Blogs

Medical tourism, connecting health with leisure

  • Medical tourism landscape and growth drivers
  • Burgeoning growth in the sector
  • Scenario in developed vs. developing economies

 

Medical tourism or travel mainly refer to a movement from one country/province to another for medical purposes. The concept is not new and has been around for thousands of years. There are archaeological evidence from ancient Mesopotamian civilization in 3rd BC of travel to the temple of healing god/goddess at Tell Brak (Syria) for eye disorders. Likewise, Greeks and Romans travelled by foot or boats to spas and cult centres all over the Mediterranean.

The size of the global medical tourism industry is valued at $61 billion (2016) and is estimated to reach $165 billion by 2023 at a CAGR of 15% ([2017-23], [Source: Allied Market Research]).

The market size estimates for the global medical tourism industry are complicated as various stakeholders as well as numerous indirect revenue streams exists (e.g. tourism revenue; medical tourists spend 5-10 times more than a typical vacationer owing to a longer stay. The patient or their family members engage in local tourist activities as well) that are indirectly attributable to the industry. This is further complicated by expatriates who seek medical treatment.  

Medical tourism landscape for stakeholders

In the contemporary world, medical travel needs are dictated by several factors including unavailability of high-quality healthcare professionals in a home country, cost-effectiveness and affordable foreign treatment with instant availability of healthcare services with a negligible wait time; tourism and recreation opportunities, etc.

Furthermore, world medical tourism market is spearheaded by the Asia-Pacific (2016) with India (Yoga, Ayurveda and the local wellness industry setting it apart from other medical tourism destinations in the world) and Singapore emerging as popular and lucrative medical destinations. Meanwhile, Thailand accounted for a lion’s share in the region and is forecasted to witness substantial growth along with India owing to improved healthcare infrastructure and increasing awareness on these economies. Further, Europe is also slowly catching up as a preferred destination due to the inflow of a large number of medical tourists, especially in countries like the U.K., Germany, France, Italy, etc.

Reasons for a burgeoning growth of the sector:

  • The medical expenses are high in the developed economies (e.g. the United States). On the contrary, technological advancements and availability of cheap labour have made these expenditures relatively cheaper in the developing economies (e.g. India, Thailand, Costa Rica, etc.) and Singapore (although medical treatment is expensive than other Asian countries, but it is still cheaper compared to other developed economies like United States/Canada) for similar state-of-the-art medical services for patients. According to the OECD (Organisation for Economic Co-operation and Development) projections, nearly 50 million medical tourists travel to the emerging economies annually.
  • It is anticipated that approx. 50% of the patients who leave their home nations to receive a medical treatment believe that they can receive a better quality of medical care in a foreign country. Thus, these developing economies not only offer cost advantage, but also provide superior patient-centric and high personalized care (that is available almost immediately) to remain competitive and attract medical tourists.
  • Additionally, in the past few years there has been a spike in the ‘International Joint Commission’ accredited hospitals (a non-profit organization that evaluates and accredits >15,000 healthcare organisations in the United States since 1990) in Asia-Pacific alone with over 300 hospitals meeting the standards (one of the main criteria for the US residents opting to go abroad in a chosen hospital with high quality of patient care).

 

Televisory examined certain hospitals in the developing economy (Thailand, ‘Thai Nakarin Hospital Public Company Limited’, ‘Chularat Hospital Public Company Limited’, ‘Bangkok Chain Hospital Public Company Limited’ and ‘Bumrungrad Hospital Public Company Limited’) and the  developed economy (the United States, ‘Kindred Healthcare, Inc.’, ‘HCA Healthcare, Inc.’, ‘Universal Health Services, Inc.’, ‘LifePoint Health, Inc.’ and ‘SunLink Health Systems, Inc.’) and tried substantiating the above difference in these two distinct kind of economies. 

  

Hence, it was seen that both the inpatient and outpatient treatments are manifold expensive in the developed economies vis-à-vis the developing economies. This is based on the above analysis of the two prominent economies in developed and developing world.

  

The number of patients served per point of care is much higher in developing economies and these nations also enjoy a higher occupancy rate than the developed economies. Thus, owing to a cheaper healthcare, these serve a large number of patients (both domestic and international).

  

Moreover, the operating expenses incurred in the developed economies are higher than those in the developing world.

  

The EBITDA margins are higher for developing economies as these cater to a large percentage of outpatients, which does not require substantial operating cost, in contrast, the developed countries serve a high proportion of inpatients.

