Oct 22

Chapter 3 Page 3 | Build It, and They Will Come …

Arnoldo Fournier, M.D., a cosmetic surgeon in San Jose, Costa Rica, was one of the pioneers in marketing his services abroad. He came to Costa Rica in the early 1980s, fresh from his residency at St. Luke’s Hospital in New York, and was told that there was no demand for aesthetic procedures in Costa Rica.

Stubbornly, he stayed and went after the U.S. market. He placed his first ad in the Tico Times, the Central American country’s English-language daily; later, he turned to the flight magazines of the international airlines: LACSA, Eastern, Skyward and Passages among them.

By the 1990s,  Dr. Fournier and other Costa Rican cosmetic surgeons, dentists, and doctors thought they had a pretty good thing going. Costa Rica was beginning to prosper as a tourist destination and U.S. retirees were making the country their home in increasing numbers; the number of Americans desiring cosmetic surgery was starting to rachet up.

Prices for cosmetic surgery in Costa Rica then, as now, were much lower than in the United States. I received an e-mail in December of 2004 from a woman in Florida who had read what I had written about my own trip for dental work; she affectionately recalled going to see my dentist, “Dr. Telma,” in 1986. She wrote:

In 1986, Dr. Telma installed 13 crowns in my mouth for $1,200. At that time, if I had this work performed in the U.S., it would have cost about $4,000 to $6,000 … As she worked, Dr. Telma and I also had incredible intellectual discussions on the anthropology of Central American Indians, their bone structure and diet, and where they came from. Both she and her husband are very well educated in many other areas, and not just dentistry … I came across your article as I was searching the ‘Net for her services again. I need two crowns and some teeth bleaching, and a minor face lift, which I am going to coordinate and schedule this summer if possible.

So what was to become known later as medical tourism was already growing in Costa Rica in the 1980s and into the 1990s. In what was to prove to be a prescient report, the World Bank in September 1995 published a 52-page study on Prospects for Health Tourism Exports for the English-Speaking Caribbean. (2) It noted:

Direct patient care is the major health service exported by Costa Rica. In addition to plastic surgery, a full range of pediatric and adult services including high technology dependent procedures such as open heart surgery are exported. Costa Rica’s target markets for the export of health services are the United States, other Central American countries, Puerto Rico, Barbados, and other Caribbean nations, Colombia, Venezuela, Canada, and Spain.

The prescient part of the study identified the reasons why potential for further substantial growth existed in the Caribbean countries:

  • Demographics in target markets (for example, aging post-war baby boomers who are concerned about physical appearance, semiretirement, full retirement and relaxation) will mean marked increases in demand for cosmetic surgery, spas, and retirement communities.
  • The growing affluent class of baby boomers may be less price sensitive and more sensitive to other aspects of the marketing mix (for example, location and confidentiality.)
  • Lifestyles in Europe and North America increase the demand for services such as spas, fitness centers, cosmetic work, or addiction treatment centers.
  • Waiting time for procedures in the United Kingdom and, to a lesser extent, in Canada encourages the search for outside health services.
  • A large portion of the U.S. population is uninsured or underinsured.
  • Private insurance does not cover selected treatments.
  • Operations in Caribbean regions appeal to doctors from target markets that enjoy visiting the region, which could facilitate strategic alliances and capital investment.
  • Lifestyle health-related problems in the target markets are similar to those among people in the Caribbean, and quality health and social marketing materials could be exported to these markets.

“The U.S .market is most apt to offer opportunities to the Caribbean because it has a large uninsured and underinsured population, it has very high prices, and it is geographically close to the Caribbean,” the report stated. “Moreover, the U.S. system is more fragmented and less controlled than health sectors in other industrialized countries. As a result, the U.S. market has multiple avenues of entry.”

The report also summed up the challenges facing countries going after the health tourism market as well, among them that:

  • U.S. medical doctors act as “gatekeepers” for the U.S. health-care system and would not want to lose patients to the Caribbean market.
  • Questions about quality of care in the Caribbean will exist in consumers minds and will be difficult to overcome.
  • Neighboring countries in Latin America could provide care at lower cost, as could countries in Eastern Europe.

Other than leaving out the entry of Asian, Middle Eastern or African nations into the market, the World Bank study was a blueprint for medical tourism for the next decade for anyone who cared to follow it. However, it made no particular impact then that I can discover now. What it stated was already obvious to pioneers in Costa Rica and elsewhere, but it took years for much of the world to begin to notice. The third and final precondition for medical tourism to become a globe-straddling business was that people had to know about it; it had to be marketed to a broader audience, somehow. The Internet came along at just about the right time.

(2) Prospects for Health Tourism Exports for the English-Speaking  Caribbean by Maggie Huff-Rousselle, Carol S. Shepherd, Robert Cushman, John Imrie, Stanley Lalta. World Bank, Washington, D.C.; Social Sectors Development Strategies, Inc. September 1995.

