has to prepare to face

the a lready exis ting competi t ion f rom other Asian count ries, namely

Thai land , Malays ia and Singapore . These count ries together current ly

at tract as much as ten t imes more medical touris ts than India. Hongkong

and South Africa are emerging as big medical tourism dest inat ions. The

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count ries that a re ac tively promot ing medica l tour ism include Israel ,

Jordan, Thailand, Malaysia, Cuba and Costa Rica. Other countries including

Greece and Croatia plan to be attractive healthcare destinations.

The trends in this new-founded tourism product are encouraging. However,

there i s an obvious lack of any conscious and well - founded effort s to

marke t med ical t ou ri sm by our count ry. The c ruci al par tner s i n t hi s

industry include central government ministries of finance, tourism, healthand medical entrepreneurs, tourist industry and insurance companies.

In many count ries , medica l tour ism is promoted by the government ' s

official policy, which facilitates effective working of medical entrepreneurs

and tourist industry to attract medical tourists

Th e ap preh en sion s ex pressed by so me sec tio ns th at "s yst ema ti c

development of medical tourism will boost up earnings by catering to the

wealthy foreigners and Indians working in the foreign countries but it mayadversely hit the low income population" need to be addressed for gaining

approval of poli t ical opinions with varied views on l iberal isat ion. From

past ten years, India has entered a phase in medical expertise th at is

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considered on par with internat ional s tandards. This is because of high

quality doctors and medical entrepreneurs who developed hospitals with

required infrastructure and management style. Some of these hospitals have

marke ting depa rtment s t o i nc rease v is ib il it y and accep tance o f t he ir

pro ducts in so me countri es .

They have got some success in overcoming prejudices of foreign pat ients

about healthcare in developing countries. However in the current scenario,there is urgent need to streamline array of activities involved in the making

Ind ia "Global hea lth des tina tion" . We requi re u rgen t formula tion o f

poli cies and procedures by top level in the government and also co-

ordination of activities of partners required to play key roles to ensure that

India uses its strength in medical field to get global financial benefits.

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MEDICAL TOURISM ININDIA THE CURRENT

SCENARIO

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3. Medical Tourism in India The Current Scenario

Medical Touri sm i s poi sed to be the nex t Ind ian success s to ry a ft er

Information

Technology. According to a Mckinsey-CII s tudy the industrys earning

potential

estimated at Rs.5000-10000 Crores by 2012. Worldwide, healthcare is said

to be a $3-tr i l l ion industry, and India is in a posi t ion to tap the top-end

segment by highlighting its facilities and services, and exploiting the brand

equity of leading Indian healthcare professionals across the globe.

Medical Tourism", the term refers to the increasing tendency among

people fro m the UK, th e USA an d many oth er th ird world countries, where

medical services are ei ther very expensive or not avai lable, to leave their

countries in search for more affordable health options, often packaged with

tourist attractions.

Tourism is an integral part of many economies services industry and is

an important source of foreign exchange. The labour-intensive nature of the

tourism industry also makes i t an excel lent generator of employment. In

2002, the travel-and-tourism industry is expected to generate some US$3.3

tr i l l ion of GDP and almost 200 mil l ion jobs across the world economy.

Approximately one third of this would come direct ly from the industry

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i tself and the remainder from the strong l inkages to other related sectors

such as entertainment, retail and construction.

Medical Tourism is perceived as one of the fastest growing segments in

marke ting Dest inat ion Ind ia t oday. The equat ion i s Wor ld C lass

Healthcare at 'Economical Price ' . Stable economic growth will create an

increase in freight f lows from, towards, through, and inside the country.

A ll t hi s w il l s ti mu la te t he in ve st me nt s i n r oa ds a nd r ai lr oa ds . A s

globalization advances, both domestic and international tourism pose newand unprecedented challenges to the health sector and its various partners.

The size of the Medical Tourism industry stands between Rs 1200 Crore to

Rs 1500 Crore and is growing at rate of 30 percent annually.

More importantly, Medical Tourism is growing rapidly and turning out to

be an imm ense busi ness opportunity for nati ons that are positioning

themselves correct ly. Last year, just f ive countr ies in Asia Thailand,

Malaysia, Jordan, Singapore and India- pulled in over 1.3 million medical

travelers and earned over $1bil l ion ( in t reatment costs alone) . In each of

these nations, medical travel spends are growing at 20% plus year-on-year.

