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 estimated to be Rs.5000-10000 Crores by 2012. The key competitive advantages of India in medical tourism stem from the following: low cost advantage, strong reputation in the advanced healthcare segment

(cardiovascular surgery, organ transplants, eye surgery) and the diversity of tourist destinations available in the country. The key concerns facing the industry include: absence of government initiative, lack of a coordinated effort to promote the industry, no accreditation mechanism for hospitals and the lack of uniform pricing policies and standards across hospitals.

To realize the industrys full potential, a coordinated effort from the various players government, private players and the associated sectors is very essential. The government should help in instituting an accreditation mechanism and device policies to facilitate private investment in the sector. An apex body should be formed for the industry in the lines of NASSCOM1 and should focus on building the Indian Brand across the world and promote inter-sectoral cooperation. The private sector for its part, should invest more in infrastructure,

horizontally integrate into related services and build joint ventures and alliances with overseas health institutions and insurance players. Finally establishment of MEDICITIES akin to STPI2 as a public-private

partnership model can also give a major fillip to Indias quest for success in medical tourism. 1 Apex body for Software in India 2 Software Technology Parks of India

INTRODUCTION

1 INTRODUCTION

Medical Tourism refers to movement of consumers to the country providing the service for diagnosis and treatment. During the past few years, the number of people going out of their home country to consume health services has significantly increased. The size of this market is estimated to be $40 billion based on a Saudi Report in 2000. During the past four years, the market grew at a whopping rate of 20-30% and is 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 tourism include improvement in export earnings and healthcare

infrastructure. No doubt a lot of countries India, Thailand, Malaysia, Singapore, South Africa, Cuba, Jordan and Lithuania are fighting for a share of the market. In order to realize the full potential of the industry, it is imperative for these countries to develop a strategic plan for

coordinating various industry players the medical practitioners, private hospitals, policy makers, hotels, trans portation services and tour operators. This report presents the strategy that needs to be implemented by India, one of the key destinations for Medical tourism, in order to achieve industryleadership.

MEDICAL TOURISM AS AN INDUSTRY

Medical tourism can be broadly defined as provision of cost effective private medical care in collaboration with the 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.

In many developing countries it is being actively promoted by the governments official policy. Indias National Health policy 2002, for example, says: To capitalise on the comparative cost advantage enjoyed by domestic health facilities in the secondary and tertiary sector, the policy will encourage the supply of services to patients of foreign origin on payment. The rendering of such services on payment in foreign exchange will be treated as deemed exports and will be made eligible for all fiscal incentives extended to export earnings. The formulation draws from recommendations that the corporate sector has been making in India and specifically from the Policy Framework for Reforms in Health Care, drafted by the prime ministers Advisory Council on Trade and Industry, headed by Mukesh Ambani and Kumaramangalam Birla.

OVERVIEW OF MEDICAL TOURISM IN GLOBAL SCENARIO

2.Overview Of Medical Tourism In Global Scenario

Countries from where people head for India are UK, Bangaladesh, Oman, SriLanka, Indonesia, Mauritius, Nigeria, Kenya, and Pakistan etc. 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 Heart Surgery 30,000 Bone marrow transplant 250,000 Liver transplant Orthopaedic Surgery Cataract Surgery 300,000 20,000 2,000

INDIA 8000 69,000 69,000 6,000 1,250

India offers a real good cost advantage over the western countries. This cost factor becomes very important while formulating schemes to attract the

Indian diaspora as they generally compare the relative 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 Orthopedic Surgery Lakh. In the west, the expense comes to $20,000(Rs 9.6 lakh). The package in Cataract Surgery Liver Transplant India costs one third of that amount. $20,000 is the price for surgery in the US. In India, it comes to just $500 The cost comes to a whopping $300,000 abroad while Indian super specialty hospitals perform the

operation for

Global Medical Tourism No Foreigners Country treated year last Earned From Money of Strengths

600,000 THAILAND

US, UK

$470 m

Cosmetic surgery, Organ transplants, Dental treatment, Joint replacements

126,000 JORDAN

Middle East

$600 m

Organ transplants, Fertility treatment, Cardiac care

100,000 INDIA

Middle

East,N.A

Cardiac Joint

care,

Bangaladesh, UK, Developing 85,000 MALAYSIA countries countries US, Japan,$40 m Developing

Replacements, Lasik Cosmetic surgery

50,000 SOUTH

US, UK

N.A

Cosmetic surgery, Lasik.

