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August, 2009
August, 2009
Medical Tourism
Market Size and Growth
The medical tourism market is expected to show strong growth through 2012 driven by
increasing healthcare costs in developed countriesa and improving quality of care in destinations
Global Medical Tourism Market Size,
20042012Ec
120
100
USD Bn
90
60
60
40
30
0
2004
2006
2012E
4,000
3,100
USD Bn
3,000
2,000
1,878
2,100
2004
2006
1,000
2012E
Notes: JCI, the international division of Joint Commission Resources, is a not-for -profit organization which provides accreditation for hospitals, ambulatory care facilities, clinical laboratories, care
continuum services, medical transport organizations, and primary care services, as well as certification for disease or condition specific care in 36 countries around the world
Sources: Grail Analysis; a Medical Tourism: Consumers in search of value, Deloitte Center for Health Solutions, 2008; b Joint Commission International Resources; c "Medical Tourism: Global
Competition in Health Care", National Center for Policy Analysis, Nov 2007; dCenter for Medicare and Medicaid Services; eKaiser Family Foundation;
August, 2009
Medical Tourism
Impact on the US
By recent estimates, $35Bn in healthcare spending was exported from the US last year; a
majority went to regions such as Asia and Latin America
Medical Travelers by Source and Destinationb
To
Asia
Europe
Latin
America
Africa
95%
4%
1%
Asia
93%
1%
Europe
39%
10%
Latin
America
1%
Middle
East
32%
North
America
45%
26%
Oceania
99%
1%
From
USa,b,1
710,000
Number of procedures
performed outside US
USD 15,000
USD 35 Bn
USD 10.7 Bn
Middle
East
6%
5%
13%
12%
8%
33%
87%
2%
58%
2%
27%
Notes: 1 These figures are derived from the McKinsey report published in 2008 and represent current data at that time (2008)
Source: a Medical Tourism Is Still Small - Getting Care Abroad May Be Less Usual Than Once , Wall Street Journal; b Mapping the market for medical travel, The
McKinsey Quarterly, Health care 2008
August, 2009
North
America
Medical Tourism
Primary Destinations and Service Offerings
The primary destinations for Medical Tourism include countries such as Thailand, India,
Singapore, and Malaysia
Comparison of Major Destinations
Major Destinations
# of Medical Tourists
Thailand
1.54 MM
(in 2007)6
JCI Accredited
Hospitals2,a
Range of Costs
(% of US cost)1,b,c
6%-28%
India
0.45 MM
(in 2007)3
11
6%-21%
Singapore
0.41 MM
(in 2006)5
15
8%-33%
6%-23%
Cardiovascular Surgery,
Cosmetic Surgery, Dental
Care, Eye Surgery, General
Surgery, Orthopedic and
Transplant Surgery
Malaysia
0.29 MM
(in 2006)4
Note: aJCI stands for Joint Commission International, is a not-for-profit organization responsible for providing accreditation and certification services; bCost of treatment includes hospitals stay only;
cAverage cost for treatment of Heart Bypass, Heart Valve Replacement, Angioplasty, Hip Replacement ,Hysterectomy, Knee Replacement and Spinal Fusion
Source: 1Medical Tourism: Consumers in Search of Value, Deloitte Center for Health Solutions, 2008; 2Joint Commission International Website; 3Numbers of note, Business Today, Dec 11,
2008; 4Top 5 Medical Tourism Destinations, Nuwire Investor, Mar 31, 2008; 55 Myths of Medical Tourism, Singapore Medicine; 6The Medical tourism industry in Thailand, I-Shou University,
Sep 2007
August, 2009
Medical Tourism
Market Drivers
A number of factors are increasing the attractiveness of medical tourism
Affordability
Medical tourism provides an opportunity to reduce costs by as much as 94% of the total US cost of the proceduresa
health insuranced
Even people with health insurance must
pay out of pocket for elective surgery and
pre-existing conditionsd
Why Medical
Tourism?
Aging Population
The aging population of the developed
world is a growing burden on the
healthcare infrastructurec
Medical Tourism
Growth Barriers
however, key barriers still exist that will continue to impede mass-appeal of medical tourism
Image Problem
Developing countries are believed to
be poor and lacking in quality
facilities / physiciansa which leads
to skepticism amongst patients
Follow-up Care
Patients face difficulty in getting
follow-up treatment in their home
country after receiving medical
treatment abroadb
Barriers to
Growth
Legal Issues
The consumer must abide by the
medical tourism destinations law
in the event of bad outcomes/
complicationsb after treatment
Other Problems
Low training standards of doctors in
medical destination countries,
language barriers and low payor
coverage
Source: aMedical Tourism Industry Grows Rapidly, Forbes, Oct 26, 2006; bMedical Tourism: Consumers in Search of Value, Deloitte Center for Health Solutions, 2008;
Hospital Manager interview, Analysis of patient testimonials and doctors opinions; cThe Medical Tourism Association Survey Results, 2009
August, 2009
Medical Tourism
Recent Trends
Increasing investments by industry players
One survey even concludes that most of patients feel that the
overall medical care experience at facilities abroad was better
than it would have been at a US facility
August, 2009
Medical Tourism
Ecosystem
Medical travelers, intermediaries and provider groups are the primary source of momentum in
the market while government and insurers are influencing the industry externally
Medical Tourism Ecosystem
Medical Travelers
Individuals seeking medical
care either contact providers
directly or work with
intermediaries to identify
providers and arrange care
Internal Components
Intermediaries
Medical travel planners, travel
agencies or hotel groups help
travelers identify destinations,
select providers and make
arrangements
Government
Governments play an active role through
legislation and by supporting the
development of the industry in their region
Provider Groups
Insurance Companies
External
Influencers
Source: Medical Tourism: Consumers in Search of Value, Deloitte Center for Health Solutions, 2008; IHG and the Medical Tourism Association Join to Facilitate Medical-Related Travel into
Latin America, InterContinental Hotels Group, Jun 5, 2008;
August, 2009
Medical Tourism
Destinations
An increasing number of nations are vying to become significant players in medical tourism
How significant of an impact will this have on the US healthcare players (hospitals, devices,
pharmaceutical / biotech, insurance, etc.)?
Which countries will emerge as the strongest players?
August, 2009
10
Medical Tourism
Summary
The continued growth of medical tourism will impact players across
the healthcare value chain as:
A
August, 2009
How large of an impact could this trend have on the industry and
within what timeframe?
11
(info@grailresearch.com)
August, 2009
12