Why do medical tourism businesses fail?

 The internet and the media in general often report stories of (purported) medical tourism business success, but remain silent when it comes to the reporting of failures. People who have developed a medical tourism business; for the most part means that they became “medical tourism facilitators”. Stories of people and businesses who decided to enter the “billion dollar medical tourism market” by addressing and targeting the patient from abroad. These are typically medical services providers who have an existing and well established domestic healthcare business or typically medical tourism facilitators who may be new to the healthcare sector.

Inspired to enter the medical tourism and medical travel sector by what they read on the internet, what they heard at conferences or based on the advice of various industry experts and consultants.

Their experience of entry into the market range from disappointment to stories of sorrow and woe. The answers are clear and simple:

• In determining the opportunity, these failed market entrants may have overestimated the size of the market (both current and potential). Some may have got this badly wrong.

• These failed market entrants to medical travel tended to be ill equipped aspirants who knew about but did not fully understand the market sector. And to their detriment, placed too much faith and trust in the knowledge and understanding of others.

• Some failed market entrants got their assessment of current and potential market size right, but they failed to consider the number of pre-existing, well qualified and established industry players.

• And of course, some perhaps did not factor in the risks of entering international markets and the effect that national and international events can have on a business which is dependent on international travel. Recent examples include drug related violence in Mexico, civil unrest in Thailand, and the NDM- 1 “superbug” story emanating from India.

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The decision to enter the international medical travel either as a facilitator or a medical services provider should take into consideration not only the size of the market, but also the number of industry players, especially those who are well equipped, in terms of capital, financing and knowledge and understanding.

In a market with many players, a good idea may become a bad idea.

The competition is becoming more aggressive and sophisticated, and often has deep pockets. And which is also the reason emphasizing the need for formal “sector-specific” executive education for those contemplating going into the health tourism business (from empiricism to professionalism).

It’s been argued that contrary to simplistic thinking, the growth of medical tourism, in isolation, (as opposed to health tourism, which includes medical tourism) will not experience the “explosive growth” predicted by some consultants and experts who fail to appreciate how healthcare delivery and consumption actually works.

Medical travel destinations which set out to become the “leading destination for medical tourism” on the basis that they were cheaper and better than domestic facilities and providers are now experiencing the effect of the “West’s Revenge”. This has been compounded by the effects of the worldwide recession. Again, contrary to the simplistic thinking of some commentators who argued that recession would drive more and more patients abroad for cheaper treatment, this has clearly not been the case; medical tourism and healthcare businesses in general are being hit by recessionary factors the same as other international markets and businesses.

White House is Writing Off Small Medical Practices?

