medicaltourismreport final

MedicaltourisminAustraliaAscopingstudyDepartmentofResources,EnergyandTourism15August2011

Medicaltourismscopingstudy

ContentsExecutiveSummary .........................................................................................................................i1 Background ......................................................................................................................... 1

1.1 Scopeandstructureofthisreport......................................................................................... 11.2 Themedicaltourismindustry ................................................................................................ 11.3 Methodology.......................................................................................................................... 1

2 Medicaltourismaroundtheworld..................................................................................... 32.1 Marketsize............................................................................................................................. 32.2 Reasonsformedicaltravel..................................................................................................... 42.3 Globalcompetitorsinmedicaltourism.................................................................................. 5

2.3.2 Thailand................................................................................................................. 62.3.3 Singapore .............................................................................................................. 82.3.4 India ...................................................................................................................... 92.3.5 Malaysia .............................................................................................................. 102.3.6 HongKong........................................................................................................... 112.3.7 MainlandChina ................................................................................................... 122.3.8 Japan ................................................................................................................... 122.3.9 RepublicofKorea ................................................................................................ 132.3.10 NewZealand ....................................................................................................... 142.3.11 UnitedArabEmirates.......................................................................................... 142.3.12 Germany.............................................................................................................. 152.3.13 LatinAmerica ...................................................................................................... 16

3 Demandformedicaltourism ............................................................................................ 193.1 Driversofmedicaltourismdemand .................................................................................... 19

3.1.1 Relativepriceofhealthservices ......................................................................... 193.1.2 Qualityandavailabilityofhealthservices........................................................... 213.1.3 Availabilityofservices,drugsorsurgerymethods ............................................. 273.1.4 Exchangeratesandincomelevels ...................................................................... 283.1.5 Otherfactors ....................................................................................................... 29

3.2 Competitorandsourcecountries ........................................................................................ 293.2.1 Scorecardcomparison......................................................................................... 30

3.3 Currentdemandformedicaltourism .................................................................................. 333.3.1 Numberofvisitors,visitornightsandexpenditure ............................................ 333.3.2 Countriesoforigin .............................................................................................. 363.3.3 MajordestinationsinAustralia ........................................................................... 39

3.4 Projectionsofmedicalvisitors ............................................................................................. 41


4 Supplyofmedicaltourism ................................................................................................ 434.1 Medicaltourismsupplychainandprocess.......................................................................... 434.2 Gaps,barriersandopportunities ......................................................................................... 45

4.2.1 Commercialgaps................................................................................................. 454.2.2 RegulatorygapsandGovernmentsupportrelativities ....................................... 464.2.3 Marketfailures.................................................................................................... 464.2.4 Keyspecialities .................................................................................................... 47

4.3 Currentandfuturecapacity................................................................................................. 474.3.1 Privatehospitalcapacity ..................................................................................... 484.3.2 Medicalandotherhealthworkforceshortage ................................................... 494.3.3 Supplyofaccommodationandothertourismrelatedactivities ........................ 50

5 Implicationsofmedicaltourism ....................................................................................... 525.1 Potentialbenefits................................................................................................................. 52

5.1.1 InjectionofforeigncurrencyandinvestmentintoAustralia .............................. 525.1.2 Reduceexternalbraindrainofmedicalprofessionals........................................ 535.1.3 Reinvestmentintothelocalhealthcaresystem.................................................. 535.1.4 Benefitstothetourismindustry ......................................................................... 54

5.2 Potentialrisks....................................................................................................................... 545.2.1 Internalbraindrainfrompublictoprivatesector ............................................ 545.2.2 Risingcostofhealthcare ..................................................................................... 55

5.3 Lessonsfromhistoryandabroad......................................................................................... 565.3.1 Redistributivepolicies......................................................................................... 565.3.2 Preventingtheinternalbraindrain .................................................................... 575.3.3 Coordinatedmarketingapproach....................................................................... 57

5.4 FacilitatingAustralianmedicaltourism ............................................................................... 585.4.1 Medicaltourist/treatmentvisas ......................................................................... 585.4.2 Insuranceandliabilityissues............................................................................... 595.4.3 Parallelswiththeeducationtourismmarket...................................................... 60

5.5 Conclusion............................................................................................................................ 61References................................................................................................................................... 63AppendixA:Consultationplan................................................................................................... 70AppendixB:Governmentsupport ............................................................................................. 74

ChartsChart3.1:Metricsofqualitybycountry .................................................................................... 23Chart3.2:PrevalenceofMRSAinAsiaPacificregion ................................................................ 24

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Chart3.3:Medicaltechnologyper1,000,000people(200510*) ............................................. 25Chart3.4:Physiciansper1000people(200410*) .................................................................... 26Chart3.5:Hospitalbedsper10,000population(200009*) ..................................................... 27Chart3.6:Numberofinternationalvisitorsbyreasonofvisit................................................... 34Chart3.7:NumberofmedicaltreatmentvisasgrantedbyDIAC............................................... 35Chart3.8:Numberofvisitornightsandaverageexpenditurepervisitor ................................. 36Chart3.9:Countryoforiginofinternationalmedicalvisitors(20052010average) ................. 37Chart3.10:Countryoforiginofallinternationalvisitors(2010) ............................................... 37Chart3.11:Expenditurebycountryoforiginformedicalvisitors(20052010average)........... 38Chart3.12:Expenditurebycountryoforiginforallinternationalvisitors(2010)..................... 39Chart3.13:Majordestinationsforinternationalmedicalvisitors(20052010average) .......... 40Chart3.14:Majordestinationsforallinternationalvisitors(2010) .......................................... 40Chart3.15:Projectionsofthenumberofinternationalmedicalvisitors.................................. 41Chart4.1:Privatehospitalbedoccupancyratesbymajormedicaltourismdestination .......... 48

TablesTable2.1:SummaryofAustraliasmajorcompetitorsinAsiaPacific........................................ 17Table3.1:Selectedsurgerycostsbycountry($US2008) .......................................................... 20Table3.2:Pricecompetitivenessofservices............................................................................. 31Table3.3:Qualityofhealthcare ................................................................................................ 32Table3.4:Governmentsupport ................................................................................................ 32TableA.1:Questionsforconsultations ...................................................................................... 71TableB.1:Summaryofthelevelandtypeofgovernmentassistancebycountry..................... 74

FiguresFigure2.1:MedicalTravellersbypointoforigin.......................................................................... 5Figure4.1:Australia'smedicaltourismsupplychain................................................................. 43Figure4.2:DistrictsofWorkforceShortageinAustralia............................................................ 50


GlossaryofacronymsABS AustralianBureauofStatisticsACHS AustralianCouncilonHealthcareStandardsAIHW AustralianInstituteofHealthandWelfareATEC AustralianTourismExportCouncilCT computedtomographyDIAC DepartmentofImmigrationandCitizenshipDOHA DepartmentofHealthandAgeingDWS districtofworkforceshortageESCAP EconomicandSocialCommissionforAsiaandthePacificFWE fulltimeworkforceequivalentIMTJ InternationalMedicalTravelJournalISQua InternationalSocietyforQualityinHealthcareIVF invitrofertilisationIVS InternationalVisitorSurveyJCI JointCommissionInternationalMATRADE MalaysianExternalTradeDevelopmentAssociationMRI magneticresonanceimagingMRO multiresistantorganismMSQH MalaysianSocietyinQualityHealthMRSA methicillinresistantStaphylococcusaureusNZ NewZealandPET positronemissiontomographyRET (Departmentof)Resources,EnergyandTourismSLA statisticallocalareaTRA TourismResearchAustraliaUK UnitedKingdomUS UnitedStates(ofAmerica)LiabilitylimitedbyaschemeapprovedunderProfessionalStandardsLegislation.DeloittereferstooneormoreofDeloitteToucheTohmatsuLimited,aUKprivatecompanylimitedbyguarantee,anditsnetworkofmemberfirms,eachofwhichisalegallyseparateandindependententity.Pleaseseewww.deloitte.com/au/aboutforadetaileddescriptionofthelegalstructureofDeloitteToucheTohmatsuLimitedanditsmemberfirms.2011DeloitteAccessEconomicsPtyLtd


ExecutiveSummaryMedicaltourismisdefinedastheprocessofpatientstravellingabroadformedicalcareandprocedures,usuallybecausecertainmedicalproceduresarelessavailableorlessaffordableintheirowncountry(Voigtetal.2010).Overthelasttwodecades,therehavebeenanumberofforcesdrivingincreasesinmedicaltravel,including(Helble2011): risingcostsofhealthcareinindustrialisedcountries; differencesinqualityandaccessibilityofhealthservices; information technology advances easing the access to information and knowledge

transfer; lowertransportcosts; reducedlanguagebarriers;and tradeliberalisation.Asa result, countrieshave increasingly investigated thepotentialeconomicbenefitsandpublichealthcostsofmedical tourism (Smithetal.2009). One studyplaces thecurrentmarketsizeatbetween60,000 to80,000 foreignersseekingmedical treatmentacrossaninternational border per year in 2008 (Ehrbeck et al. 2008). In contrast, another studyestimatedthat750,000Americanstravelledabroadformedicalcarein2007andpredictedthatthiswouldincreaseto1.6millionby2012(Deloitte2008andDeloitte2009).In2002,thevalueoftrade inthesectorwasestimatedat$US30billionforthehealthcomponentandat$US6billionforthetourismcomponentwithmorerecentestimatesofvalueupto$60billiondollarswithanannualgrowthrateof20%(Macready2007).Currently,thereisnosystemiccollectionofdatatoindicatetheglobalsizeofthismarket,andestimationsarewideandvaried.DeloitteAccessEconomicswascommissionedbytheDepartmentofResources,EnergyandTourism (RET) to conduct a scoping study on Australias viability as a medical tourismdestination.

CurrentdemandBasedonavailabledataandinformationgatheredfromconsultations,themedicaltourismmarket inAustralia is smalland scattered. In2010,visitors formedical reasons (around12,800 people) comprised only 0.23% of total visitors in Australia around 5.5millionpeople (TRA2011). However, thenumberofmedicalvisitorsappears tobegrowingatamuch fasterratecomparedtothetotalnumberofvisitors. Between2005and2010,theaverageannualgrowthrateofmedicaltouristswasestimatedtobearound14%comparedto2%foralltouristsinthesameperiod.Althoughdataquality isextremelypoor,conservativeestimates suggest that theaveragemedical visitor spent about 14 nights in Australia, spending $3,973 on airfares,accommodation and other activities (includingmedical treatment and care). Themajordestinations for medical visitors in Australia include the main capital cities (Sydney,

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Melbourne and Brisbane) and Tropical North Queensland (such as Cairns and theWhitsundays).Incontrast,theaveragevisitortoAustraliastayedforaround34nights intotalandspent$3,276on airfares, accommodation andother activities. Themajordestinations for theaveragevisitorinAustraliaweresimilartothoseofmedicaltourists.

