Ruben Toral, a health
care marketing consultant and founder of Medeguide, looks at how medical
tourism has entered the mainstream, and how its disruptive model will change
the nature of healthcare.
It was January 2005 and my secretary at the time came into
my office and handed me a note. The message was brief but clear: “Producer from
60 Minutes called. Please call back. Urgent.” Four months later, Bob Simon,
the veteran 60 Minutes journalist, was at Bumrungrad
International hospital in Bangkok, Thailand, where I worked, to do a story
on medical tourism.
If you don’t know 60 Minutes, it is the most
successful prime-time television news program in history. The show is America’s
No. 1 news program, and has won more Emmy Awards than any other prime-time
broadcast. It is a cornerstone of television journalism in the United States,
attracting more than 13.5 million viewers every week to its Sunday evening
broadcast.
The 12-minute segment on medical tourism aired in April 2005
and showcased two hospitals: Bumrungrad International, where I was the marketing director, and the Apollo hospital in New
Delhi. It focused on four ordinary Americans who decided to do a most extraordinary
thing - travel halfway around the world to developing countries for
medical treatment because it was cheaper, better and faster than what they
could (or could not) get back home.
Medical tourism enters the mainstream
Overnight, medical tourism entered the mainstream
consciousness of America on the back of one of the country’s most watched and
respected TV programs. It was, as the
saying goes, the kind of advertising money just can’t buy. While sitting in the
comfort of their living rooms, 13 million Americans learned how Byron Bonewell,
a middle-aged small business owner from Shreveport, Louisiana travelled to
Thailand, a place better known for beaches and brothels than for life-saving
heart bypass surgery.
The power of the piece was Bonewell himself. Byron was your every-man. Uninsured and
suffering from congestive heart failure, Bonewell could not afford the $100,000
he would have to pay out-of-pocket for heart surgery, and was faced with two
grim choices – death or bankruptcy.
Bonewell had resigned himself to the inevitable because, as he told Bob
Simon: “I guess I figured I’d rather die with a little bit of money in my
pocket than live poor.”
That was until he read a story about Bumrungrad in
Businessweek magazine while waiting to see his cardiologist in
Shreveport. When he returned home, he
logged on to the hospital’s website, found his doctor and two weeks
later was travelling to Thailand. The
total cost of treatment was just under $20,000.
He saved a fortune and his life.
The “60 Minutes” segment was a watershed moment for medical
tourism (and Bumrungrad International).
The story unleashed a tsunami of interest from the US -- the world’s
largest health care market. Overnight,
emails came pouring in from thousands of uninsured and underinsured Americans
who wanted to know more about treatment options at this hospital with a funny
name.
The rise of medical tourism was not lost on the
American Medical Association (AMA), the American Hospital Association (AHA) or
major US insurers, like Cigna, Aetna and United Health. The AMA published guidelines on medical tourism that were
remarkably straightforward and sensible. The AHA dismissed claims that medical
tourism was a viable threat to US hospitals, and US insurers sent their
respective medical directors around the world on familiarization trips to see
what all the fuss was about.
A potential time bomb?
Depending on where you sat, medical tourism was a either a dud
or a potential time bomb that had, as the pre-eminent Princeton health care
economist Uwe
Reinhardt put it, “the potential of doing to the US health care system what
the Japanese auto industry did to American carmakers.”
This analogy has more than a grain of truth in it. In 1973, the OPEC oil crisis catapulted gas
prices to historic levels in the US, and the Japanese responded
by exporting small, fuel-efficient cars to America. At first, Detroit laughed it off saying that
no self-respecting American would drive a sardine can on wheels with a name
like Datsun.
When the Japanese imports kept coming, the carmakers ran to
Congress for protection, but protectionism only slowed the inevitable. Detroit
finally responded by trying to design and build small cars that would compete
against the Civic and Accord. When was
the last time you saw a Vega, Pacer or Pinto on the road?
Over the past 40 years, US automakers have been out-gamed by
Japanese (and now Korean) manufacturers who are simply better at adapting their
businesses and innovating new products for a global market. Asian manufacturers gained a foothold on
price, captured marketshare
through quality, and now lead because of innovation. Today, you don’t
buy a Toyota Prius because it’s cheap; you buy a Prius because it is green technology.
Medical tourism is a disruptive agent in health care
Like Japanese cars, medical tourism is a disruptive agent in health care. Sitting in his home in Shreveport,
Bonewell was able to call up the credentials of a US-trained Thai
doctor, connect with a hospital via email, book his 20-hour flight on-line and
save $80,000 dollars in the process.
Multiply that a couple of hundred thousand times, and you have a
business that everyone wants a piece of.
Medical tourism exists because there are wide disparities in
cost, quality and access in health care markets all around the world.
Indonesians leave home to get medical care in Singapore because they don’t
trust their doctors. Americans travel to Mexico
because they cannot afford care at home. Canadians
travel to the US because they don’t want to wait for surgery.
