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)
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.
Lecture Objectives
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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
What is “Cross-Border Medical
Tourism”?
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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
WTO’s General Agreement on
Trade in Services (GATS)
WTO’s 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)
A Typology of Cross-Border
Medical Tourism
(Consumption Abroad)
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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”)
What’s 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”)
A Comparison of Price-Sensitive &
Quality-Sensitive Medical Tourism
Type of Medical
Tourism
Patients Involved
Main Reasons for
Seeking Treatment
Overseas
Price-sensitive
Relatively less
affluent people
To reduce the cost
of medical care
received
Quality-sensitive
Affluent people
To receive care of
perceived “higher
quality”; to obtain
sophisticated
services not
available in home
country
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),
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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: US$1 billion or RM 380 million)
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:
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Product standardization
Market expansion
Active marketing of medical care to consumers
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
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
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
Favored Destinations and
Treatment Sites
Treatment sites (hospitals or medical
centers) that are:
Accredited by the accreditation agency of
the medical tourist’s own home country
Owned by the medical tourist’s own home
country health care corporations
World-renowned e.g. Mayo Clinic in
Rochester, Minnesota, USA
Staffed by doctors with credentials from
the medical tourist’s own country
Motivations (besides “perceived
higher quality” or “lower cost”)
Motivation for Seeking
Medical Care Overseas
Example
To reduce waiting time
Organ transplant patient
who wants to avoid long
waiting list
Seek experimental care
or controversial care
Terminally-ill patient
desperate for a “cure”
Convenience/privacy
Gender-reassignment
surgery process involves
less hassle overseas
Pregnant female seeking
induced abortion (illegal
in her home country)
Seek care that is
unavailable or illegal in
the home country
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
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”
Possible Impact on the Health Care
Industry in the Home Country
1.
2.
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
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)
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