Physicians Say White House Should Not Write Off Small Practices

In a newly published article, the White House is advising physicians to accept a life in Big Medicine — as a hospital employee or member of a large group practice — in the wake of healthcare reform.
Some leaders of organized medicine, however, are objecting to the government message.
"We're not ready to write off the small practices," J. Fred Ralston Jr, MD, president of the American College of Physicians, told Medscape Medical News. "We think there needs to be more than one delivery model."
Dr. Ralston and Dr. Williamson were responding to an article by 2 White House officials and 1 ex-official about the implications of healthcare reform.
"The economic forces put in motion by the [Affordable Care] Act," the authors write, "are likely to lead to vertical organization of providers and accelerate physician employment by hospitals and aggregation into larger physician groups." Physicians who embrace the changes and opportunities created by the law "are likely to deliver the greatest benefits to their patients, the health system, and themselves" and "will be rewarded in the future payment system."
What does it mean to embrace "vertical organization?" This business catchphrase refers to enterprises with a hierarchal structure and centralized management. An integrated delivery system that owns hospitals, medical practices, and other healthcare services is a prime example. Other examples are the military and the federal government.
The growth of vertical healthcare organizations, as well as large, independent group practices, has slowly dismantled medicine as a cottage industry. The percentage of physicians in solo practice declined from roughly 41% in 1983 to 25% in 2007 - 2008, according to data from the American Medical Association. According to an oft-quoted study from the Center for Studying Health System Change, the percentage of physicians who are solo practitioners or are practicing in groups of fewer than 6 physicians fell from 53% in 1996 - 1997 to 42% in 2004 - 2005.
The White House officials say healthcare reform will further the trend toward aggregation. The new law lays the groundwork for financially rewarding providers based on the quality of the care they render through accountable care organizations (ACOs) and patient-centered medical homes. ACOs consist of physician practices and hospitals that take joint responsibility for meeting performance measures for quality and cost, and they either earn bonuses or incur pay cuts depending on how they perform as a group. In a medical home, a patient receives holistic, long-term primary care from a multidisciplinary team usually led by a physician, with insurers paying extra for coordination of care with outside providers.
In these new models, there needs to be information technology — as in electronic health records — and administrative personnel to "track quality measures, account for and manage shared financial incentives, and oversee care coordination," the authors write. Accordingly, the healthcare system will gradually organize itself around either hospitals or physician groups.
Past Experience With Hospital Employment Not Encouraging
Dr. Ralston of the American College of Physicians points to the unhappy experience that physicians had when droves of them went to work for hospitals in the 1980s and 1990s. Many of those marriages broke up.
"Most doctors who were employed by hospitals found the arrangement lacking," he said. The well-being of medical practices took second place to the well-being of the hospital, and the loss of independence proved painful.
Physicians in small practices can enjoy the benefits of larger organizations without giving up their independence, Dr. Ralston said. Computer technology, for example, can allow small rural practices to share common employees who tackle quality-improvement chores. And computer technology allows independent practice associations (IPAs) to function as group practices. A case in point, said Dr. Ralston, is the Mesa County Physicians IPA in Grand Junction, Colorado — a community celebrated for improving patient care while lowering costs. Healthcare reformers, he said, need to gather more evidence on how large and small organizations perform in the new framework of quality goals and financial incentives.
"I agree wholeheartedly that the law will push physicians into larger groups," said Dr. Williamson, who also is a spokesperson for the Coalition of State Medical and National Specialty Societies, which campaigned against the Affordable Care Act. "I don't think that's the role of the federal government to be doing that."
Dr. Williamson said the law will only add to the regulatory burden that has forced small-practice physicians to seek refuge in a hospital or mega-group. Many physicians, he predicted, will not accept the new paradigm and will instead leave patient care, leaving medicine even more short-handed.
He conceded that some vertical organizations in healthcare, such as the Veterans Health Administration, perform well. "But we need pluralism," said Dr. Williamson, a member of a 3-physician practice. "We need soloists as well as groups."
"The game is not over for small practices," Dr. Ginsburg told Medscape Medical News, "but it's over for small practices operating in a bubble on a piecemeal basis, ignoring the rest of what's happening to their patients. They can't just be cottage industries."
Echoing Dr. Ralston, Dr. Ginsburg said IPAs show small groups a way forward. "IPAs are keeping medical practices viable in California," he said. He noted that their record of success has occurred in a state where managed care remains vibrant. There, managed care has pioneered the use of pay for performance, which figures prominently in the new healthcare reform law.

Beware: New Superbug Widespread in India

UK doctors: New superbug gene could spread widely

LONDON – Travellers coming back from India after medical procedures have brought back to Britain a new gene that allows any bacteria to become a superbug, and this type of drug resistance could soon appear worldwide, and scientists warned.

Though already widespread in India, the new superbug gene is being increasingly spotted in Britain and elsewhere. Experts warn a surge in antibiotic resistance due to the booming medical tourism industries in India and Pakistan, as patients import dangerous bugs to their home countries.
So far 37 people had been identified with the superbug who returned to the U.K. after undergoing surgery in India or Pakistan. The superbug gene can be swapped between different bacteria to make them resistant to most drugs.
The resistant gene has also been detected in Canada, Australia, the U.S., the Netherlands and Sweden. Since many Americans and Europeans travel to India and Pakistan for elective procedures like cosmetic surgery, it was likely the superbug gene would spread worldwide, the researchers say .
In an article published online Wednesday in the journal Lancet Infectious Diseases, doctors reported finding a new gene, called NDM-1. The gene alters bacteria, making them resistant to nearly all known antibiotics. It has been seen largely in E. coli bacteria, the most common cause of UTI , and on DNA structures that can be easily copied and passed onto other types of bacteria.
The researchers said the superbug gene appeared to be already circulating widely in India, where the health system is much less likely to identify its presence or have adequate antibiotics to treat patients.

the new superbug emerges 
 
"The potential of NDM-1 to be a worldwide public health problem is great, and coordinated international surveillance is needed," the authors wrote.
The numbers of people who have been identified with the superbug gene remains very small, though.
"We are potentially at the beginning of another wave of antibiotic resistance, though we still have the power to stop it," said Christopher Thomas, a professor of molecular genetics at the University of Birmingham who was not linked to the study. Thomas said better surveillance and infection control procedures might halt the gene's spread.
Thomas said while people checking into British hospitals were unlikely to encounter the superbug gene, they should remain vigilant about standard hygiene measures like properly washing their hands.
"The spread of these multi-resistant bacteria merits very close monitoring," wrote Johann Pitout of the University of Calgary, Canada, division of microbiology, in an accompanying Lancet commentary.
International surveillance of the bacteria, particularly in countries that actively promote medical tourism, Pitout emphasized.
" If family doctors have to treat infections caused by these multi-resistant bacteria on a daily basis, the consequences will be serious" he wrote.

