hillman r0087 final1

7/28/2019 Hillman R0087 Final1

1/15

Low cost and no waiting period: Key reasons to travel

overseas for medical tourism

Abstract

Medical tourism is a global phenomenon and the number one growing niche segment of the tourism

industry. It is a sub-set of health tourism. There are many reasons why people travel to another country

and become medical tourists; such as high health and insurance costs, long waiting lists, and the absence

of the latest medical procedures and technology in their home countries. In addition, low surgical cost,

latest medical technology, no waiting period, internationally accredited medical facilities and qualified

staff in Thailand, India, Malaysia, Mexico and Poland make them attractive destinations for medical

treatment. Thus, increasing numbers of people are making an informed personal healthcare decision to

obtain the best outcome at an affordable price with no waiting period. Multiple regression analysis was

used to test the two hypotheses. This research provides insights into the importance of two key factors

such as cost and waiting period in the process of making a decision to travel abroad for medical treatment.

Research findings suggest that low surgical cost and no waiting period for elective surgery, compared to

their country of origin is the key driver for potential patients to significantly increase the demand and

travel overseas for medical procedures to improve their health and wellbeing.

Key words: medical tourism, cost, waiting period, healthcare, globalisation.

Introduction:

According to Stanley (2010, p. 22), History shows that people will always be willing to travel in order to

relieve pain, save money and expand their levels of comfort. It should be no surprise then that this

industry is poised to capitalise on our contemporary situation by simply providing a service that has been

sought throughout antiquity. This can also be applied to medical tourism which is not a new practice.


2/15

2

The affluent and rich from Asia and developing countries travel to the USA, UK and Europe in order to

receive advanced specialised medical treatment and services. Medical tourism, where patients travel

overseas for alternative therapies, diagnostic treatment, complex invasive elective and cosmetic surgeries

has grown rapidly in the past decade, especially for various invasive treatments such as orthopaedic,

heart, cancer, liver transplant, reproductive, dental and cosmetic surgeries. Medical tourism has been

widely acknowledged by academic scholars in the twenty first century (Forgione & Smith 2007;

Bookman & Bookman 2007; Horowitz & Rosensweig 2007; Hansen 2008; Healy 2009; Brotman 2010;

Heung, Kucukusta & Song 2010; Lunt, Hardey & Mannion 2010; Cormany & Baloglu 2011).

Asian countries like Thailand, India, Malaysia and Singapore are the dominant players, and have sought

to enter the market as an economic development strategy, not only due to high-tech medical expertise and

attractiveness of these countries, but mainly because of the low cost, no waiting period and international

accreditation (Horowitz & Rosenweig 2007; Bookman and Bookman 2007; Carruth & Carruth 2009;

Medhekar 2010; Hopkins, Labonte, Runnels & Packer 2010). These Asian countries are providing first

world quality, internationally accredited healthcare facilities and medical professionals through the Joint

Commission International (JCI), at third world prices. This growing popularity and growth of the

Medical Tourism industry has also been made possible due to globalisation of healthcare service

provision (Awadzi & Panda 2006; Herrick 2007; Cormany & Baloglu 2011).

The six key reasons why patients demand and travel abroad for medical treatment are: (a) no waiting

period, (b) affordability; with savings of 50 to 70 % in medical cost/procedures, which includes post

operative care, (c) worlds best state of the art medical facilities (d) qualified and experienced surgeons

and nursing staff, (e) longer hospital recuperation period with 24 hour skilled nursing care and assistance,

and (f) exotic holiday destination (Deloitte 2008; Marsek & Sharpe 2009; MTA 2010, AMTA 2010;

RNCOS 2010). The main purpose of this study was to examine the predictive relationships between two

key factors (low cost and no waiting period) and the decision to travel to another country for medical


3/15

3

treatment.

