Globalization and Medical Tourism

I. Identification

1. Issue

Globalization has caused many countries to reevaluate their economical strengths and weaknesses, as well as reassess what products or services in which nations can benefit. One such product and service that has emerged over the past decade is medical tourism. Medical tourism involves the practice of citizens exercising their personal healthcare choices in less restrictive areas. It is the traveling by candidate service recipients from one institution, jurisdiction or country where treatment is not available to another institution, jurisdiction or country where they can obtain the kind of medical procedures and innovative treatments they desire. Despite the less restrictive policies that encourage this business, these services often can also be offered as a lower-cost and more-timely option.

Because of the nature of this practice and its policies, this phenomenon has only occurred in certain, specific areas around the world. These regions and nations have attractive policies in place and have implemented unique marketing strategies that encourage the medical tourism business. This industry has demonstrated significant impact on these nations’s economic health. Unfortunately, other nations, like the United States, have not been as successful in attracting the medical tourism business. Therefore, the issue is to more thoroughly understand, through the analysis of other country’s experiences, policies and marketing strategies, why the United States should take advantage of the opportunity to further participate in this emerging industry.

Source: Photograph taken by Alyssa Morrison on December 20, 2003

2. Description:

Medical tourism is a universal term that encompasses several specialty markets. Included in these specialty markets are health tourism, reproductive tourism, suicide tourism, as well as other niche business opportunities. Tourism, in the sense of this emerging market, is basically traveling from a place where treatment is not available, because of the prevailing rules, to a place where it is available. These rules are not necessarily laws but may also be the personal and moral convictions of the health care provider, institutional policy guidelines, and recommendations by committees. Thus, policy, in some fashion, is the driver of this industry.

Medical tourism is also the most common practice carried out all over world. However there are other specialty markets within medical tourism that are also emerging as significant businesses. Health tourism is travel in a recuperative climate with natural therapeutic resources. The health tourism business is more specifically known for offering yoga, massage, traditional ayurvedic medicine and spa resorts. Reproductive tourism is the practice of consumers exercising their personal reproductive choices in less restrictive areas by traveling to another jurisdiction or country where the desired medically assisted reproduction procedures and treatments can be obtained. Suicide tourism is a very small branch of medical tourism yet its presence is still notable. This practice, much more so than the others, is tightly structured by policy.

Once consumers commit to travel for their desired medical treatment, often consumers will also take the opportunity to be a tourist in the visiting country and enjoy what it has to offer. Thus, consumers may combine their holiday and medical care into one venture. Medical tourism is comprised of three basic aspects: hospital/health services, hotels and travel/leisure. Thus, with attractive policies and/or the correct marketing strategies, this emerging industry can have significant opportunity for economic growth and infrastructure development for participating nations.

3. Related Cases:

As noted, medical tourism is the universal practice with numerous specialty markets within this business. Because this in an emerging industry, extensive research for any particular country or on any individual branch of medical tourism, its policies and marketing strategies are not available. Therefore, all areas comprising medical tourism for many of the participating geographical regions or nations will be addressed. In summary, this case study will address a broad overview of the industry.

4. Author and Date:

Alyssa Morrison
March 23, 2005

Source: Photograph taken by Alyssa Morrison on December 28, 2003

II. Policy Impacts

5. Social:

The policy behind medical tourism has two distinct functions. In the case of those countries benefiting from medical tourism, standing policy allows for the nation to promote this business to consumers who are willing to travel and have the ability to pay. In essence, policy allows consumers new and different options for their healthcare needs. Medical tourism policy offers consumers choices. Secondly, this policy can also be enacted to protect the nation and its consumers. In the healthcare field, ensuring necessary and quality service is of the utmost importance. Therefore, policy, in the medical tourism sense, protects the rights of its participants while also giving consumers more opportunity and choices in their healthcare.

6. Environmental:

While medical tourism focuses on fulfilling healthcare choices, traveling to a different country or state is also necessary. This is the basic premise behind medical tourism. Thus, by traveling to another geographical area, it is promoting tourism to location. Tourism is being used as a means for providing capital for development and preservation of these geographical areas.

