HealthAbroad.net: Point of View

Hospitals in the Malaysian state of Penang, which contribute about half of the country’s annual medical tourism revenue have asked the government to increase to number of flights to the state in an effort to further hike medical tourism revenues. Better and more frequent connections have been requested between Penang and Jakarta, southern China, Myanmar and Vietnam.  

Some seven of Penang’s 25 private hospitals are active in promoting medical tourism with most patients coming from Indonesia, followed by Japan. Hospitals in Penang are espcially keen to tap the Jakarta market - all of 17 million people.

According to the HR Magazine, published by the Society for Human Resource Management, medical tourism could become an option in employer sponsored health plans. The article can only be accessed through subscription but the NY Times reports, that clearly the price of medical tourism appeals to employers who are faced with rising health care costs and operating costs.

According to examples cited in the article “Going the Distance for Health Savings,” the cost of sending a worker overseas for procedures like removing a gallbladder can be at least 50 percent less than that of having the work done in the United States, even if the employer pays for the worker to spend recovery time in a fine hotel.

Questions on quality of healthcare persist but to encourage employees to seek treatment abroad, companies are also willing to give them a percentage of what the savings.  

Keen to promote Malaysia as a top destination for medical tourism, authorities are cracking down on fake medical centers. 6 clinics, some even delivering babies, were shut down ahead of a nationwide crackdown. The fake doctors will be charged under national law, with a maximum fine of $85,653 and six years in jail.

This action sends a strong message to dubious medical practioners, locals and foreigners alike that the administration means business. The presence of fake and unqualified doctors not only gives medical tourism a bad name, but it also detrimental to the local population who are more likely to fall victim, and sometimes with fatal consequences.

The Government of Malaysia has asked hospitals to focus on sophisticated and high-end treatment such as heart surgery, dental surgery and comprehensive plastic surgery which cost anywhere between $5000-10,000 in the country. According to the country’s Health Minister, at present too many hospitals are focusing on low-end surgery such as basic cosmetic surgery which cost $500-$1000.

According to the Health Minister points while the number of foreign patients coming to Malaysia for treatment has increased over the years, this is not reflected in the $ earnings. In 2004, about 175,000 foreigners sought treatment in Malaysian hospitals and this number went up to 230,000 in 2005 but there was little discernible change in the foreign exchange generated.

Indonesians form the majority of foreign patients coming to Malaysia.

Recently, we wrote about Indian hospitals tying up with foreign airlines to reach out to prospective markets. Now comes news that Malaysian Airlines is offering medical tourism packages in supporting the Malaysian Government’s efforts to promote medical tourism in the country.

According to an official authorised to speak on the matter, the package includes a medical check-up, accommodation with daily breakfast and airport transfers for prices ranging from US$300 to US$1,029.

Common sense would say that Indian hospitals should tie up with the the national carrier Air India, in an effort to promote India as a medical destination. But the airline’s poor service record and plummeting reputation inspires little confidence.

First the candy. According to a latest industry report, India’s medical tourism industry has been growing at the rate of 30 percent compounded. Some 150,000 patients from the West, African and South Asian countries visited India for medical treatment in 2006.

Now the kick. Singapore, Malaysia and Thailand, India’s competitors for the crown of top medical destination, combined attract ten times the medical tourist traffic that comes to India.

The cost of treatment in India is about a tenth and a fifth of those available in the UK and US. The country also has an edge in terms of very low waiting periods and an army of Western trained highly qualified medical professionals. However, South East Asian countries continue to score over India due to tourist-friendly infrastructure and a glitzier image which has been cultivated and sustained over a period of time.

It’s time for India to get a move on.  

Is this the spark that set off the chain reaction? 

According to news just coming in, at least 40 American businessess have signed a health plan which allows sending employees abroad to India, Singapore, Thailand and Malaysia, where they could potentially save upto 80% on medical expenses. Read here.