CompetitorandsourcemarketsCurrently,themainsourcemarketsformedicaltourisminAustraliaarePapuaNewGuineaandNewCaledonia. The studyalso identified the followingpotentialsourcemarkets forAustraliaasamedicaltourismdestination: theUnitedStates(US); NewZealand(NZ);and theUnitedKingdom(UK).The major competitors for Australia in the medical tourism sphere are mainly those inSouthEastAsia,andtoalesserextent,someWesternEuropeancountriesandCentralandSouthAmerica.Theseinclude: Singapore; India; SouthKorea; Thailand; Germany; CostaRica;and Mexico.Australias competitive advantage lies in its reputation as a provider of high qualityhealthcare thatextendsbeyond the treatment to thepostoperativeand recovery stage.Australia isunable tocompeteonpricealone,especiallywithSouthEastAsiancountriesduetotheirlowercapitalandlabourcosts.HencequalityofcareinkeyspecialtyareasarecurrentlyandwillremainimportantnichesforAustralia.

KeyspecialitiesThekeyspecialitiesthatareemerginginAustraliaandwhichcouldbefurtherbuiltinordertodevelopourmedicaltourismindustryinclude: cosmetic or plastic surgery, including full body lifts following bariatric surgery and

corrective plastic surgery after complications arise from procedures done in othercountries;

fertilitytreatment,inwhichAustraliaalreadyhasaworldrenownedreputation; bariatricsurgeryorweightlosssurgery; dermatologyincludingskincancerchecksandtreatment;and toalesserextent,cardiacsurgerysuchascoronaryarterystenting.

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ScorecardcomparisonsDeloitteAccessEconomicsdevelopedanumberofscorecardscomparingAustraliawith itsmain competitor and source countries based on an analysis of the literature andconsultations.Scorecardscoveredanumberofcriteria,includingrelativepriceofservices,qualityofhealthcareandlevelandtypeofgovernmentsupport. Pricecompetitiveness:Asexpected,Australiarankspoorlyintermsofitsrelativeprice

ofhealth services compared to itsmain competitors (India,ThailandandSingapore).However,itranksthesame,ifnotbetter,thanitsmajorsourcecountries(theUK,NewZealandandtheUS).

Quality of healthcare: Australia compares favourably against its Asian competitors(especially India) based onmetrics such as prevalence of antibiotic resistance rates,stateofthehealthcaresystemandsafetymeasures.Italsoranksslightlyhigherthanitsmainpotentialsourcemarket,i.e.theUS.

Governmentsupport:Becausethesizeofthemedicaltourismmarket inAustraliahasbeenscant, the levelofgovernmentsupport toencouragedemandorexpandsupplyhas been limited. As a result, Australia does not compare well against its majorcompetitorsinthiscriteria.Thisissomethingthatwillneedtobefurtherdevelopedifamedicaltourismmarketistobedeveloped.

Overall, it isdifficult forAustralia to competeagainst itsmajor competitors,evenwithahighqualityproductoffering inmostcases. Countries likeSouthKorea,and toacertainextentSingaporeandThailand,canalsoprovideacceptablyhighqualityhealthcarebutatmuchlowerprices.Moststakeholdersacknowledgedthisasourcompetitivedisadvantage,butsuggestedthatAustraliacouldmarketintoapremiummedicaltourismnicheformiddletohigherincomeearnersineconomicallyboomingeconomiessuchasChinaandIndiawhoaresearchingforthebestqualitycareinparticularspecialties.

CurrentandfuturecapacitythesupplychainCarefulconsiderationneedstobegiventothecurrentandfuturecapacityoftheAustralianhealthsystem toaccommodatemedical tourism. Australiaalready facesseveralcapacityconstraintsandgapsinitssupplychain,aswellascommercialandregulatorybarriersandmarket failure,which are likely to impacton the capacityofAustraliasmedical tourismsupply chain to accommodate future demand for Australia as a medical tourismdestination.Capital(bedcapacity):ThemostimportantfactorimpactingonAustraliasmedicaltourismsupplychain is thecapacityofAustraliasprivatehospitalsystem. For themajormedicaltourism destinations in Australia such as Queensland, bed occupancy rates have beenincreasing towards capacity. This acts as a potential constraint on themedical tourismsupplychainasmostmedicaltouristswillcontinuetorelyontheprivatehospitalsystem.Skilled workforce: In addition, health professionals in the public sector are already inshortage in Australia. There are concerns that medical tourism will run the risk offurtheringtheworkforceshortagebyattractinghealthprofessionals frompublichospitalstoamorelucrativeprivatemarket.

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Commercialgaps:InAustraliatherearecurrentlylimitedonthegroundnetworks,suchasreferralagencies/clinicians,marketingcompaniesandcoordinatorsofmedicalrecords.Regulatory gaps and Government support relativities: Visa application processes formedical tourists are relatively slow compared to competitors (e.g. India, which has anexpedited visa process). Also, relative to competitors, Australia has lower levels ofgovernment support (e.g. India has lower import duties on medical equipment andsubsidies on prime land for health facilities; Thailand, Singapore and Korea have taxbreaks).Market failures: Lackof informationhasmeantthatawarenessofAustraliaasamedicaltourismdestination,anditscompetitiveniches,islowrelativetocompetitors.

Futuredemand,supplyandstrategicconsiderationsThe underlying drivers of medical tourism demand have always existed in Australia,includinghighqualityhealthservicesandlowcostscomparedtotheUS.However,thefullpotentialof these factorshaveyet tobe realised. Asa result,medical tourismsupply inAustraliaremainsscarceanddisjointed,withfewprovidersoperatingindividually.Australias share of the global tourism market is 0.6% by visitors and 3.3% by visitorexpenditure, butAustralias share ofmedical tourismmarket only around 0.001%. Thereasonsforthissignificantdivergenceare,primarily, lackofpricecompetitivenessandtheintentionalqualityenhancementsandgovernmentsupportachievedbycompetitors.Inthesupplychain,therehasbeenlittleforpurposeinvestmentininfrastructureandinadequatemedicalandotherhealthworkforce traininghistorically,aswellas littledevelopmentofcommercialorregulatoryfacilitators.Thesefactorshavepreventedtheemergenceofacoordinatedindustrywithsufficientcriticalmasstobegloballycompetitive.While there ispotential for thedemand forAustraliaasamedical tourismdestination togrow,themarketisunlikelytogroworganicallytosuchanextentwhereAustraliawillbegintoexperiencesignificantcapacityconstraint issuesfordomestichealthservicesasaresultofmedicaltourism.In the key specialty areas and target markets outlined above, a potentially sustainablecompetitiveadvantage isunlikelytoemergeandhasnotdonesoonasignificantscaleupuntil thispoint,unless there isadecision to intentionallyaddress thesupplychain issuessummarisedabove.Basedon themajormedical tourismmarketsgloballyandconsultationprocesses for thisscopingstudy,thepotentialbenefitsofmedicaltourisminclude: injectionofforeigncurrencyandinvestmentintoAustralia; reinvestmentintothelocalhealthcaresystem;and areductionintheexternalbraindrainofmedicalprofessionalsfromAustralia.However,thesepotentialbenefitsstemmingfrommedicaltourism inAustralianeedtobecarefullyweighedagainst therisks involved indevelopingahealthcaremarket for foreignpatients.Theserisksinclude: aninternalbraindrainofmedicalprofessionalsfrompublictoprivatehospitals;and

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the cost of healthcare being bid up by foreign patient demand, thereby prejudicinglocalresidents.

Careful planning would thus need to accompany any public sector investment in anAustralian medical tourism industry, which recognises potential limitations due tocompetitive advantages of existingmarkets (notably Thailand, India and Singapore) andensures thatworkforce and other capacity are expanded apace inAustralia. Ways thatcouldencouragedemandandsupplyinAustraliaaresummarisedbelow. Thesupplyofmedicaltourismisscarceandfragmentedandassuch,themarketitselfis

notdevelopedenoughtoattractmedicaltouristsfromothercountries.Eachindividualprovider in the supply chain needs to becomemore networked and coordinated inorderforpatientstoeasilynavigatetheirwaythroughthedifferentsteps.Thisincludesontheground networks in other countries (such as referral agencies/clinicians,marketingcompaniesandcoordinatorsofmedicalrecords).

Manystakeholdershavesuggestedthatmoregovernmentsupport(bothfinanciallyandnonfinancially)isnecessaryforthedevelopmentoftheindustry.Thisissupportedbyevidenceintheliteraturewherecountrieswithhighgovernmentsupporthaveamoredevelopedmedicaltourismindustry(suchasinSingaporeandIndia).

There is little knowledge about Australia as a medical tourism destination in othercountries.Inpart,thisisbecausethemarketinAustraliaissmall,butitisalsobecausethere isa lackofmarketingandawarenessabout theavailabilityofmedical tourismwithinAustraliasowntourismmarketingcampaign.Stakeholdershavesuggestedthatit is necessary for Australia to participate (either attend or host) in internationalmedical tourism or travel conferences to market Australia to other countries. Inaddition, representatives need to attend conferences or market in potential sourcecountries to raise awareness of Australia as an attractive destination for medicaltourism.

Giventhemedicaltourismmarketwillbeverysmallandnicheinitsproductofferings,thereneedstobesomepilotingofwhatservicesAustraliacanprovideexpertise in,and the sourcemarkets that they should be targeting. To do this, one stakeholdersuggested for Australia to trial a few procedures in which they have a competitiveadvantage andmarket them to a few potential sourcemarkets to determinewhichshouldbedevelopedintofurther.

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1 Background1.1 ScopeandstructureofthisreportDeloitteAccessEconomicswascommissionedbytheDepartmentofResources,EnergyandTourism(RET)tobuildonapreliminaryanalysisconductedbyRETonAustraliasviabilityasamedicaltourismdestination.Themainfindingsofthisstudyaddress: the current and future demand for Australia as a medical tourism destination,

identifyingindividualmarketsandspecialties;and thecapacityofAustraliasmedicaltourismsupplychaintoaccommodatethisdemand.