Therefore, medical tourism provides an opportunity for developing countries to take advantage of the favourable international situation and invest in the creation and promotion of a competitive medical tourism landscape. At the same time, stimulate the overall growth in their economies by the inclusion of the sector in the national strategy. Medical tourism brings in additional revenue from healthcare services as well as tourism and helps in the economic development of a nation. Televisory expect that in the future, the developing economies (such as India and Thailand) and Singapore will see a substantial growth in the medical tourism. This will be in lieu of investments in infrastructure, medical technology and increasing awareness on the world-class medical facilities in these economies, provided they capitalise on medical tourism opportunities while offering globally renowned services at a fraction of the cost in the developed world.

Your Rating

Slack set out to kill E-mail

Started as a side project for internal use in a gaming company High revenue growth with recurring revenues Went Public by offering shares through the Direct Public Offering ...

Tire manufacturing industry, analysing the cost and margin trends

The global market for tire manufacturing stands at $180 billion. Michelin anticipates the long-term demand to rise at the rate of 5 to 10% a year in developing markets and 1 to 2% a year in mature...

Rapidly growing Indian online food delivery industry and its unrealised profits

Evolution of online food delivery industry in India Geographical penetration and scope for expansion Key players and their zeal to balance revenue and costs   Online...

An analysis of Malaysian rubber glove industry

How big is the international rubber gloves market? Reasons behind the healthy and steady growth Malaysia’s role in the industry Why are companies struggling for stable...

Failure of Amazon in China, an analysis

E-commerce market in China Online consumer product retailers in China Performance of Amazon in China   Amazon is a global e-commerce player selling a wide...

Can lithium-ion anode demand for needle coke reduce availability for electrode players?

What is needle coke? Uses of needle coke Lithium-ion battery manufacturers demand needle coke   Needle coke? Needle coke is a specialised form of petroleum coke...

Is the radio broadcasting industry in the U.S. dying? An analysis

Radio, the most powerful medium of reach in the U.S. Why the industry is moving at a slow pace? Radio’s health is still sound, will it continue in the long-term?   ...

Carbon black industry, strong potential for supernormal profitability?

What is carbon black? Its uses Impact of the environmental curbs in China   What is carbon black? Carbon black is a fine carbon powder and it is a disorderly...

Housing finance market in India. Is affordable housing driving the growth?

Overview of the housing finance sector in India Key players dominating the segment and their dynamics Factors driving aggressive demand for housing   The housing...

Indian wood panel industry, growth drivers and present trends

Current market scenario in the Indian plywood industry Growth in the housing sector and rapid urbanisation to provide the boost GST rationalization to reduce price difference...

Sri Lankan economic and political crisis

Sri Lanka’s latest political crisis, who governs the nation? Poor economic indicators adding to the nation’s woes   Sri Lanka is currently embroiled in a political crisis,...

Blockchain, an emerging concept, a disruptive technology (Part 1)

What is blockchain? How is blockchain revolutionary? Cryptocurrency, the new money ICOs, the new way of raising money Summary Blockchain is a software architecture...

Rice industry outlook 2018

Major rice producers and consumers Global rice trade Factors dominating the trade   Rice is the 3 rd largest produced agricultural commodity in the world, after...

Rise of Ant Financial, will the success story continue?

What is Ant Financial? Journey to become king of unicorn Will regulatory curbs hinder its success journey?    Ant Financial, an affiliate and integral part...

Malaysian rubber glove industry, an update

Rising global demand for gloves Impact of USP 800’s implementation and the US-China trade war on Malaysia’s rubber gloves industry Key challenges for the Malaysian rubber...

Unnoticed growth of the media and entertainment industry in India

Overall industry brief Growth of the M&E industry and its segments Major supporting elements of this growth   Media and Entertainment (M&E) is a very wide industry...

Battle for the textile and apparel industry in Southeast Asia

The reasons for China’s decreasing presence in the industry Initiatives by the governments in Southeast Asia to boost the textile trade Vietnam and Bangladesh’s quest to conquer...

Baidu’s Apollo, the underdog of autonomous driving platform

Overview of the autonomous vehicle sector in the global automobile industry Search giant Baidu’s entry into the autonomous driving space Baidu’s approach in becoming a front-runner...

OYO Rooms, an Indian start-up to enter Japan

Growth story of OYO Rooms in India Business model of OYO Rooms Analysis of strategy to enter Japan   OYO Rooms, the Indian start-up has decided to venture in Japan...

Education industry in India, an overview

Growth of private universities in the nation Future potential of the education industry in India   The education sector in India is estimated to be worth USD 91.7 billion...