In the last few months, the industry voice on the urgent need for a policy on outsourcing of employee healthcare to low-cost destinations given the exorbitant costs in the US has reached a crescendo. With the pros clearly outweighing the cons, opposition has been rather muted but most clearly come from the United Steel Workers Union (USW), the largest labour union in North America.

The scale and standing of the businesses participating in this health plan is yet and might remain unknown. But will the bigger names follow?    

Comprehensive write up in the Seattle P-I on the advantages and disadvantages of medical tourism. A must read for anyone remotely interested. The article also carries a very handy cost comparison chart.

Also keep an eye out for the “Buyer Beware” section-

• If the agency is based in the United States, check it out with the local Better Business Bureau.
• It can be difficult to evaluate the training and credentials of medical practitioners outside the United States. To find out if the hospital you are considering is accredited by Joint Commission International, a branch of the Joint Commission on Accreditation of Healthcare Organizations, go to www.joint commissionInternational.org. The agency’s accreditation is based on patient care standards.
• Remember that despite promises of a vacation, the medical procedure could limit your activities.
• Required follow-up care could be unavailable.
• Legal recourse could be difficult if things go wrong.

TIME magazine has a very comprehensive write-up on the growing medical tourism industry. If it’s made it to TIME, it’s got to be big right?

Aside from mentioning the by now quite familiar cost comparisons of surgical procedures, the article flags a growing trend of uninsured and underinsured Americans boarding planes not for the typical face-lift or tummy tuck but for discount hip replacement and sophisticated heart surgeries to Thailand, Malaysia and India. Though the numbers are yet to reach worrying proportions, doctors and industry watchers are watching them closely. Elective surgeries are key moneymakers for hospitals and even a small drop off can have a deep impact on their profits.

This trend for the moment shows few signs of abating as some pioneering American corporations swamped by rising healthcare costs are seriously considering offering employees outsourcing as a health-care option. The rationale is quite straightforward, as the article points out,

“The calculus behind this interest isn’t complicated. Many major employers in the U.S. are self-insured, which means they pick up the tab for much of their employees’ medical care. That’s why three major corporations which cover 240,000 lives asked Dr. Arnold Milstein, national healthcare “thought leader” at the consultancy Mercer Health & Benefits, to assess the best places to outsource electice surgeries. Procedures in Thailand and Malaysia, he found, cost only 20% to 25% as much as comparable ones in the U.S.’ top notch Indian hospitals sell such services at an even steeper discount.

The bottom line: If more private payers sent the patients abroad for uncomplicated elective surgeries, the savings could be enormous. “This has the potential of doing to the U.S. health-care system what the Japanese auto industry did to the American carmakers,” says Princeton University healthcare economist Uwe Reinhardt.”

But faced with intense competition, will the American health-care system fare as poorly as the Detroit carmakers? Will the tragedy of having 48 million uninsured adults aged 19 to 64 in the US bring windfall gains to Thailand, Malaysia and India?

A few things are quite clear. Outsourcing health-care is far from being the norm at the moment as US insurers though aware of medical outsourcing are scared off by the regulatory and legal uncertainities. However, the real impetus for medical outsourcing is coming from companies which faced with a need to cut costs wherever possible, are showing a willingness to promote outsourcing healthcare to their employees. While beyond the West, top of the line hospitals most likely to get their business are pulling all stops to stay buffed, while emerging hospitals are dipping into their cash pools to create gleaming oasis of excellence. If you thought medical tourism was the passing fad, think again. It made it to TIME afterall.

Malaysia has launched its own medical and health tourism portal at www.malaysiahealthcare.com. The site features a number of partner hospitals and surgical treatments.

At a news conference to launch this site, the Malaysian Tourism Minister said Malaysia would go all out to woo tourists from the Gulf region which contributed a sizeable 147,646 tourists last year. He said tourist arrivals from the United Arab Emirates (UAE) alone totalled 29,606 in 2005, an increase of almost 40 per cent from the figure in 2004.

Where’s the Arabic version of this website?