1.2 ThemedicaltourismindustryMedicaltourismisdefinedastheprocessofpatientstravellingabroadformedicalcareandprocedures,usuallybecausecertainmedicalproceduresareunavailableorunaffordableintheirowncountry (Voigtetal.2010). There issometimesadistinctionbetween medicaltouristsand medical travellers,wheremedicaltouristsarethosewhotraveloverseas inaddition toaplannedholiday,usually forelective treatment suchascosmetic surgeryorfertilitytreatmentwhilemedicaltravellersgenerallytraveloverseasforthesolepurposeof medical treatment, and more often than not seek more complex surgeries such ascardiacororthopaedic treatment. For thepurposesof this study, medical touristsandmedicaltravellersareusedinterchangeablyandsynonymously,referringtobothgroupsofpeople, as theybothbring economic benefits toAustralia,. However,domesticmedicaltourismandAustralianstravellingabroadformedicalcareareexcludedfromscope.Wellnesstourismisseparatetomedicaltourism,andusuallydescribespeopletravellingforthepurposesofmaintainingorpromoting theirhealthandwellbeing. Wellbeingservicesmayinclude: beauty,suchasbodyandfacialtreatments; lifestyle,suchasdetoxificationandrejuvenation;and spiritual,suchasmeditationandyogaretreats.This study focuses specificallyonmedical tourism,although it is recognised thatmedicaland wellness tourism are complementary and together form a broader health tourismsector(Voigtetal.2010).

1.3 MethodologyForthispreliminaryanalysis,deskresearchandanumberofconsultationswereconductedwithmajorstakeholders relevant to themedical tourism industry. Stakeholders includedrelevant Government departments, industry bodies in both health and tourism, privateprovidersofmedicaltourismandmedicaltourismfacilitators.Theconsultationstrategy including the listofrelevantquestionsandstakeholderscanbefoundinAppendixA.

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Thisreportdrawsontheinformationgatheredfromtheseconsultations,aswellasvariousdata sourced from relevant agencies includingTourismResearchAustralia (TRA) and theDepartmentofImmigrationandCitizenship(DIAC).Itmustbenotedthatmedicaltourismisstillinveryearlystagesandassuch,themarketinAustralia is extremely small and scattered. Hence, any conclusions drawn based onconsultationsand theavailabledataneed tobeconsideredwithcautionas themarket isnotmatureenoughtoanalyseaccuratelygoingforward.




2 Medicaltourismaroundtheworld2.1 MarketsizeOverthelasttwodecades,therehavebeenanumberofforcesdrivingincreasesinmedicaltravel,including(Helble2011): risingcostsofhealthcareinindustrialisedcountries; differencesinqualityandaccessibilityofhealthservices; information technology advances easing the access to information and knowledge

transfer; lowertransportcosts; reducedlanguagebarriers;and tradeliberalisation.Increasingly,countrieshaveinvestigatedthepotentialeconomicbenefitsandpublichealthcostsofmedical tourism (Smithetal.2009). However, there isnosystemiccollectionofdatatoindicatetheglobalsizeofthismarket,andestimationsarewideandvaried.At the lower end, the number of foreigners seeking medical treatment across aninternational border was estimated to be 60,000 to 80,000 people per year in 2008(Ehrbecketal.2008).Incontrasttothis,theDeloitteCentreforHealthSolutionsestimated750,000Americanstravelledabroadformedicalcarein2007andpredictedthatthiswouldincreaseto1.6millionby2012withasustainableannualgrowthrateof35%(Deloitte2008;Deloitte2009).In2002, the valueof trade in the sectorwas estimated at$US 30billion for thehealthcomponentandat$US6billionforthetourismcomponentwithmorerecentestimatesofvalueupto$60billiondollarswithanannualgrowthrateof20%(Macready2007).Aglobalconsumerhealthsurvey (Deloitte2011)providedsome indicationof thecurrentvolume of medical travellers across twelve industrialised and developing economies1(n=15,735). It found that theproportionof respondentswhohad travelledoutside theircountrytoconsultwithadoctor,undergoamedicaltestorprocedure,orreceivetreatmentinthepastyearvariedfromlessthan1%(inFrance,n=1,001,andPortugal,n=1000)to8%(inChina,n=1,000,andinLuxembourg,n=430).Inthesamesurvey,greaterproportionsofpeoplereportedwillingness to traveloutside theirowncountry fornecessarycare (e.g.ajoint replacement or heart surgery) aswell as elective surgery (e.g.cosmetic surgery ordentaltreatment)comparedtothosewhoactuallydidtravelformedicalcarein2010.

1 Belgium, Brazil, Canada, China, France, Germany, Luxembourg, Mexico, Portugal, Switzerland, the UnitedKingdom(UK)andtheUnitedStates(US).


2.2 ReasonsformedicaltravelThemainreasonthatpeopletraveloutsidetheirhomecountryisusuallysuperiorqualityofmedicaltreatment,technologyorcareoffered inanothercountry. However,respondentsfromtheUSalso identifiedcostasamajordriverforbothelectiveandnecessarysurgeryandthose fromCanada identified longwaiting lists fornecessarycare (Deloitte2011). Ingeneral,Voigtetal. (2010)noted that themain reasons forpatients travelling toobtainmedicalcareinclude(notinorderofimportance): costsavings; qualityofhealthcare; unavailabilityofservices,drugsandsurgerymethodsinthecountryoforigin; longwaitinglistsassociatedwithappropriatemedicaltreatment; abilitytoremainanonymousandmaintainprivacyoverseas(thisisespeciallyimportant

forthosewhoareobtainingprocedureslikecosmeticsurgery); culturalaffinityintermsoflanguage,foodandreligion; geographicalproximity;and theaddedbenefitofaholiday.TheDeloitteglobalconsumersurvey (2011)demonstratesthatperceived lowerqualityofhealth care and lower access to health technologiesmay explainwhy people choose totraveltoanothercountrytoreceivemedicalcare.Thesurveyshowedthat: In France (where less than 1% of the respondents reported travelling to another

country for medical care), 50% felt that the quality of care in their country wascomparable to thebest in theworld,and49% felt that theirphysiciansandhospitalshadaccesstothelatesttechnologiesandtreatments.

InChina,8%of respondents travelled toanothercountry formedicalcare,withonly13%believing that thequalityof theirhealthcarewascomparable to thebest in theworld.Aswell,only24%believedthattheirphysiciansandhospitalshadaccesstothelatesttechnologies.

WhilethisisnotexploredintheDeloitte(2011)survey,theabilityofrespondentstotravelformedicalcaremaybestrengthenedbytheirproximitytoothercountrieswithperceivedhigherqualitymedical care. Forexample, similar to France, less than1%ofPortugueserespondentsalso reported travelling formedicalcare. However, the reasons for thisarenot explained through their satisfaction with their health care systems quality oravailabilityoftechnology. The lowproportionofPortuguesepeopletravellingformedicalcare may be explained by their distance from countries with affordable higher qualitymedicalcareofferings,althoughthesurveydoesnotcoverdistancewillingtotravel.It is similarly unclear from the survey whether patients would be willing to travel toAustralia formedical care despiteAustralias reputation of providing high quality healthservices. Australiamaybesomewhat limited incapturing thismarketdue to itsdistancefromall thecountries involved in thesurveyand theability for thesecountries toaccesshigh quality (and potentially less expensive medical care) closer to their own borders.However,asdiscussedbystakeholders,AustraliahasadistinctadvantageincapturingsomemarketshareofUSoutboundmedical travellers,due toEnglishbeing themain language



and itssimilarculture. Onestakeholder indicatedthatAustraliawouldneedtotargetthepremiummarketofhighincomeearnerswhoaresearchingforthebestqualitycare.

2.3 GlobalcompetitorsinmedicaltourismCountries all over the world are becoming medical tourism destinations with somecapturingthemarketthroughareputationofhighqualityofferings(suchasGermany)andothers(suchasThailand)byofferingmedicaltreatmentand luxuriousaccommodationforlowprices.Asia is the major region receiving medical tourists. In 2008, McKinsey and Companyinterviewed providersofmedical travel and studiedpatientleveldata; their analysisofmedical travellers by point of origin is shown in Figure 2.1. The figure shows thatAsiacapturedover99%ofmedical travellers fromOceania,95% fromAfrica,93% fromothercountrieswithinAsia,45%fromNorthAmerica,39%fromEuropeand32%fromtheMiddleEast). Alsoofnoteweretheirfindingsthat26%ofmedicaltravellersfromNorthAmericatraveltoLatinAmericaand58%ofmedicaltravellersfromtheMiddleEasttraveltoNorthAmericaand33%ofmedicaltravellersfromEuropetraveltoNorthAmerica(Ehrbecketal.2008).

Figure2.1:MedicalTravellersbypointoforigin

Source:Ehrbecketal.(2008).Note:BasedonMcKinseyandCompanysinterviewswithprovidersandpatientleveldata.

WithinAsia,Thailand,India,Singapore,MalaysiaandSouthKoreaarestrongparticipantsinthemedical tourismdomain. In200607,Thailand,SingaporeandMalaysiaaloneearnedover$US3billionfromtreatinganestimated2millionmedicaltourists(PocockandPhua2011).LatinAmericaalsoreceiveslargenumbersofmedicaltourists,withCostaRicabeingapopulardestination forNorthAmericanpatients seeking cosmeticprocedures (suchastummy tucks) due to its lower prices and close proximity. There is no consistent




worldwide data available regarding the actual numbers of medical tourists, howevercountryspecificdatafromvariousstudiesoutlinedbelowindicateincreasingnumbers.Other countries are known for their specific specialities, such as South Africa wherecosmetic surgery is combined with luxury accommodation packages and safari tours.Hungary is also known for its high quality dental and cosmetic procedures, and theseprocedurescanbeobtainedfor4050%ofthepricepaid intheUS. Intotal,thereareatleast thirty countries competing in this sphere,withDubai recently entering themarketthroughthedevelopmentoftheDubaiHealthcareCity(Deloitte2010).

