Medical Tourism: Concept, Benefits, and Challenges Term Paper

Introduction

Medical tourism has emerged as a new phenomenon in the current world; this has largely been linked to various factors which include the increased cost of health care, the long duration that is involved in getting particular health care services, the enhanced convenience in cross border travel and the advancement in technology which has made the treatment of some diseases possible which would not have otherwise been if not because of technology.

Cost has been considered a fundamental drive in medical tourism. The main objective of medical tourism is to enhance accessibility by the population of better health care services.

Medical tourism is therefore understood to mean a situation where an individual travels to another country mainly to undergo a medical treatment so as to minimize on costs that might result from lower currency or due to the reason of obtaining an expert in medical practice or technology at a foreign country.

Medical tourism entails four main processes: research, planning, implementation and the outcome. The main countries where medical tourism is valued are United States, Canada, Europe and the Middle East. This is because these countries have higher GDP and hence substantial income for their population; this gives their population freedom and ability to attaining better health care.

Globalization has led to the movement of people in search of health treatment and medical services have emerged as a major phenomenon in the modern world.

This phenomenon of the globalization of health care has the implications that failure by hospitals to negotiate fair prices with the patients seeking medication attention and also their inability to negotiate good prices with insurance companies will lead to these patients traveling abroad to seek medical attention.

Global health care includes all forms of medical tourism and is practiced in every country and it exists based on social class stratification. Several governments have had the tendency of promoting an economic model for the trading of health services.

The main objective of medical tourism is to bring together both the public and the private sectors in the healthcare market and also to enhance the accessibility of all people to quality and affordable health care regardless of economic social class. Other reasons why people choose to seek medical treatment abroad are because of the desire to have alternative treatment procedure; increased desire for alternative medicine.

The patients together with the medical insurers and employers have been motivated to cut on medical costs via international outsourcing. This has been prompted by the fact that the cost of medical attention, the cost of surgery, for example, has varying prices depending on the country and some countries may charge high costs which may be hard for some individuals to afford (Kumar & Yurk, n.d.).

The major drivers that influence the directionality flow of health care

Medical tourism can be inbound or outbound. The most preferred destination for inbound medical destination is Belgium, Brazil, Dubai, India and Germany. There are several factors that influence the flow of health care to this medical destination. In the case of Belgium patients are motivated by the short duration of waiting, the low costs of services and high service quality.

In the case of Brazil, majority of the medical tourists are from US and most of them combine their medical trip with holiday because Brazil in a holiday destination of choice.

In the case of Dubai, majority of the tourists are from Germany and it is preferred due to the high quality medical services and also specialized medical services. Germany is preferred due to its strategic location at the heart of Europe and it attracts patients from Netherlands.

The flow in health care can take different dimension; this may include the fact that foreign models of health care can be domesticated. There have been increased research and other medical advances to establish the root cause of medical tourism and to establish the factors that prompt this phenomenon.

This flow of health care concerns the patient, health managers and the health workers. This may help in enhancing the health care of their native country (Sobo, 2009).

On the side of the health care workers like the nurses, doctors and other health practitioners who had earlier immigrated to overseas countries may opt to return to their home country.

Concerning the patient, there is a great need to analyze and to explore both social and cultural factors; this does not concentrate just on foreign workers who need offshore services but also migrant workers who might desire to seek medical attention back in their homes.

In this case, an Indian national who resides in the USA might wish to seek medical operation in India that to undergo an operation in foreign land. This is because they have a very big tendency of getting a medical care that may be culturally relevant to them and it may also stimulate their kinship connection and national identity.

The patient also goes abroad for medical treatment is to save costs; every patient would to get the best and the greatest value for his money and the most fundamental reason why patients travel abroad is to have an opportunity to save their money.

The opportunity to save money depends on the country of treatment, the value and kind of treatment, but irrespective of whether the patient is uninsured or underinsured, there has been a prove that they can save more than 50 percent the cost of treatment in their country.

Patients also travel abroad to obtain better and quality health care: there has been proof by veteran health care travelers. The analysis of the facilities available abroad, the customer services and the medical equipments abroad are of good quality as compared to the ones in their home countries.

In India and Thailand for example, the government have pumped alto of money into the health care system with deluxe suites and international recuperation resorts in order to cater for international medical tourism. Consequently, the physicians and the medical staff in the treatment facilities can be accessed with ease as compared to those in the US and other western countries.

The availability of exclusive treatment in foreign countries is also another factor that drives patients to seek medical treatment abroad. It has been established that even the most comprehensive health insurance excludes particular conditions and forms of treatment like cosmetic treatment and dental care or infertility problems and surgeries.

The patients are also motivated by specialty treatment: there are some medical conditions that are unavailable in particular countries and can only be received in a foreign land.

