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Medical Tourism Drops 14%–Can It Survive the Economy?

Is the medical tourism industry–which aims to provide quality care for those who can’t afford or access it at home–losing its target audience?

Bangkok Hospital

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Medical tourism–foreigners traveling to India or Thailand for procedures that would cost an arm and a leg in their home countries–has made for great segments on 60 Minutes and even magazine features. But now the economic downturn, and health-care reform, is taking a toll on the once-booming industry. The number of Americans traveling abroad for elective medical treatment has fallen nearly 14% since 2007, according to a recent study by the Deloitte Center for Health Solutions.

Is the medical tourism industry–which aims to provide quality care for those who can’t afford or access it at home–losing its target audience?

Americans are cutting back on health care: In 2008, 22% of adults reduced visits to their doctors, and 36% admitted to putting off needed medical care. So it’s not surprising that the medical tourism industry would falter. Not only are people more likely to forgo elective procedures, but they’re also not as eager to dole out cash for a flight overseas.

Even in a down economy, however, the cash you might save from traveling overseas for treatment will probably outweigh what you spend. According to the Deloitte study, the 750,000 Americans that traveled abroad for medical care in 2007 saved 30%-70% on their procedures.

Last year, Fast Company talked to Ruben Toral, president of the International Medical Travel Association. He explained that a procedure in the States with a price tag of $50,000 to $60,000 may cost as little as $8,000 overseas. We recently checked in with Toral (who has also blogged for this Web site), and he said it’s a number of factors are keeping Americans from taking advantage of medical tourism.

“Yes, the economy has affected outflows, but two other big factors are in play, and both are linked to health-care reform,” he says. “The first is, more Americans are fence sitting, thinking their treatment will eventually be covered under the new Obama plan. The second is, insurers have turned their attention away from developing new products that incorporate medical travel, and are focusing on the more pressing issue of what to do with health-care reform.”

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Toral also notes that medical tourism is about more than saving money (he says most people who travel do so to get better quality care). It’s about creating an accessible global health-care network.

“The issue is creating a network that can move patients globally to centers of care, safely and seamlessly, in large numbers. Right now, we cannot,” he says. “This is where, like it or not, insurers come into play because they already have the processes and networks to manage care and payment.”

Despite the recent decline, the Deloitte Center predicts that the number of American medical tourists will bounce back and rise by 35% each year until 2012, beginning in 2010. And as the number of foreign medical sites approved by the Joint Commission International (the health-care industry’s official accreditation institution) has increased from 76 to more than 220 since 2005, that growth doesn’t seem unreasonable.

But Toral is skeptical–he says sustained growth is predicted on the collapse of health care reform initiatives, which, if passed, may have an adverse affect on Americans’ medical tourism.

“If health-care reform passes and the U.S. health-care system has to cope with 50 million more people, I think this will stimulate demand for medical tourism among Americans with money,” he says. “That is the irony. Medical tourism may morph from a product for those who cannot afford or access care at home, to a product for those who can afford care at home but choose to get it elsewhere.”

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photograph by Steve Bronstein

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