There's untapped opportunity for travel agents in medical tourism

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Imagine a travel market that is worth tens of billions of dollars. The travelers fly all over the world, often in pairs.

In addition, some of the trips are paid for by the travelers' employers, which can translate into business-class air tickets and high-end hotels. But regardless of who is footing the bill, these travelers are unlikely to book their trips on a computer.

Actually, you don't really need to use your imagination. This market exists, hiding in plain sight. But for travel agents, it's among the least explored opportunities.

The market in question is medical tourism -- or, for purists, medical travel, since tourism is not its reason for being.

The medical travel business is scattered globally, with multiple destinations targeting global markets, and thus is not easy to quantify. Nevertheless, a few brave souls have waded in.

Focus on Medical TourismFor example, in a 2009 report on medical tourism, Deloitte's Center for Health Solutions projected, with some caveats, that as many as 1.6 million Americans would travel overseas in 2012 for medical treatment, representing an annual growth of 35%.

Josef Woodman, CEO of Patients Beyond Borders, a consultancy and publisher of reference materials for medical travelers, offers a more conservative forecast, estimating that just 600,000 medical travelers went abroad in 2010.

Scott Edelstein, a Washington-based health care counselor at the Squire Sanders law firm, previously forecasted that global medical tourism would be a $100 billion business this year, but this July he backed off putting any number on the market.

That's about it for estimates. However, Jonathan Edelheit, CEO of the Florida-based Medical Tourism Association (MTA), estimated that more Americans travel nearer to home than go abroad for medical care.

As for American spending, he said, the MTA's best estimates are that international trips average $8,000 to $12,000 each, including medical and travel costs.

The spending also includes touristic activities; some 90% of medical travelers or their companions do touristy things at the destinations, according to a 2009 MTA survey of medical travelers.

Big bucks at any volume

If 1.6 million Americans go abroad for medical procedures this year, the amount they spend could range from $12.8 billion to $19.2 billion. But even if that number is, say, merely 1 million, the spend would still be in the billions of dollars.

Medical travelers who are uninsured or underinsured go abroad for the prices. Others seek treatments not available in the U.S. And still others make medical journeys with the encouragement of their insurance companies, which see it in many cases as a way to save money.

Medical tourism also includes patients whose employers are large, self-insured corporations willing to fund travel for treatment.

Josef WoodmanWoodman estimated that employer-sponsored medical travelers comprise less than 10% of those traveling internationally, but these companies can and often do incentivize employees to choose the overseas option by offering them business-class travel for the patient and a companion plus high-end hotels. In some cases, the incentives include a share of the money the employer saved by not paying for treatment in the U.S.

Health care reform is the newest wrinkle in this picture, but the MTA anticipates that the Patient Protection and Affordable Care Act, popularly known as Obamacare, will have little impact on medical tourism. In a press statement, it predicted that Americans would continue going abroad to control costs and to avoid "the already problematic supply-and-demand issues" in the U.S. health care system.

Canadians, even with a comprehensive government health care program, also travel for medical treatments, either to obtain elective procedures that would be more costly in Canada or to avoid waiting lists for nonurgent care.

Indeed, international travel for medical procedures is a global phenomenon. Europeans travel within Europe, Asians within Asia and so on.

To that point, Woodman said there are 160 dental clinics in Gyor, on Hungary's northwestern border. Along with dentists in Budapest, these clinics primarily serve British and German patients as well as Americans.

People from all over the globe also come to the U.S. for a wide range of medical reasons. This includes women who give birth here: some for citizenship rights, but also a number of Chinese who come to avoid the one-child rule that applies in much of their homeland.

In any case, countless factors have produced a big and growing business involving millions of travelers and billions of dollars.

Change in the air

Travel agents have not typically played in this space, but this summer the stars have realigned to suggest there is a place for retail agents in the medical tourism business and that it is time to get serious about the niche.

Anadolu Medical CenterThis shift did not happen overnight. Two years ago, the American Marketing Group (AMG) created a unit, Well-Being Travel, to kick-start this business for affiliates of its agent groups Travelsavers and the Network of Entrepreneurs Selling Travel (NEST). It tapped Companion Global Healthcare as a preferred medical travel facilitator for the agencies.

In June, Well-Being Travel hosted the Well-Being and Medical Travel Conference in Scottsdale, Ariz., in part just to explain what a medical travel facilitator does. It laid on lots of advice meant to keep agents out of legal trouble and introduced Custom Assurance Placements as the preferred supplier of medical travel insurance for Travelsavers and NEST agencies.

In addition, the MTA, which launched a certification program for medical tourism facilitators two to three years ago, this July added a certification program for agents who want to be medical travel specialists.

