In his “Second Opinion” column for IMTJ, Constantine Constantinides from healthCare cybernetics looks at the reasons why some businesses attracted to the medical tourism sector by forecasts of “explosive growth” have missed out on success, and how they have failed to understand the realities of the international medical travel sector.
When it comes to medical tourism, the internet and the media in general report stories of (purported) business success, but remain silent when it comes to the reporting of failures. Of course, when one only measures the number of business successes, whilst ignoring the corresponding number of “trials and failures” (or “mere survivors”), it is not surprising to conclude that successfully exploiting the market is simply a matter of hanging up your “Open for Business” sign.
I receive the occasional email from people who have developed a medical tourism business; for the most part, this means that they became “medical tourism facilitators”. I also get to hear stories of people and businesses who decided to enter the “billion dollar medical tourism market” by either:
-
Additionally, addressing and targeting the patient from abroad (not such a big risk). These are typically medical services providers who have an existing and well established domestic healthcare business.
-
Or, exclusively, addressing and targeting the patient from abroad (a big risk). These are typically medical tourism facilitators who may be new to the healthcare sector.
Both types of market entrant were inspired to enter the medical tourism and medical travel sector by what they read on the internet, what they heard at conferences or based on the advice of various industry experts and consultants.
The messages I receive from many about their experience of entry into the market range from disappointment to stories of sorrow and woe. When I ask myself, “Why should this be?.....Where have they gone wrong?”, the answers are clear and simple:
-
These failed market entrants to medical travel tended to be ill equipped aspirants who knew about but did not fully understand the market sector. And to their detriment, placed too much faith and trust in the knowledge and understanding of others.
-
In determining the opportunity, these failed market entrants may have overestimated the size of the market (both current and potential). Some may have got this badly wrong.
-
Some failed market entrants got their assessment of current and potential market size right, but they failed to consider (or want to consider) the number of pre-existing, well qualified and established industry players (the competition!).
-
And of course, some perhaps did not factor in the risks of entering international markets and the effect that national and international events can have on a business which is dependent on international travel. Recent examples include drug related violence in Mexico, civil unrest in Thailand, and the NDM- 1 “superbug” story emanating from India.
Making the bottom line the top line
The decision to enter the international medical travel either as a facilitator or a medical services provider should take into consideration not only the size of the market, but also the number of industry players, especially those who are well equipped, in terms of capital, financing and knowledge and understanding.
When a few players in a market become many players, a good idea may become a bad idea.
I have for some time been pointing out that the competition is becoming more aggressive and sophisticated, and often has deep pockets. And which is also a reason I emphasize the need for formal “sector-specific” executive education for those contemplating going into the health tourism business (from empiricism to professionalism).
So, “caveat vendor”.
Since 2008, I have been arguing that contrary to simplistic thinking, the growth of medical tourism, in isolation, (as opposed to health tourism, which includes medical tourism) will not experience the “explosive growth” predicted by some consultants and experts who fail to appreciate how healthcare delivery and consumption actually works.
Those who follow what I write (and say) are probably familiar with my “West’s Revenge” caveat (the “backlash” response to an imbalance of trade). The West’s Revenge is now playing out through the development of internal medical tourism and increasing price competition for treatment in domestic markets. Medical travel destinations which set out to become the “leading destination for medical tourism” on the basis that they were cheaper and better than domestic facilities and providers are now experiencing the effect of the “West’s Revenge”. This has been compounded by the effects of the worldwide recession. Again, contrary to the simplistic thinking of some commentators who argued that recession would drive more and more patients abroad for cheaper treatment, this has clearly not been the case; medical tourism and healthcare businesses in general are being hit by recessionary factors the same as other international markets and businesses.
Dr Constantine Constantinides runs healthCare cybernetics, a “think and do tank” with a recognized competency in Health Tourism Integration and Development. His home base is on the island of Samos in Greece.
Comments provided below do not represent the views of IMTJ. Comments will be published "as is" and will not be edited by IMTJ staff. IMTJ is hosting these comments, and is not undertaking an editorial role in the content of these comments. However, it is editorial policy not to publish comments which have been submitted anonymously.