2.3.2 ThailandThailand is themarket leader in theglobalmedical tourism industry. It isestimated thatthe number of foreign patients in Thai hospitals has grown from 500,000 in 2001 to1.4millionin2006(ESCAP2009).TheTourismAuthorityofThailandNewsRoomreportedthat in2008,1.5million foreigners visited Thaihospitals generating an estimated $US6billion for theThaieconomy. On thebackgroundof thissuccess, theThaigovernment isactivelypromotingThailandshealthofferingsonitsTourismAuthorityofThailandwebsite2with the aim of doubling itsmedical tourism revenue by 2014 (France 2009). The Thaigovernment has also implemented various incentives for foreign investment intohealthcareincludingtaxholidays, landownershiprightsandpermissiontobringinforeignexpertsandtechnicians(ThailandInvestmentReview2010).Thesuccessofmedical tourism inThailand initiallygrewoutof significant revenuedropssufferedbyprivatehospitalsduringtheAsianfinancialcrisis in1997. Sincethen,withthesupport of the Thai government, Thai private hospitals have been marketing medicalservicestoforeignmarkets.One exampleof this is theBumrungrad InternationalHospital inBangkok. Thehospitaltreatsover1millionpatientsperyearwith420,000ofthosebeinginternationalvisitorsandhada turnoverofover$US317million in2010. Itsserviceofferings include luxuryhotelstyleaccommodation,internationalrestaurants,servicedapartmentsdirectlyconnectedtothehospital,access toover150 interpreters,embassyassistance, international insurancecoordinationandvisaextensionservices. Itsstrength inattractingforeigners issupportedthrough sixteen representativeoffices throughoutAsia,Africa, theMiddleEast,AustraliaandNewZealand(BumrungradInternationalHospital2010).Accordingly,byearly2011,14hospitals inThailandwere JointCommission International(JCI2011)accredited3whichrequiresthequalityandsafetyoftheirservicestobeassessedagainststrict internationalstandards(seeBox1). TheThailand InvestmentReview(2010)reportsthatforeignpatientsfromallovertheworldareattractedby: thepromiseofqualityservices; competitiveprices,with someprocedures costingas lowas10%of thepricepaid in

NorthAmericaandWesternEuropeancountries;and a wide variety of services including cosmetic surgery, organ transplants, joint

replacements, dental treatment, and positron emission tomography (PET) and

2http://www.tourismthailand.org/3http://www.jointcommissioninternational.org/JCIAccreditedOrganizations/


computed tomography (CT) scans for the detection of cancer, heart defects, braindisordersandotherconditions.

In 2006, itwas predicted that 49% ofmedical tourists travelling to Thailandwere fromJapan,withtheUS,theUK,Australia,theMiddleEastandothercountriesinSouthEastAsiaalso contributing significant numbers (ESCAP 2009). A survey conducted by the ThaiDepartment of Export Promotion found that 60% of foreigners seeking medical care inThailandwereexpatriatesinThailandorinneighbouringcountries,10%weretouristswhohappened to be ill, and the remaining 30% travelled to Thailand specifically formedicalservices(PachaneeandWibulpolprasert2006). Box1:JointCommissionInternationalAccreditationandCertificationProgramTheJointCommissionwasestablishedin1951intheUSasapatientsafetyandqualitycareaccreditationbody. It iswellknown intheUS,providingevaluationandaccreditation formore than 9,500 hospitals and home care organisations and more than 6,300 otherhealthcare organisations that provide long term care, behavioural care, laboratory andambulatorycareservices.Inaddition,itprovidesaccreditationofmorethan1,000diseasespecific care programs. In 1994, the JCI grew from collaboration between the JointCommission and Quality Healthcare Resources Inc. to provide education and consultingservices to international clients. It is now effective in over 80 countriesworldwide. In2007, JCI received accreditation by the International Society for Quality in Healthcare(ISQua).ThisprovidesassurancethatJCIsstandards,trainingandprocessesusedtosurveyhealthcare organisations meet the highest international benchmarks for accreditationentities.TheJCIwebsiteadvertisesthefollowingbenefitsofJCIaccreditationandcertification: Improvepublictrustasanorganisationthatvaluesqualityandpatientsafety; Involvepatientsandtheirfamiliesaspartnersinthecareprocess; Buildacultureopentolearningfromadverseeventsandsafetyconcerns; Ensureasafeandefficientworkenvironmentthatcontributestostaffsatisfaction; Establish collaborative leadership that strives for excellence in quality and patient

safety; Understandhowtocontinuouslyimproveclinicalcareprocessesandoutcomes.TheJCIAccreditationandCertificationProgramsincludeAmbulatoryCare,CareContinuum,Clinical Laboratory,Hospital,Medical Transport,PrimaryCare, andClinicalCareProgramcertification (standardsapplying to15specificdiseaseprogramssuchasheart failureanddiabetesmellitustype1andtype2).Accreditation under the Hospital Program includes meeting International Patient SafetyGoals,meetingrequiredstandards forAccess toCareandContinuityofCare,PatientandFamilyRights,AssessmentofPatients,CareofPatients,AnaesthesiaandSurgicalPatients,MedicationManagementandUse,PatientandFamilyEducation,QualityImprovementandPatientSafety,PreventionandControlofInfections,GovernanceLeadershipandDirection,FacilityManagementand Safety,StaffQualifications,andEducationandManagementofCommunicationandInformation.Theaveragecost fora fullhospital survey in2010was$US46,000,not includingcostoflivingexpensesforsurveyorswhileonsitee.g.transportation,mealsandaccommodation.Source:JCI(2011).



2.3.3 SingaporeIn2006,over410,000foreignerstravelledtoSingaporespecificallyforhealthcareandtheSingaporeangovernmentaimstogrowthisfigureto1millionfrom2012.Aswell,medicaltravellers toSingaporegeneratedover$US560million for theeconomy in2006 throughthe delivery of surgeries such as liver and heart transplantation, complex neurologicalprocedures,jointreplacementsandcardiacsurgery.BecauseSingaporehasalowdomesticpopulation, itsdeliveryofsophisticatedandspecialisedmedicalcareandretentionofthebestmedicalpractitioners ishighlycontingenton itmaintainingacriticalmassof foreignpatients(Singh2009).Governmentsupport for themedical tourism inSingapore isdelivered throughSingaporeMedicineandisledbytheMinistryofHealth.Itissupportedbythreegovernmentagencies the EconomicDevelopment Board that promotes new investments in the healthcareindustry; the Singapore Tourism Board which is in charge of marketing and developingoverseas referral channels; and International Enterprise Singapore, which promotes thegrowthandexpansionoftheindustry.There has beenmuch criticism aimed at Thailand and India arguing that their residentsfrom lower socioeconomic backgrounds are unable to benefit from the large incomegeneratedbymedicaltourism.Singaporehaslargelyavoidedsomeofthisbecausemedicaltourism takes place in corporatised hospitals that serve a government owned network(ATEC2008) Publiclyownedhospitalsdonotqualifyforthesametaxbreaksdesignedtoencourage private sector growth. Hence, in Singapore, revenues generated bymedicaltourism are fully taxable and thus profits can be reinvested back into the public healthsystem(PocockandPhua2011).In2008,theHealthMinisterexplainedthatoneproblemassociatedwithmedicaltourisminSingapore is the drain ofmedical expertise from the public to the private sectorwheremore attractive remuneration was available (Chee 2010). However, this problem isnoticeably lesspronouncedcompared toThailandandMalaysia. Reasonscontributing tothisaresummarisedbelow. Singapore has managed to maintain relatively competitive public salaries and as a

result,hasahigherproportionofmedicalspecialistsworkinginthepublicsector(65%)comparedtoThailandandMalaysia(25%to30%)(PocockandPhua,2011);and

Singapore has largely recruited foreign trained doctors. For example, in 2007, 400foreign doctorswere recruited from overseas in addition tomore than 200 doctorsgraduatingfromlocalSingaporeaninstitutions(SingaporeHansard,3March2008citedinChee2010).

WhiletheworkforcegapbetweenpublicandprivateservicesinSingaporeissmallerthaninThailandandMalaysia,healthcarecostshavebeenescalatingandareincreasinglypaidoutofpocketbyserviceusers. In2008,theaveragehospitalbillwasUS$795whichwas30%more than theaveragecost in2005. Methodsusedby thegovernment tocontaincostsinclude: limitingconditionsthatarecoveredunderMedisaveorMedishield; theuseofdeductiblesandmaximumcapsonclaimsandcopayments;and



The Singapore government has also allowed Medisave funds to be used at specificprivatehospitals inMalaysia in abid to further curb risingoutofpockethealthcarecosts(Chee2010).

While the costofmedical care ishigher in Singapore than in Thailandor India,mostofSingaporespatientscomefromitsneighbouringcountriessuchasIndonesia(estimatedat50% in 2005)and Malaysia (estimated at 11% in 2005) (Chee, 2010). Further afield,SingaporeisalsoattractingmedicaltouristsfromChina,theMiddleEastandtheUSduetoits affordability and clean image. Singapore now has 16 medical facilities that are JCIaccredited,including12withhospitalprogramaccreditation.

2.3.4 IndiaLikeestimatesmeasuring theglobal sizeofmedical tourism,estimatesof the sizeof theIndianmedical tourismmarketsare varied. McKinseyandCo., in collaborationwith theConfederation of India Industries, estimated that in 2005, 150,000 medical touriststravelled to Indiaand thiswasexpected to increaseby15%eachyear (ConfederationofIndian Industries and Mckinsey and Co. 2002 cited in Hazarika 2010). However, otherestimatesplaced inboundmedicaltourismatapproximatelyhalfamillionforeignpatientsby 2004 and in 200506, another report placed industry estimates closer to onemillion(ESCAP2009andGupta2008).By2012,theindustryhasbeenpredictedtogrowto$US1billion(ConfederationofIndianIndustriesandMckinseyandCo.citedinESCAP2009).MedicaltouristsinIndiacomefromtheMiddleEast,theUK,Canadaandotherdevelopingcountries, injecting $US 480 million into the economy in 2005 (The IndusView 2007).AccordingtoGupta(2008),theTajMedicalGroupreceives200enquiriesadayfromaroundtheworld and arranges packages for 20 to 40Britons permonth to have operations inIndia. India captures the market through its low cost procedures ranging from heartsurgery, joint replacements, hip resurfacing, cataract operations, cosmetic surgery,dentistryandgallstoneremoval.Indiasmainstrengths lie in its lowwages,therebymaking itoneofthecheapestmedicaltourismdestinations inAsia. Combinedwith itshighprevalenceofEnglish languageandhigh quality of medical professionals, India is one of the most popular destinations formedical tourism. Themedicalprofession in Indiaalsohas strongnetworkswith theUS,witharound30,000doctorsworkingintheUSoriginatingfromIndia(Singh2009).Thegovernmentof Indiahas introduced incentivestoencouragemedicaltourism in Indiaincluding increasingdepreciation rates (from25% to40%) to allowoldequipment tobereplaced by new equipment sooner, and expedited visas for medical tourists. Medicaltourism isviewedasanexport industry,hence lower importdutieson specifiedmedicalequipment have been introduced to encourage the sector. Prime land has also beenoffered at subsidised rates to encourage the development of health infrastructure formedicaltourists(Gupta2008).Thegovernmentisofthebeliefthattherevenuesearnedthroughmedicaltourismwillhelpimprove the capacity and quality of domestic healthcare services. However, researchshowsthecontraryisoccurring.Forexample,privatehospitalshavebeenknowntorefusetreatment for patients from lower socioeconomic backgrounds free of charge despiteagreeingtodosoasaconditionofreceivinggovernmentsubsidies(Gupta2008).Likewise,



Vijaya(2010)believesthatinthecontextofasystemwheremedicalcareismostlypaidforprivatelyoutofpocket,not through government subsidies, the incomeeffectofmedicaltourismwill not be great enough to offset cost increases in the domesticmedical caremarket. This ismainlybecauseofworsening shortages inhealthcare resourcesasmoremedicalpersonnelmovefromthepublicsectortotheprivatesector.Biddingupthepriceof health services negatively and unfairly impacts on people from lower socioeconomicbackgrounds.In addition, medical tourism has profit maximisation as its key goal, meaning that thehealthsectorisincreasinglyfocusedonimplementingadvancedtechnologiesforthosewhocan afford them and not expanding programs for those who are unable to pay. Forexample,theNationalHealthPolicynotesacuteshortages incommunityservicesmedicalpersonnelwhocan treat themainburdenofcommunicablediseaseamong thedomesticpopulation (suchas tuberculosis)andnoncommunicablediseases,suchascardiovasculardisease,diabetesandasthma(NationalHealthPolicy2002).However,thereareanecdotalreportsofanexpansioninthenumbersofexpatriatedoctorsrecruitedtoworkinhospitalscateringformedicaltouristsinprimarilysurgicalspecialities(Vijaya2010).To address quality and safety concerns, sixteen Indian hospitals are now JCI accreditedunderthehospitalprogramandoneisaccreditedundertheambulatorycareprogram.