Elsewhere around the world, Hong Kong, Lithuania and South Africa are

emerging as big medical/healthcare destinations. And a dozen other nations

including Croatia and Greece plan to make themselves attractive healthcare

destinations.

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Five years ago, hardly 10000 foreign pat ients visi ted India for medical

treatment.

Today Ind ia i s a key p laye r i n med ical t ou ri sm with 100 ,000 foreign

patients coming in every year and revenue of Rs.1500 Crores. Th e current

market growth-ra te i s a round 30% per year and the count ry i s inching

closer to major players like Singapore and Thailand.

The following sections discuss in detail the

current state of the Medical Tourism in India:

Indias Medical Infrastructure

15000 Hospitals

875000 Hospital Beds

500000 Doctors

737000 Nurses

170 Medical Colleges

350000 Pharmacies

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3.1 Cost Competitiveness The Key driver

The main reason for Indias emergence as a preferred dest inat ion is the

inherent advantage of i ts heal thcare industry. Today Indian heal thcare is

perceived to be on par with global standards. Some of the to p Indian

hospitals and doctors have strong internat ional reputat ion. But the most

impor tan t f ac to r t ha t d rives med ical t ou ri sm to Ind ia i s i ts l ow cos t

advantage. Majori ty of foreign pat ients visi t India primari ly to avai l of

First World Service at Third World Cost.

Source : Bus iness Wor ld India and Indian Brand Equi ty Foundat ion

As the table above shows, India has s ignif icant cost advantages in several

health procedures making it a preferred destination

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3.2 The Service Spectrum

India o ffers a varie ty o f se rv ices for overseas pa tient s . The tab le below

pre sents

a classification of the service spectrum.

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3.3 Consumer Profile

The demand for Indian healthcare services primarily comes from three types

of

consumers . The table below presents the profi le of these three consumer

groups:

Though tour ism is not the pr imary need of these consumers , i t o ffers

additional attraction particularly for people traveling for cosmetic surgery

and less complicated procedures.

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3.4 Market Players

The major players in Indian medical tourism are: the Apollo Hospitals ,

Escorts Hospital, Wockhardt Hospitals , Arvind Eye Hospitals , Manipal

Hospi ta l s, Mal lya Hospita l, Shankara Nethra laya e tc. AIIMs, a publ ic

-sector hospital is also in the fray. In terms of locations Delhi, Chennai,

Bangalore and Mumbai cater to the maximum number of h ealth tourists and

are fast emerging as medi-tourism hubs.

3.5 India in Medical Tourism SWOT Analysis

Given below is a SWOT Analysis of the Indian Medical Tourism Industry

in its current state:

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3.6 Health Tourism In India Advantages and

Opportunities

The inflow of heal th touris ts from the West , especial ly the UK, US and

some of the European countries has been on the rise for the last couple of

years. Price difference or affordability of the treatment, coupled with

quality of doctors are the main reasons for the growing western traffic .

The qual i ty of Indian hospi ta ls has improved s igni ficant ly and now

matches with the best in any part of the world. India has more than 100

healthcare institutions, which are of international standard.

Many hospitals in India today have the infrastructure and equipment that

match with the best centers in the world, be it

t ransplantat ions(l iver/kidney/heart or bone marrow), cancer t reatment,

including radiotherapy, neurosurgery, including s te ro tac t ic surgery. ,

angioplasty and cardiac surgery(bypass and p ediatric)

Publ ic -Pr iva te Partnersh ip combines in terna l hospi ta l expert i se wi th

supply chain and logistics expertise.

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The medical tourism industry which is est imated to be worth Rs 1500

crores annually has not only the potential to generate substant ial forex

earnings but also provide employment opportunities for the large pool of

sk il led labor avai lab le in India, according to Dr. PC Reddy, chai rman,

Apollo Hospitals Group, India.

According to Group President Pratap C.Reddy, the annual heal th bi l l of

people from Afro-Asian countr ies see king treatment outside their country

is $10 billion. If India can tap even a fraction of that market, the potentialis enormous.

Joint Commission Accreditation of Healthcare Organizations (JCAHO)

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3.7

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LESSONS FROMINTERNATIONAL

SUCCESS STORIES

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4 Lessons from International Success Stories

The success s tories from across the world provide signif icant s trategic

inputs for the development of a strategy for India.

