In medical tourism’s
“Field of Dreams”, the mantra of “Build it and they will come” has
become a well worn phrase often heard at conferences and promoted too
frequently by advisers and consultants. Ian Youngman from IMTJ debunks the
myth.
The “Build it and they will come” approach gained favour in
the 1990’s. Property investors developed shiny new office blocks, shopping
centres or housing estates, in the hope that businesses and people would flock
to their new location, making them very rich. When the property boom was at its
height globally, it seemed to work. It seemed that all you had to do was borrow
money, build something on a patch of land space, and hey presto, you were made
for life.
The downturn
Then of course, it all went horribly wrong. Property
developers, banks and governments crashed with debts that are too huge to
contemplate. Countries such as Ireland and Spain are littered with half built
housing complexes, offices, shops and factory units laying vacant, and even
unfinished hospitals.
The crash should have killed off the concept of spending
millions building a new hospital and hoping people will come; or even hoping
that it will be filled with medical tourists. But not so. Countries heavily dependent on tourism became
desperate to find new sources of tourism revenue. Medical tourism seemed to be
the solution. Build hospitals and healthcare facilities to cater for the
burgeoning medical tourists.
Patient flows
In many countries in Asia, China or the Arab World, the
increased and increasing demand for healthcare in general and hospital care in
particular means that many new hospitals have been built. But these are for
local people. They are to cater to existing known patient flows.
Some have been built to cater for medical tourists.....where
there is It an established patient flow. Thousands of Latino-Americans, and
Mexicans living in the USA, cross the border for healthcare. There are few
modern hospitals in Mexico, so building new hospitals or developing existing
facilities to US standards make sense. There is proven demand.
Specialist centres
There is another breed of new builds. These are rare. Cancer
centres or other specialist clinics only offering one form of treatment can
attract people from overseas when the treatment or specific medical technology
is not available at home. But these are high risk. As soon as a new way of
dealing with cancer that requires heavy investment starts to take off globally,
then sooner or later many of the home countries have these facilities too.
If the treatment is new, unproven and yet to be approved in
the developed healthcare systems, then patients may come until the treatment is
proven and available at home, or, as with stem cell treatment in China and Costa
Rica, the government suddenly panics and closes specialist hospitals and
clinics.
Fertility treatment may be an option. But what happens if
the home country changes the law so that treatment is available at home? Or
where the country of origin makes or interprets the law so that the child of
surrogate mothers is not allowed legal citizenship?
Speculative build
Some countries and some entrepreneurs believe that even
though a country is small, has no or few medical tourists, a shiny new hospital
with the latest technology and many trained doctors will lead to medical
tourists queuing to get in. Build it and
they will come.
Dubai has found that despite massive investment, attracting
patients and filling the healthcare facility is the biggest problem. Attracting
clinics with leading US and UK brands hasn’t worked. Clinics closed, facilities
remain unbuilt and many locals prefer to go overseas. The problem that Dubai
and others found is that if you promise specialists, such as surgeons, a high
income and lots of patients you do attract top talent. But unless you can
produce enough patients in that specialty, you do not keep top talent.
Specialists do not stand still, they have to practise and deal with new
challenges both to keep up with the latest techniques and technology and keep
sharp. If they are under used their knowledge gets older by the day, their
ability slows, and their reputation suffers. They cannot afford empty time. So
if the promised numbers do not appear, they disappear.
A related problem that few in the medical tourism industry
have addressed is the global shortage of medical and nursing staff. There are also concerns that as demand for
healthcare expertise rises, the quality of the personnel available has fallen.
Medical tourism hospitals
Few new hospitals, Mexico excluded, of any size are built as
medical tourism hospitals. In a long standing centre for medical tourism such
as London, there are no hospitals dedicated to treatment of medical tourists.
In some major London hospitals, the revenue share from international patients
may be as high as 25%. But these are unusual. International patients are
treated alongside the domestic private paying or insured patients who provide
the bulk of the hospital’s income.
In private hospitals in the less developed destinations, the
bread and butter business comes from well off locals (or those with health
insurance), holidaymakers, business travellers and expatriates. Many hospitals
that feature as in medical tourism articles are not actually very big. They may only provide 50 or so beds and may
thus lack some of the facilities available within bigger facilities. But they only need a few medical tourists to
make a difference. Compare this to a typical private hospital in London with
200-300 beds. Or the average hospital in the USA, providing 165 beds (American
Hospital Association).
Those with dreams of 500, 1,000, or 2,000 bed medical
tourism hospitals are the real test of “ build it and they will come.”
Many recent proposals for medical tourism hospitals or
medical cities have simply not happened. They never get beyond the planning
stage, if that. Some have been the dream of a local politician desperate to boost
the local economy.
If revenues from the treatment of the local population does
not cover the core running costs of a new hospital, then the hospital is
dependent on medical tourists to make a buck. That is a high risk strategy.
Conclusion
Medical tourism experts, consultants, politicians and even
some hospital owners have one thing in common. Few are putting their own or
their organisation’s money into these ventures. So it is down to the investors
to ask the questions. Just how many medical tourists can this facility really
attract? Where from? What for? And will this result in sustainable long term
demand?
Yes, the world needs new hospitals and more doctors in the
right places. But “Build it and they will come” only works in a Field of Dreams
not in the real world of medical tourism.
Ian Youngman is a writer and researcher specialising in insurance and health. He writes regularly for a variety of magazines, newsletters, and on-line services. He also publishes a range of insurance reports and undertakes research for companies. An ACII, with an honours degree in Economics from the University of Liverpool, Ian was a co-founder of The General Insurance Market Research Association. He also has widespread experience within the insurance industry at management level, working for brokers, a bank and an insurance company.
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