Literature Review

Medical Tourism

Medical tourism is a number one niche tourism segment. Medical tourism is an economic activity that

involves trade in services from two distinct sectors of the economy - medical/healthcare and tourism

(Bookman and Bookman 2007). Jones and McCullough (2007) have described medical tourism as

international economics in action (p. 1077), as patients seek cheaper and state of the art healthcare in

medical treatment in collaboration with the tourism industry for foreign /international patients in countries

such as Thailand, India, Mexico or Poland. Medical tourism is identified as a subset of health tourism by

Carrerra and Bridges (2006). Thus, the global growth of the medical tourism phenomenon is based on two

factors: (a) the number of foreign medical tourists travelling and (b)the amount of revenue they generate

in terms of foreign exchange (Chanda 2001; GOI 2008). According to Carrerra and Bridges (2006), at the

international level, the health and medical tourism industry is sustained by 617 million individuals with

an annual growth rate of 3.9% annually and worth US$513 billion.

Thus, in the twenty-first century it is obvious that foreign medical tourists, mainly from developed

countries, are travelling to developing countries for medical care that is not only non-invasive in nature,

but also invasive using the latest technology and surgical procedures. The comparative costs of medical

treatment and surgery are very important factors, together with no waiting period, that patients consider

before they make an informed decision to travel overseas for medical treatment. The first world quality of

care and international accreditation protects them from any kind of post-surgical problems and infections

after surgery. Most of the recent academic research is either conceptual or based on industry reports.

However, medical tourism and hospital websites, supply patient blogs, which outline the reasons for

travel abroad for medical treatment (Deloitte 2008; Marsek & Sharpe 2009; RNCOS 2010).

Given the rational consumer assumption in economics, the key purpose for the patient to travel abroad is


4/15

4

for obtaining complex medical treatment/surgery. There are various determinants of demand which can be

adapted and applied to medical supply chain tourism related services from any economics textbook

(McTaggart, Findlay & Parkin 2010). The main aim of the patient is to purchase a medical service which

could be a combination of diagnostic, non-invasive and invasive surgery for improving ones health and

wellbeing in another country. Therefore, people make informed decisions based on low cost, no waiting

period, privacy, destination, quality and reputation of the hospital. This forms part of the entire medical

travel package. For our study we have focussed on two factors that determine and influence the demand

for medical tourism: cost and waiting period.

Cost

Individuals make choices about what to consume in terms of goods and services based on cost or price.

Medical Tourists make informed economic choices by making cost comparisons of treatment and travel

costs to another country for medical treatment/surgery. They also make the best alternative use of their

resources to improve their health and overall wellbeing. The law of demand clearly states that the lower

the price of a good or service, the higher the quantity of demand will be per customer who is willing and

able to buy the service/treatment, holding all other factors constant (McTaggart, Findlay & Parkin 2010).

Consumers are trying to maximise their utility where the benefit they receive from travelling overseas for

medical treatment is greater than the cost incurred in terms of improving their health. This might involve

combining the procedure with a holiday at an exotic destination where the treatment takes place such as

India or Mexico.

According to Deloitte (2008) in a survey of US Health care consumers report, for consumers in search of

value, and medical treatment in Thailand, India, and Singapore can cost as little as 10 percent of the cost

of comparable care in the United States (p.4). The Deliotte report also mentions that the price usually

includes the cost of airfare and accommodation in a resort. The consumers were primarily concerned

about the price, quality of care and safety (p.8). Gupta (2004) posits that the provision that patients are

increasingly looking for is cost effective private medical care in elective, diagnostic, cosmetic surgery and


5/15

5

alternative therapies. This requires medical intervention with the help of modern technology, where the

patient has to travel out of their home country for treatment and may also engage in tourism. In 2007,

450,000 thousand patients from foreign countries were treated in India compared to Thailands 1200,000.

The key reasons for the US, UK and other European countries patients to visit India are low cost

procedures, absence of waiting lists, best quality treatment, accredited with JCI, clinical and Para-medical

talent, and third party intervention through health insurance (AMTA 2010; JCI 2010).