2.3.5 MalaysiaSimilartoThailand,in1997theAsianfinancialcrisiscausedadropinthenumberMalaysianpatientsseekingcare inMalaysianprivatehospitals. Asaresult,thesehospitalsexploredan alternative offshore target market. In 2007, Malaysian hospitals treated 341,288foreignpatients,earninganestimated$US78million frommedical treatments includingcardiothoracicprocedures,cosmeticsurgery,radiotherapyandradiology(PocockandPhua2011, ESCAP 2009 and TourismMalaysia 2008). A 2006market analysis indicated thatthesepatientsweremostly from Indonesia (72%),Singapore (10%), Japan (5%)andWestAsia(2%)(U.S.CommericalService2006citedinESCAP2009).Similartotheseresults,theMalaysianTourismPromotionBoardestimated from20062008,76.7%of thesepatientswerefromIndonesia,3.4%fromJapan,2.7%fromEurope,1.8%fromIndia,1.3%1.8%fromChina, 0.5%1.0% from the Middle East and 1.1% from Singapore (Malaysian TourismPromotionBoard,20062008citedbyChee2010)Malaysia now offers modern medical facilities, large numbers of highly trained medicalspecialistswhoholdpostgraduatequalificationsfromtheUK,AustraliaandtheUS,awideuseofEnglishandcompetitivefees.Medicaltreatmentsarecarriedoutinprivatemedicalcentres that provide luxury accommodation in which the patient can recover andrecuperate. The ability to providemedical procedures at low prices isMalaysiasmaincompetitive advantage over other proximal Asian nations and the Government is nowfocusingon improving thequalityof servicesoffered inorder toattractmore foreigners(ESCAP2009).In1998,healthtourismpromotioninMalaysiabeganundertheNationalCommitteeforthePromotion of Health Tourism. This committee has strong involvement from theGovernmentbodiesincludingtheHealthMinistry,theMinistryofCulture,ArtsandTourismand other government agencies such as the Malaysian Association of Tours and TravelAgencies.ItalsohasprivatesectorinvolvementfromtheAssociationofPrivateHospitalsof



Malaysia and Malaysian Airlines. The committee carries out promotional activities incollaborationwiththeMalaysianExternalTradeDevelopmentAssociation(MATRADE)andTourismMalaysia.In2002,thetargetcountriesforMalaysiaidentifiedforpromotingmedicaltourismwere: countrieswithinadequatemedicalfacilitiessuchasIndonesia,Myanmar,Vietnamand

Laos; countrieswithhighcostsofmedical treatmentsuchasSingapore, JapanandTaiwan;

and countrieswithlongwaitinglists,i.e.theUK.Middle class citizens from theMiddle East and Chinawere also targeted. In response,MATRADEandTourismMalaysiahaveactivelypromotedhealthtourismintheMiddleEast,Myanmar, Vietnam, Jakarta and Surabaya, Sri Lanka, China, Vietnam and Cambodia(MinistryofHealth2002bcitedinChee2007).Inadditiontopromotionalactivities,theMalaysiangovernmenthassupportedthemedicaltourismindustrybyrelaxingregulationsforadvertisingmedicalservicesandestablishinganaccreditationsystemforhospitalsthroughtheMalaysianSocietyinQualityHealth(MSQH).MSQH accreditation was established in 1997 and allows hospitals to advertise agovernmentcertifiedstandardofqualityonceattainedanditissignificantlylessexpensivethan JCI accreditation (Chee 2010). However, perhaps in an effort to achieve greaterforeign recognition, sevenMalaysianhospitalsarenow JCIaccreditedunder thehospitalprogramandoneundertheambulatorycareprogram.Tofacilitatefurtherdevelopmentofthemedicaltourismindustry,theGovernmenthasalsoofferedsignificanttaxincentives.In2009,revenuesfromforeignpatientswereexemptedfrom income tax by 50% on the value of increased exports and in 2010, this rate wasincreased to 100%. In 2010, tax deductions were also announced for setting upinternational patient units and for the expenses of international accreditation. Privatehospitaloperatorscanalsoclaimdoubledeductiononexpenses incurredfromadvertisingmedicaltourismoverseas(Chee2010).

2.3.6 HongKongHong Kong is not currently a key player in the medical tourism market due to lack ofhospital capacity, high costs and a lack of private sector and government support.However, it has been recognised that Hong Kong is well placed to capture part of themedical tourism market in Asia due to its high quality healthcare services includingadvancedcancertreatmentsandChinesemedicine(Heungetal.2011).Currently,manypatientstraveltoHongKongfrommainlandChinaforhealthcaretherapiesrangingfrombasicmedicalcheckupstocancercareandEasterntherapies.HongKonghasseveral private hospitals that are internationally accredited by the UK based TrentAccreditationAssociationandby JCI. Inaddition, sinceearly2010privatehospitalshavealsobeenassessedby theAustralianCouncilonHealthcareStandards (Lee2009 cited inHeungetal.2010).



Amajorbarrier formedical tourism inHongKong is the scarcityof land, thusmaking itextremely expensive to purchase land for building more hospital infrastructure andincreasing capacity. However, theHongKong government is investigatingpublicprivatepartnershipstohelpfundinfrastructureandstaffingrequirementsnecessaryfordevelopingtheindustry(Heungetal.2011)

2.3.7 MainlandChinaMainlandChina,likeHongKong,doesnotcurrentlyhaveawelldevelopedmedicaltourismindustryanditisunknownhowmanypeopletraveltoChinatoseektreatments.Howeverit is listed by medical tourism booking websites such as Surgery Planet(www.surgeryplanet.com) and China Connection Global Healthcare(www.chinaconnection.cc) as an emerging and desirable destination for those seeking awiderangeofmedicalspecialitiesatmuch lowerpricesthan intheUS. Chinasstrengthspossibly lie in itsofferingoftraditionalChinesemedicine integratedwithwesternmedicaltechnology.Chinacurrentlyhas11hospitalsaccreditedundertheJCIhospitalprogram.China isalsohometo leadingstemcellresearchandtreatmenthospitalsandcanprovidetreatmentstomedicaltouristswhichmaybeconsideredexperimentalorwhichdonothaveregulatoryapprovalinothercountries.However,duetoalackofsafetyandefficacydata,westerndoctorsdiscourage theirpatients from seeking these treatments. OneofAsiaslargestneurologicalhospitals,TiantanPuhua inBeijing, is inpartnershipwithanAmericanmedical group and offers stem cell injections to people who have suffered a range ofneurological injuries including damaged spinal cords, strokes, ataxia or cerebral palsy.Physical therapy and traditional Chinesemedicine are also part of the treatment and atypicaltwomonthcoursecosts$US30,000to$US35,000(AssociatedPress2008).

2.3.8 JapanCurrently, the Japanese government is planning to replicate the successes of medicaltourism inSingaporeandThailand. The InternationalMedicalTravel Journal reports thatdeveloping a successful medical tourism industry is part of Japans tenyear economicgrowthstrategytoreviveitseconomy(IMTJ2010a).In2010,JapansEconomy,TradeandIndustry Ministry announced plans to launch a new joint publicly and privately fundedorganisationwiththesoleaimofincreasingmedicaltourisminJapanfromazerobase.ItisexpectedthatChina,RussiaandtheMiddleEastwillbecomeJapansmaintargetmarketformedical tourists. Japanhasonly twohospitals thathavebeen JCI accreditedunder thehospitalprogram,onein2009andtheotherin2011.TheDevelopmentBankof Japanestimates that foreigndemand formedical treatment inJapan will reach 430,000 people by 2020 and will have a value of 550 billion($US6.4billion)(TheYomiuriShimbuncitedfromTourismandAviation2010).Accordingly,the Japanese government is considering creating a medical service visa system andinvestigating the development of interpreting services at medical institutions. Due toJapanshighpercapitasupplyofmedical technologydevicessuchasmagneticresonanceimaging (MRI) and PET, yet low utilisation rates in some areas, there are plans to takeadvantage of this existing infrastructure by offering foreigners full medical checkups.Currently,somesightseeingtoursinNagasakiandFukushimaincorporatePETexaminationsand are already beingmarketed to potential customers in China (The Yomiuri ShimbuncitedfromTourismandAviation2010).



Barrierstothedevelopmentofmedicaltourism inJapanarenotonly intensecompetitionfrom nearby South EastAsian neighbours, but there are also very few doctorswho arebilingualormultilingual. There isalsoacurrentshortageofdoctorswithonly2.2doctorsper1,000peoplecompared to theOECDaverageof3.1per1,000people in2008 (OECD2011a).Inordertorecruitmoredoctors,Japanhasalreadyraisedthelimitonthenumberofmedicaltrainingplacesavailableandisspendingmoreondoctoreducation(BloombergBusinessweek2009).