4.1 The Case of Cuba

Cuba i s one of the ear liest successes in medica l tour ism indus try. The

country successful ly tapped the demand for medical tourism from Latin-

American countries. Cubas success can be attributed to the strategic push

pro vided by government through State-Owned Comp anies. The two main

ingredients of Cubas success were:

4.1.1 Promoting Privatization of HealthCare

The government promoted private investment in healthcare to increase the

supply of high quality and specialized healthcare. Healthcare was accorded

infrastructure s tatus and laws enacted to increase participat ion of private

entrepreneurs. One example is al lowing treatment for skin diseases using

human placenta that was banned elsewhere .

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4.1.2 Centralized Marketing through SERVIMED

The governmen t cen tr al ized p romotion o f hea lth s ervi ces abroad by

ent rust ing the r espons ib il it y t o SERVIMED a newly formed pub li c

company. SERVIMED coordinated with tour operators and travel agencies

to develop health packages.

The package included travel in Cubas national airline, 2 4 hours assistance,

and companion personnel for the pat ient , repatr iat ion, and post-surgery

controls. To support efficient marketing, SERVIMED also opened offices in

Argentina, Brazil, Chile, Mexico, and Venezuela.

The two-pronged strategy successfully resulted in 30,000 patients visiting

Cuba in 1997 for treatment earning US$ 30 million foreign exchange .

4.2 The Case of Thailand

A more recent success s tory i s tha t of Thai land . Thai land i s one of the

wor ld ' s l eading hea lthcare des tinat ions with a forecas t o f 1 mil li on

overseas pat ients for the current year. The main reasons for Thailands

success are:

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4.2.1 Inter-Sectoral Coordination

The Thai government rea l ized early the need for coordina tion across

various sectors to real ize the industrys potential . Hence i t developed a

common vision, strategic direction, joint-strategy and shared objectives for

various sectors in order to faci l ita te bet ter coordina tion be tween the

concerned players the Ministries of health, tourism, foreign affairs and

other bodies like Thai Airways Tourism Authority of Thailand.

4.2.2 Effective Marketing - Tourism Authority of Thailand

The Tour ism Authori ty of Thai land (TAT) has p layed a s tel lar ro le in

pro viding integrated marketing Th ai tourism abroad. TAT has more than 18

offices worldwide and has won several international credits for developing

excellent market ing campaigns targeted at touris ts . TAT has so far been

extremely successful in marketing Thai health services also.

4.2.3 Focus on Hospital i ty

Thai land heavi ly focuses on hospi ta l ity to provide superior consumer

exper ience and bui ld ing b rand equ ity. For example the Bumrungrad

Hospital in Bangkok provides hospital i ty services that include: pick up

from Airpor t, l anguage in terpreters for 18 languages and an in-house

Starbucks and McDonalds to cater to tourists from U.S and U.K.

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4.2.4 Building Infrastructure

Thailand built a strong health infrastructure during the economic boom by

encouraging private and public participation. In 1996 alone Thailand spent

a whopping 7% of GDP on healthcare. Priority was also given for Foreign

Direct investment in heal thcare sector with Thai Government processing

3000 FDI proposals in just four years.

To summarize, these cases emphasize the need for a strong government role

in improving coordination, infrastructure and integrated marketing.

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INDIA - STRATEGICTHRUSTS FOR THE

FUTURE

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5 India - Strategic Thrusts for the Future

T he f oll ow in g s ec ti on l ay s d ow n t he s tr at eg y f or In di a t o a ch ie ve

leadership position in medical tourism. The strategy largely draws from the

discussions in previous section.

5.1 Role of Government

The role of Indian Government for success in medical tourism is two-fold:

Acting as a Regulator to institute a uniform grading and accreditation

system for hospitals to build consumers trust.

Acting as a Faci li tator for encouraging private investment in medical

infrastructure and policy-making for improving medical tourism.

For facilitating investment the policy recommendations include:

1. Recognize healthcare as an infrastructure sector , and extend the benefits

under sec 80-IA of the IT Act. Benefits include tax holidays for five years

and concessional taxation for subsequent five years.

2. The government should actively promote FDI in healthcare sector.

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3. Conducive f iscal pol icies - providing low interest rate loans, reducing

import/excise duty for medical equipment

4 . Fac il it at ing c learances and cer ti fi ca tion l ike med ical r eg is tr at ion

number, anti-pollution certificate etc.

