Medical Tourism vs. Traditional International Medical Travel: A Tale of Two Models

In medical tourism, the direction of travel is opposite of that in the traditional model of international medical travel, where patients have historically journeyed to leading medical centers in highly developed nations for health care.

Medical tourism has transformed a one-way pipeline towards industrialized countries into a two-way highway, with patients now traveling in both directions.  This paper presents a comparative analysis of the medical tourism model vs. the traditional form of international medical travel.  The factor that most differentiates the two models is the availability of resources to patients.  Financial resources give traditional international patients access to medical facilities of their choice throughout the world.  Conversely, the absence of some resource drives patients to pursue medical tourism.

INTRODUCTION

Medical tourism is a rapidly evolving trend wherein patients from industrialized nations seek health care in less developed countries, bypassing services offered in their own communities.  Although the term medical tourism is sometimes used in reference to all travel for medical care, we believe that this phenomenon is meaningfully different from the traditional pattern of international medical travel (Horowitz and Rosensweig 2007).  In the traditional model, patients journey from less developed nations to major medical centers in highly developed countries for advanced medical treatment.  In the medical tourism model, driven by a number of forces outside of the organized health care system and traditional medical referral network, an increasing number of patients travel to an assortment of countries at variable levels of development for their health care needs (MacReady 2007; Milstein and Smith 2006).  The evolution of medical tourism has transformed the unidirectional pipelines of patients traveling towards industrialized nations for health care into a complex network of two-way highways.  This paper examines and compares the movement of patients in each direction. Our analysis will describe and clarify the important ways in which medical tourism differs from traditional international medical travel.

We acknowledge that the name “medical tourism” does not recognize the true nature of a patient’s situation nor does it accurately reflect the fact that activities at the destination may be limited to receiving complex medical services.  Many agents, medical practitioners and other industry participants are discontented with the name medical tourism, and a number of alternative terms have been suggested, including “medical value travel” and “global health care”.  The alternate terms of which we are aware do have advantages, however, we believe that each also has shortcomings.  For the purpose of this analysis, we will use the term “medical tourism” because, as the most popular one in common usage, it provides an unambiguous way of differentiating this evolving phenomenon from the traditional model of international medical travel (Horowitz, Rosensweig and Jones 2007).

A FRAMEWORK FOR ANALYSIS OF MEDICAL TRAVEL

By the close of the nineteenth century, a number of important medical centers had been established in Europe and the United States.  Rapid scientific discovery and medical progress in the ensuing decades stimulated a proliferation of medical facilities in developed nations, making the latest clinical techniques and technological innovations increasingly available to the citizens of these countries.  At the same time, people in less developed parts of the globe had poor access to medical services.  Accordingly, patients with the resources to do so began to travel to major referral centers to have medical evaluation and treatment that were unavailable in their own countries.  Today many advanced hospitals in North America and Europe continue to export cutting edge medical care to a large number of international patients.

In addition to exporting medical care, the major teaching hospitals in North America and Europe also supply postgraduate medical education to physicians from less developed nations.  Although many physicians remain in the country where they complete their postgraduate training, a substantial number return to their homeland where they provide medical services, as well as the knowledge and leadership necessary for local health care institutions to participate in the international marketplace.

The key similarities and differences between the traditional international medical care model and the medical tourism model occur in four basic spheres:  the parties involved (patients, providers and agents), the places (origin and destination), the reasons for traveling for health care, and the patient’s access to resources (Figure 1).

THE MEDICAL TOURISM MODEL – UNDERSTANDING THE DIFFERENCES

Medical tourism is driven and shaped by the complex interactions of myriad medical, economic, social, and political forces.  The characteristics of the traditional model and the medical tourism model are compared in Table 1.  There are three key similarities between the traditional form of international medical care and medical tourism.  First, in both models patients have illnesses, injuries or other circumstances for which they need or want medical evaluation and treatment.  Second, patients in both models are willing and able to travel to get the care they need or desire.  Finally, patients are unable or unwilling to receive their care within their own country.

The Parties Involved in Medical Tourism

Patient specific issues necessarily determine the need for treatment, the urgency of action, the options for international travel, and the choice of destinations.  Furthermore, the patient’s personal and family circumstances are major factors in determining if, when, where and how there will be international medical travel.  Traditional international patients who are unable to receive optimal care in their own country travel with the goal – indeed the expectation – of receiving the very best care available.  In contrast, patients in the medical tourism model would almost certainly prefer to have major surgery in their hometown hospital or regional referral center if that were a reasonable option for them.  Paradoxically, a patient may actually drive right past a suitable facility on the way to the airport to catch a flight to an unknown medical center in a faraway land.  Medical tourists balance their health needs against other considerations, particularly affordability, availability and timeliness of care.  Attractively low cost is the major reason that patients from highly industrialized nations use less developed countries for medical services.   These patients feel forced to accept uncertainties about accommodations and quality of care, as well as the inconvenience of medical travel, in order to obtain services at prices they can more comfortably afford.  The opportunity to conserve limited financial resources and protect the equity in their home mollifies uncertainties. 