2.3.9 RepublicofKoreaFollowingthesuccessesofSingaporeandThailand,theSouthKoreangovernmenthasalsoannounced its plans to promote medical tourism overseas to Japan, China, Russia and,morerecently,theUS.Thegovernmenthasdesignated5%ofhospitalbeds(or2,046beds)inthecountrys44hospitalstoforeignersseekingmedicaltreatmentinSouthKorea.Over thepast threeyears, thenumberof foreignersvisitingKorea formedical treatmenthasbeen increasingwith27,480 visitors in2008,60,201 in2009andaccording to theHealthMinistry,81,789in2010(TheKoreaHerald2010citedinKPMG2011andKorea.net2011). The governmentpredicts thisnumber to increase to140,000 in2012 (Korea.net2011).However,itisnotclearwhetherthesefiguresarerepresentativeofpeopleseekingWestern medicine only or are a broader representation of those seeking traditionalOrientalmedicineaswellasWesternmedicine. Amore conservativeMinistryofHealthestimateputsthefigureat21,338medicaltouristsvisiting in2010withthemajormarketbeing Korean Americans attracted by the availability of medical treatments at cheaperpricesthanintheUS(MinistryofHealthandWelfare2011).The Korean government promotesmedical tourism to prospective patients through theKoreanTourismOrganisationandparticipates inglobalmedical tourismconferencessuchastheSeoul InternationalMedicalTourismCongressthatwas lastheld in2009. In2010,threeAmerican subsidiariesofKoreancompaniespurchasedaKorean insurancepackageunderwhich theywillencourage350Americans to fly toKorea for the treatmentof14different conditions including cancer and heart disease (Weber 2010). The governmentalsoheldamarketingevent inDubai in2010 inanefforttoattractmoreArabpatientstoKorea for medical services and has implemented guidelines around food, religiousobservancesandclinicalcarethatcaterfortheculturaltastesofIslamicpatients.South Koreas biggest island, Jeju Island, is also in the process of creating the JejuHealthcare town,a jointprojectbetween theKoreangovernmentand theprivatesector.JejuHealthcare townaims toattract visitors fromotherAsian countries seekingmedicalcheckups, medical treatments and wellness treatments. Its location provides a majoradvantageasitisinthevicinityof18cities,allwithpopulationsofoverfivemillionpeopleandallwithin twohours flightof Jeju Island (includingHongKong,Shanghai,BeijingandTokyo). The government aims toencourage foreign investment into Jeju Island throughlocaltaxexemptions,housing,specialemploymentbenefitsfornewemployees,corporatetaxincentives,registrationtaxincentivesandpropertytaxincentives(IMTJ2009a).Currently20SouthKoreanmedicalfacilitiesareJCIaccreditedwitheightaccreditedunderthehospitalprogramand12undertheambulatorycareprogram.MedicaltouristsvisitingKoreamostly seek cosmetic surgeriesandgeneral checkups,which inKorea include fullbodyMRIscans. Koreahasalsobeenpromoting itsNationalCancerCentre,whichoffers



proton therapy for treatingprostate cancer. This isof great advantage touninsuredorunderinsured patients from theUS due to itsmuch lower price. In addition, in 2010,protontherapywasonlyavailableatsevencentresintheUS,andKoreapredictsthesewillsoonreachtheircapacity.Hence,KoreasNationalCancerCentreplanstocapturesomeofthespilloverfromthesecentres(Kram2010).

2.3.10 NewZealandIn 2010, the New Zealand Trade and Enterprises Investment team investigated theopportunities forNew Zealand thatmay exist in the development of amedical tourismindustry. Deloitte (2010) found that the current industry is very small with a limitednumberofexistingfacilitiesspecialisinginmedicaltourism.Clearbenefitsfortheeconomywerepredictedforevery$NZ1 injected intothehealthsystem,medicaltourismwouldcontribute $NZ 0.58 to the tourism sector and $NZ 2.40 into thewider economy. Theaveragemedical tourismpatientwasestimated to inject$NZ141,152perprocedure intothe economy from inputs related to themedical procedure itself and from the tourismbenefitssuchasflights,accommodationandcompaniontravel(Deloitte2010).AccordingtoATEC,theadvantagesthatNewZealandhasasamedicaltourismdestinationlie in the fact thatmost physicians inNew Zealand have received their training inNewZealand,theUSandtheUK,allofwhichhaveEnglishastheirfirstlanguage(Hingertyetal.2008). Although the costs formedical procedures inNew Zealand are greater than forprocedures inSingapore,Thailandor India, theyaresignificantly less than that in theUS.Forexample,proceduressuchasheartbypasssurgeryandvalvereplacementsarelessthan25% of the cost of the procedure in theUS (Deloitte 2010). In addition,many privatehospitalsinNewZealandareaccreditedbyQualityHealthNewZealandwhichlikeJCI,isamemberoftheISQua.Companies such as Medtral New Zealand are already marketing a wide range of NewZealands medical services such as orthopaedic, cardiac, abdominal, gynaecological,urological and plastic reconstructive surgery and in vitro fertilisation (IVF) to potentialcustomers intheUS. Medtraloffersquotationsonpackages includingtheprocedureandassociated expected hospital costs, air flights, accommodation pre and post surgery,boastingsavingsofupto50%forcustomersfromtheUS.Medtralautomaticallycoversallpatients with insurance, with coverage against unexpected prolonged hospitalisation, afollowupoperation inNewZealandandtransporthomeviaaprivatemedicalevacuationplane(Medtral2011).TheDeloitte (2010)reportpointsoutthatNewZealandhasastrongpublichealthsystemwithessentialhealthcareprovidedfreeofchargewhichwillprovidean importantfallbackoption for the domestic population in the context of rising prices formedical care. Thereportstatesthatthecurrent inflowofmedicaltourists is lowhencetherearenocurrentcapacitylimitationsinthehealthsystem.

2.3.11 UnitedArabEmiratesDubai Healthcare City became fully operational in 2010 and has been designed as aninternationalhealthcarehub. Itoffersover90medical facilities, twohospitalsand2,000healthcareprofessionals.Itbringstogetheramedicalcommunity(4.1millionsquarefeet),awellnesscommunity(19millionsquarefeet)andabusinesscommunityandclaimstobe



the largest internationalmedicalcentrebetweenSouthEastAsiaandEurope. Itprovidesluxuryoutpatientresortsintandemwithclinicalservices(DubaiHealthcareCity2011).Dubai Healthcare Citys focus on the international market is clearly articulated in itsmonthlypublication inEnglishcalledHealthMatterswhichcoversabroadrangeofhealthissues fromplasticsurgeryafterbirth (outliningproceduresavailableatDubaiHealthcareCity) to sports psychology. Its international reputation is strengthened by an academicmedical centre which consists of a University Hospital and a Harvard Medical School.Similarly,itssafetyandqualitystandardsareensuredbytheCentreforHealthcarePlanningandQualitywhichhasbeenestablishedjointlywithPartnersHarvardMedicalInternational(DubaiHealthcareCity2011).DubaialsoofferstheAmericanHospitalwhereallphysicianshaverecognisedqualificationsfromtheUSandotherwesterncountries(AmericanHospital2011).Dubai Healthcare City has been designated a taxfree zone and will therefore be tax,customanddutyfreeinordertoattractforeigninvestment(withnorestrictionsonforeigninvestment).However,theUAEisnotasabletocompeteonpricewiththeaveragecostofheartbypasssurgeryintheUAEat$44,000,comparedto$18,500inSingapore,$11,000inThailand and $10,000 in India (AMEinfo.com 2008). The availability of lower pricesinternationallyhasmotivatedresidentsintheGulfregiontotraveltoSoutheastAsia,Chinaand India for medical care. Currently, Malaysia is capitalising on the Gulfs outboundmedicaltrafficbyactivelypromotingtheirheaIthcarefacilitiesandtouristattractionswithintheUAE(Freemantle2010).Inaddition,UAEisstillfacingqualityissueswiththereporteddeath of an Emirati woman in 2008 following liposuction treatment at a health clinicdamaging their reputation (AMEinfo.com2008). Inaneffort to improve their reputationfor quality and safety, 33 hospitals in the UAE are JCI accredited under the hospitalprogram,with49medicalfacilitiesJCIaccreditedintotalforprogramssuchasambulatorycare,clinicallaboratoryanddiabetesoutpatientservices.

2.3.12 GermanySince2001,GermanyhasbecomeapopulardestinationformedicaltouriststravellingfromtheMiddleEast.TherehasalsobeenanincreaseinRussianpatientstravellingtoGermanydue to increased marketing efforts. In 2009, it was estimated that Germany attracted70,000patientsfromothercountriesforinpatienttreatment(IMTJ2010b).Plasticsurgery,orthopaedic surgery,physical therapyand treatments forheartdiseaseand infertilityareamong the most popular healthcare treatments utilised by Arabs in Germany. ArabicpeopleareattractedtoGermanyforitsofferingofhighqualitymedicaltreatmentandhighstandardsofconfidentialityandsecurity (AlaAlHamarneh2006). GermanycurrentlyhasfivehospitalsaccreditedundertheJCIHospitalsProgramandboastscomparablehealthcareservicestotheUSatmorecompetitiveprices.Germany has well developed facilitators of medical tourism who provide assistance forobtainingvisas,logisticalassistance,multilingualandtranslationassistance,accountingandinsurance services, VIP and security services, and additional travel and tourist services.Some of them have captured this flow of people from the Middle East by developingwebsitesinArabic(AlaAlHamarneh2006)..Germany currently is looking further afield at attracting US patients for bone marrowdiseases,organtransplantationandcanceroncologytreatments(VicunaandHo2009).




2.3.13 LatinAmericaAs amedical tourism destination,Mexico has amajor competitive advantage due to itsproximity to the US. Accordingly, 40,000 to 80,000 American seniors spend theirretirement in Mexico receiving heathcare and nursing home assistance (HealthTourism.com2011).Mexico canalsooffer surgeriesat25% to35%of the cost in theUS,andhenceattractsNorthAmericansmainly for cosmetic,dental,orthopaedicandbariatric surgery (Deloitte2008).InsurancecompaniesarerecognisingthepotentialsavingsinMexicoandincreasingcoverage for procedures undertaken in Latin America. For example, Blue Shield ofCaliforniacurrentlyhasanAccessBajainsuranceplanwithmorethan3,000membersfromtheUSwhoaresent toMexico formedical treatment (BlueShieldofCalifornia2011andIMTJ 2011). According to the International Medical Travel Journal, the MexicangovernmentpredictsthatMexicocanexpect650,000medicalvisitorsby2020(IMTJ2011).In preparation for the influx of medical tourists, Mexico currently has nine hospitalsaccredited under the JCI hospitals program. However, a possible barrier to thedevelopment of the industry is the persistent drugrelated crime and violence issues inNorthernMexicowhichhas reduced thenumberofUSpatients frommore than60permonthto1everythreemonthsinMonterry(IMTJ2011).NorthAmericansalsotraveltoCostaRicaformedicaltreatment involumes, leadingtoanincrease in property developments planned for healthcare facilities, recovery centres,hospicehomesandwellnessretreats.Itisestimatedthat200,000healthtravellerssoughttreatmentinCostaRicain2008,buttherearenoofficialcountsavailable(IMTJ2009b).InCostaRica,wellnesstourismanddentistryweretheoriginaldrawcards,butnowforeignersareattractedbyCostaRicaslowpricesandmostvisitfortreatmentindiabetes,cardiology,urology, fertility, orthopaedics and neurology, with the main attraction being cosmeticsurgery(IMTJ2009c).