Hospitals and hotels

But before an agent decides to dip a toe or two in this market, it's important to know who is in this game already and how it is played. Medical tourism has, in varying degrees and for some time, influenced how hotel companies and travel destinations plan, develop and promote their health care alternatives.

Essentially, for a hotel, a nearby hospital that draws a lot of out-of-town patients can be an excellent and reliable source of business. (See related report, "Hospital-adjacent hotels get built amid development standstill.") 

Puerto Rico's Hyatt Place Bayamon and El Tropical Casino, a 156-room property set to open in 2014, offers a case in point. Its owners acknowledge that the San Pablo HIMA Bayamon Hospital was a factor in choosing the location for its planned property and is expected to be a key demand generator.

Hyatt Place Bayamon renderingSome medical complexes simply make hotel development essential. Groundbreaking is set for later this month for Health City Cayman Islands, which is intended to attract foreign patients. The hospital will have 140 beds initially, and current infrastructure will be sufficient for two or three years.

But ultimately this is a $2 billion project that will result in a complex with 2,000 hospital beds, which will stimulate the development of a small city. As the complex grows, entrepreneurs will have to build hotels to meet demand, a source said.

Very occasionally, hoteliers make the trade aware of packages. This summer, the Courtyard by Marriott Bali and the BIMC Hospital Nusa Dua announced they were teaming up to offer Bali's first medical tourism packages.

But these aren't tourism packages as the term is generally understood. In anticipation of the hospital's debut in May, Courtyard by Marriott's general manager, Jeff Tyler, said, "We carefully looked at services that aid in recuperation, such as special diets and nutrition, unique spa and wellness programs as well as ensuring wheelchair access to all areas of the property."

In addition, according to a press statement, the Marriott, which is within walking distance of the hospital, will coordinate specialized medical services such as aftercare visits by BIMC Hospital nurses.

Marriott has been attuned to the possibilities for years, as evidenced by a 2004 press release noting that the JW Marriott Bangkok was "five minutes" away from Bumrungrad International, one of the world's best-known hospitals for medical travelers. The press release touted the "perfect alignment" between a hotel offering five-star comfort for pre- and post-hospital stays and a hospital that combines modern health care with luxury amenities, even a Starbucks in the lobby.

Prisma Dental ClinicHospitals promote their facilities and services on websites, highlighting aspects that would appeal to foreign nationals. One such facility, the Prisma Dental Clinic near San Jose, Costa Rica, reports 80% of its business comes from outside the country, mostly from the U.S.

Bumrungrad in Bangkok said it gets 420,000-plus international patients annually, roughly 40% of all its business. Patients Beyond Borders' Woodman said 24,000 of them are Americans.

This is a domestic and inbound story, too. The Mayo Clinic in Rochester, Minn., has long drawn patients from around the world for its cutting-edge approaches to medical care. The Cleveland Clinic reports that 25% of its patients come from outside Ohio, and a quarter of the hits on its website are from outside the U.S.

Surgery and sightseeing

Many patients who travel for medical procedures aren't very sick, or they aren't sick at all. Dental care accounts for close to a third of medical travel. Some people travel for preventative care. And plastic surgery procedures were among the earliest to spark demand for medical tourism.

Moreover, the 2009 MTA patient survey found that 83% of medical travelers make the trip with a spouse or other companion, meaning that for each medical procedure, there can be two people buying local services, guided sightseeing, hotels, meals and the like. Besides, the medical procedures themselves are good for the host destination's economy.

With that in mind, governments have been eager to help develop and promote medical travel. For example, Proexport Colombia, the government's tourism promotion agency, said the development and promotion of Colombia's health services has been a priority since 2009 and that the government teamed up with private interests to develop new infrastructure for health services in regional capitals.

The Cayman government is supportive of the Health City Cayman Islands project, a joint venture of Ascension Health Alliance of St. Louis and Narayana Hrudayalaya Hospitals in India. In 2011, Reuters reported that the government had "fulfilled its part of the bargain" by passing legislation to cap medical negligence claims at $600,000. The report said the Caymans are under pressure from Britain to diversify the economy.

Last month, the Jamaica Observer newspaper reported that the island's government is researching ways to exploit the health and wellness market.

Sime Darby Medical CentreFarther afield, the Malaysian government decides which facilities can participate in medical tourism. Mary Wong Lai Lin, CEO of the Malaysia Healthcare Travel Council, told delegates to the Scottsdale conference that "medical tourism is highly regulated in Malaysia. We only use the top hospitals, and they meet strict health care standards" to participate in the council's network.

The Malaysia Healthcare Travel Council is organizing the first Malaysia International Healthcare Travel Expo for November "to mark the rapidly emerging and highly lucrative global health care travel industry." Anyone who might provide travel services to patients is invited, along with those in the health care industry.

