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A Look Into The Hybrid Future of Medical Tourism

A Look Into The Hybrid Future of Medical Tourism August 30, 2022
Hybrid

Medical tourism markets around the world were profoundly disrupted by the global COVID-19 pandemic. As the travel and tourism markets begin to recover, with some travel corridors coming back better than others, many health, dental and wellness providers, well as destination managers are wondering what the future of medical tourism looks like.[1]

Two things are certain: the changes brought about by the pandemic will have lasting effects on the markets, and the future is “hybrid” with many combinations of locations, access methods and treatment models. This certainty is based on factors that are global and were emerging before the pandemic hit in early 2020 and accelerated by the global shutdown.

The factors are:

  1. Access
  2. Technology
  3. The Environment
  4. Costs
  5. People

The strategic repositioning of providers and destinations will determine success in the global marketplaces for cross border trade in health services.

Access

Medical Tourism The brief history of health tourism (medical tourism) has focused on individuals traveling from one location to another to access and consume health, wellness, dental and medical services.[2] This model of access hit the wall called SARS CoV-2, or COVID-19. The pandemic-related shutdown of regional travel has shown how vulnerable these markets are because they relied on physical access.  People still wanted or needed services, but during a travel shutdown, travelling to another location was not practical, and in some cases not possible.

Another difficulty created by the pandemic has been the restrictions of local access to elective or nonurgent treatments and services. Because hospitals were closed and clinics shuttered, many consumers’ treatments were postponed and/or delayed. This has motivated many to look for alternatives such as private providers, and some to look elsewhere, including across borders.

Now that commercial airline traffic is returning, albeit with difficulties, some of the pent-up demand of 24+ months of shutdown is being experienced as surging activity by health, wellness, dental and medical providers in some destinations.

But this is a rebound effect, and not a stable, sustainable return of cross border market activity in health tourism. In established travel corridors, once pent-up demand has surged and been satisfied, the durable or sustainable rate of demand for this “old model” of health tourism will be lower than previously measured in many regional corridors, unless new services or markets are developed.

There is also psychological hesitancy in the minds of some would-be travelers about the safety and comfort of travel, but these “psychological access” restraints on market growth will be gradually reduced as the travel and tourism sector irons out its scheduling and labor wrinkles.

Worldwide, in the years to come, the cross-border trade in health, wellness, dental and medical services will grow, but “access” will be profoundly different, the old models will decline and may no longer be possible.

Technology

Digital communications, remote patient monitoring technologies, telehealth and telemedicine are bellwethers pointing the way to a hybrid future in the markets for cross-border trade in health, wellness, dental and medical services.

Telehealth and telemedicine adoption in the developed economies around the world has quadrupled during the pandemic. Many of us are now using virtual technologies to do everything from talking to friends, to discussing symptoms with a doctor. These technologies are agnostic of the participants’ locations – so it is no longer necessary for the patient to get on a plane, fly to a distant location, and introduced herself to her doctor.

Remote patient monitoring (RPM) is another burgeoning, virtual electronic tool in the growing realm of “digital health”. Using readily available devices, healthcare providers can receive, send and communicate information and data with consumers or other providers anywhere in the world, at any time. In a truly digital, imaginary environment, diagnostic evaluation and clinical decisions could be made remotely, the patient or consumer could travel to the provider and be treated, then return to her home location, monitored remotely with follow-up telehealth visits to confirm recovery and success.

For the most part, this full “digital episode” is not yet widely adopted. The medical malpractice, liability and regulatory responsibility for these services, including developing, tracking and enforcing standards of practice have yet to be worked out in most places. And the technological standards for cross-border electronic trade in health services have yet to be aligned, harmonized and codified. But these standards and pathways are being developed, and quickly.

So while we remain years away from an imagined, digital health future, there is certainly no going back with regard to virtual access and remote monitoring. Consumers want it and expect it.

The Environment

Medical TourismIt is apparent that environmental issues now occupy a far greater share of global attention among advanced and developing economies. Among the more substantial contributors to the carbon footprints of developed countries in particular is airline travel. Making air travel more earth-friendly is already underway, and will probably continue with modifications to aircraft and other innovations. The “old model” of medical tourism where one person got on an airplane, traveled to a destination to consume medical or dental care, and then flew back home seems inefficient and damaging to the atmosphere. Both providers and destinations, as global citizens, will necessarily take up environmental causes over the next several years and critically re-evaluate former behaviors (such as above) as wasteful and even damaging.

Environmental pressures will change consumer behaviors and modify how destination managers and location-based providers promote themselves to traveling consumers in remote locations.

Costs

medical costsThe rising cost of healthcare was a critical issue before the pandemic, especially in developed economies made worse by the demographics of the aging. The pandemic created demand-side shocks (travel/access) as well as supply-side shocks, with hospitals and providers unable to care for elective patients and perform many procedures due to the overwhelming needs of persons with COVID-related illnesses and public health closures. Already, in the early time of recovery from the pandemic, we are seeing national attention return to cost controls. Expect this attention to escalate, and with overall inflation increasing costs, healthcare will become and even greater focus.

In the past, differences in costs between one country and another has been seen as a reason why consumers might travel for care. This “price arbitrage” already is a motivator in certain elective segments like cosmetics, but high quality, affordable healthcare will become a progressively more important component of national budgets wherever the state or country pays the bill. This will result in a wide array of arrangements between source countries and provider destinations, including utilization review, managed care and cross-border provider networks. Risk management (in the actuarial sense) will take on new meaning for cross-border trade, especially expensive and highly complex tertiary and quaternary medical services.

People

Happy Healthcare workersIn any service-based business, the people providing service are critical ingredients; they are the “means of production”. This is especially true in healthcare. The worldwide shortage of trained healthcare professionals is well-documented and was creating service delivery constraints even before the pandemic. In the aftermath of the extraordinary stress put on healthcare providers by the pandemic, many qualified healthcare professionals have retired early, or decided to leave the profession. This situation has created a painful constraint on the delivery of healthcare services. Wherever the population demographic is leaning towards older, this reduction in capacity (or absence of trained people), is especially painful. There are widespread reports of hospitals unable to admit patients because of staffing constraints. These restrictions are not easily resolved, and are likely to last a long time because, even if there were pool of young, willing students, it takes years to train a nurse or allied health professional and even longer to train a dentist or medical doctor.

For emerging economies with younger populations, this creates a distinct opportunity in cross-border trade. The hybrid future of medical tourism may find individuals “old” economies being treated both remotely and locally by health professionals from “young” economies. For the health and well-being of the advanced economies, there is no more important health agenda than the development of the human resources needed to care for their aging populations!

The Hybrid Future

Hybrid Future A WebinarSignificant repositioning will be required for success. The hybrid future of medical tourism depends more on technology than price differences, and on skilled human resources more than anything else. Physical and psychological access will be important, as will superiority and the perceived quality of the services and the destination (their “brands”), but if there is no available capacity, it will not be feasible to develop sustainable channels of demand among consumers or their insurers. Strategic steps must be taken now to make the hybrid model possible and to fortify these markets through innovation and education.

To explore more dimensions of marketing health & medical tourism, contact Irving Stackpole at istackpole@stackpoleassociates.com


[1] Stackpole, I, Ziemba, E, Johnson, T. Looking around the corner: COVID-19 shocks and market dynamics in US medical tourism. Int J Health Plann Mgmt. 2021; 36( 5): 1407- 1416. doi:10.1002/hpm.3259

[2] UNWTO, GATS Mode 2 cross border trade in services.

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