Cross-Border Medical Tourism: A Typology and Implications for the Public and Private Medical Care Sectors in the South-E

1. Cross-Border Medical Tourism: A Typology and Implications for the Public and Private Medical Care Sectors in the South-East Asian Region Kai-Lit Phua, PhD FLMI Associate Professor School of Med and Health Sciences Monash University (Sunway Campus)

2. Biographical details Kai-Lit Phua received his BA (cum laude) in Public Health & Population Studies from the University of Rochester and his PhD in Sociology (medical sociology) from Johns Hopkins University. He also holds professional qualifications from the insurance industry. Prior to joining academia, he worked as a research statistician for the Maryland Department of Health and Mental Hygiene and as an Assistant Manager for the Managed Care Department of a leading insurance company in Singapore. He was awarded an Asian Public Intellectual Senior Fellowship by the Nippon Foundation in 2003.

3. Lecture Objectives • Definition of Cross-Border Medical Tourism • GATS and trade in medical services • Typology of medical tourism • Hypotheses for further research • Possible impact on the home country • Possible impact on the host country

4. What is “Cross-Border Medical Tourism”? • Medical care of short term foreign visitors whose primary purpose for the visit is to seek medical treatment • In other words, the seeking of medical care in foreign countries

5. WTO’s General Agreement on Trade in Services (GATS) WTO’s four modes of trade in services: (i) Consumption abroad e.g. cross-border medical tourism (ii) Commercial presence e.g. foreign investment in medical care sector (iii) Presence of natural persons e.g. foreign doctor who arrives to treat local patients on a voluntary or paid basis (iv) Cross-border supply e.g. cross-border telemedicine (teleconsultation, remote surgery etc)

6. A Typology of Cross-Border Medical Tourism (Consumption Abroad) • Price-sensitive medical tourism • Quality-sensitive medical tourism Note that medical tourism is not a new phenomenon e.g. Third World elites have sought medical care in Australia, Britain, France, USA etc (quality-sensitive medical tourism resulting in “higher cost overseas treatment”) What’s new is ordinary people from more developed countries seeking care in less developed countries because of large price differentials e.g. American seeking medical care in Thailand (price-sensitive medical tourism resulting in “lower cost overseas treatment”)

7. A Comparison of Price-Sensitive & Quality-Sensitive Medical Tourism

8. Medical Tourism in SEAsia and in South Asia Main destinations are Thailand, India & Singapore Lesser destinations are Malaysia and the Philippines In 2006 (full citations are listed in my paper), • Thailand: 1,200,000 medical tourists (One hospital in Bangkok treats 400,000 medical tourists per year) • India: 600,000 (Indian embassies give out M visas valid for 1 year) • Singapore: 374,000 (Medical tourists and other foreigners make up 60% of the patients of one major private sector medical corporation in Singapore) • Malaysia: 292,000 (Earnings in 2006: RM 204 million. Expected earnings in 2010: US$1 billion or RM 380 million)

9. What Can Account for the Growth in Medical Tourism? Malaysian health policy expert Dr Chee Heng Leng (Asia Research Institute, NUS) argues that: This is a side effect of the “commodification” of medical care Commodification: • Product standardization • Market expansion • Active marketing of medical care to consumers

10. Characteristics of Medical Tourists Quality-sensitive medical tourists: Affluent people e.g. wealthy citizens Ruling elites e.g. Myanmar army Generals seeking medical care in more developed SEAsian countries Price-sensitive medical tourists: Middle class people who are reasonably well-informed about foreign countries and which foreign medical centers to go to

11. Kinds of Medical Treatment Likely to be Sought Overseas 1. Quality-sensitive medical tourism: sophisticated services e.g. open heart surgery 2. Price-sensitive medical tourism: Non-urgent medical procedures such as hip replacement or knee replacement surgery, cosmetic surgery, dental surgery, gender reassignment surgery Other possibilities: organ transplants (“transplant tourism”) Medical procedures that do not require an extensive period of treatment or extensive followup

12. Favored Destinations and Treatment Sites Destination Countries with these characteristics: Ranked high in terms of perceived medical care quality Major languages such as English, Spanish, French etc are widely spoken Foreign visitors feel welcome and safe Politically stable with a relatively high standard of living Easy to fly to

13. Favored Destinations and Treatment Sites Treatment sites (hospitals or medical centers) that are: Accredited by the accreditation agency of the medical tourist’s own home country Owned by the medical tourist’s own home country health care corporations World-renowned e.g. Mayo Clinic in Rochester, Minnesota, USA Staffed by doctors with credentials from the medical tourist’s own country