The above measures will kick-start hospital financing, which is struggling

now due to cap it al i nt ensive and low e ff ic iency nature o f hea lthcare

business.

For facilitating tourism the government should:

1. Reduce hassles in visa process and institute visa-on-arrival for patients

2. Follow an Open-Sky policy to increase inflow of flights into India

3 . Crea te Me dical Attachs to Indian embass ies that promote heal th

services to prospective Indian visitors

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5.2 Formation of Nat ional Associat ion of Health Tourism

(NHAT)

The promotion of medical tourism has so far been very fragmented with

in it ia t ives by few s tates and private hospi ta ls . The ear l ie r d iscuss ions

clearly underline the need for presence of an apex body that can coordinate

the promotion of medical tourism abroad. In the Indian context too, this has

been successfully demonstrated in th e software industry by NASSCOM. It

is therefore essential to form an apex body for health tourism NAHT. The

NAHT should be formed as an association of the private hospitals operating

in the industry. The main agenda for NAHT will be:

1. Bu ilding the India Brand Abroad : Classify the target consumer segments

based on their attractivenes s and position the India Brand based on the

three main value propositions high quality service, value for money and

destination diversity . An integrated market ing Communicat ions campaign

using print, media and road shows should be developed.

2. Promoting Inter -Sectoral Co ordination: The NAHT should take up the

responsibility of aligning the activities of various players Tourism

Department , Transport Operators , Hotel Associations, Escorts personnel

etc .

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3. Information Dissemination using Technology : NAHT should set up a

portal on medical tourism in India targeted at sharing information and

enabling online transactions.

4. Standardiza t ion of Services : NAHT sh ould also focus on establishing

pri ce parity for similar kinds of treatments in various hospitals and ensure

the hospitals adhere to high hygiene and quality standards .

5.3 Role of Private SectorThe action items for private sector are:

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1. Increased part icipation in building infrastructure: To achieve its full

potential, i t is es timated that India needs an investment of Rs.100000 to

140000 Crores by 2012. Since the government can afford only a third of the

amount, the private sector should play an active role to fill the gap.

2. Integrate Horizontally: Private hospitals should also plan to integrate

horizontal ly for providing end-to-end healthcare solut ions to consumers.

For example Apollo multi specialty hospitals is already planning to set up

spas and alternative mediclinics to attract more foreign tourists .

3. Joint Ventures / All iances : To counter increasing competition, Indian

hospi ta l s should t ie-up with fore ign inst itu tions for assured supply of

medical touris ts . Specif ical ly t ie-ups with capaci ty constrained hospitals

and insurance providers will provide significant competitive advantage.

5.4 Value Innovation Through MEDICITIES

Another successful example of the software industry is the establishment of

E xp ort Ori en ted Sof twa re Tech no log y Pa rks . Th is mo del c an b e

success fu lly r ep li ca ted in t he med ical t ou ri sm indus try by means o f

MEDICITIES. Each MEDICITY could be a self-sustained heal thcare hub

with super speci al ty hospi ta ls o f i nt erna tiona l s tandards , anc il la ry

faci li t ies , research insti tutions, health resort , rehabil i tat ion centers and

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residential apartments. This model can be floated through a public-private

partner ship. Th e government will provide land and ancillary services and

the pr iva te p layers wil l p rovide infras tructure and serv ices. From the

consumer s point of view, the MEDICITIES wil l offer superior value at

affordable prices. From industrys point of view, this will offer significant

competitive advantage for India.

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MEDICAL TOURISM:OPPORTUNITIES AND

CHALLENGES FORINDIA

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6 Medical Tourism: Opportunities and Challenges for

India

India's relatively developing medical tourism segment has been anointed by

heal thcare and tour ism indus try pundi ts as the next 'bes t' th ing for the

count ry. According to a McKinsey report , India i s poised to genera te

business worth USD 2.2 billion by 2010, however there are plenty of

cha ll enges tha t need to be addressed for Ind ia t o become the wor ld 's

preferred healthcare destination. Prominent among them being the need for

pro per accreditation and requisite standardisation systems in place, a

tr ipart i te synergy between hospitals , tour operators and respect ive s tate

governments. The panelists for the session comprised Dr R V Karanjekar,

chief execu tive o ff icer, Dr D Y Pat il Hospi ta l and Resea rch Cen tr e,

Mumbai; Anupam Verma, director administration at PD Hinduja National

H os pi ta l, Mu mb ai ; Jo y Ch ak ra bo rt y, d ep ut y a dm in is tr at or a t S ri

Ramachandra Medical Centre; Gour Kanjilal, regional director (Western &

Central Region), Indiatourism, Mumbai and Mahendra Jain, commissioner

of tourism, government of Karnataka.

