WEALTH

FOCUS
of InterMedika, his international healthcare consultancy in
downtown Bangkok.
With the Internet becoming ever more prevalent and
insurance premiums and co-payments increasing,
Schroeder expects that patients will want more control
over healthcare providers. “We may soon see something
like TripAdvisor for healthcare,” he reflects. “Patients are
picking up more of the bill, so inexpensive, quality, foreign
alternatives are likely to become more important to them.”
PLASTIC SURGERY WITH A HOLIDAY
Bumrungrad is the poster child of medical tourism. It looks
like a five-star hotel and has services to match. There are 21
VIP suites, a Japanese restaurant, a McDonald’s, and a
queue of people buying snacks from Starbucks. The hospital
facilities include 19 operating rooms equipped for general
surgery and surgical specialties, and 1,200 surgeons and
dentists, of whom more than 200 are US board certified.
Cost and quality are the key selling points for
Bumrungrad, and for rivals such as Samitivej, Phyathai
International and Bangkok Hospital. At Bumrungrad, a
package for coronary artery bypass graft surgery costs
$19,000. In the United States, an uninsured patient will be
set back $80,000 at least for the same.
Yet the success of Bumrungrad was accidental.
Schroeder and his team re-opened the 12-storey hospital in
late 1996, with 580 beds and a $60 million debt on their
books. Then the 1997 Asian financial crisis hit. The Thai
baht plummeted, “doubling our debt and halving our
potential market overnight,” recalls Schroeder.
During the crisis, squeezed middle-class Thais
switched to the cheaper state-funded healthcare system.
Underused private facilities, like Bumrungrad, went into
survival mode and offered surplus capacity to foreigners
from the region seeking medical and surgical treatments
as a cost-effective alternative to providers at home.
Consequently, Schroeder bristles slightly at the notion
of “medical tourism,” noting the term can be misleading.
“People who come for serious medical care don’t ask how
close we are to the beaches. They come for quality
procedures conducted at a fair price in an environment
with good infrastructure.”
CREATIVE ACCOUNTING
The Thai industry really boomed after 9/11. Tightening visa
conditions in Europe and the United States meant people
from Arab countries preferred to take the seven-hour flight
east to Bangkok. Today, Bumrungrad has an Islamic prayer
room, a certified halal kitchen and more than 150
interpreters, many of them Arabic for the benefit of Gulf
Muslim patients, now one of its most important markets.
Altogether, Bumrungrad serves 1.1 million patients a year,
including 520,000 who visit from other nations. In 2013, it
generated $477 million in revenue. However, reliable data
on global medical tourism is difficult to come by and the
numbers are often overblown.
In 2008, Deloitte projected that annual patient outflows
from the US would be 10 million by 2012 and worth $21
billion a year to developing countries. It was a brave
prediction, considering most Americans do not even own
valid passports. The figures were revised down one year
later. Only 1.6 million Americans would be seeking
healthcare outside the US in 2012.
“Such projections invariably overestimate demand,”
says Johanna Hanefeld, senior lecturer in health policy and
systems at the London School of Hygiene and Tropical
Medicine. In 2010, only 167,000 medical tourists attended
Thai hospitals, according to research she conducted with
Thinakorn Noree and Richard Smith – far less than Deloitte
and the Thai government expected. The Thai Ministry of
Commerce estimated, for example, that in 2006, 1.2 million
medical tourists accessed health services in Thailand.
Malaysia is often touted as another medical tourism
success story. The country welcomed more than 850,000
global medical tourists and took in $230 million of revenue
last year, according to the Malaysian Ministry of Health.
Hanefeld has good reason to treat such predictions with a
skeptical eye.
The issue is how numbers are counted. For example,
almost 30 million tourists visited Thailand in 2015. The
group coming primarily for medical treatment was only a
fraction. But Thailand counts every interaction with the
healthcare system, from the consultation to the x-ray or CT
scan, as well as the operation, as separate interactions. By
this count, one person can have up to 20 treatments per
visit. Such “creative accountancy” greatly inflates medical
tourist numbers.
Hanefeld believes that “medical tourism remains on a
much smaller scale in Thailand than is promoted, so its
effect on the domestic health system is limited.” She also
believes it is unlikely that a global medical tourism market
in Thailand, or indeed elsewhere, will develop soon along
the line the boosters claim. “Most people want to be treated
locally or at least in their home region when they’re sick,”
she explains. There are also serious issues such as differing
national judicial systems that mean there is little chance
for compensation should malpractice suits arise, unless
patients are prepared for a legal battle in the host country.
Continuity of care can also be missing when the patient
finally returns home.
Based on the success of Bumrungrad and its rivals,
Schroeder believes the value proposition for medical
24 • Allianz