Dental treatment AFRICA

Treatment Costs ($)*

Procedure

US

INDIA

SOUTH AFRICA

THAILAND

Facelift

8000-20,000

10,000- 20,000 1,252

2,682

Hip replacement

17,000

2,500

6,671

N.A

Open surgery

heart 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 like house keeping, Food and Beverage, Lenin, diagnostics labs, medical equipment, ambulatory services etc are outsourced. Hospital focuses on core activity of patient care. Medical Business Process Outsourcing includes Medical coding, Billing, Claims Processing, Transcription etc.

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Global Economic and Logistic Trends .

Global Change

Economic Changing

BusinessNew Pressures

Logistics practices

*Rapid business and

growth

in *Outsourcing

for of

the*Greater

sensitivity

to

services coordination high-tech flows:

three transit/delivery times. Goods,*Cost competition *Customers are often part ofof large supply chains.

manufacturing *Rapid growth

Information and Funds in *Geographic production. the *Just in time Inventory spread

international Trade *Competition on

basis of cost, quality Management. and time.

2.1Benefits of Medical Tourism

Tangible

Foreign exchange earrings which enable economic wealth of nation 12

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 alliances 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 13

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 Is India prepared for global medical tourism 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 government policy for collaboration between the 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 at highly competitive price when compared to those prevalent in the western countries. The CII- McKinsey report mentions that the medical tourism market has been growing at the rate of 15 per cent for past five years and by 2012, Rs 10,000 crore will be added to revenues of the private players. 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 private players, in medical tourism are hospitals in the Apollo chain. Main destinations are Delhi, 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 tenth of the cost in US or Europe depending on the intervention required.

In addition to above destinations, the country has many cities with advanced medical facilities making India, a country with tremendous 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 herbal therapy, naturopathy, yoga, aromatherapy, reiki, music therapy which does not require advanced medical expertise.

India is relatively new entrant into this field and it has to prepare to face the already existing competition from other Asian countries, namely Thailand, Malaysia and Singapore. These countries together currently attract as much as ten times more medical tourists than India. Hongkong and South Africa are emerging as big medical tourism destinations. The

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countries that are actively promoting medical tourism 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 is an obvious lack of any conscious and well-founded efforts to market medical tourism by our country. The crucial partners in this industry include central government ministries of finance, tourism, health and medical entrepreneurs, tourist industry and insurance companies.

In many countries, medical tourism is promoted by the government's official policy, which facilitates effective working of medical entrepreneurs and tourist industry to attract medical tourists

The

apprehensions

expressed

by

some

sections

that

"systematic

development of medical tourism will boost up earnings by catering to the wealthy foreigners and Indians working in the foreign countries but it may adversely hit the low income population" need to be addressed for gaining approval of political opinions with varied views on liberalisation. From past ten years, India has entered a phase in medical expertise that is

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considered on par with international standards. This is because of high quality doctors and medical entrepreneurs who developed hospitals with required infrastructure and management style. Some of these hospitals have marketing departments to increase visibility and acceptance of their products in some countries.

They have got some success in overcoming prejudices of foreign patients about healthcare in developing countries. However in the current scenario, there is urgent need to streamline array of activities involved in the making India "Global health destination". We require urgent formulation of policies and procedures by top level in the government and also coordination 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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19

MEDICAL TOURISM IN INDIA THE CURRENT SCENARIO

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3. Medical Tourism in India The Current Scenario

Medical Tourism is poised to be the next Indian success story after Information Technology. According to a Mckinsey-CII study the industrys earning potential estimated at Rs.5000-10000 Crores by 2012. Worldwide, healthcare is said to be a $3-trillion industry, and India is in a position 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 from the UK, the USA and many other third world countries, where medical services are either very expensive or not available, 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 it an excellent generator of employment. In 2002, the travel-and-tourism industry is expected to generate some US$3.3 trillion of GDP and almost 200 million jobs across the world economy. Approximately one third of this would come directly from the industry

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itself and the remainder from the strong linkages to other related sectors such as entertainment, retail and construction.