Policy instrument: the directionality of health care is motivated by the desire from other countries to aid the countries contain and control the rising costs of health care. This has been and still it is an overwhelming problem facing the current world especially with heightening globalization (Woodman, 2008).

Investment capabilities: the flow of health care enables medical providers to comprehend the cost structure in various countries which can be instrumental in the formulation of better operational and investment decision.

Also the directionality of the flow in health care may be influenced by of the medical or health workers to look for better places to advance their careers, others to get better terms of services where as others are motivated by the desire to fulfill the desire of the families. Technological flow is also instrumental; this goes hand in hand with the flow of diseases.

Health workers: there has been increased cross border migration and this keeps on intensifying due to the flattening of the world.

The medical field has witnessed cases of increased migration of nurses and other medical practitioners, this is largely due to the shortage of nurses in the host destination or there is availability of better terms of services in those countries as compared to the country of origin or it may be also due to philanthropic nature of some countries especially in terms of disasters.

Segments of Patients who Seek Health Care Abroad

All patients stand a better chance of travelling abroad to receive medical care only on the condition they are fit to travel. Patients travelling to look for medical services outside the borders of their countries can be categorized into the following segments:

Medical tourism for underinsured: the contemporary world has witnessed spiraling costs of insurance coverage and this has forced some insurers to cut down on costs leading to the mergence of an underinsured group of the population.

The rising figure in medical costs, high deduction by the insurance providers, the issue of co-payments and increasing out of pocket expenses together with few physicians have prompted many patients to look for alternative treatment abroad.

Medical tourism for elective surgery: “there is an increasing number of patients who travel abroad to look for elective surgical procedures like cosmetic or plastic surgery that are more often than not covered under their insurance plans” (Health base, n.d., p. 1).

The medical treatment for uninsured: it is estimated that up to 16% which is close to forty five million of the American population are not under any insurance cover (Health base, 2006); majority of this individual are self-employed and most of the time finance their health care from their savings. Since the financing of health care is a costly affair, medical tourism has been considered a better alternative in order to save medical costs.

Medical tourism for others: there has been some situations that the cost of accessing medical treatment abroad is cheap even for those individuals who have insurance cover, sine sometimes their medical insurance may be less than their out of pocket amount:

“Consequently there is the case of a baby who may not be qualified for either Medicare or Medicaid but might be in need of an immediate surgery, also their the group of people who may have lost their group coverage due to being retired and the surgery they may require might not be covered by the social security or Medicaid or the Medicare” (Health base, 2006, p. 1).

Under all the mentioned circumstance, medical tourism is the best alternative of addressing their medical conditions

Others are those patients that travel in search of reasonably priced health care and the second segment involve those patients who travel into a foreign country in search of quality health care that may not be offered in their home country.

In the Europe, Asia and North America, there is an unprecedented increase in the cost of health due to the hard economic times and inflation and hence the search for an affordable health care is forcing patients to look for alternative health care options.

In countries like Canada and Britain, the ineffective and inefficient national health care structure is considered a factor that prompts patients to look for medical treatment abroad also in these developed countries, the waiting duration and procedure is very long like for example hip replacement that takes almost one year.

Patients from developed countries with modern health care system would wish to save some money but get a quality health care commensurate to his money; they have to travel outside their home countries since he cannot finance the available health care system with his little money.

It is assumed that it is the conventional demand for quality that is motivating a lot of people to look for better and affordable health care in foreign country.

Cosmetic surgery patients: patients who are in need of cosmetic surgery are considered the victims of medical tourism. Their preferred destinations are Argentina, Brazil and other South American countries.

Reproductive organs and associated patients: this is the practice of seeking medical attention abroad in the areas of surrogate pregnancies, in-vitro fertilization which may entail the freezing of embryo involved in retro-production.

Reasons for Growing Rivalry for Inbound International Patients

Medical tourism has developed as an industry in the international arena in the twentieth century and it has sprouted in both the size and the growth, it has also developed into one of the lucrative fields an economic instrument of various countries.

The united states of America involve most in inbound kind of medical tourism though there is an increasing number of those individuals looking for outbound medical tourism. Medical tourism can be classified into three based on the original country of the tourist, these are; inbound, outbound or intra bound.

Inbound tourism concerns only non- resident who travel in a particular country, outbound tourism on the other hand concerns residents of a particular country travelling in another country whereas domestic tourism involves the inhabitants of a given country who travel inside their country.

These three are lumped together into national, international and internal tourism. Internal tourism encapsulates domestic and inbound tourism, international tourism on the on the hand includes inbound and outbound and national tourism encapsulates domestic and outbound.

Several countries are witnessing a lot of rivalry in inbound tourism; this is simply because of the following factors:

Inbound tourism has been considered a precious source of revenue to any country, its financial system and the countries’ economy. This revenue may arise from the expenditure by the tourists, their hotels spending and their benefit to the local businesses.