14. Motivations (besides “perceived higher quality” or “lower cost”)

15. Motivation of Less Costly Care For many medical tourists, ........ the real attraction is price. The cost of surgery in India, Thailand or South Africa can be one-tenth of what it is in the United States or Western Europe, and sometimes even less. A heart-valve replacement that would cost $200,000 or more in the U.S., for example, goes for $10,000 in India--and that includes round-trip airfare and a brief vacation package. Similarly, a metal-free dental bridge worth $5,500 in the U.S. costs $500 in India, a knee replacement in Thailand with six days of physical therapy costs about one-fifth of what it would in the States, and Lasik eye surgery worth $3,700 in the U.S. is available in many other countries for only $730. Cosmetic surgery savings are even greater: A full facelift that would cost $20,000 in the U.S. runs about $1,250 in South Africa. B. Hutchinson “Medical Tourism Growing Worldwide” http://www.udel.edu/PR/UDaily/2005/mar/tourism072505.html

16. Organisation and Financing of Trips Overseas By individual patients and their families using personal savings/borrowed money By self-insured employers eager to reduce the cost of health care generated by their employees By insurance companies or administrators of national health care systems who realise that costs can be reduced by having enrollees treated overseas By “cultural brokers” such as tour operators, agents and others who work with overseas hospitals and foreign health care providers By public agencies set up by governments to promote medical tourism e.g. “Singapore Medicine” and “National Committee for the Promotion of Health Tourism in Malaysia”

17. Possible Impact on the Health Care Industry in the Home Country • In high cost countries like the USA, there may be a significant reduction in demand for particular medical procedures • If so, health care providers such as hospitals and specialists will be forced to react e.g. health care corporations may open up branches overseas; specialists may go overseas to seek patients to treat

18. Possible Impact on the Health Care Industry in the Host Country 1. An influx of medical tourists into a host country is equivalent to an increase in the demand for higher end medical services. This implies higher prices for local people (in the short run). 2. May accelerate movements of health personnel e.g. from poorer countries to more developed countries in SE Asia; from the public sector to the private sector; from less lucrative medical specialties to more lucrative specialties (e.g. general surgery to plastic surgery) 3. May further distort the allocation of health care resources (more devoted to tertiary care)

19. Possible Impact on the Health Care Industry in the Host Country …. initial observations suggest that medical tourism dampens external migration but worsens internal migration … it does not augur well for the health care of patients who depend largely on the public sector for their services as the end result does not contribute to the retention of well-qualified professionals in the public sector service. Dr. Manuel Dayrit, World Health Organization

20. References • American Cancer Society. Questionable cancer practices in Tijuana and other Mexican border clinics. 2006. http://www.cancer.org/docroot/ETO/content/ETO_5_3x_Questionable_Practices_In_Tijuana.asp?sitearea=ETO • Barraclough S, Phua KL. Health imperatives in foreign policy: the case of Malaysia. Bull of World Hlth Org 2007; 85(3):225-229. • BBC News. Doctors’ concern at overseas care plan. 2002. http://news.bbc.co.uk/2/hi/in_depth/health/2002/bma_conference/2076661.stm • Bishop RA, Litch JA. Medical tourism can do harm. BMJ 2000; 320:1017. • CBC News Online. Medical tourism: need surgery, will travel. 2004; June 18. http://www.cbc.ca/news/background/healthcare/medicaltourism.html • Chee HL. Medical tourism in Malaysia: international movement of healthcare consumers and the commodification of healthcare. Working Paper Series No. 83. Singapore: Asia Research Institute, 2007.

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22. References • Online NewsHour. Traveling for treatment. 2005; Feb 21. http://www.pbs.org/newshour/bb/health/jan-june05/thailand_2-21.html • Phua KL. World Trade Organization (WTO) negotiations: possible effects on health and health services in Malaysia. Jurnal Kesihatan Masyarakat 2004; 10:7 – 13. • Runckel CJ. Where to go for medical tourism? 2007. http://www.business-in-asia.com/asia/medical_tourism2.html • Scheper-Hughes N. The global traffic in human organs. Current Anthro 2000; 41(2):191 – 224. • Schweimler D. Cuba’s medical success story. 2001; September 10. http://news.bbc.co.uk/2/hi/americas/1535358.stm • Straits Times. Medical attraction. 2007; March 24. • Walker T. Consumers go abroad in pursuit of cost-effective healthcare. Managed Healthcare Executive 2006. http://www.managedhealthcareexecutive.com/mhe/article/articleDetail.jsp?id=357668 • World Trade Organization and World Health Organization. WTO agreements and public health. Geneva: WTO and WHO, 2002.

23. The End Thank you