Regina
Herzlinger, author of Who Killed Health Care and a professor at the Harvard Business School, frames the medical tourism argument by
stating: “The medical travel market is a bit over-hyped today, but economics
dictates why it will become huge over time: if a supplier has very high prices
and erratic quality, it creates an opening for nimbler rivals.”
In a word, medical tourism is arbitrage. Not just on price but quality and access too.
Today, any consumer anywhere in the world enabled by a computer or smartphone
can shop globally for heart, back or prostate surgery. Asian hospitals,
including Bumrungrad, have taken the lead in packaging their products for sale
on the web to a global audience.
Packaging? Products? Sounds like manufacturing or retail. It
is. Medical tourism is packaging health
care in a way that consumers with cash and choice understand. That’s the real medical tourism story - not
patients traveling abroad for care. That has been happening for centuries.
Look at Bumrungrad. It sees more than one million patients a
year, generates 55 percent of its revenue from foreign patients, has more
customer service staff than most places have nurses, and
markets fixed-priced surgical packages on its website. Bumrungrad is a medical tourism juggernaut
because it has refined its system to cater to medical tourists.
A changing business model
The internet, globalization and consumerism are forcing
doctors and hospitals all over the world to adjust their business models to
consumer demands for transparency and speed.
It happened in banking, retail, tourism and financial services, and now
it’s coming to health care. Understanding what consumers want in health care is
pretty simple. They want Trip Advisor. Show me options, tell me the price and
give me consumer feedback.
The Health
Research Institute at PriceWaterhouseCoopers conducted a survey of 200
health executives around the world, and “satisfying more demanding/empowered
patients” was the third-most difficult challenge impacting their health care
systems, after meeting the demands of an aging population and controlling costs.
Winning the hearts and spines of medical travellers is a
lucrative business, but it is hard work and requires organisations
to rethink and restructure how they deliver care and market their
services. That’s the catch. Hospitals
and doctors are challenged to understand new market realities where the
consumer, not the doctor, is the centre of the universe.
As Bumrungrad’s marketing director from 2001 to 2007, I was
part of a paradigm shift – a real one, not a sound bite. I saw a no-name hospital in a developing
country attract hundreds of thousands of patients from around the world, not
because it had the world’s best doctors or best technology or the cheapest
price. Bumrungrad assumed leadership in
medical tourism by delivering service and turning patients into disciples that
wanted to tell their story.
In today’s new world order, nothing is more powerful than
getting people to share their experiences with your brand. It’s the engine that powers Facebook,
Instagram and Trip Advisor, and “sharing” is exactly what Bonewell did on 60
Minutes. One man sharing an honest
experience that 13 million people could relate to. Ka-pow!
As a health care marketing consultant, hospitals and health
care organizations contact me hoping that I can help them recreate the
Bumrungrad magic for their brand. More
than a few walk away disappointed when I tell them that I cannot - at least
not in the same way. The moment and the
story have changed.
60 Minutes did not “make” Bumrungrad; it was a
by-product. The hospital won mind and
market share by adapting quickly to a changing marketplace. It was not
necessarily the first mover, but rather the fast mover advantage that propelled
the business and the brand forward. The
hospital responded to global events, like the Asian Financial Crisis, September
11, SARS and the US healthcare crisis
by providing the right product at the right time. Do that once and you are lucky; do it twice
and you are a leader.
Asia is the new supplier of medical services to the world
Bumrungrad embodies the explosive growth and innovation we
have come to expect from Asia in general.
From Turkey to Taiwan, Asia is positioned to become the new supplier of
medical services to the world with hospitals that
look like hotels, US-trained doctors and brands that will someday rival Mayo,
the Cleveland Clinic and Johns Hopkins.
By 2020 health care spending is projected to consume 20
percent of GDP in the US and 16 percent of GDP in OECD countries, as they try
to come to grips with fixing an infrastructure that simply cannot cope with
populations that are getting older, fatter and sicker. Aging, lifestyle and
chronic diseases are forcing employers, insurers and governments all around the world to rethink a better, faster and more efficient
delivery model.
Like in car manufacturing, Asia has a chance to redefine
health care through innovation. Unlike the US, Asia is not locked into an
insurance-based reimbursement model serving an aging, chronically ill market
with not enough skilled labour. Asia is
an eclectic mix of cash and insurance systems, young and old populations,
developed and developing markets.
Scanning the horizon, the smart money in
health care is being spent on building capacity, brands, audience and
access. From India to Indonesia,
investment dollars are pouring into the region to build capacity to meet the
needs of emerging economies that want more health care services. But for all the investment dollars being
spent on bricks and mortar, it is less clear how hospitals are spending their
money to build audience and create better access to their doctors.
That’s the whitespace in health care and where
the next Bumrungrad will be.
If you are interested in hearing more from Ruben, he will be a featured speaker at IMTEC 2013 in Monaco: 22-23 March 2013.