Several countries in their bid to raise money and to promote their economy have moved from uplifting inbound tourism to the promotion of intra bound tourism which has been proved to be an important flesh to the economy (Kumar & Yurk, n.d.).

The record for patients travelling across borders is obtained from tourism boards, newspaper accounts and data from the government sources. The emergence of the social media has proved instrumental in obtaining data necessary for cross border patients to obtain information on the medical services abroad.

The Asian countries like Malaysia, Thailand and Singapore have been receiving more patients or better referred as medical tourists as compared to other countries on the globe. The main reasons for the increased cross border medical services is because of distinction in quality and efficiency of service and the difference in pricing between different hospitals around the globe.

The increased competition for the market for foreign patients is a slowly growing phenomenon that has developed from the modern cost-based principle that enables health care providers to attract patients based on their cost, quality of their service, level of their service and convenience in the side of the patient

The national, regional and international competition for foreign patients has drove several hospitals and health care providers and their respective systems to improve their service models in order to place themselves in a better position to attract more patients.

Most hospitals are striving for high doctor-patient ratio, others are pursuing specialization to place themselves in a better position and be in pole position to attract particular clique of patients and to rank top in the international scale.

This has been pursued by the “Escort Heart Institute and Research Center in India that performs approximately 15000 heart surgeries annually and only experiences a death rate probability of 0.8 percent” (Japan competitive report, 2007, p. 1).

Price differentiation among hospitals may be considered an act of predatory intent. This implies that the pricing of a commodity or a service based on factors as customer class is a tactic for predation. Some hospitals set low prices as a strategy to discourage the entry or to encourage the exit of a rival business.

Price differentiation may be necessitated by the hospital classification: there is government and private hospitals, this two categories of hospital charge different prices, in the case of government hospitals, the pricing is very low because they lack sophisticated equipments and medical technology that will enable them to provide quality health care, also the state of government funded hospitals are in appalling condition and this is reflected in their pricing.

Private hospitals on the other hand charge high prices due to the quality of service rendered and also the technology and equipment that is employed in performing the medical operation. Public hospitals are driven by the desire to maximize profit at the same time to maintain relevance in the market share particularly fighting for market share by charging low prices.

Price differentiation is also as a result of the economic class of patients that frequent various hospitals. Hospitals that attract high income patients are tempted to charge high prices and those that attract low income economic class charge low prices.

Reasons for Global Price Differentiation among Hospitals

The hospital industry is a regulated one and as such the main sphere of competition is quality and location rather than pricing since the price of hospital service is pegged on the above two factors. Other factors influencing price differentiation in the hospital industry are ownership and marginal costs of production which are explained later in this sub-section.

There is varying price differential in the health care services between the Asian nations and the countries of the most developed world. India has been considered to be the cheapest destination for health care or rather medical tourists. Heart bypass operation for example in India is a sixth of the price charge for other countries like Malaysia. The following are the factors that are associated with the price variation among different health care providers;

Market power: market power is understood as the difference in market influence of various organizations. This is explained economically as the ability of a seller to increase the price of a commodity or a service without closing business.

An example of this is in the negotiation of a contract between a health provider and a health insurance plan which gives the health care provider to receive reimbursement it demands based on the market power.

In this case the insurer can hinder the hospital from increasing the charge by failing to sign the contract and as a result e can cause the hospital to lose patients covered under the scheme when the market power lies with the payers, then costs can rise nut slowly as opposed to when suppliers possess market influence that results in a faster increase in market price.

It is this market power that that explains the difference in price among health care providers.

Price of services: this is measured in terms of price per unit of care; this includes physicians’ fees, hospital rates and prices of drugs or the pharmaceutical charges.

In terms of physicians’ charges, some countries pay their physicians based on the salary structure of that country, the standard of living or the salary that reflects the GDP. Price differential of services is determined by the price, quality and the quantity of services (Bodenheimer, n.d.)

Reasons why Countries like US have high Costs and Procedure for hip Replacement

The provision of medical service in the USA is the province of several parties and many of the health care facilities are owned and managed by the private parties. The reasons for the high costs of medical procedure in the USA are largely because of the following factors:

Health care facilities: majority of the health facilities in the USA are owned and operated by the private sector, though the governments have got their own health facilities, they are associated with ineffectiveness and low quality health care service.

Health care facilities in the USA are categorized based on their area of specialization like the surgi-centers which specializes in operations. The fact that health institutions are in the hands of the private parties who are profit oriented makes these medical procedures like the hip replacement more expensive when compared with other nations.

The medical care in the US is measured by the use of Consumer Price Index (CPI) but trying to establish the consumer indexes in the medical market has proved difficult due to the dynamism in the market prices. The high rates for medical procedure in the USA are associated with medical inflation (Triplet, 1999).

Physician practice: the cost of training and employing physicians in the United States of America is very high. In the USA there are varying costs for physicians performing similar procedure.

