Businesseworld Magazine
Cyril Parry waited for a very long time for his turn to come. The 59-year-old retiree from Birmingham, UK, was suffering from rheumatoid-arthritis. He needed a hip replacement operation urgently. He waited patiently though his pain was getting worse and his movements increasingly restricted. Unfortunately, Parry was stuck at the end of a very long queue. The overburdened National Health Service orthopaedic surgeons in the UK were booked solid - for several years. Finally, Parry was told that his turn would come four years and nine months down the line.That was when Parry started surfing the Net to see if he could get his hip surgery done elsewhere in the world. After a full year of research, he shortlisted two destinations: a hospital in Thailand and Apollo Speciality Hospital, Chennai. In November this year, Parry opted for the latter because, at £4,000 (excluding airfare but inclusive of a 10-day stay, post-operative care and a full health check-up), it was almost £5,000 cheaper than the Thai option.

It was ironic that Parry needed to travel abroad for his treatment. He was, after all, undergoing a procedure called the 'Birmingham Hip Resurfacing' - a new technique considered as a superior alternative to the full-hip replacement surgery, and named after the city it was pioneered in. It was perfected at the Royal Orthopedic Hospital in Birmingham as recently as 1998. Cyril Parry needed to travel because of the healthcare system followed in the UK which is creating long waiting lists of patients in that country. More on that later. But long waiting lists are not the only reason that there's been a huge surge in medical travel globally in recent years. Patients from rich countries in the Middle East travel to the US when they need top notch medical care. Residents of poor developing nations such as Nigeria or Bangladesh travel to their more developed neighbours for medical treatment because there aren't enough good facilities available in their own countries. Thousands of Japanese citizens seeking medical treatment fly abroad because of the prohibitive costs of treatment in their home country. Americans seeking cosmetic surgery often fly to South Africa for face tucks and breast augmentation because their insurance coverage doesn't pay for those - and it is cheaper to get them done in South Africa than back home.

Nobody has collated the complete worldwide statistics about how many people travel abroad for health- and medical care-related reasons every year or how much they spend. But a Saudi Arabian report pointed out that in 2000, medical travellers from the Gulf region alone spent over $27 billion seeking treatment in various nations around the world. If the medical travellers from around the world spent even half as much that year, the total business in 2000 alone would have been in excess of $40 billion. And even that could be an underestimate.

"The estimate is that the healthcare market in the Organisation of Economic Cooperation and Development countries alone is worth about $3 trillion, and expected to go up to $4 trillion in 2005," says Rupa Chanda, professor at the Indian Institute of Management-Bangalore, and who was part of a working group led by Isher Ahluwalia of ICRIER which prepared a report for the World Trade Organization on the potential for trade in health services. Chanda refuses to hazard a guess on how much of this is actually cross-border medical traffic, just saying that the opportunity is huge.

More importantly, it is growing rapidly and turning out to be an immense business opportunity for nations that are positioning themselves correctly. Last year, just five countries in Asia - Thailand, Malaysia, Jordan, Singapore and India - pulled in over 1.3 million medical travellers and earned over $1 billion (in treatment costs alone). In each of these nations, medical travel spends are growing at 20%-plus year-on-year. Elsewhere around the world, Hong Kong, Lithuania and South Africa are emerging as big medical/healthcare destinations. And a dozen other nations including Croatia and Greece plan to make themselves attractive healthcare destinations.

By itself, travelling abroad for health is not a new phenomenon - even in ancient times, there were examples of people travelling abroad to spas or famous medical centres for health treatment. But in the past five years or so, the movement has accelerated sharply. It has developed a massive momentum for two critical reasons.

The first is, of course, the demographics of the developed nations and also the problems that are cropping up in their healthcare systems. In the US, the UK, Japan and many European nations, the proportion of the elderly (60 years and above) vis-à-vis the total population is increasing rapidly. In the US, the baby boomers - the biggest chunk of the population - have either hit retirement age or are heading towards it. The number of people aged 65 years and above is expected to double in the next 15 years. In the UK, the people aged 60 years and above will form 25% of the population in the next 30 years - up from 16% now. Similar trends are being seen in almost all nations in Western Europe. Meanwhile, life expectancy here has risen steadily over the years. Add the two up and you get a big surge in demand for healthcare.The big problem is that as their health needs increase exponentially, the healthcare systems in these countries are beginning to creak under the pressure. The number of doctors and nurses joining the workforce in both the UK and the US is not keeping pace with all the demands of the ageing population. This is creating the push factor.

Meanwhile, there is a pull factor being created by a handful of developing countries like Thailand and Malaysia that have good doctors and excellent facilities, and which are positioning themselves as medical destinations in order to boost their economies. Both Thailand and Malaysia see this developing into a multi-billion dollars-a-year business. There is also the other factor - like people from the least developed countries who find affordable sophisticated medical care facilities in developing countries like India and Malaysia. "The competence and skills of Indian doctors is accepted internationally and people are coming from all over the world to our hospital to get treatment," says Prathap C. Reddy, chairman, Apollo hospitals group. Curt Schroeder, CEO of Thailand's Bumrungrad Hospital, echoes that sentiment about his country's healthcare facilities.

Cross-border travel for healthcare reasons is still a highly disorganised movement, but nations are slowly waking up to its potential. In some places the governments have taken a lead. In others, like South Africa and Lithuania, travel agents specialising in medical tourism are driving the trend. In India, private hospitals like Apollo and Escorts Heart Institute and Research Centre are trying to attract patients on their own.

Though the movement can still be considered to be in its infancy, medical travel has come under the radar of both the World Health Organization (WHO) and the World Trade Organization (WTO). As far back as the early 1990s, the WHO commissioned the Social Sector Development Strategies, Inc. (SSDS, Inc.), a Boston-based non-profit organisation specialising in global healthcare systems, to see whether the English-speaking Carribbean islands could become a significant healthcare destination for travellers from the US, the UK and Canada. The study took a hard look at both the advantages and the disadvantages of these nations before reluctantly coming to the conclusion that they would be uncompetitive in most of the areas. The WHO's interest is simple - it realises that medical travel can help boost the medical facilities (and the medical economy) in developing countries while also taking care of some of the problems of rich nations. The WTO sees medical travel as one of the four modes (See 'WTO: How The Medical Trade Will Grow') that will help boost trade in healthcare services worldwide. Both WHO and WTO understand that medical travel could ameliorate much of the demand-supply imbalance in global healthcare. Developed nations benefit as costs or waiting time - or both - come down for a significant chunk of their population. Developing countries benefit as it brings in revenues - and provides the right spur to improve their overall healthcare sector, apart from reducing brain drain in their medical fraternities. Least developed countries, too, benefit as they lack facilities for cutting-edge treatment.