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Asia Business Development – Asia Business Consulting » Medical Tourism in Emerging Markets

SpirE-Journal 2011 Q3

Medical Tourism in Emerging Markets

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Medical Tourism in Emerging Markets

Medical tourism as an industry has come into its own. With escalating healthcare costs and long waiting times from strained public health systems in many countries, the Asian value proposition of high quality, safe, fast and cheap healthcare is irresistible. In hindsight, it was an inevitability that off-shoring and globalization would come to the healthcare services space. What does medical tourism mean for countries, vendors, professionals and patients?

Historically, medical tourism was associated primarily with cosmetic surgery. Getting a nip and tuck together with spa treatments, wellness retreats and beach holidays seemed a natural thing to do. Gradually, medical tourists came to seek dental treatment as well. 

However, in the last decade or so, medical tourism has come to be associated with a broad spectrum of procedures going well beyond cosmetic surgery and dentistry. The list includes knee and hip replacements, heart bypasses, cataract removals and even non-elective procedures like neurosurgery and cancer treatment. It is now common for Healthcare Management Organizations (HMOs) in the US to prescribe overseas surgical procedures for insured American patients, depending on the details of their plan. 

The countries sending medical tourists abroad tend to have strained public healthcare systems that drive up waiting times for most elective procedures. But the most compelling reason for the existence of medical tourism as an industry is the lower cost of healthcare it offers. Medical professionals in many Asian countries are paid a fraction of what they could command in the US and UK for example, while the very same physical equipment can be deployed in clinics and operating theatres abroad as is found in the West. 

As demand grew, so did the skill sets of healthcare clinicians and professionals working in the mostly private healthcare facilities that take in medical tourists. Some of these private groups – like India’s Apollo group and Thailand’s Bumrungrad Hospital – now have formidable international reputations for quality healthcare. 

What drives Medical Tourism?

Affordability remains the key driver for this industry, whether the party which wishes to save cost is a patient, a government, an employer or an insurance provider. Medical procedures in developing countries can be 50 % to 80 % cheaper than in developed countries. 

The need for cost savings is particularly acute for elective procedures that are not fully covered by insurance or social safety nets in developed countries due to being seen as quality of life enhancements – for example the implantation of hearing aids or cosmetic procedures. In such cases, the patient bears the costs out of their personal savings – and such costs can be devastating. In the US, where over 40 million people do not have proper health insurance, medical costs are one of the biggest single causes of bankruptcy. 

Who are the customers?

In 2008, Americans spent more than $650 billion at US hospitals. Although the world’s most renowned physicians and surgeons hail from the US, outbound medical tourism is booming, so much so that the American Medical Association has issued guidelines to U.S. nationals travelling abroad for medical care. The UK is another major source country, primarily due to long waiting times for elective procedures under the publicly-funded National Health Service (NHS). 

Eastern Europe and Russia are collectively one of the largest sources of outbound medical tourist dollars. Russia is (unsurprisingly) the largest market for medical tourism spending in this region, especially for gynecology and urology. Russian consumers were found to be a prime customer segment for Singapore healthcare providers for example, with Traditional Chinese Medicine (TCM) treatments gaining popularity in Russia. To illustrate the cost savings gained – simple dental surgery costs five times more in Russia than in Singapore. 

Over the years, as the economic theory of comparative advantage would predict, Asian countries have developed reputations and business volume in different disciplines within the medical tourism market: 

Malaysia – cosmetic surgery

India – orthopedic & cardiac surgery

Korea – spine surgery, stem cell treatment, cosmetic surgery

Thailand – eye and dental surgery, obstetric diagnostic tests, sex change procedures, hair transplants & other cosmetic procedures

Singapore – organ transplants, cancer treatment, cardiac surgery, neurosurgery

Philippines – dental surgery

Mauritius – stem cell treatment


Medical Tourism in Emerging Markets


The Confederation of Indian Industry has estimated that earnings from medical tourism could reach US$2 billion by 2012 – an astronomical growth rate since 2002 when earnings were US$300 million. Multi-pronged approaches are being adopted in India to nurture the industry. 

India has a two-tiered medical system where a thriving private healthcare industry co-exists with the public healthcare sector. The former has been crucial for medical tourism. The Indian government has introduced a medical visa catering to foreigners who visit India for medical tourism. 