Table 1: Cost Comparison for Selected Surgeries

Countries Heart Bypass Hip Knee Hysterectomy

Australia $33,340 $23,800 $20,089 $7,113

USA (US$) $130,000 $43,000 $40,000 $20,000

India (US$) $9,300 $7,100 $8,500 $6,000

Thailand $11,000 $12,000 $10,000 $4,500

Singapore $16,500 $9,200 $11,100 $6,000

Korea (US$) $34,150 $11,400 $24,100 $12,700

Source: American Medical Association (2010)

Note: With regard to Australian surgical procedures as listed above, many costs are generally covered by

private health insurance when undergone in Australian hospitals; however Australian private health

funds will not cover overseas medical costs.

In Australia, a heart bypass surgery can cost up to AUD$33,340. In India's best hospitals it could cost

between $9,000 and $10,000. The savings for a total knee replacement in India are around 45 per cent,

according to Medibank private. A heart-valve replacement costing US$200,000 or more can cost only

US$10,000 in India, including return airfares and a holiday package. In many cases, these cheaper

packaged prices include the airfares, accommodation and even sightseeing and tour services to and from

the airport, taking care of everything from the time of arrival until departure (Bumrungrad International

Hospital (2010). Given the cost comparisons of medical surgery between countries, as well as the more

increasingly available information regarding accreditation of medical facilities, it is becoming easy and


6/15

6

affordable for patients to judge and compare the standards of medical care, or make decisions about

travelling abroad for medical treatment. It is not that easy for the patients to judge the potential medical

risks, compare quality of care, or make decisions about appropriate treatment without a doctors guidance,

or by just surfing the internet.

Hypothesis 1-Low surgical cost and affordability will influence the demand for medical tourism.

Waiting Time

Waiting time from the point of referral to actual treatment for elective surgery and other complex

surgeries in developed countries is an important issue (Duckett 2005). For example, in the case of

Australia, the government does not have any policy to reduce the waiting time for surgery and has

provided patients with the option of public and private hospitals. A subjective approach is used where

patients are classified into urgent, semi-urgent and non-urgent, based on their need of treatment (Willcox

& Seddon et al. 2007) According to an OECD report by Hurst and Siciliani (2003), waiting time for

elective surgery may vary from country to country in terms of the definition of waiting period and

aggregation method. For their study they have defined waiting time in two ways. (1) the waiting time

between specialist assessment and the time the patient is admitted for surgery (inpatient waiting time),

and (2) A more comprehensive measure of waiting for surgery would cover the whole period from the

time that a GP refers the patient to a specialist to the time the patient is admitted for surgery. That

includes any delay between a GP referral and the specialists initial assessment (outpatient waiting time)

and any delay between the specialist assessment and the surgical treatment (inpatient waiting time)

(Hurst & Siciliani (2003, p.10). A specialist may require diagnostic tests or procedures to be carried out

on the same day as the patient visits the specialist or it may take longer. Thus, the inpatient waiting time

is completed when the treatment is received. They have further differentiated between the waiting times

of the patient admitted for treatment from the waiting time of the patient on the list. According to

Salant (1977) and Carlson and Horrigan (1983), the average waiting time of the patients on the list is the

same as the average waiting time of the patients admitted for treatment in western or developed countries.


7/15

7

Hypothesis 2: No waiting period for an elective surgery, will significantly increase the demand for

medical tourism.

The key reasons for medical tourism not only include the high costs of medical treatment in a developed

country, non availability of certain medical treatments in the home country due to regulations, a desire for

privacy in medical treatment combined with an alternative therapy, and a vacation at an exotic

destination; and the long waiting period for medical surgery from a system which is already over

congested (Connell 2006; De Arellano 2007; MacReady 2007). That is, the speed of obtaining the surgery

is very vital for the patient who is suffering in pain. The Second hypothesis relates to the waiting period

where the people have to wait in a queue for 3 to 12 months in the private sector, or over 6 years in the

public system for any elective surgery in developed countries. Given the complexity of medical problems,

patients are looking for, not only cost effective, but speedy diagnosis and medical surgery, with a

minimum or no waiting period. This is because in the developed countries such as USA, UK, Canada, or

Australia, the healthcare system is over crowded, and a shortage of skilled specialist doctors and qualified

nurses has resulted in long queues for complex elective surgeries. A patient may have to wait for one year

or more in Canada or the UK for elective surgery, compared to a week or days in major medical tourism

destinations.