7. Economic:

Medical tourism has had significant economic impacts on particular geographical regions and nations. The goal of this industry is to provide economic stimulus to the geographical areas, often developing nations. The objective of this business is to increase jobs, income, and quality of life of the participating nations of medical tourism. This business also promotes infrastructure development to support the industry.

8. Other:

Since this is an emerging, competitive industry, countries seek education, advanced skills and training to benefit from this profitable business. Therefore, medical tourism, and the policies around it, has encouraged participants to receive continued education and training. Additionally, this business also requires the use of advanced technology, and this, in turn, encourages participating countries to gain more exposure to these various technologies.

9. Suggested Interventions:

While there are several specialty markets of medical tourism that are very controversial, specifically reproductive and suicide tourism, countries are reconsidering and/or analyzing their standing policies. There are consumers who take advantage of these opportunities, as well as opposition from non-market groups who have forced possible policy reform. Thus, these nations must continue to analyze and revise their policies in order to protect the practice of medical tourism and its consumers.

Source: Photograph taken by Alyssa Morrison on January 3, 2005

III. Legal Clusters

10. Disclosure and Status/Policy Issue:

While there is no main policy issue, policy, or less restrictive policy, is the backbone of this industry. Most often, consumers are willing to travel to receive medical procedures in a geographical location that maintains policies that are less prohibitive than their current location’s policies. There are other factors, too, that encourage medical tourism, like time and money. However, if policy is not in place to encourage this business, regions or countries would not be able to participate and benefit from this industry. Additionally, because of their particular standing policies, nations are better able to market themselves to new consumers globally.

11. Forum and Scope/Existing Policy Framework:

International: The concept of medical tourism is primarily to encourage travel by consumers globally. Therefore, most countries enact a policy framework that is attractive to worldwide consumers on the basis that if they are willing to travel and pay the necessary fee, consumers are able to receive the healthcare practice they desire.

National: Medical tourism does not require a consumer to have to cross national borders. Often, medical tourism is evident from state to state or jurisdiction to jurisdiction. In this case, policy encourages consumers to travel from one area to another area where policy is more attractive or less restrictive. This type of medical tourism that markets this practice is more often seen in the specialty market of reproductive tourism.

Regional: Although countries do not tend to formulate policies based on regional expectations, there are certain geographical areas that do benefit more from the medical tourism industry. Southeast Asia has marketed itself as the primary geographical area to cater to medical tourism consumers. Since this has become a competitive business, countries in this geographical area continue to analyze and reform their policies to encourage this practice and rise above their competitors. Additionally, as this industry continues to emerge, this similar phenomenon is becoming more apparent in the European Union as well.

12. Decision Breadth/Stakeholders/Policy Actors:

Policy is often shaped by numerous actors. The government plays are large role in outlining medical tourism policy in its nation. However there are other actors that can affect policy. Healthcare providers, institutions, special committees, advisory boards, associations, as well as numerous other players, can all impact policy guidelines.

On the tourism aspect of this industry, there are also other actors that can also influence policy. Businesses, recreational organizations, as well other associations and groups can impact policy guidelines that encourage medical tourism.

Source: Photograph taken by Alyssa Morrison on December 27, 2003

13. Legal Standing/Legal Regulatory Framework/Suggested Policy Interventions:

Although there is no documented legal regulatory framework for the medical tourism industry, there is always a legal liability concern when dealing with the healthcare industry. The healthcare industry is a much regulated business entwined with liability issues. Therefore, countries enact policies that address this concern on an individual basis. Because some countries are willing to take on more risk with healthcare liability, they have been able to emerge as leaders in this industry. Other countries, like the United States, have not been able to benefit as greatly from medical tourism because of increased legal liability and policy.

