Medical Tourism Industry Growing in Emerging Markets
In August 2010, Euromonitor International attended the first Medical Travel Meeting held in Brazil and shares in this article the findings of the conference and reviews the future outlook for the Brazilian medical industry as discussed by the experts in the field.
Medical tourism big in emerging markets
Medical tourism was unthought-of up until some decades ago: travelling was expensive and the health market limited to the boundaries of a country. This has changed, however, as medical tourism turned into a commodity.
The impact this has had on markets is resounding, with Asia Pacific dominating the scene with state-of-the-art hospitals like the Bumrungrad International Hospital in Bangkok, Thailand, and, most importantly, lower prices. So far, Thailand, India and Singapore together have treated over 1 million international patients and consistently led sales in this multi-billion industry.
Price, quality and access key
According to experts, such unprecedented success was driven by three main factors – price, quality and access. Although it seems easy to construct a powerful health industry, it takes time and exceptional marketing to create a brand that is trustworthy.
Despite having excellent facilities and being fairly accessible, Latin American destinations like Brazil are not the cheapest, when compared to its Asian counterparts. Hence, the main question is – how to compete in an industry that is mainly driven by price?
The Brazilian product
Given the current global state of the medical tourism industry, a question that was posed repeatedly during the meeting was – why Brazil?
The answer is simple. Brazil has nationally and internationally accredited hospitals, highly qualified professionals, and modern technology. It is also home to São Paulo – the fourth largest city in the world with 11 million inhabitants and one of the largest centres of international health.
São Paulo is a leader in areas such as cardiology, orthopedics, oncology, neurology, and cosmetic surgery with a world-class hospital system and a wide array of diagnostic services. Several hospitals located in the city are accredited by the Joint Commission International (JCI), Accreditation Canada and NIAHO.
Nevertheless, in order to further enhance its competitive positioning and challenge Asia’s dominance, Brazil, as well as other Latin American destinations, will need to first look into internal issues such as infrastructure. Airports, hotels, highways and even hospitals require developing, not only because the region is close to operating at its capacity, but also most importantly patients look for accessibility and comfort when travelling.
Crowding out the locals
In Brazil, there are concerns that attracting too many medical tourists may crowd out healthcare for Brazilians. If efforts were too successful, it could be that there are limits imposed. At the same time, however, there is the benefit that the revenue generated by medical tourism in the country could fund the expansion of health services for locals.
Brazil will also need to develop more collaborative actions between the government and healthcare institutions by creating multi-lingual signage/websites, and eliminating tourism barriers such as visas.
Embracing cosmetic surgery
Another important point mentioned by participants relates to the fact that the country cannot turn its back on specialties like cosmetic surgery. Although this type of procedure is usually not covered by insurance and tends benefit doctors more than hospitals, cosmetic surgery is well-liked in Brazil not only for aesthetics, but also reconstructive surgery. Therefore, if the country successfully manages to spin off its current product, it will start from a strong and credible base to attract a larger number of international patients each year.
In order to divert patients from Asia to Latin America, Brazil and others need to focus on what they do best – focus on the “humanisation” of its services. Overall, that is what Latin America is known for – a warm and welcoming culture. Not surprisingly, personal care and service are major strengths.
Moreover, Brazil needs to promote high value and proximity to main source markets like the US. Mexico has done so by launching a Consulting Board for Health Tourism in November 2009, which aims to attract 20% of the US$60 billion global medical tourism industry.
World-class only will do
Also important is to segment the market appropriately and focusing on procedures that are done best. No-one will travel 10,000 miles to a country to receive medical treatment that is considered average. Medical tourists travel because they look for the best doctors and facilities available worldwide. Considering that pricing remains a major driver, Brazil and Latin America will need to focus on consumers that are not price sensitive, emphasizing proximity and service.
The implications of attracting patients from all over the world are yet unknown to the health system in Brazil and Latin America, mainly due to its low market penetration. It presents great potential to boost travel and tourism activity in the region with a chance to diversify its tourism product.
However, significant challenges remain. Competition with Asia will be difficult, and in Brazil, there is strong opposition by doctors and institutions due to fears that medical tourists may jeopardise the current health structure in place.