Medical Tourism is perceived as one of the fastest growing segments in marketing Destination India today. The equation is World Class Healthcare at 'Economical Price '. Stable economic growth will create an increase in freight flows from, towards, through, and inside the country. All this will stimulate the investments in roads and railroads. As globalization advances, both domestic and international tourism pose new and 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 immense business opportunity for nations that are positioning themselves correctly. Last year, just five countries in Asia Thailand, Malaysia, Jordan, Singapore and India- pulled in over 1.3 million medical travelers and earned over $1billion (in treatment 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 patients visited India for medical treatment. Today India is a key player in medical tourism with 100,000 foreign patients coming in every year and revenue of Rs.1500 Crores. The current market growth-rate is around 30% per year and the country is 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 destination is the inherent advantage of its healthcare industry. Today Indian healthcare is perceived to be on par with global standards. Some of the top Indian hospitals and doctors have strong international reputation. But the most important factor that drives medical tourism to India is its low cost advantage. Majority of foreign patients visit India primarily to avail of First World Service at Third World Cost.

S o u r c e : B u s i n e s s Wo r l d In d i a a nd In d ia n B r an d Eq u i t y F ou nd a t i o n

As the table above shows, India has significant cost advantages in several health procedures making it a preferred destination

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3.2 The Service Spectrum

India offers a variety of services for overseas patients. The table below presents 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 profile of these three consumer groups:

Though tourism is not the primary need of these consumers, it offers 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 Hospitals, Mallya Hospital, Shankara Nethralaya etc. AIIMs, a public -sector hospital is also in the fray. In terms of locations Delhi, Chennai, Bangalore and Mumbai cater to the maximum number of health 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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28

3.6

Health

Tourism

In

India

Advantages

and

Opportunities

The

inflow of health tourists from the West, especially 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 quality of Indian hospitals has improved significantly 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

transplantations(liver/kidney/heart or bone marrow), cancer treatment, including radiotherapy, neurosurgery, including sterotactic surgery.,

angioplasty and cardiac surgery(bypass and pediatric)

Public-Private Partnership combines internal hospital expertise with supply chain and logistics expertise.

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 The medical tourism industry which is estimated to be worth Rs 1500 crores annually has not only the potential to generate substantial forex earnings but also provide employment opportunities for the large skilled labor available in India, Apollo Hospitals Group, India. pool of

according to Dr. PC Reddy, chairman,

According to Group President Pratap C.Reddy, the annual health bill of people from Afro-Asian countries seeking treatment outside their country is $10 billion. If India can tap even a fraction of that market, the potential is enormous. Joint Commission Accreditation of Healthcare Organizations (JCAHO)

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3.7

31

32

LESSONS FROM INTERNATIONAL SUCCESS STORIES

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4 Lessons from International Success Stories

The success stories from across the world provide significant strategic inputs for the development of a strategy for India.

4.1 The Case of Cuba

Cuba is one of the earliest successes in medical tourism industry. The country successfully tapped the demand for medical tourism from LatinAmerican countries. Cubas success can be attributed to the strategic push provided by government through State-Owned Companies. 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 status and laws enacted to increase participation of private entrepreneurs. One example is allowing treatment for skin diseases using human placenta that was banned elsewhere .

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4.1.2 Centralized Marketing through SERVIMED

The government centralized promotion of health services abroad by entrusting the responsibility to SERVIMED a newly formed public company. SERVIMED coordinated with tour operators and travel agencies to develop health packages.

The package included travel in Cubas national airline, 24 hours assistance, and companion personnel for the patient, repatriation, 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 story is that of Thailand. Thailand is one of the world's leading healthcare destinations with a forecast of 1 million overseas patients for the current year. The main reasons for Thailands success are:

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4.2.1 Inter- Sectoral Coordination

The Thai government realized early the need for coordination across various sectors to realize the industrys potential. Hence it developed a common vision, strategic direction, joint-strategy and shared objectives for various sectors in order to facilitate better coordination between 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 Tourism Authority of Thailand (TAT) has played a stellar role in providing integrated marketing Thai tourism abroad. TAT has more than 18 offices worldwide and has won several international credits for developing excellent marketing campaigns targeted at tourists. TAT has so far been extremely successful in marketing Thai health services also.