The MTA, too, has launched a series of health and wellness destination guides written for the general public and underwritten by the destinations themselves. Among the first takers were the Las Vegas Convention and Visitors Authority and Jordan's Private Hospitals Association. The MTA expects to publish the guides for most major medical tourism destinations.

Later this month, Puerto Vallarta will host the Third Mexico Travel Health Forum. It will bring medical travel facilitators, travel agents, insurance companies and doctors together as buyers to meet suppliers of health care and tourism services in Mexico.

The Mexico City Ministry of Tourism plans to launch its own medical tourism initiative this fall specifically targeting Americans, according to Carlos Mackinlay, the city's minister of tourism. "We're not getting that market now and we want it," Mackinlay said. (Read more from Mackinlay, In the Hot Seat.) 

The Malaysia Healthcare Travel Council was an exhibitor at the Scottsdale conference, and the tourist offices from South Korea and Thailand filled out the Asian contingent. Israel, Mexico and Turkey were represented, as well, as was the Greater Fort Lauderdale Convention and Visitors Bureau.

The list of possible medical travel destinations is considerably longer, and the reasons for choosing any given destination vary. Speakers at the medical tourism conference identified Brazil, Costa Rica, Mexico and South Africa as top choices for cosmetic procedures, while Costa Rica, Hungary and Turkey led in dentistry.

Woodman told delegates that India and Malaysia are tops for dollar savings, and other Asian sites are noted for specialties: China, India and Korea for alternative medicine, South Korea for high-tech capabilities, Singapore for oncology and Thailand "perhaps unfairly for its transgender operations, but it has lots of great offerings." In addition, Turkey has 39 U.S.-accredited hospitals and "is a great medical destination," he said.

AMG's Well-Being Travel

Anne Marie Moebes, executive vice president of Well-Being Travel, told delegates at the Scottsdale conference that Rick Mazza, president and CEO of AMG, Well-Being Travel's parent, first focused on medical tourism about five years ago.

Anne Marie Moebes and Rick MazzaEven then, she said, "we felt the travel industry needed to be involved," and so the legwork began. AMG hired medical professionals to look at overseas facilities on its behalf, and Moebes visited medical tourism destinations to enhance her understanding.

In addition, she said, "We attended conferences on medical travel ... and began meeting with partners who mentored us."

At first, she said, "our thought was to have travel agents learn to be medical travel facilitators, but lawyers said that was not a good idea."

The medical travel facilitator is the liaison between patients and the hospitals and medical staff. Ideally, the facilitator has visited the facilities it works with and has determined they are accredited and of good quality. A facilitator offers choices for care providers and, finally, makes the medical appointments and ships medical records.

Agents vs. facilitators

Providing those services carries risk. Therefore, Moebes told the roughly 320 agents at the Scottsdale event, "We want you to be the specialists on the travel side, and we are forming partnerships."

Agents should refer their medical travelers to a reliable medical travel facilitator, she said, to let that expert help clients select a hospital and make medical arrangements. That's where the preferred-supplier relationship with Columbia, S.C.-based Companion Global Healthcare (CGH) comes in, although it isn't like any other preferred-supplier deal.

Moebes said that no money changes hands between CGH and travel agents, but each can refer business to the other.

"We don't condone" agents' earning commissions "on the medical aspect," Moebes said. "The reason is the liability."

David Boucher, president of CGH, which is owned by BlueCross BlueShield of South Carolina, introduced his business to conference delegates. For most it was an introduction to medical travel facilitators.

Since its launch in 2006, he said, CGH has forged a network of facilities it recommends to patients seeking the best matches for medical procedures overseas. It has contracts with 22 hospitals in 13 countries.

David BoucherAll must be accredited by the Joint Commission International, a U.S. accrediting organization for non-U.S. health care facilities. CGH adds its own accreditation after vetting each with onsite visits. Boucher said, "The purpose of our visits is to measure the traveler experience from end to end."

Also, after meeting management at network hospitals, he said, CGH is in a position to deal quickly with emergencies.

In its role as the matchmaker between patients and prospective overseas medical providers, Boucher said, CGH provides biographies of several doctors. Patients "can meet them, too," Boucher said. "After all, Skype is free."

CGH does not collect referral fees from hospitals, Boucher said. It charges a $700 consulting fee, paid by the patient or the employer. If the patient is paying for the procedure, he said, a hold is put on the patient's credit card.

Boucher described an extensive operation with global reach, while other facilitators at the Scottsdale conference were smaller businesses. Some specialize in only one or a few destinations, or they might specialize in specific types of procedures.

Agents who serve medical travelers will have to learn their way around an unfamiliar industry sector involving medical travel facilitators with varying business models.

Next week: legal liability, medical travel insurance and the MTA specialist program.

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