The Travellers

You could divide the world's medical travellers into four distinct geographical groups who travel for distinctly different reasons. The first is made up of the Americans. Indeed, countries like Thailand, Malaysia and South Africa, which were the first to try and tap 'medical tourists', all geared their systems to attract the growing American clientele.

Why would the Americans travel abroad when their own country boasts of the best medical facilities in the world? And especially as they don't have to wait in queue like the British? The two Es: ego and economy. The US healthcare system is predominantly insurance-driven. But health insurance covers critical care - not cosmetic care. And there are vast numbers of Americans today who are looking for cosmetic surgery - whether it involves a facelift, a liposuction or dental treatment for a brighter smile.

According to the American Society of Aesthetic Plastic Surgery, in 2002, 6.6 million Americans went in for cosmetic surgery in the US itself. They were also the biggest chunk of foreign customers for cosmetic surgeons in Thailand, Malaysia and South Africa. These three countries, between them, pulled in over 100,000 Americans seeking cosmetic surgery.

As the baby boomers - those 76 million Americans born between 1946 and 1964 - age, they are increasingly going in for facelifts, botox treatments, tummy tucks, et al. And since cosmetic surgery is mostly not covered by medical insurance, many Americans prefer to travel abroad. A full facelift costs $8,000-20,000 in the US and only $1,252 in South Africa. Thailand is slightly more expensive at $2,682. Best of all, going abroad means a vacation as well after the surgery is over.

Vanity isn't the only reason why Americans seek treatment abroad though. Lack of insurance cover is another. Last year, 15.2% of the US population - some 43.6 million people - had no health insurance coverage. And a significant proportion of even the 84% with insurance were under-insured.

Many of these people weren't poor - at least according to developing country standards. Some of them were people between jobs who didn't have insurance simply because they were earlier covered by their employers. Given the increasing cost of medical treatment in the US, it made sound economic sense to seek treatment abroad.

If cosmetic surgery and costs were the factors driving the Americans to travel abroad, the second major group - the British - were being forced to seek medical treatment in other countries by the sheer waiting lists caused by the National Health Service (NHS). Unlike in the US, the British healthcare system ensures free treatment to all its citizens. The only problem is that the NHS, which was set up in 1948, is struggling to cope because of a shortage of both doctors and hospital beds. (Private medical facilities are available in the UK, but they are prohibitively expensive and also relatively fewer in number.) In 2001, more than 1 million British citizens were waiting for inpatient treatment and half-a-million for outpatient treatment according to a study by the Vienna University of Economics and Business Administration. At least 40% of the people requiring inpatient care needed to wait over three months for their turn to come. Hip replacement and eyecare had the longest waiting periods.

The situation is so bad that in 2002, the NHS started a pilot scheme 'overseas treatment' to see if surgery services abroad could be bought to shorten the waiting lists. The project focussed mainly on facilities available in the European Union - in countries like Austria and Germany. Meanwhile, many thousands of British patients take the initiative to seek their own treatment abroad without waiting for the NHS to sort out its problems.

The third big group of medical travellers comes from the Middle East. These are citizens of the oil rich nations flying abroad to seek medical facilities that are either unavailable or in short supply in their own countries. An agency in Saudi Arabia estimated that every year, more than 500,000 people from the Middle East travel seeking medical treatment for everything from open heart surgery to infertility treatments. They travel everywhere - to Jordan, Saudi Arabia and Bahrain; to the US; to India, Thailand and Malaysia. By some estimates, India itself attracted 70,000-plus medical travellers from the Middle East last year.

Finally, the last group of medical travellers form a motley lot. They are from the least developed countries and countries with generally poor medical infrastructure, who usually seek treatment facilities at some neighbouring country with better infrastructure. Last year, it was estimated that at least 50,000 people from Bangladesh and Nepal came for medical treatment to India. A significant majority of the 126,000 medical travellers to Jordan came from neighbours with poor medical infrastructure facilities.

Tapping The Big Market

A $40-billion-plus market growing at over 20% a year throws up huge opportunities for anyone smart enough to tap into it. The SSDS, Inc. study for the WHO pointed out that business opportunities covered a big spectrum - from retirement homes and spas, to cosmetic and dental surgery, to critical but non-emergency surgery needs like hip replacements, organ transplants, angioplasty and vision correction. Other studies show even alternative healthcare could be a significant niche opportunity.

In the initial years, most countries that tapped into the medical destination opportunity essentially focussed either on spas or on the 'vanity' and the 'exotic' surgery requirements. In South Africa a number of outfits (travel agents with hospital connections) sprang up to tap into the market for facelifts, tummy tucks and cosmetic dental surgery. Thailand initially had a somewhat dubious reputation as an excellent country to go to for sex change operations. India's primary claim to fame was its ayurvedic treatment centres. "Beauty, youth and wellness is a huge area for growth and we need to promote it aggressively," says Apollo's Reddy.

Over the past few years, though, many countries have realised that an equally big opportunity lies in promoting the more conventional treatments. Some of this, of course, was always happening in the background - like people from Mauritius, Bangladesh and the Gulf coming to India for conventional surgeries and people from Japan flying to Singapore, Malaysia or Thailand for similar reasons. Only now, the nations have started pitching themselves as world-class but inexpensive destinations for almost all health requirements.

They might be getting some unexpected help soon - from insurance giants. Healthcare insurers in the developed countries are not blind to the fact that the option of medical treatment in countries like Thailand and Malaysia could help them reduce premiums and offer options to people who are currently uninsured. Over the next few years, insurance firms are expected to provide a fillip to the medical travel business.

Most insurance companies in the US and the UK have already accredited hospitals worldover where Western visitors can seek emergency medical treatment. Now a few hospitals in Thailand are going a step further - they are getting themselves accredited by the Joint Commission Accreditation of Healthcare Organizations (JCAHO). A full accreditation from this organisation allows a hospital to pitch for the insurance traffic too. Travelling has never been so healthy before.