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Medical tourism in India: generating profits while providing health care.

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                  Medical tourism in India: generating profits while providing health care.

India is known for its expertise in introducing cost-effective methods in various fields, be it a space program or in medical expertise. The cost-effectiveness of medical services attracts tourists from all over the world; majorly the elite from South-East Asian countries and other developing countries seeking treatments not available in their home countries. Government patronage and the corporate boom in medical care have made medical tourism a multibillion dollar industry.

‘Medical tourists / Patients‘ travelling abroad for medical care does so for various reasons, elite patients from developing countries seek treatments not available in their homeland, patients from countries like United States seek treatments that costs around ten times in their home country. And, as Public funded Insurance is unable to cope with the rising demands of an increasingly aging population, patients from countries like United Kingdom and Canada travel to India to beat the huge waiting period for many routine procedures.

routine procedures

The key selling points of Indian medical tourism industry are the combination of high quality facilities, competency, English-speaking medical professionals, cost effectiveness and the attractions of tourism. The cost differential is huge here: Open-heart surgery costs up to $70,000 in UK and $150,000 in the US; in India’s best hospitals it could cost between $3,000 and $10,000. The cost of Knee surgery is $8,000 in India; in Britain it costs $17,000. Dental, eye and cosmetic surgeries in western countries cost three to four times as much as in India. Medical tourists usually get a package deal that includes flights, hotels, treatment and, often, a post-operative vacation in the exotic locations.

The then US president Barack Obama while visiting a renowned hospital in National Capital Region made a praising remark on the high quality service provided by these high-end private hospitals.

Cost Comparison for Selected Surgeries

Promotion through Government policies and patronage

The private sector has always been the primary medical service provider; the neo liberal policies introduced by the government have bolstered its rapid growth. The public expenditure on health services is in abysmal state, and the private health care is generally availed by the high end customers. The new wave of globalization has fostered a consumerist culture and has helped medical industry sustain through it.

Government patronage and the subsidies provided have helped this sector to grow at rapid speed. Government stance on this particular issue is outlined in The National Health Policy, 2002; it is clear that the government policy supports medical tourism: “To capitalize on the comparative cost advantage enjoyed by domestic health facilities in the secondary and tertiary sector, the policy will encourage the supply of services to patients of foreign origin on payment. The rendering of such services on payment in foreign exchange will be treated as ‘deemed exports’ and will be made eligible for all fiscal incentives extended to export earnings. This formulation draws from recommendations in the ‘Policy framework for reforms in health care’, drafted by the Prime Minister’s Advisory Council on Trade and Industry headed by Industrialists Mukesh Ambani and Kumaramangalam Birla.

Revenue tale

According to Industry estimates, the total revenue of medical tourism was valued over $310 million in 2005-06 with a record 1 million foreign medical tourists visiting the country every year and is expected to grow to $7-8 billion by 2020.

Visitors from 55 countries come to India for treatment but the biggest growth in business is from the UK and the US.  The government predicts that India’s healthcare industry could grow 13 per cent in each of the next six years, boosted by medical tourism which, industry watchers say, is growing at 30 per cent annually. Since 2006, the government has also started issuing M (medical) visas to patients and MX visas to the accompanying spouse. 

 A comparison of different medical tourism initiations.

The extra revenue generated by medical tourism could benefit the healthcare in India if taxed adequately to support public health. There is a big concern about the mal practices of these private hospitals .the medical tourism industry is provided with tax concessions; the government gives private hospitals treating foreign patients benefits such as lower import duties and an increased rate of depreciation (from 25 per cent to 40 per cent) for life-saving medical equipment. Prime land is provided at subsidized rates. The industry also gets a pool of medical professionals who train in public institutions for meager fees and move on to work in private hospitals – an internal brain drain. Thus, the price advantage of the medical tourism industry is paid for by Indian tax payers who receive nothing in return.

This is the biggest drawback and setback for health services in India, but these issues are not unsolvable. Let’s take an account of a country like Cuba, a pioneer in the field of medical tourism.  It has hospitals for Cuban residents and others for foreigners and diplomats. Cubans receive free health care for life while tourists have to pay for it.

The Cuban government has developed medical tourism to generate income which is ploughed back to benefit its country’s citizens. The Cuban example shows that there are ways to use medical tourism to really benefit our people. Cuba is the most successful example of medical tourism. Many important lessons can be learned from the Cuban experience.

Ayurveda medical tourism (leisure and treatment)

Ayurveda medical tourism (leisure and treatment)

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