In 2004, India t reated and cared for 1 .8 lakh pa tien ts. This number i s

poised for substantial growth - 25-30 per cent in 2005. Th e panel agreed

that India's main USP in this regard was the prospect of low-cost treatment

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by highly professional doctors. In dia will have to pro ject itself as being a

holist ic medical dest inat ion to get an edge over other countr ies . "India

offers not just treatment but spiritual and mental healing as well. We need

to club together a couple of 'pathies' because we have a very strong base of

alternative healing therapies like yoga, naturopathy, ayurveda, etc.

Creating awareness about India's facilities is a must to establish credibility

in foreign markets. The standardisation of a price band for graded hospitalsand a qual i ty assurance model should be taken up immediate ly to take

medical tourism ahead. "CRISIL and ICRA have started something on price

bands but are facing few challen ges at the moment. Wh at we can do, is try

and fol low the Thailand model . Thailand f irs t developed i ts s tandards as

per Joint Commiss ioner In ternational (JSI) which helped them to get

approval from NHS of UK. So convincing medical insurance companies was

not a problem." Talking about ini t iat ives that can help in generat ing the

right exposure.It is time we create a database on the facilities on offer, the

number of pat ients received and from which market , reason for choosing

India, their length of s tay, etc . These data can provide pointers to help us

in devising country-specific promotional strategies."

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A joint task force on medical tourism has already been set up by ministry

of tourism in col laborat ion with ministry of heal th which wil l look into

qua li ty a ssurance , s tandardi sa tion o f p ri ce , g loba l network ing and

improving visibility. At the same time, the government should introduce a

medical visa to faci l i tate long-stay he opined. Anupam Verma very ably

moderated the two hour seminar and responded to queries from the doctors

and the tour operators.

As the hon secretary of Maharashtra Medical Tourism Council formed last

yea r i n col labora tion with F ICCI , he has been act ively involved in

pro moting the state as the prefer red med ical tourism destination abroad.

Just as the primary motivator for medical tourism is cost, medical tourism

is largely limited to individuals paying for procedures out-of-pocket. While

in some circumstances insurance providers and private insurers will pay

at least for the cost of a procedure, if not for travel costsfor the most part

they do not. As long as public and private insurers limit their members to

hospitals at home, the market for international medical tourism will remain

limited. Moreover, some other limitations exist:

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The third world, with its image of overcrowded cities, poor infrastructure,

and inadequate heal th care for i ts own inhabitants , wil l continue to have

difficulty appealing to Westerners, no matter how modern and gleaming the

hospitals that cater to them.

Follow-up care is l imited to the individuals s tay at the foreign medical

facility. Complications and post-operative care are then left to doctors as

far as thousands of miles away. Standards of care are much less developed

i n c ou nt ri es s uc h a s I nd ia a nd T ha il an d, s o a n i nd iv id ua l m us t b e particularly careful to choose a hospital wi th high standards an d

acc redi ta tion . Malprac ti ce l aws a re weak in coun tr ie s l ike Ind ia and

Thailand, which leaves pat ients with l imited recourse i f something goes

wrong. Of course, this contributes to low costs, as malpractice insurance is

much cheaper in these countries. Regardless of these issues, medical (and

dental) tourism seems set to grow and to offer pat ients in the developed

world who fal l through the cracks of private and public insurance a cost-

effective way to outsource their medical n eeds to a low-cost provider.

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6.1 GROWTH OF THE MEDICAL TOURISM INDUSTRY

The countr ies where medical tourism is being act ively promoted include

Greece, South Africa, Jordan, India, Malaysia, Philippines and Singapore.

India i s a recent en t rant in to medica l tour ism. According to a s tudy by

McKinsey and the Confederat ion of Indian Industry, medical tourism in

India could become a $1 billion business by 2012. The report predicts that:

By 2012, i f medica l tour ism were to reach 25 per cent of revenues of

pri vate up-ma rket player s, up to Rs 10,000 crore will be added to therevenues of these players. The Indian government predicts that Indias

$17-bil l ion-a-year heal th-care industry could grow 13 per cent in each of

the next six years, boosted by medical tourism, which industry watchers say

is growing at 30 per cent annually.

