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Medical Tourism Economic Report: Latin America versus Asia

latin-america-vs-asia

Two regions that have been impacted greatly by the industry of medical tourism are Latin America and Asia. Both these regions have their share of developing economies and low priced healthcare options. In addition, both have strong tourism industries and best-in-class healthcare providers. In the following report, we will explore some of the strengths, weaknesses, opportunities and threats for the two regions and compare and contrast their potential.

Latin America
This region has many economic opportunities in the future including a growing interest and momentum in the medical tourism industry. Although, not as advanced as a region in medical tourism as are several countries in Asia, Latin America has many advantages that it can grow on, which include: having a close proximity to North America, low cost of labor (particularly compared to North America), many ‘western’ trained and English speaking healthcare practitioners, a culture that many Europeans and North Americans find familiar, limited medical malpractice costs, beautiful locations including world-class beaches and hotels, and a friendly and caring culture. Countries in Latin America that are focused on medical tourism are: Mexico, Costa Rica, Brazil, Argentina, Guatemala, Colombia, Chile, and El Salvador (to name just a few of the major players).

The economic numbers for Latin America are not as easy to find as forecasts are for the Asian region and countries. However, Jonathan Edelheit, president of the Medical Tourism Association (MTA) stated in an April 2009 article that by 2017 up to 23 million Americans could be traveling overseas spending up to $79.5 billion per year, and over 50% of that business could be headed to Latin America. Several hospitals and healthcare clusters in Latin America have become international destinations and could continue to grow their market share. There is also a growing awareness of the need of governmental support (if not investment) in Latin America that will only help this industry. Finally, a huge advantage is the number of North Americans that are planning to retire abroad and the core competence in dental care in many Latin American countries.

Latin America Region SWOT Analysis

Strengths
• The proximity of most medical tourism destinations are within a reasonable flight from North America.
• Most Latin American countries have a favorable exchange rate which leads to lower cost good and services.
• Many Latin American countries have high rates of fluency in both English and Spanish.
• Latin America has a booming tourism market with many scenic locations and various types of geography (beaches to mountains) to choose from.
• Latin Americans are known for their overall friendly and family-oriented culture (they also boast the hosting of a variety of world-renowned celebrations).
• The wonderful climate in Latin America destinations is deemed to be conducive to recovery.
• Services and procedures such as: rehabilitation, retirement, dental, cancer treatments, low-cost pharmaceuticals, reproductive medicine, and diabetic care.

Weaknesses
• Many medical tourists are either ill informed or fearful of travelling to Latin America because of a reputation of violence, corruption, and poverty/disease.
• Lack of standardized quality measurement and quality ranking systems.
• Difficulty in seeking legal remedy in the event of malpractice.
• Major insurance carriers have yet to promote or widely cover medical treatments in Latin America.
Several Latin American countries are trying to serve too wide a swath of the market to maintain a sustainable industry.

Opportunities
• Large, growing population of Hispanics in North America that are not opposed to traveling to Latin America to receive healthcare.
• History of Americans and Canadians receiving healthcare and other low-cost services in Latin America.
• Possibility of receiving funding by U.S. or Canadian government-sponsored programs.
• Many Americans can travel freely back-and-forth and in some cases without Visas as a result of free trade agreements (e.g., NAFTA, DR-CAFTA, etc.).
• Some governmental initiatives supporting medical tourism.
• Strong willingness of North American firms to reduce healthcare costs.

Threats
• Disease (particularly pandemics), gang wars, coups, or other negatively perceived events as a result or even caused by poverty, over-crowding, criminals groups, unstable governments, and cultural expectations.
• Increasingly socialist policies that may limit the medical tourism industry in certain countries.
• Competition from Asian Nations for North American and European medical tourists.
• Some opposition to globalization of healthcare by key stakeholders in North America (e.g., unions, politicians, and healthcare associations).
• Due to the economy, many consumers simply do not have large enough cash reserve to pay for services.
• Limited numbers of insurance carriers that have comprehensive relationships with medical providers in Latin America.

Asia
Just as this region was able to become the dominant player in outsourcing of manufacturing, software design, call centers, and design, Asia hopes to become the greatest hubs for medical tourism. Currently, with several of the top medical tourism countries by volume, this region looks to remain a top player in this industry for many years to come. Asia has many advantages, as a region, including having a low cost of labor, recent investments and openings of best-in-breed hospitals, in some Asian countries- healthcare providers are in greater numbers (than compared with more developed ‘Western’ countries), limited medical malpractice costs, beautiful locations including world-class beaches and hotels, and a focus on hospitality and patient comfort. Countries in Asia that are focused on medical tourism are: India, Thailand, Malaysia, Singapore, Korea, and the Philippines (to name just a few!]).

According to a recent article on Hotelmarketing.com, Asia’s medical tourism industry is expected to be worth at least $4 billion by the year 2012. Currently, an estimated 1.32 million medical tourists come to Asia from all over the world, including the U.S. and Europe (actually, quite a bit of the current travel comes from within the Asian region itself). Several hospital chains in Asia have created such outstanding reputations for themselves that medical tourism has become a major revenue generating activity for these economies.