Khazanah Malaysia beat Fortis India for Parkway Singapore ownership

Malaysia's Proton Car in Geneva

What next for Fortis after it loses bidding war for Parkway?

India’s Fortis Healthcare has lost out to Malaysian government company Khazanah in the bidding war for Singapore based Parkway Holdings. Fortis’s main Indian rival Apollo Hospitals has links with Khazanah and expects to benefit from new joint ventures. The key to understanding why several parties were so interested in Parkway is that Apollo, Fortis, Parkway and Khazanah see many opportunities not only in their own countries, but across Asia and beyond. The simplistic version is that all see massive opportunities in attracting medical tourists to their hospitals. On this, they compete with countries and hospitals worldwide. Many of their competitors are happy to slowly expand in their home countries and attract domestic and medical tourist customers.

These four companies, although different in approach, size and management style, have a longer term and wider vision. They understand that there is a finite limit to how many people they can persuade to go to another country for surgery or a health check. They also understand that modern private healthcare is increasingly global. So their aim, on their own and with private and public partners, is to build new hospitals in countries where people will want treatment, but in their own country. Asia, and particularly China, is seen as offering huge potential, but other countries are under the microscope too. The trick is getting into a new country or area, ahead of local and international rivals.

Fortis saw Parkway as a vehicle for international expansion, particularly into South-East Asia. Fortis Healthcare will sell the 24% stake it currently holds in the Singapore’s largest hospital chain to Malaysia’s sovereign wealth fund Khazanah Nasional Berhad. So instead of borrowing money to buy Parkway, it will get money from exiting Parkway. Fortis can either try to increase its investments at home or look for other targets similar to the Parkway chain. Malvinder Mohan Singh of Fortis says, “We intend building a pan-Asian and global healthcare group and will explore other organic and inorganic opportunities within the region. Our vision for a global healthcare service provider which can cross leverage learnings across geographies, optimize cost and provide the best quality to the benefit of the patient has not changed. We hope to re-invest the value unlocked from this experience to support our vision to become a global healthcare provider.”

The acquisition of Parkway would have turned Fortis into Asia’s largest private healthcare network, with a presence in Bangladesh, Brunei, Cambodia, China, India, Indonesia, Malaysia, Mongolia, Myanmar, Pakistan, the Philippines, Russia, Saudi Arabia, Sri Lanka, Ukraine, the United Arab Emirates and Vietnam. Now Fortis will have to find other ways to expand. Fortis had hoped to use Parkway’s brand and secure a pan-Asia recognition that would help it promote medical tourism.

Demand for private medical services has been growing in Asia as incomes rise. Most of Asia’s medical tourism is intra-regional, or from the Middle East and Africa, with a flow of patients from countries with less developed healthcare infrastructure towards those with better hospitals, rather than the widely promoted opportunities for Americans and Europeans to get lower cost healthcare. Singapore was an early mover in medical tourism. Parkway has shown that middle class patients from developing countries such as Indonesia can be tempted to make the short flight to Singapore for a standard of healthcare that is difficult or impossible to obtain in their own countries.

Parkway runs three hospitals in Singapore, with a fourth under development, plus one in energy-rich Brunei, six in China and two in India. In addition, it runs 11 in Malaysia, including nine operated by the Pantai group, in which it has a 40 per cent stake, with Khazanah holding the remaining 60 per cent. The Malaysian government has identified private healthcare as a key sector for development, and recently announced a series of initiatives to promote the industry, including tax breaks for new hospitals aimed at medical tourists, simplified visa requirements for patients and incentives for medical specialists to work in the country. Khazanah has not revealed plans for Parkway, but unlike Fortis it does not run hospitals, it will probably just act as a source for funding new investments and may encourage Parkway to look for partners in joint deals, to give it the expertise in countries where it does not operate now.

Where does Apollo Hospitals fit? Khazanah has a stake in Apollo and Apollo has partnerships with Parkway. Apollo plans to build 100,000 beds per year for the next two decades. It has 50 hospitals in India and other countries. Apollo Hospitals owns, part owns or manages hospitals in Mauritius, Ghana, Nigeria, Yemen, Bangladesh, Kuwait, Seychelles, Sri Lanka, Caribbean islands and the Dutch Antilles. It has just agreed to manage the Indira Gandhi Memorial Hospital located in Male, Republic of Maldives. Apollo is also developing business by technical innovation. It is now offering endovascular treatment [liberation treatment] to patients with multiple sclerosis and has already performed this procedure on 35 patients from Canada and the USA. India’s oldest corporate hospital chain attracted 60,000 foreign patients in 2009.