In India, the Apollo group alone has so far t reated 95,000 internat ional

patients, many of whom are of In dian origin. Apollo has bee n a forerunner

in medica l tour ism in India and a t tracts pa tients f rom Southeas t Asia ,

Afr ica, and the Middle Eas t. The g roup has t ied up with hospi ta ls i n

Mauritius, Tanzania, Bangladesh and Yemen besides running a hospital in

Sri Lanka, and managing a hospital in Dubai.

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Another corporate group running a chain of hospitals, Escorts, claims it has

doubled its number of overseas patients - from 675 in 2000 to nearly 1,200

this year. Recently, the Ruby Hospital in Kolkata signed a contract with the

Bri t ish insurance company, BUPA. The management hopes to get Bri t ish

patients from the queue in the National Health Services soon. Some

estimates say that foreigners account for 10 to 12 per cent of all patients in

top Mumbai hospitals despite roadblocks l ike poor aviat ion connectivi ty,

poor road infrastructure and absence of uniform quality standards.

Analysts say that as many as 150,000 medical touris ts came to India last

year. However, the current market for medical tourism in India is mainly

limited to patients from the Middle East and South Asian economies. Some

claim that the indus try would f lour ish even without Western medical

tourists. Afro-Asian people spend as much as $20 billion a year on health

care outside their countries Nigerians alone spend an estimated $1 billion

a year. Most of this money would be spent in Europe and America, but it is

hoped that this would now be increasingly directed to developing countries

with advanced facilities.

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6.2 PROMOTION OF MEDICAL TOURISM

The key sel l ing poin ts of the medica l tour ism indus try are i ts cos t

effect iveness and i ts combination with the at t ract ions of tourism. The

latter also uses the ploy of selling the exotica of the countries involved

as wel l as the packaging of heal th care with t rad it ional therapies and

treatment methods.

Price advantage is , of course, a major sel l ing point . The slogan, thus is ,First World treatment at Third World prices. The cost differential across

the board is huge: only a tenth and sometimes even a sixteenth of the cost

in the West. Open-heart surgery could cost up to $70,000 in Britain and up

to $150,000 in the US; in Indias best hospi ta l s i t could cost be tween

$3,000 and $10,000. Knee surgery (on both knees) costs 350,000 rupees

($7,700) in India; in Britain this costs 10,000 ($16,950), more than twice

as much. Dental, eye and cosmetic surgeries in Western countries cost three

to four times as much as in India.

T he p ri ce a dv an ta ge i s h ow ev er o ff se t t od ay f or p at ie nt s f ro m th e

developed countr ies by concerns regarding standards, insurance coverage

and other infrastructure. This is where the tourism and medical industries

are trying to pool resources, and also putting pressure on the government.

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In India the strong tradition of traditional systems of health care in Kerala,

for example, is utilised. Kerala Ayurveda centres have been established at

multiple locations in various metro cities, thus highlighting the advantages

of Ayurveda in heal th management . The heal th tour ism focus has seen

Kerala participate in various trade shows and expos wherein the advantages

of this traditional form of medicine are showcased.

A g en er ic p ro bl em w it h m ed ic al t ou ri sm i s t ha t i t r ei nf or ce s th e

medical ised v iew of heal th care . By promoting the notion tha t medica lservi ces can be bough t o ff t he she lf f rom the lowes t p ri ced p rovide r

anywhere in the globe, it also takes away the pressure from the government

to provide comprehensive health care to all i ts citizens. It is a deepening of

t he wh ol e n oti on o f h ea lt h c ar e th at i s b ei ng p us hed t od ay wh ic h

emphasises on technology and private enterprise.

The important question here is for whom is cost effective services to be

pro vided. Clearly th e services are cost effective for those who can pay

a nd i n a dd it io n c om e f ro m c ou nt ri es wh er e m ed ic al c ar e c os ts a re

exorbitant - because of the failure of the government to provide affordable

medical care. It thus attracts only a small fraction that can pay for medical

care and leaves out large sections that are denied medical care but cannot

afford to pay. The demand for cost effect ive special ized care is coming

from the developed count ries where there has been a decl ine in publ ic

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spending and r ise in l i fe expectancy and non-communicable diseases that

requires specialist services.