Patients traveling from the United States generally fit one of two profiles.  The first is a middle class adult who requires elective surgical care but has inadequate or absent health insurance coverage.  In an article in the New England Journal of Medicine, Milstein and Smith (2006) refer to these patients as “middle-income Americans evading impoverishment by expensive, medically necessary operations…”  The other group consists of patients who desire procedures such as cosmetic surgery, dental reconstruction, fertility treatment and gender reassignment procedures.  In both groups, resources are insufficient for them to comfortably buy care in their local market, but adequate for them to obtain care in a low cost offshore medical center.  In the traditional international model patients are routinely airlifted to major referral centers at great cost.  In stark contrast, urgent offshore surgery would not be feasible or useful in the medical tourism model.

For patients from Canada, Britain and other countries where a governmental health care system controls access to services, the primary motivation to abandon the local medical system is the desire to have timely treatment, circumventing delays associated with long waiting lists (Asian Pacific Post 2005).  Because government sponsored health systems generally do not pay for cosmetic surgery and similar type services, patients from countries with such programs pursue medical tourism for the same reasons as patients from the United States.

Patients also travel to offshore medical centers to have procedures that are not available in their own countries.  For example, in many industrialized countries stem cell therapy may be accessible only by participation in clinical trials.  However, stem cell therapy is more readily available in the medical tourism marketplace (Breen 2007; Arom, Ruengsakulrach, Jotisakulrantana 2007).  Some patients choose to have medical care abroad because of the opportunity to travel to exotic locations and to vacation in luxurious surroundings.  Although some medical tourism agents and travel professionals may promote sightseeing and recreational endeavors, as the seriousness of the medical circumstances increases the importance of the tourism activities rapidly diminishes. Finally, patients undergoing sex change procedures, cosmetic surgery, and alcohol or drug rehabilitation have greater confidence that their privacy and confidentiality will be protected in a faraway health care facility.

The next party to consider in our analysis consists of physicians and other health care providers.  The dynamics of the referral process are quite different in the two models of international care.  In many cases in the traditional model, the patient’s physician is involved in the decision as to what country, facility and individual physician the patient should be transferred to.  The local physician may be familiar with the institution and the specialist to whom he is referring the patient, perhaps having previously visited or even trained at this institution.  The referring physician may know the specialist personally from previous contact.  When the patient returns home, the local physician, familiar with what has transpired, is in a position to readily provide continuing care.  The involvement of referring physicians in the traditional model of international medical travel is in contrast to the near absence of such involvement in the medical tourism model. 

There are several reasons why physicians may refuse to become involved in this patient-directed endeavor.  First, doctors in developed nations, unfamiliar with the practitioners and practices in less developed countries, are reluctant to have their patients pursue care by unknown providers in distant lands.  Second, the local physician may deeply believe that it is untenable to choose a provider for potentially risky medical therapy based on anything other than medical considerations.  Finally, physicians in highly litigious nations may be particularly reluctant to endorse offshore treatment because of concern about vicarious liability.  If a patient were to have an adverse consequence, plaintiff’s counsel would likely pursue any possible case of vicarious liability against the well-insured local defendant before attempting to win (and collect) a claim against a provider in another country.

In the traditional model, the foremost reason for travel is medical care and the role of travel professionals is limited to the usual scope of their business.  In contrast, medical tourism agents have identified and developed a new, high-growth business line directing patients to offshore medical centers for a wide array of health care services.  In addition to arranging travel, medical tourism agents help patients select a country, a facility and a practitioner.  They determine prices and collect payment, assemble and transmit medical records, and organize medical concierge services at the destination.  Finally, they arrange for postoperative follow-up in the patient’s own community after they return.  Essentially functioning as facilitators or brokers of health care services in the medical tourism marketplace, these agents fulfill the role that the physician does in the traditional model.

Places – You’re going where?

A fundamental difference between the traditional international model and the medical tourism model is whether the patient is traveling towards or away from a highly developed country.  In the traditional model, industrialized nations are exporting health care expertise and services to patients from less developed countries.  In the medical tourism model, the direction of trade is generally opposite.  Consequently, industrialized countries are now purchasing (importing) health care from developing countries.  One notable exception to this general direction of travel is in reproductive tourism where patients may travel towards industrialized nations with favorable laws and regulations in order to gain access to eggs from paid donors (Leigh 2005).   In this situation, financial considerations are overshadowed by the patient’s desire to obtain specific benefits, as long as she has the requisite resources to pursue this goal. 