IV. Trade Clusters

14. Type of Measure:

Research states that the economic profit that the medical tourism industry contributes to the nation’s gross domestic product (GDP) is the measure of success. This financial revenue can be calculated by healthcare earnings, as well as the profits from tourism related activities. Besides the monetary value that is calculated, countries can measure the affects of this industry by the increase in number of tourists, as well as the number of new jobs. Together, countries are able to determine the many influences that the medical tourism industry has on its economy.

15. Relation of Trade Measure to Environmental/Tourism Impacts:

Directly Related to Product: The revenue generated from the consumers traveling to the country for their healthcare needs will go towards building the nation’s healthcare system and tourism infrastructure.

Indirectly Related to Product: Because medical tourism crosses many different types of business sectors, the revenue generated will also indirectly support these other sectors indirectly as well. While this practice will primarily benefit the healthcare and lodging industries, the service and recreational industries will also profit from this business.

Not Related to Product: The result of the medical tourism industry is far-reaching. Not only will it benefit many different business sectors directly and indirectly, medical tourism can provide an increase in a nation’s overall economic health. Revenue generation will increase the GDP. This resultant growth will encourage development of the nation’s infrastructure and its people’s quality of life.

Related to Process: Revenue generation from this business will hopefully encourage the further development of the infrastructure that is required to carry out the medical tourism product. Development of the healthcare system, as well as the travel and tourism infrastructure, will benefit the nation and its people on the whole.

Source: Photograph taken by Alyssa Morrison on December 31, 2003

16. Trade Product Identification/Trade and Services:

The medical tourism product generally provides numerous types of services. First and foremost, medical tourism is providing a consumer with the healthcare service that they need or desire. In addition, this type of business also offers the consumer the lodging services that they require to participate in this process. Often consumers will also take part in some leisure, recreational or sightseeing activities while visiting the country. Therefore, the tourism industry may also be providing a service to these consumers as well.

17. Economic Data:

The medical tourism industry can be a product for any country. However, numerous nations have significantly benefited from this business more than others. The country’s that have demonstrated the most significant gains are noted below.
• Medical tourism has contributed approximately $25 million per year to Cuba’s economic status.
• India has seen a 27 percent increase in tourists while medical tourism, itself, has demonstrated a 20 percent growth. Additionally, India has attracted 150,000 medical tourists in 2003. By 2012, medical tourism is expected to bring an additional $1.1 – 2.2 billion in annual revenue.
• In 2002, Thailand treated more than 600,000 tourists that generated approximately $503 million in revenues.
• In 2000, Singapore attracted more than 150,000 tourists for medical care which added 0.19 percent to its GDP. By 2012, this island is expected to treat more than 1 million tourists. This figure will complement a 3 percent market share for health care services, generate some $3 billion in revenue, add 1 percent to the GDP and lead to some 13,000 new jobs

Source: Photograph taken by Alyssa Morrison on December 27, 2005

18. Impact of Trade Restriction:

Because the basis of this industry requires consumers to travel for their healthcare needs, trade restrictions on travel would impact its capabilities. Among the two most problematic restrictions would be on visa issuing and International Travel Bans to specific regions or countries. Thus, if the consumers are unable to travel to the desired country, the product and service cannot be sold.

19. Industry Sector:

As suggested previously, the primary industry sector for medical tourism includes: the healthcare industry, as well as the international travel and tourism industry. The secondary industry sectors would include: service, information technology and communication industries.

20. Exporters and Importers:

In the medical tourism industry, the export is the consumer. Because the consumer comes into the country for their healthcare needs, they provide foreign currency to the economy. In the end, they leave the country with the desired medical care. It is the hope that there are no real imports and that all of the goods and services are provided domestically.

Source: Photograph taken by Alyssa Morrison on December 25, 2003

V. Macro/Environment Cluster/ Tourism Policy Clusters:

21. Environmental Problem Type/Environmental Aspects:

Although the main focus of the medical tourism product is the healthcare service provided, countries are also encouraging consumers to be tourists. As a tourist, they are enjoying the beauty and recreation of the area. The hope is that some of the revenues from these activities will go into developing the environmental infrastructure, as well as conservation and preservation.