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CONCLUSION

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7 CONCLUSION

The medica l tour ism indus try offers h igh potentia l for India pr imari ly

because of its inherent advantages in terms of cost and quality. Ho wever

the competition is getting heated up and the success in future will largely

be determined by development and imp lementation of a joint strategy by

various players in the industry. The government should step in the role of a

regulator and a faci li tator of private investment in healthcare. An apex

body for the industr y needs to be formed to promote the India brand abroad

and aid inter-sectoral coordination.

Joint ventures with overseas partners and establ ishment of MEDICITIES

will help in India building a significant advantage and leadership position

in the industry.

The healthcare has become global concern and the service is intangible in

nature. In fiercely competitive global market where information is shared

instant ly, consumers will vir tual ly have al l the knowledge and choices in

the world. India has bright prospects to emerge as the global destination for

medical touris ts to avai l world-class qual i ty heal thcare faci l i t ies at cost

advantage. As the medica l tour ism indus try i s growing exponent ia l ly,

hospi ta ls need to develop e ff ic ient l og is ti cs sys tem for con tinuous

improvement to meet the requirements of in terna tional pa tients and to

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attain sustainable competitive advantage. Health opportunities for foreign

patients may lead to better standards at home. Government has to take

active role in promoting the health tourism by providing the infrastructure

facilities, creating network and connectivity with health, tourism, and other

re la ted indus tr ies , t ie -ups with o ther count ries. Logis tics information

s ys te m wi ll e na bl e s ha ri ng i nf or ma ti on a nd e ff ec ti ve h an dl in g o f

i nt erna tional pat ient care f rom the point o f r eceiving to the point o f

sending back. Medical Tourism will help in maintaining good international

relations, cross border relations, trade relations, exchange of manpower andtechnology among counties . To capital ize the opportunit ies globally, a

coordina ted s t ra tegy i s required by upgrading and res t ruc tur ing the

hospital services and to attract international market .

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REFERENCES

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8 REFERENCES

PAPERS

1. Rupa Chanda, Trade in Health Services , Bullet in of the World

Health Organization 2007;80(2); Pg: 158-163

2. D av id Di az B en av id es , Tr ad e P ol ic ie s a nd e xp or t o f h ea lt h

servic es A Developmen t Persp ective, World Health

Organization Publication, Pg 53 - 69

3. In di a B ra nd E qu it y F ou nd at io n, I nd ia i s f ar Ch ea pe r th an

Thailand, March 2008, www.ibef.org

4. IDFC Ltd , Invest ing in Pr iva te Heal thcare in India Funding

Robust Business Models, December 2006

5. Mu el le r H a nd K au fm an n E L , We ll ne ss Tou ri sm : Ma rk et

Analysis of a Special Health Tourism and Implications for Hotel

Industry , Journal of Vacation Marketing, Vol 7(1) , Pg 6 17,

July 2007

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ONLINE ARTICLES

The Health Travellers Cover Story, Business World India

Link: http://www.businessworldindia.com/Dec2203/coverstory01.asp

In dia Health Ca re Industry India Brand Equity Foundation

Link: http://www.ibef.org/artdispview.aspx?art_id=3361&cat_id=119

Prosp ects for He alth To urism Exports for th e Engli sh Speaking

Carribean

Consultancy Report, World Bank SSDS Inc September 1995

Link: http://www.ssds.net/ssds-products/health-tourism-rev1.doc

BOOKS

Kel ly Lee , Global iz at ion and H ea lt h A n I nt roduct io n , Palgr av e

Macmillan

Publication, 2003

Mckinsey CII Study, Healthcare in India The Road Ahead, Mckinsey

&

Company, 2002

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9 APPENDIX

9.1 Size of Medical Tourism Market in India 2012

Note: If Me dical tourism were to rea ch 25% of pri vate up market, Rs. 5000

Rs.

10000 Cro re wil l be added to the r evenues o f t hese p laye rs . Med ical

tourism will

then represent 3 to 5% of total delivery market in 2012.

9.2 Economics of HealthCare Business

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From the table above we find that for p rivate investment in hospitals to be

sustainable, i t is essential for government to provide incentives in terms of

tax holidays, low cost loans and el iminat ion of import /excise duties on

equipment .

60(a) Medical Tourism in India Strategy for Its(1)

Documents