In several of the countries in Asia, effective public-private partnerships have been formed in order to market their expertise globally. Finally, the Asian region leads the world in low-cost pricing and has a huge population to provide robust regional medical tourism revenues as well.

Asian Region SWOT Analysis

Strengths
• More mature medical tourism markets, facilities, and practices.
• The public-private partnerships and country/regional cooperation to woo foreign medical tourists.
• Government sponsored tax breaks and open environment for foreign private investments in healthcare infrastructure.
• A relative surplus in the labor pool due to large populations and strong emphasis in education in some countries.
• A history of using complementary and alternative medicines (CAM) alongside traditional ‘Western’ medicine (e.g., yoga, Ayurveda, herbs, TCM/TKM, etc.).
• In close proximity to Middle Eastern medical tourists.
• Asia also has a booming tourism market with many scenic locations and various types of geography (beaches to mountains) to choose from.
• Asians are known for their culture of hospitality and service.
• Services and procedures such as: wellness/CAM, eye-care, musculoskeletal care, cardiac care, transplants, hemodialysis, and general/plastic surgery.

Weaknesses
• The length of travel for many European and North American tourists.
• Some fears of travelling to Asia because of a reputation of social unrest, violence/terrorism, corruption, and poverty/disease.
• The lack of European and North American language (e.g., English, German, French, etc.) ability.
• The culture in Asia is arguably very different from occidental cultures.
• Difficulty in seeking legal remedy in the event of malpractice.
• Large disparity in the healthcare systems for the poor and rich/medical tourists.
• Several Asian countries are trying to serve too wide a swath of the market to maintain a sustainable industry.

Opportunities
• Large populations in the region offer many advantages (e.g., more regional medical tourism, lower cost of labor, more healthcare professionals, etc.).
• Increasing strength and diversity of Asian economies and many fast-growing areas.
• Many strong governmental initiatives supporting medical tourism.
• Shrinking cost of fuel (i.e. gas prices) which makes airfare lower and encourages medical tourism.
• The wealth in the Middle Eastern could lead to more tourists travelling to the Asian region.
• The Asian expertise in off-shoring of various industries to add to their chances to capitalize on this market.
• The emphasis on education and healthcare in many countries in Asia.
• Strong private investments will build the infrastructure of the region.

Threats
• Disease (particularly pandemics), social unrest, terrorism, overcrowding, dirty environments in some areas of Asia are perceived negatively and hurt marketing efforts.
• Competition from Latin America, Eastern Europe, and the Middle East for North American, European, and Middle Eastern medical tourists.
• Due to the economy, many consumers simply do not have large enough cash reserve to pay for services or airfare.
• Limited numbers of insurance carriers that have comprehensive relationships with medical providers in Asia.
• Fast growth of medical tourism in other regions and countries outside of Asia.

As these regions continue to mature in their understanding of their strengths and weaknesses, we expect that regions and individual countries will find their ‘niche’ areas in which they excel. The Asian region has the advantage of greater populations (several billion in the region alone) and a more ‘mature’ medical tourism market. Whereas, the Latin American market has an advantage of being in close proximity to over 350 million North Americans and a fast growing and fairly youthful Hispanic population.

The major weakness that many countries in both regions currently have, in our humble opinion, is not understanding their core areas of competence and taking advantage of these by differentiating themselves in the market place. However, both regions have many amazing opportunities to grow their economies in the near term through medical tourism.

David G. Vequist IV, Ph.D. is the founder and Director of the Center for Medical Tourism Research (www.medicaltourismresearch.org) – the very first Medical Tourism research center in the world. He is also an Associate Professor of Management in the H-E-B School of Business & Administration at the University of Incarnate Word in San Antonio, Texas, USA. He is also a consultant, author and speaker on topics such as healthcare trends and technologies. He can be reached at vequist@uiwtx.edu.

Erika Valdez, a native of Mexico, and just graduated from the MBA program (May 2009) in the H-E-B School of Business & Administration at the University of Incarnate Word in San Antonio, Texas, USA. She is a Graduate Assistant at the Center for Medical Tourism Research (www.medicaltourismresearch.org) and a promising speaker and author in the area of medical tourism and economic development in developing nations. She can be reached at eri.valort@gmail.com.

Billy Morrison, a native of Chile, is a graduate of the MBA program in the H-E-B School of Business & Administration at the University of the Incarnate Word in San Antonio, Texas USA. Billy is a social entrepreneur and promising speaker, author, and futurist. He can be reached at billyamorrison@aol.com.

This article is a column quoted from the Medical Tourism Magazine . Please click here to go to the original article written by David G. Vequist, Erika Valdez and Billy Morrison and published Jun 1, 2009.

This article is uploaded by Majbritt Thomsen, administrator on ‘Views On Tourism’.

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Posted in Asia, Development, Education and qualification, Performance and management, Sale and marketing, South America, Sustainability.


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