For countries unable to meet healthcare demands, medical tourism has helped supply treatment for the global middle class.
By Rick Twelves | March 26, 2018
Across the world, people are looking for quality healthcare services at an affordable price. In the United States, growing healthcare costs are forcing some customers to look abroad for cheaper solutions. On the flip side, in parts of Africa, it’s the poor infrastructure and limited services that have given rise to a similar phenomenon. In both cases, the arrangement has been possible in part thanks to historically low international airfare. The result of this shift is a growing medical tourism industry. While the industry offers life-saving procedures to many who could otherwise not afford or access treatment, the entire industry is little more than a band-aid for global healthcare ails.
Consider India. The country is ubiquitous with outsourcing, so it was only a matter of time before healthcare was outsourced too. Medical tourism is exploding there: from $3bn in 2015 to a projected $8bn by 2020. Who are the happy customers? At one end of the spectrum are Americans who either lack coverage or want to avoid financial ruin; a $130,000 operation in the US may cost a mere $10,000 in India. Interestingly, more than 80% of American medical tourists are from the boomer generation.
At the other end of the spectrum, sub-Saharan Africa’s growing middle class is driving an expanding market for medical tourism. In Nigeria, Indian-owned hospitals and clinics book packages for local patients to travel to India when local procedures are not available. Some 20,000 Nigerians received Indian medical visas in 2015. Additionally, Indian companies operate telemedicine facilities for consultation and post-operative care in Africa. For Kenyans, the shorter wait times and superior services of hospitals in India drive an estimated 60% of outbound medical tourists there, where they spend $42m-60m annually. African consumers prefer India rather than the United Kingdom or United Arab Emirates for the same reason American medical tourists do: lower costs with little or no perceived loss in quality. Africans have the added hurdle of visa restrictions, and India issues them both faster and more easily, which is imperative for time-sensitive medical treatments.
The consequences of this “consumer diplomacy” are multifaceted. On the bright side, India’s private healthcare sector has enjoyed major incentives to expand and improve infrastructure. Inbound medical travelers also contribute to India’s hospitality and tourism sectors. The industry succeeds in providing access to healthcare for those from the global middle class at a price they can afford.
However, medical tourism is only a short-term solution. In Nigeria and Kenya, outbound medical travelers spend badly needed funds abroad, depriving local economies of key consumers who can afford local treatment. In India, the modernization of private sector health care has far outpaced subsidized public sector alternatives, exacerbating the country’s stark income inequality. Meanwhile, healthcare needs remain unmet for the majority of Indians and Africans who cannot afford out-of-pocket airfare and medical costs. Thus, medical tourism is a middle-class problem: The poor cannot afford the costs of travel and overseas treatment, whereas wealthier elites continue to access healthcare anywhere.
Possible solutions are accelerating. The same Indian-owned hospitals in Nigeria are training doctors on how to perform specialized operations in the hopes of reducing medical tourism. A recent announcement details the training of paramedics across sub-Saharan Africa. Indian doctors who have studied and lived abroad are now flocking home to offer their expertise, all while training the next generation. If medical tourism can help increase domestic capabilities, the desire to tap foreign healthcare markets will decrease. Alternatively, if countries chose to specialize in a particular procedure – dental, cosmetic, organ transplants, etc – then the industry could become more efficient and lower costs further.
Next week is World Health Day, and fittingly for 2018, the World Health Organization has chosen #HealthForAll as this year’s theme. For countries unable to meet their healthcare demands, medical tourism can help supply treatment for the global middle class. In order to reach poorer populations, however, governments and private institutions must work together to increase capacity at home and better co-ordinate efforts abroad.