Research Methods

Research process and sampling: The survey instrument consisted of three parts: (a) a standardised

introduction, (b) questions which reflected the specific research interests of the university and community

researchers participating in the study and (c) demographic questions. The survey was titled community

attitude towards medical tourism. The study variables and questions for the topic were constructed (part-

b) based on the literature (Deloitte 2008; Marsek & Sharpe 2009; RNCOS 2010). A random selection

approach was used to ensure that all respondents had an equal chance to be contacted. From the target


8/15

8

population, three samples were drawn to cover Central Queensland: Rockhampton Regional Council Area,

Mackay Regional Council area and the remainder as Other Central Queensland. Table-2 shows the

breakdown of the sample by respondent gender and sub-sample area.

Table 2: Sample Size by Region and Gender

Gender RRC MRC Other CQ Total Sample

Count & % Count & % Count & % Count & %

Male 222 = 50.9 199 = 47.7 214 = 49.1 635 = 49.3

Female 214 = 49.1 218 = 52.3 222 = 50.9 654 = 50.7

Total 436 = 100 417 = 100 436 = 100 1289 = 100

The profile was broken down by the following age groups: 18 24 years, 25 34 years, 35 44 years, 45

54 years, 55 64 years, and 65 or older. There was over sampling in the 4565+ age categories

(particularly 65+) and under sampling in the under 45 age categories.

The 2010 Central Queensland Social Survey (CQSS) was administered to (N=1289) respondents in

Central Queensland through Computer-Assisted Telephone Interviewing system (CATI) installed on a

local area network at the Population Research Laboratory (PRL). The average length of time for each

interview was 29 minutes. Following the pre-test, an electronic questionnaire was modified for the main

data collection. The sample database was also loaded into the CATI system that allocates telephone

numbers to the interviewing stations. The question text and instructions were presented on the computer

screen to the interviewer who asked the questions to the respondent over the telephone and then entered

the given responses into the computer. Since the interviewers keyed the responses directly into the

computers, a continual monitoring of the closed-ended responses was possible. The interviewing was

conducted over a period of 4 weeks in 2010. If the interviewers were unsuccessful in establishing contact

on their first call, a minimum of five call back attempts were made. Upon making contact, interviewers

identified themselves and then asked the screening questions for selecting the respondent.


9/15

9

Statistical Procedures

Multiple regression analysis was used to test the hypothesis to see if there is a predictive relationship

between one independent variable and a criterion, dependent variable (Ho, 2006). Multiple regression

analysis was used because it is a multivariate statistical technique used to examine the relationship

between a dependent variable and several predictors (Hair et al., 2010). Stepwise multiple regressions

were performed to predict the relative contribution of cost, waiting time and privacy on the dependent

variable decision to travel overseas to undertake medical treatment. Hair et al. (2010) state that multiple

regression analysis provides a means of objectively assessing the magnitude and direction of each

predictors relationship to its dependent variable.

Scales: The surveys assessed relationships between different factors influencing the decision to travel

abroad for medical treatment. The scales used for this studys variables were adapted for this study. Some

items in the privacy scale measured perception of convenience, anonymity, and confidentiality of medical

procedures and services. The final survey comprised Likert-scale items, and nine demographic items. The

Cronbachs Alpha for the cost scale in the current study was 0.757, for the waiting time scale was 0.86,

and 0.812 for the demand for medical tourism scale.

Findings

The study was designed to quantitatively test two key hypotheses (cost and waiting time) and therefore

data were collected using self-administered online surveys. The survey was administered to a general

population in Central Queensland Australia. The target population designated for telephone interviewing

was all persons 18 years of age or older who, at the time of the survey, were living in a dwelling unit in

Central Queensland that could be contacted by direct-dialled, land-based telephone service. Out of the

total research sample (N=1289), Australian-born, were 88.7 %, non-Australian were 11.3 %, and most of

the respondents were reasonably well educated (88% high school/vocational education, 13% graduate and

28.5 with post graduate education). About 62.5 % were employed, almost 30 % were pensioners,