Many factors converge to determine a country’s competitive position in the medical tourism marketplace. Clearly, the availability of certain clinical services and the quality of care delivered are essential for a nation’s long-term success in this endeavor.  The ability of physicians and ancillary staff to communicate accurately in the language of their foreign patients is one of the many variables that determine success in a destination’s goal of becoming a preferred medical tourism destination.  A country or specific facility may be able to achieve competitive advantage in the marketplace by leveraging various non-clinical factors, including proximity to target patients and the ease of travel between the two locations.  Developed physical infrastructure, political and legal institutions, and market economics are essential for a country to establish a competitive position as a medical tourism destination (Bookman and Bookman 2007).  The quality of the airport and the local transportation and telecommunication systems, as well as the availability of suitable accommodations, will not be overlooked by medical tourism agents and their clients.  Some destinations have been able to derive marketplace prominence due to luxurious accommodations and easy access to desirable vacation resorts and tourist attractions.

The principal reason why care in medical tourism destinations is available so inexpensively relates to the disparity in the level of national economic development between the patient’s country of origin and the destination country.  The per capita gross domestic product (GDP), based on market exchange rates (MER), for key countries of origin and destination in the medical tourism industry are shown in Figure 2.  The per capita GDP, converted to US dollars using the MER, is a proxy for the average wage levels in these particular nations.  Because these relative wages can be quite low in developing countries, American patients greatly enhance their financial position when they change dollars into the currency of the destinations where they purchase medical care.  In addition, low administrative and medicolegal expenses for overseas practitioners and facilities also contribute to the reduced cost of offshore medical care.

Medical institutions in poor countries may derive substantial benefit by providing services to medical tourists.  The foreign-source revenue earned can be reinvested into facilities and equipment and used to attract high quality physicians.  The improved physical assets and professional skills enhance the institution’s ability to better serve foreign patients as well as local residents who otherwise would have limited access to modern medical facilities and services.  To ensure that the residents of destination countries actually derive benefits from having a local medical tourism industry, appropriate macroeconomic redistributive policies must be developed and enforced by governmental authorities (Bookman and Bookman 2007).  Chinai and Goswami (2007) express an opposing position about medical tourism, warning that this business may compromise the availability and quality of care for local residents by adversely impacting workforce distribution.

An important insight is that modern well-equipped hospitals in some areas of the world serve the dual role of regional referral centers for patients from poor neighboring countries and, concurrently, function as low cost medical tourism destinations for patients from highly developed nations.  This fact is well illustrated in Southeast Asia where hospitals in India, Malaysia, Singapore and Thailand provide tertiary health services to patients from nearby less developed economies such as Bangladesh, Indonesia, Myanmar and Nepal.  At the same time, these medical facilities provide advanced care to people from distant industrialized nations including Britain, Canada and the United States.

Finally, it is noteworthy that a number of highly developed nations, including Canada, Germany, Italy and Israel, are attracting foreign patients from other developed nations, as well as from less developed nations, under the banner of medical tourism.  Although travel between highly developed countries allows certain patients to circumvent waiting lists for various medical procedures, within our analytic framework, this activity more closely resembles the traditional international medical services model than the medical tourism model.

Benefits Sought – Why Leave home?

In the traditional international medical services model, the patient’s dominant motivation to travel is to obtain the best possible care available.  In the medical tourism model, the reasons to embark on international travel are more complex.  In this situation, the patient balances health needs against many other considerations, and medical concerns may even be subordinated to other issues such as allocation of personal resources.  The five major reasons why people pursue medical tourism are shown in Table 2. 

The primary driver for patients from highly industrialized nations to travel to less developed countries for medical services is affordably low cost.  The second reason that patients choose medical tourism is to avoid waiting lists, a particular problem for residents of Canada, Britain and other countries with National Health Systems.  In 2005, the waiting times for hip and knee replacement were 21.8 and 28.3 weeks, respectively, in British Columbia, Canada, in contrast to service within a few days of referral in most medical tourism destinations (Asian Pacific Post 2005).  Some patients travel to offshore medical centers to have specific procedures that are not currently available in their own countries.  Stem cell therapy is one of a number of procedures available in some medical tourism destinations but unavailable or restricted to clinical trials in many industrialized countries.

For some patients, having health services abroad provides an opportunity to journey to exotic locations and to vacation in luxurious surroundings.  For people who travel abroad for general health evaluations, routine diagnostic studies, and limited surgical or dental procedures, the pleasurable non-medical aspects of the trip may be highly valued.  Similarly, the prospect of recovering from cosmetic surgery in a luxurious beachside resort is attractive to many potential medical tourists, particularly when the package can be purchased for less than the price of the operation in one’s own community.  On the other hand, a patient who, for parsimonious reasons, travels to a distant country for major surgery for a life-threatening condition isn’t likely to be concerned about visiting the local tourist attractions.  Finally, some patients seek offshore medical care to protect their privacy and confidentiality.  In a faraway country, there is little concern that privacy will be violated or that medical records will be viewed by any of the parties who have access to such in the United States.
 