4.2.3 Focus on Hospitality

Thailand heavily focuses on hospitality to provide superior consumer experience and building brand equity. For example the Bumrungrad Hospital in Bangkok provides hospitality services that include: pick up from Airport, language interpreters for 18 languages and an in-house Starbucks and McDonalds to cater to tourists from U.S and U.K. 36

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 healthcare 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 - STRATEGIC THRUSTS FOR THE FUTURE

38

5 India - Strategic Thrusts for the Future

The following section lays down the strategy for India to achieve 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 Facilitator 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 fiscal policies - providing low interest rate loans, reducing import/excise duty for medical equipment

4. Facilitating clearances and certification like medical registration number, anti-pollution certificate etc.

The above measures will kick-start hospital financing, which is struggling now due to capital intensive and low efficiency nature of healthcare 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. Create Medical Attachs to Indian embassies that promote health services to prospective Indian visitors

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5.2 Formation of National Association of Health Tourism (NHAT)

The promotion of medical tourism has so far been very fragmented with initiatives by few states and private hospitals. The earlier discussions 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 the 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. Building the India Brand Abroad : Classify the target consumer segments

based on their attractiveness and position the India Brand based on the three main value propositions high quality service, value for money and destination diversity. An integrated marketing Communications campaign using print, media and road shows should be developed.

2. Promoting Inter- Sectoral Coordination: 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. Standardization of Services: NAHT should also focus on establishing

price 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 Sector

The action items for private sector are:

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1. Increased participation in building infrastructure: To achieve its full

potential, it is estimated 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

horizontally for providing end-to-end healthcare solutions 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 / Alliances : To counter increasing competition, Indian

hospitals should tie-up with foreign institutions for assured supply of medical tourists. Specifically tie-ups with capacity 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 Export Oriented Software Technology Parks. This model can be

successfully replicated in the medical tourism industry by means of MEDICITIES. Each MEDICITY could be a self-sustained healthcare hub with super specialty hospitals of international standards, ancillary

facilities, research institutions, health resort, rehabilitation centers and

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residential apartments. This model can be floated through a public-private partnership. The government will provide land and ancillary services and the private players will provide infrastructure and services. From the consumers point of view, the MEDICITIES will 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 FOR INDIA

45

6 Medical Tourism: Opportunities and Challenges for India

India's relatively developing medical tourism segment has been anointed by healthcare and tourism industry pundits as the next 'best' thing for the country. According to a McKinsey report, India is poised to generate business worth USD 2.2 billion by 2010, however there are plenty of challenges that need to be addressed for India to become the world's preferred healthcare destination. Prominent among them being the need for proper accreditation and requisite standardisation systems in place, a tripartite synergy between hospitals, tour operators and respective state governments. The panelists for the session comprised Dr R V Karanjekar, chief executive officer, Dr D Y Patil Hospital and Research Centre, Mumbai; Anupam Verma, director administration at PD Hinduja National Hospital, Mumbai; Joy Chakraborty, deputy administrator at Sri

Ramachandra Medical Centre; Gour Kanjilal, regional director (Western & Central Region), Indiatourism, Mumbai and Mahendra Jain, commissioner of tourism, government of Karnataka.

In 2004, India treated and cared for 1.8 lakh patients. This number is poised for substantial growth - 25-30 per cent in 2005. The panel agreed that India's main USP in this regard was the prospect of low-cost treatment

46

by highly professional doctors. India will have to project itself as being a holistic medical destination to get an edge over other countries. "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 hospitals and a quality assurance model should be taken up immediately to take medical tourism ahead. "CRISIL and ICRA have started something on price bands but are facing few challenges at the moment. What we can do, is try and follow the Thailand model. Thailand first developed its standards as per Joint Commissioner International (JSI) which helped them to get approval from NHS of UK. So convincing medical insurance companies was not a problem." Talking about initiatives that can help in generating the right exposure.It is time we create a database on the facilities on offer, the number of patients received and from which market, reason for choosing India, their length of stay, 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 collaboration with ministry of health which will look into quality assurance, standardisation of price, global networking and

improving visibility. At the same time, the government should introduce a medical visa to facilitate 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 year in collaboration with FICCI, he has been actively involved in promoting the state as the preferred medical 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:

48

The third world, with its image of overcrowded cities, poor infrastructure, and inadequate health care for its own inhabitants, will continue to have difficulty appealing to Westerners, no matter how modern and gleaming the hospitals that cater to them.

Follow-up care is limited to the individuals stay 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 in countries such as India and Thailand, so an individual must be particularly careful to choose a hospital with high standards and

accreditation. Malpractice laws are weak in countries like India and Thailand, which leaves patients with limited recourse if 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 patients in the developed world who fall through the cracks of private and public insurance a costeffective way to outsource their medical needs to a low-cost provider.

