November 06, 2008

Global Economic Recession: A blessing in disguise for medical tourism

Much before the credit crisis rocked the American economy and the world, Michigan-based Jill Howard (name changed) made up her mind to visit India during the Christmas holidays this year for a joint replacement surgery. The 58-year-old engineer had planned her surgery in India, because she knew that the costs for the treatment would be much lower here compared to the US.

However, with the turn of September, things began to shape differently across the world. The global crisis was now much palpable with the collapse of investment banks and the ensuing credit crunch. And as the crisis gnawed at the margins of some of the world’s top corporates, one could see the telltale signs of a global depression.

What ensued in the following months was an economic mayhem with the rising number of pink slips, sky-rocketing fuel prices, sinking stock markets and dimming sentiments. Everything, from food prices to air fares hit the roof.

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However, all this had no affect on Howard’s plans for her surgery in India. In fact, now she had all the more reasons to get the surgery done in India as a joint replacement surgery in the US would have cost her a stupendous $50,000 against only $8,000 in India.

“So even if I were to add the airline expenses, travel and stay, it would be cheaper to fly to India for the same treatment,” she said.

Like Howard, several medical industry experts, too, believe that it couldn’t be a better time to fly to India for medical reasons. In fact, many say that the recession was a boon in disguise for the country’s medical tourism sector. (Medical tourism refers to travel undertaken for medical care.)

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According to experts, the immediate impact of any recession was cost cutting and cost rationalisation. So, with the US being the hardest hit by the current crisis, efforts to reign in costs would be the strongest in that country.

According to financial advisory, audit and consulting firm Deloitte, in 2007, about 4,50,000 patients from abroad visited India for medical treatment.

Experts peg the growth of the country’s medical tourism at about 30-35% in the financial year 2008-2009.

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Vishal Bali, managing director of corporate hospital chain Wockhardt, said India has been getting about 3,000 patients from abroad every year. “And we see this rising by 35% this year.”

According to Ankur Bharti, consultant, Technopak Health, cost-cutting would be the main growth driver for the country’s medical tourism this year. “Cost-cutting would be the main reason why more international patients would come to India, especially from the US as medical costs are four to five times lesser here,” he said.

Anupam Sibal, group medical director, Apollo hospitals, said a bypass surgery in the US could cost about $75,000. The cost could be around $8,000-9000 in India.

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“A liver transplant in the US would cost around Rs 1.5 crore. In UK, the cost would be around Rs 80 lakh. However, in India, a liver transplant costs only about Rs 18-20 lakh for adults and Rs 12-15 lakh for children. Since the difference is so huge, I think patients will prefer flying down to India,” Sibal said.

Kumar Menon, specialist, medical informatics and telemedicine at Amrita Institute of Medical Sciences (AIMS) at Kochi in Kerala, said the medical tourism sector would remain constant and largely unaffected by the global economic turmoil.

“At AIMS, we specifically get a huge chunk of Malayalees settled abroad, especially in the Gulf region, coming home for medical treatment during the holidays. This trend would remain unaffected by the crisis.”

Industry professionals, however, warn that treatment involving cosmetic surgery, including areas like cosmetic dentistry, dermatological treatment and ayurvedic massages, will witness a decline.

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Menon said the number of patients coming to India for those medical conditions that were not so intense and a treatment for which could wait, will see a decline.

However, areas such as cardiology, neurology, ophthalmology and oncology will continue to get more patients from abroad.

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