Author: Deshpande Rajakumar
Medical tourism has an enormous impact in delivering affordable health care to needy patients across borders. It challenges effective treatment modalities in being "low-cost" and "valuebased," rather than "poor-quality" or "cheap." It leverages local health care, tourism, transport, logistics, food, language, and a host of deliverables, and generates tremendous value for the host country.
Indian healthcare is poised to be at the forefront of the medical tourism industry. Indian consumer spending is anticipated to be $4 trillion by 2025, with an estimated $500 billion spent on health care. In 2016, worldwide medical tourism generated $100 billion, but is projected to be $200 billion a decade later.
Twenty percent of the Indian population had health insurance coverage by 2015, up from around 2 percent in 2006, with a CAGR of 30 percent. The health economy is reshaping through a shift in demographics, with villagers moving to larger towns and cities. Tier 3 cities have become Tier 2 cities in a short period of time, with Tier 1 cities set to become "Megalopolises." For example, the population in the city of Bengaluru rose from 4.13 million in 1991 to 5.10 million in 2001. According to population projections based on those numbers, Bengaluru should have reached 9.72 million by 2025 and 15.62 million by 2050. But the reality is quite different. The population of Bengaluru exploded to 11.5 million in 2015, and is now estimated to grow to 25 million by 2025! This is an extraordinary growth, applying stress on planning, resources, and delivery of health care. Similar patterns are emerging in other major cities in India. There is a shift also in disease patterns, from "communicable" to "lifestyle" diseases. India had teetered on starvation in the 1960s, but has become self-sufficient in food production. There is a remarkable change from a picture of a skinny, half-naked "native" to an obese, globetrotting executive in a matter of a few decades. Diabetes is the future scourge of this pattern shift, with 300 million people to be affected by 2020. Such a dramatic change offers huge scope for new treatment modalities.
Public spending on health care initiatives by the government of India has hovered around 4 percent of GDP compared to 15 percent in the USA. There is increasing private sector involvement, to about $100 billion in 2015. World-class health facilities are being built in many cities, many with support from international investment funds. Large hospital groups like Fortis hospitals, Apollo hospitals, Narayana hospitals, and a host of small groups are investing in different cities to provide quality health care to various segments of the population.
General Agreement on Trade in Services (GATS) has resulted in initiatives like telemedicine services from Apollo hospitals (worth about $4 billion), medical billing and outsourcing ($20 billion globally), "M" visa and more.
All this has resulted in patients traveling to India in search of better treatment and relatively low-cost but world-class capabilities. For example, spinal fusion procedures cost only $6,000 (Figure 1). These costs are attractive and affordable for medical travellers. The outcomes are comparable to many advanced centers in the US, UK, France, Japan, and Germany.
Patients look for "value for money" when they seek treatment. This includes affordability and cost-effectiveness, high-quality health care, and immediate service. Improved communication and travel services are a necessary part of this attraction. Flexible pricing is key to organize the best possibility of treatment for the patient. This is critical for certain economic class of patients. Surgical treatment remains the same but "stay" is considered differently. Some reduction in costs are possible while treating a group of patients.
Certain strategies are being adopted to make treatment affordable. Hospitals are becoming solution providers, rather than offering surgery alone. Common procedures that can be done safely at an offsite hospital in the host country are performed by visiting surgeons after a simple or small "upgrade."
Difficult surgeries are then offered in the Indian hospital, increasing patient confidence in the capability of the hospital systems involved. This expands the reach to different locales in the foreign country and offers treatment that may not be available to them at all.
Similar implants are made available with lesser range, reducing costs substantially. Simple kits with less range, and "loaner" sets are helping make expenses leaner. The complete range is not necessary in common procedures, as it adds to the cost of acquiring, maintenance, sterility, and replacement. Less range means lesser variety of implants and tools to use those implants. Loaner sets for surgery reduce acquisition costs for the health care provider while it offers flexibilty for the vendor to support multiple hospitals who cannot invest in such technologies. Equipment vendors are willing to discuss with hospitals to provide and partner in cathlabs and diagnostic centers. This strategy has resulted in less downtime and maintenance costs for the healthcare provider.
Additionally, the 2014 "Make in India' initiative launched by the government has encouraged Indian medical companies to manufacture at home. This has the potential to reduce costs, as local manufacturing has less labour expenses. Affordable health care start-ups are encouraged to experiment with alternatives that can challenge existing technologies. Mobile health care initiatives are expected to cross $600 million in 2017. The recent "Digital India" campaign again launched by the government of India, is certainly going to change the scenario by taking health care technology to the "pocket of the common man."
At the same time, indigenous Indian industry is expanding and proving itself quite capable of accommodating these changes.(Figure 2)
With increasing costs of importing and an ever-expanding base of patients, it becomes imperative for care givers to innovate in many areas of the business. At an anticipated $500 billion in medical device and diagnostic equipment costs by 2030, Indian health care organizations must develop affordable means of treatment to those in need. Potentially, local manufacturing of devices and diagnostic equipment, which can then be exported to needy countries to offset costs, is going to become an important method.
Ultimately, safe treatment practices at affordable costs is the key to encourage medical tourism. "Value for money" has become the new mantra for Indian healthcare organisations. The increasing volume of medical tourists indicate India is becoming a global health care destination of choice, likely reaching even greater significance in the coming years as global health care costs reach unacceptable levels. Strategies now being utilized by Indian health care organizations may become fine-tuned to fulfill global needs in the future.