One of these private groups, Apollo Hospitals, is one of the largest healthcare providers in Asia. It manages over 10,000 beds and 50 hospitals, out of which many have been accredited by the Joint Commission International (JCI), USA. The standard of healthcare they provide is sufficient to attract foreign patients. 

Another Indian private healthcare group is Fortis, which has designed specific packages to cater to medical tourists. Fortis runs an an English-speaking department that deals with foreign patients, assisting them with acquiring medical visas, transportation, accommodation and even guiding the patients from one doctor’s appointment to another. 

Other private sector players in India have gone one step further and partnered with overseas tour companies to offer tailor-made medical tourism packages.

South Korea

In South Korea, the government has launched the Council for Korea Medicine Overseas Promotion (CKMP) as a brand to increase the standing of Korean healthcare services in the medical tourism market. With the support of the Ministry of Health and Welfare, the CKMP is known as “the gateway to Korea as a medical tourism destination”. The CKMP program encompasses 35 qualified healthcare providers. They have formed alliances with health insurance companies, facilitators and TPAs in order to attract more U.S. patients. 

So as not to make empty promises, South Korea has taken steps to ensure the quality of their healthcare services. One of these is through using the Joint Commissions International (JCI) as a guideline for quality management. 

As in India, the government has introduced a special class of medical visas for foreign patients. In addition, the government has contributed half of the marketing budget, with the remaining half coming from member hospitals. Korea’s marketing strategy aims to target patients with less severe illness in the U.S., China and Japan. The Korea National Tourism Association is confident that these efforts will bear fruit. 


Thailand is one of the leading medical tourist destinations in the Asia Pacific. The Thai government realized the potential in this industry at an early stage, and made the necessary investments. 

Thailand offers a broad range of medical procedures from dentistry and cosmetic surgery to cardiovascular surgery and even sex change operations. Recently, it has introduced a new product offering catering to the alternative medicine market. Thailand now offers preventive or “wellness” treatment. For example, Piyavate Hospital has four detoxification rooms and two colonic-hydrotherapy rooms. These are unique offerings, blurring the line between hospitals and spas. 

Thailand pride itself on its high quality of healthcare services. Thai hospitals have won various awards such as the Top 10 World Medical Destination award, and accreditation from the Joint Commission International (JCI) and Thailand Quality Class (TQC) programs. In particular, Thailand has developed a strong reputation for excellence in dental, eye and cosmetic surgery.


In 2007, the National Health Tourism Development Strategy was created in Hungary with the involvement of various industry experts. It outlined a plan to establish Hungary as Europe’s leading “healing country” by 2015. This year, 2011, is the “Year of Health Tourism” in Hungary. It is a strategic move by the national Tourist Office that aims to draw foreign patients’ interest, not only in healthcare services but also in Hungary’s cultural heritage. 

Hungary has gone aggressive in marketing itself to medical tourists. Its medical tourism website, Treatment Abroad, compares the price of a face lift between the UK and Hungary. A Hungarian company has even planned a beauty contest for women aged 18 and above who have had plastic surgery (the Miss Plastic pageant). This aims to remove the stigma attached to aesthetic surgery and to promote medical tourism. 

Conclusion: The Growth that lies ahead

Looking ahead, medical tourism can only grow from strength to strength, due to the trend of aging populations world-wide. By 2015, it is predicted that there will be 75 million more people over the age of 65 than in 2010. This means a total of 617 million people over the age of 65, 53 % of which will live within the Asia-Pacific. This ageing population will place an additional burden on public healthcare systems which are already strained in many developed and developing countries. 

People aged over 65 are especially susceptible to knee and hip injuries, which makes hip and knee replacement surgery a huge growth area within medical tourism. 

Another growing trend has been the blurring of the distinction between spas and hospitals. Medical spas usually operate under a licensed healthcare professional to treat patients with simple, non-surgical procedures. They can offer specialized treatments such as Botox injections, cellulite treatments, microdermabrasion and eyelash lengthening drugs, but these treatments are carried out in a spa-like setting. There are already some countries offering medical spas (e.g. in Thailand’s Bangkok Mediplex). This is still a niche market within medical tourism, with plenty of room to grow. 

The last trend to watch out for may be a shift in the source of demand. With China accounting for 45% and India 20% of the elderly population in the Asia-Pacific by 2015, and with global economic winds blowing from West to East, market growth will be driven from emerging Asia, and not only from the US and Europe. 

Things can only get better for the medical tourism industry. And that will attract more countries and companies into the competition – which is good news for patients.

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