WHITHER healthcare tourism?
I talked recently to a private equity investor who said he did not really believe in healthcare tourism. Well, I can understand scepticism at all the hype, but it does exist and it will start growing fast in Europe again in a year or so. You can get an interesting take on this from the splendidly named Balázs Stumpf-Biró, head of the new special interest group, the European Medical Tourism Alliance (EuMTA). He reckons there are three ages to healthcare tourism. The first age, up the late 1990s, was Individual and Local. It consisted of individuals deciding to go to a neighbouring country for treatment and spread through word of mouth. In Europe, the classic example is Austrians heading East for dental treatment in neighbouring Hungary. The next age is Individual Trans-Continental. This started with the advent of the web and cheap airfares. These made it possible for consumers to research the market much more easily and to go further for treatment. A few years later we had the advent of the intermediary running a website directing consumers to specific offerings in exchange for a commission. The third age is the Corporate. This has already dawned in countries like Singapore and India, where large enterprises are being built around the concept. In the corporate age, healthcare insurers become heavily involved as healthcare tourism can substantially cut treatment costs. It is also the age when the state starts to take an interest. For example, the Gulf states have started to build massive facilities locally in an effort to retain their citizens and to build this important service industry domestically. The Hungarian government is encouraging a new health city outside Budapest. It is startling how far the third age has dawned outside Europe. For instance, I was recently in Libya where the ministry of health informed me that over 1 million Libyans have gone abroad in the last few years for healthcare. That is nearly 20% of the population. It reflects distrust of the free public sector and really appears to have permeated every class – my taxi-driver’s father had died in hospital in Tunis and his aunt visits the country every quarter to treat her kidneys. Perhaps it is not so surprising that Tokushukai Medical Corporation, the largest Japanese healthcare provider, has recently built a 400 bed private hospital in Tunis specifically for healthcare tourists. Tokushakai’s only investment in Europe is the Tokuda 1,000 bed hospital in Sofia. In fact, such investments do exist in Europe, principally in Munich, where many private hospitals have wings and floors built specifically for the Russian and Arab markets. But I don’t know of any large, greenfield site operations dedicated to healthcare tourism. Healthcare tourism is often perceived as wealthy westerners leaving their country for treatment somewhere cheap. In fact, much healthcare tourism today in Europe is the wealthy in Romania, the Ukraine and Russia heading west for acute care they can trust. Munich is the main beneficiary. The recession has had a big impact on healthcare tourism. Discretionary West to East healthcare tourism has suffered badly with falls of 30% plus. Acute East-to-West will also suffer. But the corporate market is about to come to Europe. Look to Turkey to head the development. Large hospital groups, there with lots of excess bed capacity, are talking to big healthcare insurers in the west with the support and blessing of the state.
We would welcome your thoughts on this story. Email your views to Max Hotopf or call 0207 183 3779.