22. Resource Impact and Effect:

This type of practice does not really require any substantial amount of environmental resources. Therefore, there are no major impacts or effects of the medical tourism business on a nation’s environmental resources.

23. Urgency and Policy Review:

On the whole, medical tourism is still in an emergent state. Therefore, this practice has not necessitated any type of real urgency. However, most of the countries participating in this business have launched a global advertising and marketing campaign to varying extents. Each country has unique marketing strategies that target specific markets. Additionally, because each country seeks growth, each has their own unique policies that allow for the attraction of these consumer markets.

24. Substitutes and Alternative Policies:

The most common alternative to receiving healthcare in one’s desired country is obtaining one’s healthcare needs in a competitive country. Therefore, countries attempt to make their policies as attractive and simplified as possible to attract the consumer. If not, consumers may find a different country with less restrictive policies to provide them their desired care.

Source: Photograph taken by Alyssa Morrison on December 28, 2003

VI. Other Factors:

25. Culture:

Because this industry is carried out in many different countries around the world with various languages and practices, culture can play a significant role in this business. Nations must be cognizant of culture when marketing to specific target markets. Additionally, consumers must appreciate culture and traditions that may affect their foreign healthcare experience. Because many of the countries providing this service are developing countries, culture can be very different and varied. All participants in this business must understand and appreciate that culture can play a significant role in the medical tourism process.

26.Trans-boundary Issues:

For medical tourism on a whole, overwhelming trans-boundary issues are not present. However, there are two specific markets within medical tourism, reproductive and suicide tourism, which do present trans-boundary challenges. With reproductive tourism, often consumers travel to another jurisdiction to receive a service that cannot be provided at home. Abortions and decisions surrounding in vitro fertilization can be two specific practices that can present challenges to the consumer. This is true for suicide tourism as well. There are issues surrounding the rights of the individual accompanying the consumer. Some countries view this as assistance, which often is prohibited. Therefore, although medical tourism does not present too many trans-boundary issues, specific markets can present challenges and should be more closely analyzed.

27. Rights:

For the most part, medical tourism is not affected by one’s rights. However, when dealing with reproductive and suicide tourism, a consumer’s rights must be considered. Consumers have rights. However they may be affected by receiving treatment in a foreign country or upon returning to their home country. Consumers must consider their rights, and they make seek treatment in alternative locations if a different area’s policies better serve a patient’s rights. This could be true for practices or procedures such as abortions, in vitro fertilization, as well as euthanasia. Thus, consumer’s rights may play a part in decisions made for the medical tourism product.

Source: Photograph taken by Alyssa Morrison on December 20, 2003

28. Policy Implications:

Many nations around the world, particularly developing countries, have taken advantage of the benefits of medical tourism. This emerging industry can provide significant economic stimulus for a nation’s revenue growth and financial health. It can also stimulate infrastructure development and improve the quality of life of the nation’s people. However, nations must position themselves correctly to reap this profit.

Countries must establish attractive policies that encourage medical tourism practice in their country as well as attract consumers to participate in this phenomenon. Nation’s often demonstrate less restrictive policies than its neighbors and competitors.

Once a nation has policies in place, they must correctly market themselves. Countries use different and unique marketing strategies, such as lower-cost, more-timely, higher-quality, to promote their services to their target market. Thus, this industry has demonstrated significant impact on the nation’s economic health, however less-restrictive and attractive policies must be in place first. Countries must also market themselves properly to continually enjoy the benefits of this emerging business.

29. Recommendations:

Because of the nature of this practice and its policies, this phenomenon has occurred primarily in certain, specific areas around the world. These particular regions and nations have attractive standing policies and have implemented unique marketing strategies that encourage the medical tourism business. This industry is open to all countries around the world. It is those countries that can continually analyze and adapt that will prosper in the emerging medical tourism industry.

Source: Photograph taken by Alyssa Morrison on December 30, 2003