Table2.1:SummaryofAustraliasmajorcompetitorsinAsiaPacific

Thailand Singapore India Malaysia RepublicofKorea NewZealandNumberofmedicaltourists

1.5millionin2008

410000in2006 Variedestimates:500000to1millionin200506

341288in2007 81789in2010 Estimatedtobearound150peryear.

Keycompetitiveadvantage

Lowlabourcoststhereforelowcostofmedicaltreatment.

Welldevelopedtouristdestinationwithluxuryaccommodationofferings.

14JCIaccreditedhospitals.

Governmentinvestmentandpromotionofthesector.

Knownforhighqualitycomplexneurologicalprocedures,jointreplacementandcardiacsurgery.

Reputationforhighquality.

LowercostofmedicaltreatmentthanintheUS.

CloseproximitytotherestofAsia.



Lowlabourcostsmakingitoneoftheleastexpensivedestinationsformedicaltreatment.



LowercostmedicaltreatmentcomparedtootherAsiannations.

Luxuryaccommodationinprivatehospitals.

Governmentinvestmentandpromotionofthesector

Closeproximityto18citieswithpopulationsover5millionpeople.

8hospitalsJCIaccreditedunderthehospitalsprogram.

MuchlowerpricescomparedtotheUS.Especiallyintheareaofprotontherapy.


LowercostsofmedicaltreatmentthanintheUS.

MostphysicianshavetrainedintheUS,UKandNewZealand.

Englishisthefirstlanguageofmostphysicians.

Welldevelopedandmarketedtourismofferings.

17

DeloitteAccess Commercialin


18

DeloitteAccess Commercialin

KoreaThailand Singapore India Malaysia Republicof NewZealandInitiativestoencourageindustrydevelopment

Taxholidays,landownershiprightsforforeigninvestors.

HighqualityinternationalmarketingthroughSingaporeMedicine.

Taxbreaksforprivateinvestment

Increaseddepreciationratesonoldequipment

Expeditedvisasformedicaltourists.

Lowerimportdutiesonmedicalequipment.

Primelandforthebuildingofhealthinfrastructureformedicaltouristsavailableatsubsidisedrates.

InternationalmarketingthroughMATRADE.

Relaxingregulationonadvertisingmedicalservices.

Establishmentofalessexpensiveaccreditationsystem.

Significanttaxincentives.

Internationalmarketing.

Foreigninvestmentencouragedthroughtaxexemption,housingandspecialemploymentbenefitsforemployees,corporatetaxincentives,taxincentives,registrationtaxincentivesandpropertytaxincentives

Theindustryisstillundeveloped

Futureprospects

Aimstodoublerevenueby2014

Aimstogrowto1millionmedicaltouristsby2012.

Aimstogrowto$US1billionby2012.

Recentlyintroducedsignificanttaxincentives.

JejuIslandisintheprocessofcreatingJejuHealthcaretown.

RecentgovernmentinvestigationoftheopportunitiesforNewZealandindevelopingthisindustry.


3 Demandformedicaltourism3.1 DriversofmedicaltourismdemandTravelpatternsingeneralareimpactedbyacomplexandinterrelatedsetofvariablesanddisentangling thesedrivers,particularlyonamarketbymarketbasis,canbechallenging.Dissatisfaction with their own domestic health system, unavailability or low quality ofappropriatetreatment,andaffordabilityofmedicalcare inthedomesticmarketaresomeofthebiggestdriversofpeopletravellingformedicalcare(Helble2011).Hence, the internationaldemand forAustraliaasamedical tourismdestinationwillbeareflectionofanumberofdrivers.Theseinclude: relativecostofhealthservicesinAustralia; availabilityof services (orhigherquality services),drugsor surgerymethods thatare

unavailableinothercountries; thereputationofAustraliaasasafedestinationformedicaltourism,andadestination

forhighqualityhealthservices; exchangeratesandincomelevels;and other factors including migration rules and regulations for medical treatment visas,

Australias proximity to Asia and countries experiencing rapid economic growth,conjointleisuretourismopportunities,anonymityandprivacy,andculturalaffinity.

3.1.1 RelativepriceofhealthservicesAs discussed in Chapter 2, countries such as Thailand, Singapore and India are majorcompetitors in the global medical tourism market. This is mainly due to their costadvantageasaresultoflowerinputcosts(suchaslabourandotherresources).Basedon informationgathered from the consultations,most stakeholders indicated thatAustraliaisunabletocompeteontheglobalmedicaltourismmarketbasedonpricealone.Thepriceofhealthcareformostsurgeries inAustralia issignificantlyhigherrelativeto itsAsianneighbours,asshowninTable3.2.Table 3.2 provides a summary of selected surgery costs by country. Some comparatorcountrieswere included due to theirmajor impact in the globalmarket and intentionalstrategyofmedicaltourismmarketdevelopment(Thailand,Singapore,India,Korea)whichmake them natural competitors. Some countries have been included as highincomeEnglishspeaking potential source countries since this combination plays to Australiascompetitiveadvantagemoreover,theUSisahugemarketwithhighhealthcarecostsandNZisveryproximal.CostaRicawasincludedasaproximalcompetitorforthepotentialUSmarket,andFrancedueto itsappetiteforcosmeticsurgery,whereAustraliamayenjoyacompetitivespecialtyniche.Moreover,atleastsomedatawereavailableforeachofthesecountries.


Table3.2:Selectedsurgerycostsbycountry($US2008)

USA SouthKorea

CostaRica Singapore Thailand India NZ France UK Australia

Heartbypass $130,000 $34,150 $24,000 $16,500 $11,000 $9,300 $30,500 n/a $24,544 $23,070Heartvalvereplacement

$160,000 n/a n/a $12,500 $10,000 $9,000 $30,500 n/a n/a n/a

Angioplasty 57,000 n/a n/a $13,000 $13,000 $11,000 $8,500 n/a $14,875 n/aHipreplacement $43,000 $11,400 $12,000 $9,200 $12,000 $7,100 $15,000 n/a $14,000 $16,470Kneereplacement $40,000 $24,100 $11,000 $11,100 $10,000 $8,500 $14,000 n/a $16,625 $13,902Hysterectomy $20,000 $12,700 $4,000 $6,000 $4,500 $6,000 $6,000 n/a n/a $4,922Spinalfusion $62,000 n/a n/a $9,000 $7,000 $5,500 n/a n/a n/a n/aBreastenlargement n/a n/a n/a n/a $3,022 $2,972 n/a $4,947 $7,613 $5,136Facelift n/a n/a n/a n/a $5,028 $3,750 n/a $5,777 $11,813 $6,675Liposuction n/a n/a n/a n/a $3,245 $2,476 n/a $3,717 $5,250 n/aSource:Voigtetal(2010);Deloitte(2010);Tattara(2010);TreatmentAbroad(2008).Note:Comparisonsarein2008$USsandtheAustraliannominalexchangeratehasappreciatedagainstthe$USsubsequently,sopricecompetitivenessmayhaveerodedsubsequentlysomewhat,atleastfortheUScomparison.Inpurchasingpowerterms,theappreciationhasnotbeenasmarkedandthechangingexchangeratewouldalsoaffecttherealcostpersurgeryineachcountryduetoimportsofmedicalsurgeryinputitems(e.g.USproducedmedicaldevicessuchasstentsforheartsurgery).Henceitisnotclearexactlyhowcostrelativitiesmayhavechangedsince2008.

20 Deloitte Access Commercialin


Table 3.2 shows that the cost of obtaining healthcare in Australia is still considerablycheapercomparedtotheUS.CombiningthiswiththefactthathealthcarecostsintheUScontinuetorise(GanandFrederik2011),manystakeholdersrecognisethatAustraliamaybeabletotargetNorthAmericanpatientsformedicaltreatmentbasedonlowerpricesandadeveloped,Englishspeakingeconomy.Medical tourists from theUS are predicted to grow from 750,000 travellers in 2007 to1.6millionby2012withanestimated35%annualgrowthrate (Deloitte2009). SpendingonmedicaltourismbyUSpatientsisprojectedtodoublefrom$40billionperyearin2010to$80billionperyearby2017 (Deloitte2009;Deloitte2008). On topof this, insurancepremiumsare increasing intheUSand in2008,around46millionpeoplewereuninsuredand29%ofthosewhohadinsurancewereunderinsuredwithsuchlowcoveragethattheyoftenpostponedmedicalcaredue tocosts (DeNavasWaltetal.2009;Consumer reports2007citedinGanandFrederick2011).In addition, US health insurance providers, especially those involved in company basedhealth schemes, are looking at offshore medical care options in an effort to offsetescalating healthcare costs (ATEC 2008; Deloitte 2009). For example, Deloitte (2009)identifiedfourinsurancecompaniesintheUSwhowerepilotingmedicaltourismcountriesandsendingemployeestoApolloHospitals in India,BumrungradHospital inThailandandhealthfacilitiesinMexico.Inaddition,WestVirginiaandColoradobothattemptedtoenactlegislationtofiscallyincentiviseemployeestoobtainmedicalcareormedicalproceduresinforeignhealthcare facilities throughmeans suchaswaivingcopaymentsanddeductiblesandpaymentforroundtripairfares(Deloitte,2009). Neitherofthebillscametofruition,buttheyshowthatstatelegislatorsintheUSarelookingatmedicaltourismasapotentialalternativetohealthcareintheUSwhichisbecomingprohibitivelyexpensive.

For these reasons, there is potential for patients from theUS to become astronger source market for Australia in the medical tourism industry givenAustraliashealthservicescostarestillmuchcheaperthanintheUS.