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Sep 26

In Chapter 1 of Beauty from Afar, I suggested that medical tourism was already a big business in 2005 and that it might be acting as a safety valve for the U.S. health-care system. I was right on both counts.

Chapter 1 Page 4 | Patients Going Abroad: A Burgeoning Industry

Medical tourism was and is a big business and that fact has been a source of great frustration to entrepreneurs who believed then, and even today, that therefore it can be tamed, routinized and turned into a corporate profit engine.  The biggest problem with that has been that the part of medical tourism that looks like it would be very profitable — putting Americans on airplanes and sending them overseas for surgery — is not a very big part of the medical tourism business at all. It is a very small part of the picture, relatively speaking, and will remain so unless and until American businesses and government embrace medical tourism.

Most of medical tourism from the United States is still for elective procedures, dentistry and cosmetic surgery; and the Great Recession has affected that business substantially. Yes, people are more interested than ever in saving money. However, through the medical tourism boom of 1998-2007 or so — a lot of Americans were paying for their cosmetic surgery and dentistry with credit cards or by taking second mortgages out on their homes. That is not happening quite so much any more, for obvious reasons.

Yet medical tourism is working well as a safety valve for many people the world over who cannot get or afford the care they need or want locally. It has been consumer driven. It is in the hands of patients.

Big research companies talk about medical tourism being worth many billions of dollars, with many more to come. They are right, though their methodology is often deeply flawed and even laughable. But those medical tourism dollars are spread out all over the world and are very difficult to count.

The next segment will talk about spiraling medical costs in the U.S. There’s a topic that certainly hasn’t gone stale in a few years. I’ll be interested in whatever it was that I had to say. 😉

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Sep 26

Chapter 1 Page 4 | Patients Going Abroad: A Burgeoning Industry

The story of modern medical tourism is, at one level, also part of the story of the changing global economy, of giant and accelerating shifts in the production of goods and services to nations that have lower costs than the United States and Western Europe. The catch-all phrase for this is  “globalization,”  and it represents, depending on whom one listens to, anything from the end of civilization as we know it to the last, best hope of mankind. The truth, as always, is more complicated, though that is of little solace to workers in the United States whose jobs have been outsourced, whose factories have been off-shored, who are still trying to figure out just exactly how  “free trade”  is helping them.

For the estimated 42 million people (1) in the United States who lack adequate medical insurance, however,  the globalization of quality medical care and services actually is one of the benefits of free trade. And the availability overseas of comparatively inexpensive elective procedures, including plastic and cosmetic surgery,  gives
Americans who are willing to travel outside the country options to which they are turning in increasing numbers.

Medical care, however, is not like manufacturing textiles or CDs or writing computer programs or providing technical support via telephone.  In the United States, and everywhere else, the first requirement of a medical-care system is that care be available locally, and the second is that it is available swiftly in an emergency. No one is going to go abroad for a simple check-up, for a flu shot, to have a cavity filled, to set a broken bone  —  not unless they live near a border and it is convenient to do so.  Increasing numbers of Americans willing to travel overseas for certain kinds of treatments and surgeries will not have a radical impact on the general delivery of health-care services in the United States anytime soon. In some areas, the effect is ambiguous; medical tourism is a back-up system, a safety valve for the American health-care system.

That an uninsured North Carolina man would have heart valve surgery in a state-of-the-art hospital in India with top-flight surgeons and eight registered nurses tending to his needs for $10,000 instead of in a hospital near his home for $200,000, as reported by CNN in January 2005,   does not deprive the hospital in the United States of $200,000 in revenue. The man didn’t have insurance and he didn’t have the money. Having surgery in India was a way to save or extend his life in a way that he could afford. His only choice in the United States was to wait until he had a heart attack so that he could be treated on an emergency basis. Assuming he survived, sticky financial negotiations that might have led to his bankruptcy would be left until later.

Medical tourism, in the short run,  provides a similar safety valve for the public health-care systems of Canada and Western Europe where the problem is not so much cost as it is accessibility. People needing or wanting non-emergency medical treatment can wait months to see a doctor. Canadians may even venture to the United States for care, despite the cost, to avoid average waits that were as high as 17.9 weeks in 2004. (2)

In June 2005, the Deccan Herald News Service of India reported that the largest holiday tour operator in Great Britain, Thomas Cook,  and the Apollo Group of India were in advanced negotiations over all-inclusive medical tourism packages. Those close to the deal speculated that the number of Britons who might travel to India for health care could rise from 400 or so annually into the tens of thousands,  should the trip become sufficiently routine.

(1) National Center for Health Statistics, 2004 National Health Interview Survey. Early Release of Selected Estimates. (Author’s Note, 2009: This has been a much-debated number for some years. But most sane people agree that the number of uninsured and underinsured people in the United States is “a lot.”)

(2) Fraser Institute (Vancouver, B.C.) 14th annual edition of  “Waiting Your Turn: Hospital Waiting Lists in Canada” (2004).

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