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Medical tourism market in India

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Medical tourism market in India
Interview with Vivek Shukla about the medical tourism market in India

Daniel Zimmermann: You recently spoke at the 2nd European Congress on Health Tourism in Budapest in Hungary. Is the medical tourism market in Europe similar to that of Asia or did you note major differences?
Vivek Shukla: Medical tourism in Asia has two types of patients. On the one hand, there are patients from developed countries like the US, who are looking for high-quality treatment options that are cheaper than in their home countries. On the other hand, there are patients from underdeveloped countries looking for treatment options that are not available in their countries.

I believe many Europeans travel ‘within the continent’. In Asia, apart from patients travelling ‘within the continent’, a number of health tourists also comes from America, Africa and other continents. The number of patients travelling from Europe to Asia is significantly lower compared with the health tourists coming from North America or Africa.

Medical tourism in Europe and Asia is booming. In your opinion, what is the reason for this growth?
Treatment costs have risen consistently. It does not matter if you are paying out of your pocket or your insurance company is paying for you. As long as someone is paying for the treatment and the treatment costs increase, sooner or later equivalent quality at cheaper prices will be considered as an option.

Also, the number of private health-care players has grown significantly, especially in India. In search for higher revenue and footfall, these players will certainly look beyond their borders.

What are the cost differences between hospitals and dental offices in India and other countries in Asia, and how do the costs compare with Europe, Australia or the US?
In India, general costs, like rent for office space and the cost of equipment, are considerably lower compared with Europe or the US. Therefore, the price of treatments can be considerably lower.

Overall, a good standard of living can be maintained in India at a lower cost than in developed countries. For example, groceries cost about 20 times less here than in Germany or France.

India is already a significant player in the field of medical tourism. Can you tell us how big the market in India currently is?
There is much speculation about the size of the market. The Indian government claims that about 200,000 people visited India last year for medical treatment. One report suggested that the medical tourism market is growing by 20 to 30 per cent per year and will reach US$2 billion by the year 2012.

The Indian government recently introduced a medical travel visa, in order to track the number of medical travellers to the country. This will help in drawing conclusive evidence for the inbound numbers.

Can you already see the impact the medical tourism industry will have on the economy and especially the health-care system in India?
A large health-care system helps the economy to grow. In fact, there are signs of an increased number of medical tourists flying in because of the global economic slowdown. It is a kind of Giffen’s Paradox that we studied in Economics, which implies that the demand for cheaper goods and services goes up during inflation. Medical tourism is good for various allied industries including airlines, hotels, travel agencies, and the pharmaceutical and medical equipment industry.

In India, the medical tourism initiative is driven by players from the private sector. There has been a continual rise in the number of private health-care ventures since 1990. Hence, the medical tourism business is going to grow further as the number of private health-care businesses increases. Currently, the Compound Annual Growth Rate of the industry is estimated to be about 13 to 15 per cent per year, in spite of the slowdown.

Countries like the Philippines are currently running big campaigns on medical tourism.
I think they could be instrumental in attracting patients, if well executed. However, an advertising campaign is not everything that you need. You need to back it up with a lot of PR work.

Speaking of PR work: you consult doctors and hospitals in terms of management and business development. How well are physicians and dentists in Asia prepared for the influx of patients from abroad?
Lately, many physicians and dentists have woken up to the new trend. They are accumulating knowledge not only about soliciting international patients, but also about servicing them. Treating a patient from the rural areas in India is not the same as treating an American or a European patient. Dentists and physicians are realising the need to give more information, build web sites, respond to e-mails, etc.

Doctors in India enjoy a good reputation globally, and they are well trained and educated. New challenges will arise when it comes to managing the experience of patients and creating operational health-care systems.

What is your foremost recommendation to doctors or dentists who want to become involved in the medical tourism market?
They need to be very clear about what they are offering and to whom; you cannot give everything to everyone. You need to know the spectrum of your offerings and the market segments that you will target. The American market, for example, is very different to the Nigerian market. Patient needs and expectations are also different.

The next step is to equip yourself at the internal and operational level to deliver what you are about to promise.

Do Indian doctors compete more with their Asian counterparts or with their colleagues in the industrialised world?
The environment is fairly competitive, as India has about 650,000 doctors. Most of them deal with high patient numbers, as the country has a large population. These doctors compete mostly with other doctors in Asia, and medical tourists have a choice between India, Thailand, Singapore and other destinations in Asia. This is where direct competition takes place.

There are initiatives in the European Union that aim to give patients seeking cross-border health care more rights. Will we see similar developments in Asia in the future through, for example, bilateral or multilateral free trade agreements?
Sooner or later this will happen. It is just a matter of someone taking the lead and introducing these initiatives. Patient rights and legal protection are very important issues. Countries that are flexible and open to these concepts will have advantages in the long run.

What role will employers and insurance companies play in these developments?
I think they will play a major role. Patients will demand more security and rights. This will put pressure on the insurance companies and employers. In order to save costs and payouts, the insurance companies and employers will have to heed the demands of the patients. Low cost should not result in low quality.

Let us take a look into the future. How big will the medical tourism sector in Asia be in 10 to 15 years?
This depends on many factors. Some of the most important factors include the cost of treatment in the Western world, political stability in Asia and the legal rights of medical tourists.

There is a high probability that the medical tourism market will grow further in the Asian region. I sense that in the long run, the number of players will be reduced. At the moment, everyone is trying to jump on the bandwagon. After a while, only those with robust plans and government backing will survive.

Thank you very much for the interview.

by Daniel Zimmermann, DTI

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