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6.1 GROWTH OF THE MEDICAL TOURISM INDUSTRY

The countries where medical tourism is being actively promoted include Greece, South Africa, Jordan, India, Malaysia, Philippines and Singapore. India is a recent entrant into medical tourism. According to a study by McKinsey and the Confederation of Indian Industry, medical tourism in India could become a $1 billion business by 2012. The report predicts that: By 2012, if medical tourism were to reach 25 per cent of revenues of private up-market players, up to Rs 10,000 crore will be added to the revenues of these players. The Indian government predicts that Indias $17-billion-a-year health-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 treated 95,000 international patients, many of whom are of Indian origin. Apollo has been a forerunner in medical tourism in India and attracts patients from Southeast Asia, Africa, and the Middle East. The group has tied up with hospitals in 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 British insurance company, BUPA. The management hopes to get British 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 like poor aviation connectivity, poor road infrastructure and absence of uniform quality standards.

Analysts say that as many as 150,000 medical tourists 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 industry would flourish 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 selling points of the medical tourism industry are its cost effectiveness and its combination with the attractions of tourism. The latter also uses the ploy of selling the exotica of the countries involved as well as the packaging of health care with traditional therapies and treatment methods.

Price advantage is, of course, a major selling 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 hospitals it could cost between $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.

The price advantage is however offset today for patients from the developed countries 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 health management. The health tourism focus has seen Kerala participate in various trade shows and expos wherein the advantages of this traditional form of medicine are showcased.

A generic problem with medical tourism is that it reinforces the medicalised view of health care. By promoting the notion that medical services can be bought off the shelf from the lowest priced provider anywhere in the globe, it also takes away the pressure from the government to provide comprehensive health care to all its citizens. It is a deepening of the whole notion of health care that is being pushed today which emphasises on technology and private enterprise.

The important question here is for whom is cost effective services to be provided. Clearly the services are cost effective for those who can pay and in addition come from countries where medical care costs are 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 effective specialized care is coming from the developed countries where there has been a decline in public

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spending and rise in life expectancy and non-communicable diseases that requires specialist services.

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CONCLUSION

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7 CONCLUSION

The medical tourism industry offers high potential for India primarily because of its inherent advantages in terms of cost and quality. However the competition is getting heated up and the success in future will largely be determined by development and implementation of a joint strategy by various players in the industry. The government should step in the role of a regulator and a facilitator of private investment in healthcare. An apex body for the industry needs to be formed to promote the India brand abroad and aid inter-sectoral coordination.

Joint ventures with overseas partners and establishment 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 instantly, consumers will virtually have all the knowledge and choices in the world. India has bright prospects to emerge as the global destination for medical tourists to avail world-class quality healthcare facilities at cost advantage. As the medical tourism industry is growing exponentially, hospitals need to develop efficient logistics system for continuous improvement to meet the requirements of international patients 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 related industries, tie-ups with other countries. Logistics information system will enable sharing information and effective handling of

international patient care from the point of receiving to the point of sending back. Medical Tourism will help in maintaining good international relations, cross border relations, trade relations, exchange of manpower and technology among counties. To capitalize the opportunities globally, a coordinated strategy is required by upgrading and restructuring hospital services and to attract international market. the

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REFERENCES

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8 REFERENCES

PAPERS

1. Rupa Chanda, Trade in Health Services, Bulletin of the World Health Organization 2007;80(2); Pg: 158-163

2. David Diaz Benavides, Trade Policies and export of health services A Development Perspective, World Health

Organization Publication, Pg 53 - 69

3. I ndia Brand Equity Foundation, India is far Cheaper than Thailand, March 2008, www.ibef.org

4. I DFC Ltd, Investing in Private Healthcare in India Funding Robust Business Models, December 2006

5. M ueller H and Kaufmann E L, Wellness Tourism: Market 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 India Health Care Industry India Brand Equity Foundation Link: http://www.ibef.org/artdispview.aspx?art_id=3361&cat_id=119 Prospects for Health Tourism Exports for the English Speaking Carribean Consultancy Report, World Bank SSDS Inc September 1995 Link: http://www.ssds.net/ssds-products/health-tourism-rev1.doc

BOOKS
Kelly

Lee, Globalization and Health

An Introduction, Palgrave

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 Medical tourism were to reach 25% of private up market, Rs. 5000 Rs. 10000 Crore will be added to the revenues of these players. Medical 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 private investment in hospitals to be sustainable, it is essential for government to provide incentives in terms of tax holidays, low cost loans and elimination of import/excise duties on equipment .

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