Medical Travel Offers $60 Billion Opportunity
by Nick Verrastro /
Los Angeles—The travel industry has an enormous opportunity in the $60-billion worldwide medical travel market that is expected to experience exponential growth through 2017, according to several market research studies.
The high quality and low costs of treatments in the major medical travel destinations are driving this market's growth, along with U.S. health insurers and employers seeking to reduce the costs of health coverage.
Wellness Travel to spas at resorts and on cruises is a major segment of the medical travel market, as more people seek to satisfy their quest for well-being in their travels.
The market is also being driven by health care reform in the U.S. and developments in medical technology, according to Paul H. Keckley, Ph.D. executive director of the Deloitte Center for Health Solutions.
Speaking at a recent medical travel conference in Los Angles, Keckley said that Deloitte projects medical travel will grow 35% a year over the next three years with substantial growth in ophthalmic, dental, orthopedic and cosmetic procedures. Deloitte also sees long-term growth in travel for minimally invasive procedures that result from new technology. (See the top story in this section.)
“You can expect that the continued shift to technology enabled care from acute settings to other settings will drive substantial growth in medical travel,” Keckley said, adding that biotherapeutics, such as injections that obviate need for surgery, will bend the curve somewhat and over time reduce demand for surgeries in the U.S. market.
In addition to foreign destinations, medical travel also includes traveling within the patient's home country for treatment to the Mayo Clinic in Rochester, MN, for example, as well as ethnic travel –immigrants returning from the U.S. to their native country for similar quality care at a much lower cost.
Companies called medical travel facilitators generally pro vide consumers with arrangements for their medical procedures but the facilitators lack expertise in arranging transportation, accommodations and activities at the destination before and after a medical procedure.
The issues on the travel side of this market, include air transportation (expertise here is vital), hotels and resorts that have the specialized services and facilities for medical travelers, access to activities and destination experiences for the medical traveler and those accompanying them on the trip, knowledge of travel insurance coverages for this market, and access to receptive services, among other issues.
The medical travel market in the US is projected to grow from 750,000 American traveling globally for medical care in 2007 to 25 million by 2017, according to the Deloitte 2008 Survey of US Healthcare Consumers conducted by Deloitte Centers for Health Solutions.
Deloitte projects that spending by outbound U.S. medical travelers will jump from just over $2 billion last year to as much as $79.5 billion in 2017. One market survey estimated that the worldwide medical travel market will reach $110 billion in 2010.
While Deloitte’s 2009 Medical Travel Update found that the recession put a damper on medical travel growth in 2008, because consumers delayed non-urgent medical procedures, Deloitte is still forecasting 20% growth this year and 35% growth from 2010 through 2012.
In the face of rising health care costs – and insurance deductibles – in the US, the Deloitte study found that U.S. consumers are looking to countries such as India, Thailand and Singapore, where procedures can be 10% of what they cost in the United States.
The 2008 Deloitte Survey included cost comparisons of U.S. vs. foreign surgical procedures. For example, the inpatient price of knee surgery in the U.S. is $11,692; the outpatient U.S. price is $4,686; and the average of the three lowest foreign prices, including travel costs, is $1,398, according to the Deloitte study.
Deloitte's survey found that 39% of U.S. consumers would consider going outside the country for an elective procedure if the outcomes were equivalent to or better than those in the U.S. with standards of care at U.S. levels.
Some of the major American medical institutions, such as Johns Hopkins, Columbia University and Cleveland Clinic, are responding to this growing market by partnering with hospitals and medical centers worldwide.
Also, the Joint Commission, which accredits medical institutions in the U.S., has established the International Joint Commission to accredit institutions in foreign countries as a metric of quality for Americans seeking treatment abroad.
Dublin-based Research and Markets reports that more than 30 countries in Asia, Africa and Eastern Europe are serving millions of medical tourists annually. Thailand, Singapore, Malaysia, India, Korea and the Philippines are the major destinations in the Asian medical tourism market and they are making a big push to grow their medical tourism industries, according to Research and Markets.
In the Americas, Mexico, Costa Rica, El Salvador, Guatemala, Argentina and Brazil are developing as major medical tourism destinations, while in Europe, Turkey seeks to be a major player along with Germany and Spain, where the Barcelona Centre Medic plans to increase its American business by parlaying Americans' familiarity with the city as the major homeport for Mediterranean cruises.
Wellness Travel is a segment of the market that already has caught the travel industry's attention -- and eye for its growth potential.
"Many tourists are increasingly choosing to go on trips which have the direct aim of improving their sense of wellness," according to Richard Miller a founder of TourismROI.com, a Web portal that brings together travel and tourism management and investment information, writing in a call for papers for the Travel & Tourism Research Association Europe Chapter's Conference on Health Wellness and Travel in Venice next year.
Miller stated that medial tourism "can include spa tourism -- medical or leisure-based; state-funded medical treatments; sports and adventure tourism that focus on physical health and fitness; occupational wellness trips, addressing work-related issues such as stress-management; and holistic or spiritual retreats, which can balance body, mind and soul."
An emphasis on preventive health care is also contributing to the growth potential for Wellness Travel.
And not to be overlooked, notes Miller, "The mainstream tourism industry is also investing heavily in wellness products – for example the cruise industry – possibly to give a healthy ‘feel’ to a product traditionally associated with eating too much."
The travel industry's recognition of the growth potential in medical travel can also be seen in efforts by destination marketers.
For example, Korea is positioning itself as a major medical travel destination with the Korean Government Tourist Office and the Korean Health Development Institute working together to promote medical travel to the country. (See related story in this section.)
Mexico is also eyeing growth in this travel market, leveraging its proximity to the U.S. and ISO-accredited medical centers, a number of which are operated by U.S.-based health companies.