3.1.2 QualityandavailabilityofhealthservicesManyof thestakeholderscommented thatwhileAustraliacannotcompetewithmanyoftheSouthEastAsianandSouthAmericancountriesoncost,itscompetitiveadvantageliesin its reputationasadestination forhighqualityhealthcare. Twostakeholders indicatedthatAustraliaprovidesveryhighqualitypostoperativecareandrecovery.EachStateandTerritory inAustraliaprovides legislationandpoliciesregardingsafetyandquality standards for public and private hospitals within their jurisdiction. It is notmandatory in Australia for hospitals to achieve accreditation. However, the AustralianInstitute of Health and Welfare reports that, in June 2010, 85% of all public hospitals(accounting for93%ofpublichospitalbeds)and56%ofprivatehospitals (accounting for84% of private hospital beds) were accredited for quality and safety standards (AIHW,2011). Accreditation isrecognisedthroughseveralbodies includingtheAustralianCouncilon Healthcare Standards (ACHS) and the Quality Improvement Council which are bothISQua accredited (ISQua, 2011). Hospitals can also be certified as compliant with theInternationalOrganizationforStandardizations(ISO)9000qualityfamily(AIHW,2011).In



general, amajority of Australian hospitals are currently providing a high quality servicewhichmeetsinternationallyrecognisedstandards.Ehrbecketal. (2008) found thatqualitydrivesmostof todaysglobalmarket formedicaltravelwith40%ofallmedical travellers seeking theworldsmostadvanced technologies(Ehrbeck et al. 2008). For example, hip resurfacing, a less invasive alternative to hipreplacements,wasnotavailable intheUSuntil2006although itwasavailable inCanada,EuropeandsomeAsiancountries(FoodandDrugAdministration2008cited inHopkinsetal.2010). A further32%ofall travellerscitedbetterqualitycare formedicallynecessaryprocedures as their reason for travel from their own countrieswhich are usually in thedeveloping world (Ehrbeck et al. 2008). For example, Singapores reputation for highquality medical facilities andwell trained doctors attractedmore than 370,000medicalpatients in 2005 and in 2004, thesepatientsweremainly from Indonesia,Malaysia, theMiddleEastandtheUS(ESCAP2009).The metrics used for comparing the quality of health services in Australia against itscompetitorsandsourcecountriesinclude: safetymeasures including hospital infection rates and readmission to an emergency

roomorhospitalduetocomplicationsfromsurgery; bacterialandantibioticresistancerates;and stateofthehealthcaresystembasedonmedicalworkforceandmedicaltechnologies.SafetymeasuresTheCommonwealthFundInternationalHealthPolicySurveyofSickerAdults(Schoenetal.2008)asksaseriesofquestions tocollect informationabout theirexperienceswith theirhealthcaresystem.Thefollowingcountriesareincludedinthesurvey: Australia; Canada; France; Germany; Netherlands; NewZealand; UK;and US.Tocomparethequalityofsurgeryacrossthesecountries,twometricsareused: theproportionofsurveyedhospitalisedpatientswhoreportedaninfectioninhospital;

and theproportionofsurveyedpatientswhowerereadmittedtohospitaloranemergency

roomforcomplicationsarisingduringrecovery.Chart3.1showsthecomparisonbetweenAustraliaandothercountriesbasedonthesetwometrics.OfsurveyedhospitalisedpatientsinAustralia,7%reportedaninfectionwhiletheywere in hospital, and 11% were readmitted to hospital or an emergency room fromcomplicationsduringpostoperative recovery. Forhospital infections,Australia is rankedequal fifth, outperforming New Zealand and the UK. For readmissions due to



complications,Australia is rankedequal fourthwithNZ,behind theUS,NetherlandsandCanada.

Chart3.1:Metricsofqualitybycountry

02468101214161820

Australia

Canada

France

Germany

Nethe

rlands NZ

UK US

%

Hospitalisedpatients reportinginfectioninhospitalReadmittedtoHospital orWenttoERfromComplicationsDuringRecovery

Source:CommonwealthFund(2008).

BacterialandantibioticresistanceratesMedical tourismmay increase the riskofacquisitionandcomplicate themanagementofmultiresistant organisms (MROs), especially those travelling to developing countries forsurgery.MROsareresistanttoanumberofdifferentantibioticsandcauseinfectionsthatare difficult to treat. CommonMROs thatmay affectmedical tourists are summarisedbelow. Data forMROprevalence across countries are scattered, incomplete andoutofdate. New Delhi metallobetalactamase1 (NDM1) has been strongly associated with

healthcarereceivedontheIndiansubcontinent.IthasbeenshowntohavetransferredtoothercountriesincludingUS,Australia,Canada,JapanandsomeEuropeancountries(Rogersetal2011).

MethicillinresistantStaphylococcusaureus(MRSA) isveryprevalent incountriessuchas Japan,HongKongandSingapore (seeChart3.2). Thismaybeduetoanumberoffactors such as people being able to purchase antibiotics over the counter atpharmacies,theirproximitytoSouthEastAsiancountrieswhereprevalenceishigh,andantibioticprescribingpractices.

The presence of strains of MRSA that were heterointermediately resistant tovancomycin (hVISA)hasbeen found in Japan, India,SouthKorea,Singapore,ThailandandVietnam(Songetal2004);

Penicillin resistance rates are very high in Japan, Taiwan, Korea, Hong Kong andVietnam.Singapore,SriLanka,ThailandandAustraliahavemoderatelyhighrates.



Chart3.2:PrevalenceofMRSAinAsiaPacificregion

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Australia

Japan

Taiwan

China

HK

Philipp

ines

Singapore

SthA

frica

%

Allsites Blood

Source:Belletal(2002).Note:Bloodrepresentsbloodculturesthatweretested,whileallsitesincludebloodstreaminfections,pneumonia,woundinfectionsandurinarytractinfectionsthatweretestedinhospitalisedpatients.

Australiahasanadvantageintermsoftheprevalenceofbacterialandantibioticresistancedue to itsgeographic isolationand itsantibioticprescriptionpractices. It is ranked fairlyhighlyintheAsiaPacificregion.CapacityofhealthcaresystemsAustralia fareswellagainst itscompetitors for inboundmedical touristswhencomparingthecapacityoftheirhealthcaresystemsaccordingtomedicaltechnologydensity,physiciandensityandhospitalbednumberdensity.However,thefollowingdatapresentedneedtobe framed in thecontextof thecapacityofAustraliaspublicandprivatehospitalswhichare approaching capacity and Australias medical workforce shortage which particularlyaffectsregionalAustralia.BoththeseissuesareexploredfurtherinSection4.3.AsdemonstratedbyChart3.3,AustraliahasgreaternumbersofCTandPETscannersper1,000,000population than itsmaincompetitors in theAsiaPacific regionnotablyNewZealand, Thailand, the Philippines andMalaysia (data for Singapore and Indiawere notavailable). Australia also outcompetes these countries in terms of density of MRImachines, althoughNew Zealand has a slighter greater density ofMRIs. Australia alsodemonstratesacompetitiveadvantagefurtherafieldrecordinggreaterdensitiesacrossallthreetechnologiesthanCostaRica,MexicoandSaudiArabia(informationforGermanywasnotavailable).OtherthanSouthKoreaandJapan,Australiasdensityofdiagnosticmedicaltechnology suggests thatAustraliamaybebetterplaced thanmostof its competitors tooffercomprehensivemedicalcheckupsandhighqualitydiagnostics.



Chart3.3:Medicaltechnologyper1,000,000people(200510*)

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Australia

SthK

orea

CostaR

ica

Thailand

Malaysia

Japan

Phillipines

Mexico

Saud

iArabia

NZ

France

OECD

average

MRI CTscanners PETscanners

No.per1,000,000

Source:WHO(2011a);OECD(2011a);OECD(2011b).*Variousyearsinthisperiodfordifferentcountries,dependingondataavailability.

Chart3.4demonstratesthatAustraliahasahigherdensityofphysiciansthanitscompetitorcountries, except Germany, in the medical tourism industry. This may indicate thatAustraliaisbetterplacedthanitsAsiaPacificneighbourstoprovidecomprehensivemedicalcare,especiallyincombinationwithitshighdensityofmedicaltechnologyasdemonstratedabove. Whilethe lowdensityofphysicians incountriessuchas IndiaandThailand isnotnecessarily an indication of physician accessibility in the private sector, which is wheremedical touristswould be seeking treatment,medical tourists may consider that a lowoverallphysiciandensity in a country thatheavilypromotesmedical tourismmaybe anindicatorofpoorhealthcareequityamongthelocalpopulation.



Chart3.4:Physiciansper1000people(200410*)

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Australia

India

SthK

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Singapore

Thailand

Malaysia

Japan

Phillipines

Mexico

China

Saud

iArabia

NZ

Germany

France

OECD

average

Physicians per1,000

Source:WHO(2011b);OECD(2011a);OECD(2011b).Note:DatafromWHOisrepresentativeofphysiciansoverallanddatafromOECDisrepresentativeofpractisingphysicians. Hence, OECD data used for Australia, South Korea, Japan, New Zealand andGermany may beslightlyunderrepresentativewhencomparedtoWHOdatausedforothercountriesrepresentedhere.*Variousyearsinthisperiodfordifferentcountries,dependingondataavailability.

ComparedtomostofitscompetitorsintheAsiaPacificregion,Australiahasmorehospitalbedsper10,000headofpopulation.JapanandSouthKoreahaveafargreaterhospitalbedcapacitywithJapandemonstratingnearlyfourtimesthehospitalbednumberspercapitaofAustralia. However, Australia has a far greater capacity of hospital beds to serve itsdomesticpopulationthancompetitorsIndia,Singapore,MalaysiaandThailand.Similartophysiciandensity,thismayindicatethathealthcareequityinthelocalpopulationsofthesecountrieswillbeworsenedby increasingflowsofforeignersseekingmedicaltreatment inthese countries. It alsomaybe an indication that these countries are reaching capacitylimitshenceAustraliacouldcapitaliseontheirmedicaltouristoverflows.



Chart3.5:Hospitalbedsper10,000population(200009*)

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CostaR

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Singapore

Thailand

Malaysia

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Phillipines

Mexico

China

Saud

iArabia

NZ

Germany

OECD

average

Source:OECD(2011b);WHO(2011c).*Variousyearsinthisperiodfordifferentcountries,dependingondataavailability.

3.1.3 Availabilityofservices,drugsorsurgerymethodsPennings (2002) summarises the reasonswhypatientswould traveloverseas for servicesthatarenotaccessibleintheircountryoforigin: a treatment may not be available in the origin country because there is a lack of

expertisecomparedtoothercountries; a treatment is forbiddenby law formoralreasons inorigincountry (as in thecaseof

abortionoreuthanasia); atreatmentordrugisnotavailablebecauseithasnotyetreceivedapprovalbyofficial

pharmaceuticalortherapeuticalorganisations;and certainpatientsmaynotbeeligibleforsometreatments,forexample ifthepatient is

toooldforreproductivetreatments,orthepatientistooyoungforbariatricsurgery.Voigtetal. (2010)highlightssomeofthehighlyspecialisedandnichemedicalproceduresthatsomemedicaltourismcou

medicaltourismreport final

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