10/15

10

approximately 41.8 % of the respondents had an annual income of more than AUS$ 52,000, 24.7% had

income of more than AUS$ 100,000 and 34.8 % did not report any income. About 69.7% of the

participants were married. Hypotheses one and two were tested using stepwise models which were

generated at the p


11/15

11


12/15

12

limitations of the research include that community attitudes towards medical tourism were explored by

administering the questions to potential medical tourists by phone, rather than surveying participants face-

to-face. Future research will focus on identifying the actual medical tourists, and conducting firstly a

qualitative interview followed by a questionnaire, to explore if they have considered cost, waiting time,

privacy, quality amongst other factors, as the key reasons to demand medical treatment abroad.

References

AMTA (2010), The Asian Medical Tourism Association (AMTA) http://www.health-

tourism.com/medical-tourism/conferences/, (cited on 12-2-2009).

Anderson, G. F., Hussey, P. S., Frogner, B. K., & Waters, H. R. (2005), Health Spending in the United

States and the Rest of the Industrialised World Health Affairs 24(4), 903-914.

Awadzi, W. & Panda, D. (2006), Medical tourism: Globalization and the marketing of medical services,

Consortium Journal of Hospitality & Tourism, 11(1), pp: 75-81.

Bookman, M. Z. & Bookman, K. R. (2007), Medical Tourism in Developing Countries, New York,

Palgrave Macmillan.

Brotman, B. A. (2010), Medical Tourism Private Hospitals: Focus India. Journal of Health Care Finance,

Vol. 37 (1), pp: 45-50.

Bumrungrad International Hospital (BIH) (2009), Medical Tourism: Service and facilities, medical

care/about-us/services-and-facilities.aspx; http://www.bumrungrad.com/ (cited on 14-3-2010).

Carlson, J. &. Horrigan, M. (1983), Measures of unemployment duration as guides to research and

policy: comment, American Economic Review, Vol. 73, (5), pp: 1143-1150.

Carrera, P. M. & Bridges, J.F.P. (2006), Globalisation and healthcare: understanding health and medical

tourism, Expert Review of Pharmacoeconomics & outcomes research, Future Drugs, Vol.7, (1),

pp. 447-445.

Carruth, P. J., & Carruth, A. K. (2010), The Financial and Cost Accounting Implications of Medical

Tourism, International Business & Economics Research Journal- August 2010, Vol. 9,(8), pp:


13/15

13

135-140.

Chanda, R. (2001), Trade in health services, Working Paper, No. 70, Indian Council for Research on

International Economic Relations, New Delhi, India, November.

CII & Mckinsey. (2002), Healthcare in India: The road ahead. New Delhi: Confederation of Indian

Industries and Mckinsey & Company.

Connell, J. (2006), Medical tourism: Sea, sun, sand and surgery, Tourism Management, Vol. 26, (6),

pp: 1093-1100, Dec 2006 (cited on 4-10-09)

Cormany, D. & Baloglu, S. (2011), Medical travel facilitator websites: An Exploratory study of web page

contents and services offered to the prospective medical tourist, Tourism Management, Vol. 32,

pp: 709-716.

De Arellano, R. (2007) Patients without borders: the emergence of medical tourism.International Journal

of Health Service. Vol. 37(1):193198

Deloitte (2008), Medical Tourism: Consumers in Search of Value, Deloitte Centre for Health Solutions,

Washington, D.C.

Duckett, (2005), Private Care and Public Waiting, Australian Health Review, Vol. 29, (1), pp: 87-95.

Ernst & Young (2006), Health Quotient: making ideas meet opportunities, Health Sciences India. New

Delhi: Ernst & Young, Private Ltd.

Forgione, D. A. & Smith, P.C. (2007), Medical tourism and its impact on the US health care system, Vol.

34, (I), pp: 27-35. Journal of Health Care Finance, 34(1), 27-35.

Gupta, A. S. (2004), Medical tourism and public health. Peoples Democracy, Vol. 28 (19),

http://pd.cpim.org/2004/0509/05092004_snd.htm, (cited on 3-3-2010).

