Medical Tourism and Public Health

People’s Democracy

Organ of the Communist Party of India (Marxist)


No. 19

May 09,

Tourism and Public Health


Sen Gupta


most recent trend in privatisation of health services is medical tourism, which
is gaining prominence in developing countries. Globalisation has promoted a
consumerist culture, thereby promoting goods and services that can feed the
aspirations arising from this culture. This has had its effect in the health
sector too, with the emergence of a private sector that thrives by servicing a
small percentage of the population that has the ability to “buy” medical
care at the rates at which the “high end” of the private medical sector
provides such care. This has changed the character of the medical care sector,
with the entry of the corporate sector. Corporate run institutions are seized
with the necessity to maximise profits and expand their coverage. These
objectives face a constraint in the form of the relatively small size of the
population in developing countries that can afford services offered by such
institutions. In this background, corporate interests in the Medical Care sector
are looking for opportunities that go beyond the limited domestic “market”
for high cost medical care. This is the genesis of the “medical tourism”




tourism can be broadly defined as provision of ‘cost effective’ private
medical care in collaboration with the tourism industry for patients needing
surgical and other forms of specialized treatment. This process is being
facilitated by the corporate sector involved in medical care as well as the
tourism industry – both private and public.


many developing countries it is being actively promoted by the government’s
official policy. India’s National Health policy 2002, for example, says: “To
capitalise 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”. The formulation draws from recommendations that the
corporate sector has been making in India and specifically from the “Policy
Framework for Reforms in Health Care”, drafted by the prime minister’s
Advisory Council on Trade and Industry, headed by Mukesh Ambani and
Kumaramangalam Birla.





countries where medical tourism is being actively promoted include Greece, South
Africa, Jordan, India, Malaysia, Philippines and Singapore. 
India is a recent entrant into medical tourism. According to a study by
McKinsey and the Confederation of Indian Industry, medical tourism in India
could become a $1 billion business by 2012. The report predicts that: “By
2012, if medical tourism were to reach 25 per cent of revenues of private
up-market players, up to Rs 10,000 crore will be added to the revenues of these
players”. The Indian government predicts that India’s $17-billion-a-year
health-care 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.


India, the Apollo group alone has so far treated 95,000 international patients,
many of whom are of Indian origin. Apollo has been a forerunner in medical
tourism in India and attracts patients from Southeast Asia, Africa, and the
Middle East. The group has tied up with hospitals in Mauritius, Tanzania,
Bangladesh and Yemen besides running a hospital in Sri Lanka, and managing a
hospital in Dubai.


corporate group running a chain of hospitals, Escorts, claims it has doubled its
number of overseas patients – from 675 in 2000 to nearly 1,200 this year.
Recently, the Ruby Hospital in Kolkata signed a contract with the British
insurance company, BUPA. The management hopes to get British patients from the
queue in the National Health Services soon. Some estimates say that foreigners
account for 10 to 12 per cent of all patients in top Mumbai hospitals despite
roadblocks like poor aviation connectivity, poor road infrastructure and absence
of uniform quality standards.


say that as many as 150,000 medical tourists came to India last year. However,
the current market for medical tourism in India is mainly limited to patients
from the Middle East and South Asian economies. Some claim that the industry
would flourish even without Western medical tourists. Afro-Asian people spend as
much as $20 billion a year on health care outside their countries – Nigerians
alone spend an estimated $1 billion a year. Most of this money would be spent in
Europe and America, but it is hoped that this would now be increasingly directed
to developing countries with advanced facilities.




key “selling points” of the medical tourism industry are its “cost
effectiveness” and its combination with the attractions of tourism. The latter
also uses the ploy of selling the “exotica” of the countries involved as
well as the packaging of health care with traditional therapies and treatment


advantage is, of course, a major selling point. The slogan, thus is, “First
World treatment’ at Third World prices”. The cost differential across the
board is huge: only a tenth and sometimes even a sixteenth of the cost in the
West. Open-heart surgery could cost up to $70,000 in Britain and up to $150,000
in the US; in India’s best hospitals it could cost between $3,000 and $10,000.
Knee surgery (on both knees) costs 350,000 rupees ($7,700) in India; in Britain
this costs £10,000 ($16,950), more than twice as much. Dental, eye and cosmetic
surgeries in Western countries cost three to four times as much as in India.


price advantage is however offset today for patients from the developed
countries by concerns regarding standards, insurance coverage and other
infrastructure. This is where the tourism and medical industries are trying to
pool resources, and also putting pressure on the government. We shall turn to
their implications later.


India the strong tradition of traditional systems of health care in Kerala, for
example, is utilised. Kerala Ayurveda centres have been established at multiple
locations in various metro cities, thus highlighting the advantages of Ayurveda
in health management. The health tourism focus has seen Kerala participate in
various trade shows and expos wherein the advantages of this traditional form of
medicine are showcased.


generic problem with medical tourism is that it reinforces the medicalised view
of health care. By promoting the notion that medical services can be bought off
the shelf from the lowest priced provider anywhere in the globe, it also takes
away the pressure from the government to provide comprehensive health care to
all its citizens. It is a deepening of the whole notion of health care that is
being pushed today which emphasises on technology and private enterprise.


important question here is for whom is ‘cost effective’ services to be
provided. Clearly the services are “cost effective” for those who can pay
and in addition come from countries where medical care costs are exorbitant -
because of the failure of the government to provide affordable medical care. It
thus attracts only a small fraction that can pay for medical care and leaves out
large sections that are denied medical care but cannot afford to pay. The demand
for cost effective specialized care is coming from the developed countries where
there has been a decline in public spending and rise in life expectancy and
non-communicable diseases that requires specialist services.





tourism is going to only deal with large specialist hospitals run by corporate
entities. It is a myth that the revenues earned by these corporates will partly
revert back to finance the public sector. There is ample evidence to show that
these hospitals have not honoured the conditionalities for receiving government
subsidies – in terms of treatment of a certain proportion of in patients and out
patients free of cost.  If anything,
increased demand on private hospitals due to medical tourism may result in their
expansion. If they expand then they will need more professionals, which means
that they will try to woo doctors from the public sector. 
Even today the top specialists in corporate hospitals are senior doctors
drawn the public sector. Medical tourism is likely to further devalue and divert
personnel from the public sector rather than strengthen them.


concentration of health care providers is a well-known fact – 59 per cent of
India’s practitioners (73 per cent allopathic) are located in cities, and
especially metropolitan ones. Medical tourism promotes an “internal brain
drain” with more health professionals being drawn to large urban centres, and
within them, to large corporate run specialty institutions.


tourism is going to result in a number of demands and changes in the areas of
financing and regulations. There will be a greater push for encouraging private
insurance tied to systems of accreditation of private hospitals. There is a huge
concern in the developed countries about the quality of care and clinical
expertise in developing countries and this will push for both insurance and
regulatory regimes. The potential for earning revenues through medical tourism
will become an important argument for private hospitals demanding more subsidies
from the government in the long run. In countries like India, the corporate
private sector has already received considerable subsidies in the form of land,
reduced import duties for medical equipment etc. Medical tourism will only
further legitimise their demands and put pressure on the government to subsidise
them even more. This is worrying because the scarce resources available for
health will go into subsidising the corporate sector. It thus has serious
consequences for equity and cost of services and raises a very fundamental
question: why should developing countries be subsidising the health care of
developed countries?