As in the case of hip replacement for example, there was varying costs among different healthcare providers and it was largely associated with factors like physician practice and experience in surgical operations, the quantity and kind of ancillary services ordered, duration of time the patient spends in the theatre room and the kind of prosthesis used.

The costs of all this factors in the USA are high and hence high cost of medical procedure.

Cost of technology: technology is expensive and the use of technology means indirectly passing the cost-burden to the consumer, technology is a medical liability but they are necessary in performing complex medical operations like organ transplant.

The medical technology used in the USA is of a high quality and they are expensive to purchase and to maintain hence the high cost of medical operation and procedure (USA General Accounting office, n.d.).

The use of indicators: there are several indicators in the USA that are applied in determining the cost of medical procedure. One of the prominent indicators is the referral-sensitive; this involves analyzing the variations in medical procedures carried out based on population stratification.

The major determinants for pricing of medical operations in the USA are economic class, the race, status of insurance and the likelihood of receiving similar treatment abroad.

Consequently there is the agreed mode that the high health care costs especially in medical procedures like hip replacement is deep rooted; that is due to the American wealth. America being rich than any other country on the globe means the Americans are willing to spend more because they pay doctors more than what other countries can pay.

Americans rely on expensive specialists who take advantage of advanced technologies like the CT scans and the MRI machines; these specialists also prefer high cost surgical equipments or expensive medical procedures as compared to other doctors performing similar operation in other countries.

There is also the perception that wicked insurance incentives lure doctors and the patients to make use of expensive medical equipments than is required. The health care insurers are also to blame for the high cost of medical services; these providers consume a lot of money in administrative and advertising cost which makes health care expensive for nothing (New York Times, 2007).

Furthermore the high healthcare cost for medical procedure in the US is explained in terms of the purchasing power parity of the people and the GDP of the nation. These two factors can result in higher price for similar health procedure and service paid in the US than what other countries pay or demand for the same medical goods and services.

Also the high cost results from the America culture with regards to tort laws that in the medical context may result in defensive medicine, this implies the application of medical tests and procedures only as a defense from any malpractice litigation as opposed to as a clinical imperative (Reinhardt, 2008).

Conclusion

The discovery of medical tourism has been considered a critical instrument of change that is necessary for better future.

Despite the advantages and the benefits of medical tourism, it has not gone without challenges; this is because it has been linked with unethical practices and it is often maligned, all this criticism motivated by ignorance. Medical tourism has exposed the lines of weakness in the health care system of developed countries (IMTJ, 2011)

There is an increasing prospect that with the advancement in technology the phenomenon of medical; tourism will gain momentum.

This is because people will be using internet to acquire information that is instrumental in the knowledge of what medical care is available in foreign land and it will also be relevant in the cost-benefit analysis. Through the development of information and communication technology, nurses and other medical practitioners may share information that is relevant for medical tourism like the sharing of knowledge.

Proponents of medical tourism have justified the growth in significance of medical tourism by arguing that is has enhanced patients choice and preference, and also helped give health consumers alternative treatment which may not be found in their domestic countries and it has also fostered international competition.

It is also evident that in the United States, medical tourism is important and a safety net for the uninsured and underinsured Americans who may not be in position to cater for the expensive medical treatment at home.

Many countries did not take medical tourism seriously but of late many countries have considered it a lucrative business and are now putting a lot of resources into the health sector to attract medical tourists. Just like other individuals, medical tourist reserves the right to travel abroad in search of better health care.

Medical tourism however comes with a lot challenges and has some conditions that should be adhered to, these are; the certifying bodies must first accredit to ensure that they meet the required international standards.

References

Bodenheimer, T. High and Rising Health Care Costs. Web.

Health base. (2006). Healthcare beyond boundaries. Web.

IMTJ. (2011). Medical tourism: The Resentment Factor and the Ripple Effect. Web.

Japan competitiveness report. (2007). Medical tourism in Japan. Web.

Kumar, R. and Yurk, R. Redefining Medical Tourism as Global Healthcare. New York, NY: Taylor & Francis Group, LLC.

New York Times. (2007). High cost of health care. Web.

Reinhardt, U. (2008). Why does U.S healthcare cost so much. Web.

Sobo, E. (2009). Medical Travel: What It Means, Why It Matters. New York, NY: Taylor & Francis Group, LLC.

Triplet, J. (1999). Measuring the prices of medical treatments. New York, NY: Brookings Institution Press.

USA General Accounting office. Hospital Costs Cost Control Efforts at 17 Texas Hospitals. New York, NY: DIANE Publishing.

Woodman, J. (2008). Patients beyond Borders: Everybody’s Guide to Affordable, World-Class Medical Travel, 2^nd Ed, Patients beyond Borders. New York, NY: Taylor & Francis Group, LLC.