Hair, J.F., Black, W.C., Babin, B.J. and Anderson, R.E. (2010), Multivariate Data Analysis; a global

perspective, New Jersey, Prentice Hall.

Hansen, F. (2008), A revolution in healthcare: Medicine meets the marketplace. The Institute of Public

Affairs Review: A Quarterly Review of Politics and Public Affairs, 59(4), 4245.

Healy, C. (2009), Surgical tourism and the globalisation of healthcare, Irish Journal of Medical Science,


14/15

14

Vol 178 (2), pp: 125-127.

Herrick, D.M. (2007), Medical tourism: Global competition in healthcare (NCPA Policy Rep. No. 304),

http://www.ncpa.org/pub/st/st304, (cited on 3-3-2010).

Heung, V., Kucukusta, D., & Song, H. (2010), A Conceptual Model of Medical Tourism: Implications

for Future Research, Journal of Travel & Tourism Marketing, Vol, 27 (3), pp: 236-251.

Ho, R. (2006). Handbook of univariate and multivariate data analysis and interpretation: SPSS approach.

Boca Raton: Fl. Taylor & Francis Books, Inc.

Hopkins, L., Labont, R., Runnels, V., & Packer, C. (2010), Medical tourism today: What is the state of

existing knowledge? Journal of Public Health Policy, 31(2), 185-198. doi: 10.1057/jphp.2010.10

Horowitz, M. D. & Rosensweig, J. A. (2007), Medical Tourism-Health Care in the Global Economy, The

Physician Executive, Vol. 33, (6), pp: 24-31.

Hurst, J. & Siciliani, L. (2003), Tackling Excessive waiting Time for Elective Surgery: A comparison of

policies in Twelve OECD Countries. OECD Health working papers.

JCI (2010), Joint Commission International Accreditation Standards for Hospitals-4th Edition,

http://www.jointcommissioninternational.org/, (cited on 3-3-2010).

Jones, J. W. & McCullough, L. B. (2007), What to do when patients international medical care goes

south, Journal of Vascular Surgery, Vol. 46, ( 5), pp: 1077-1079.

Lunt, N., Hardey, M., & Mannion, R. (2010), Nip, Tuck and Click: Medical Tourism and the Emergence

of Web-Based Health Information, The Open medical informatics journal, Vol.4, pp: 1-11.

MacReady, N (2007), Developing countries court medical tourists J Lancet, Vol.369, pp: 18491850.

Marsek, P. W. & Sharpe, F. (2009), The Complete Idiots Guide to medical tourism, Penguin, USA.

Mattoo, A. & Rathindran, R. (2006), How health Insurance inhibits trade in health care, Health Affairs,

Vol. 25, no. 2, pp.358-368 (March-April 2006).

McTaggart, D., Findlay, C. & Parkin, M. (2010), Economics, Edition 6, Pearson Education, Australia.

Medhekar, A. (2010), Growth of Medical Tourism in India Public-Private Partnerships. Refereed paper

presented at the Seventh IIDS International Conference on Development, Calcutta 13 to 19


15/15

15

December.

Medical Tourism Association (MTA) (2010), http://www.medicaltourismcongress.com/.

RNCOS. (2010), Tourism Industry: Booming Medical Tourism in India New Delhi: Industry Research

Solutions, RNCOS E-Services Pvt Ltd.

Salant, S. (1977), Search theory and duration data: a theory of sorts, The Quarterly Journal of

Economics, Vol. 91, (1), pp: 39-57.

Stanley, M. (2010), Anywhere But Here. National Underwriter / Life & Health Financial Services

114(18), 22-25.

Willcox, S., Seddon, M., Dunn, S., Edwards, R. T., Pearce, J. & Tu, J. V. (2007), Measuring and

Reducing Waiting Times: A Cross-National Comparison of Strategies, Health Affairs, Vol. 26

(4), pp: 1078-1087

York, D. (2009), Medical Tourism: The trend towards outsourcing medical procedures to foreign

countries, Journal Continuing Education, Health Professional, Vol. 28, pp: 99-102.

hillman r0087 final1

Documents