The Pivotal Role of Resources 

 The overarching issue that most differentiates the traditional international medical patient from the patient in the medical tourism model is the availability or unavailability of resources.  In the traditional international group, the availability of financial resources provides the patient ready access to health care facilities throughout the world.  In the medical tourism model, it is the absence of some resource that generally drives the decision about foreign travel for medical services.  Although traditional international patients may not have personal wealth, they may have support available from health insurance benefits, government programs or philanthropy. Approximately 47 million Americans (16 % of the US population) do not have any health insurance and many others have reduced benefits because of preexisting conditions (National Coalition on Health Care 2007).  Furthermore, health insurance may provide limited benefits for fertility treatment and almost never covers the cost of cosmetic surgery or gender reassignment.  It is predictable that medical tourism will become evermore popular among patients who lack insurance funding for desired care, and for those who are encumbered by waiting lists and other bureaucratic obstacles.  Whereas children constitute an important patient group in the traditional international medical care model, the literature on medical tourism makes almost no mention of pediatric medical or surgical services.  Governmental support and philanthropy is more likely to be available for children requiring specialized medical and surgical care, obviating the need for parents in developed nations to take their children to offshore medical centers for pediatric care.

In countries with long waiting lists for medical services, the time and/or patience to wait for care is reasonably considered a resource that is lacking for those patients who want prompt treatment for painful or potentially dangerous conditions.  In medical tourism, certain assets can be exchanged for others and value can be amplified because of differences in economic development between the countries involved in the transactions.  For example, consider a patient in Ontario, Canada with painful arthritis who is scheduled for knee replacement surgery six months later.  The resource that he lacks is access to timely care.  However, he may be able to “buy time” using another resource, namely, money.  Because of his location, this man could purchase orthopedic surgery in nearby New York State, if he is able and willing to pay the price for such.  But if this patient decides that he is cannot take on this substantial expense, he can arrange surgery in a medical tourism destination where his costs would be much lower.  Indeed, he can have surgery in Asia within a few days (buying time) at approximately 10% of the cost he would pay in New York, thus amplifying the purchasing power of his existing financial resources. 

In addition, the inability to access biological resources drives transplantation tourism and reproductive tourism.  Patients travel to distant medical centers for organ transplantation or fertility treatment because they are unable to get donor organs and donor eggs, either due to allocation issues or social and legal impediments in their own countries (Leigh 2005).

Patients in the medical tourism model generally have limited financial resources.  If a patient has abundant resources, then the cost of care would not be a concern and there would be no need to contemplate offshore services.  On the other hand, because a patient must have access to enough money to allow travel and payment for care, medical tourism is generally not a feasible option for the most impoverished members of society.

MEDICAL TOURISM – COMING OF AGE

The insurance industry will have an increasing impact on the growth of medical tourism.  Insurance professionals are collaborating with employers to find ways to reduce the burden of employee health care by utilizing foreign health care destinations.  Insurance companies can offer attractive incentives to beneficiaries who are willing to travel to overseas medical destinations, including waiving deductible and out-of-pocket health expenses, and paying for travel for the patient and a family member.  Insurance provider networks are being expanded to include physicians and hospitals around the globe, with the expectation that a majority of large employers’ health plans will include offshore medical centers within a decade (Milstein, cited in Van Dusen 2007).  Countries that have long waiting lists for certain procedures will increasingly address their backlog by sending patients to low cost foreign medical facilities, thereby avoiding the difficulty, delay and expense of expanding local capacity. 

Innovative practices in medical tourism are being introduced into the marketplace.  Physicians and medical facilities within the United States are now accepting referrals from medical tourism agencies and providing highly discounted services to American patients (Van Dusen 2007).  Although domestic medical tourism cannot capitalize on the economic disparities between industrialized and less developed nations, onshore providers do have important logistic and marketplace advantages.  The concept of providing care to unfunded poor patients by directing certain services to lower cost hospitals in foreign destinations warrants exploration because of the potential to substantially extend the resources of philanthropic organizations and relieve the burden on domestic health care facilities.

Medical tourism will likely have a substantial impact on the availability and delivery of health care services in developing countries as well as industrialized nations.  The health care system and medical community will be transformed as consumers increasingly recognize that their purchasing options transcend national borders.  Medical tourism destinations will prosper by offering international patients maximum value in the form of high quality care delivered by well-trained service-oriented professionals in comfortable modern accommodations at affordable prices.  With maturation of the marketplace, the differences between the two models described in this paper may, in fact, become blurred.  In time, the very best medical centers will evolve into highly respected international referral destinations.  These select medical facilities will increasingly serve the role of traditional international medical referral centers, rather than that of medical tourism destinations.

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