Driven by global trends and with a strong trust in
overseas medical resources and research achievements,
many Chinese people have begun to schedule medical
trips abroad. A lot of spas and salons are also starting to
introduce overseas medical programs.
By Fifi Kao
In recent years, the entire world has seen a rise in medical tourism. Many countries pay great attention to developing international medical services in order to attract more tourists who seek medical treatments.
According to the date issued by the Stanford Research Institute, the revenues from global medical tourism totaled US$438.6 billion in 2013, and increased to US$678.5 billion in 2017, accounting for 16% of the overall income of global tourism. It is estimated that the number will reach US$800 billion by the end of 2019.
Huge Demand for Overseas Medical Services
In the past few years, the government has continued to encourage and support the development of medical services. The overseas medical industry drew great attention from the public in 2019. Inside the industry, the supervision systems and policy-making procedures keep improving, various business models survive the tests and the market size continues to expand. A lot of investment capital has been flowing to the big enterprises in the overseas medical service field. A lot of overseas agencies are emerging and bringing in a huge amount of overseas medical resources.
Signs indicate that the demand for overseas medical services will become more diverse in the future. Now in the exploration stage, severe disease treatments and medical check-ups are the two main areas of demand. According to the survey, of all overseas medical products, the products for severe disease treatments take up 40.2% and those for medical check-ups take up 28.0%. More specifically, cancer patients especially seek new drugs. High-end medical check-up programs are usually supported by innovative medical devices and equipment. Such huge demand for severe disease treatments and high-end medical check-up programs also indicate that the requirements for new drugs and equipment in China haven’t been satisfied yet. In addition, fertility assistance services such as surrogacy and test-tube baby also take up to 14.6% and the number continues to rise.
Concerning the destinations, different country shows a different medical level and each have their strengths. For instance, South Korea is a second-to-none destination for aesthetics plastic surgery. Thailand attracts many women for pregnancy care and test-tube baby programs. Hungary’s dentistry is widely praised. Switzerland has been known for stem cells technology for a long time. Japan’s strengths are in medical check-ups and cancer treatment. China’s overseas medical market is mostly dominated by the products and services of the U.S., Japan and India. The former two especially take a big market share, providing 70% of all overseas medical products. This tendency will stillikely remain unchanged in the near future.
It is not a surprise to see India listed among the top 3 destinations for China’s Overseas Medical Services. Among all the medical tourism destinations in the world, India features the lowest cost and highest quality. It covers a wide range of medical programs, yet with cost a tenth of the same programs in the U.S. Moreover, India boasts quite advanced medical techniques and uses English as the official medical language. India’s wellness culture featured by yoga, Ayurveda and spa is widely known in the globe. All these factors have made it a famous health destination today.
The most prestigious departments in India’s medical world include cardiovascular medicine, orthopedics, nephrology, oncology and neurosurgery. Tourists not only get the best experience in medical and health aspects, but also have the chance to experience the rich culture of the country. It is estimated that the annual increase rate of India’s medical tourism is 22-25%. Every year, overseas medical tourists contribute 3 billion dollars of net profit to the country. Medical tourism has become one the biggest industries in India.
India is also called “the world’s pharmacy”. It’s the second biggest bio-drug production country, after only the U.S. In India, generic drug production is protected by the government and it has contributed 20% of all generic drugs in the world. The drugs are exported to over 200 countries. Over 60% of them are exported to developed countries including Europe, U.S. and Japan. As is portrayed in the movie Dying to Survive, generic drugs in India have guaranteed curative effects, yet their price is just 20%-40% of the original drugs from Western countries. China’s patients, especially those who suffer cancer and hepatitis, are in bad need of India’s cheap and quality generic drugs.
Overseas Medical Service Agencies Continue to Benefit
With the increasing demand for overseas medical services among Chinese people, intermediary agencies which provide cross-country medical services are showing a strong rise. The services offered by such agencies normally include applying visas for patients and their family members, making appointment and transferring the patients to hospitals abroad, sorting out the patient’s medical recordings, translating related medical materials and accompanying the patients for overseas doctor visit and interpreting for them.
At present, there are three types of overseas medical service agencies in China. The first type is traditional overseas medical service organizations. They started the earliest and now are many in number. They continue to update the offline services and have begun to set up online platforms. The second type is the China offices of overseas institutions. More specifically, famous hospitals or medical groups abroad set up offices in China. The third type is online platforms. Through he internet, patients can be connected to doctors and medical services abroad.
Currently, traditional overseas medical service organizations still take up a large part of the market. However, internet medical service platforms and overseas institutions who set up offices in China also play significant roles. Obviously, the internet is becoming an important approach for connecting people together, which may influence the competition pattern in the overseas medical service industry. Concerning foreign institutions which open offices in China, they can perfectly combine China’s medical resources and overseas medical technology and thus create an accurate way to attract customers.
In 2019, the market size of China’s overseas medical services has reached 3.2 billion yuan, showing a 60% year-on-year growth. It is predicted that the market will continue to grow fast in the next 3-5 years. The intermediary agencies will greatly benefit from it.
Several years ago, guests might pay several million dollars for a single anti-aging package without really understanding where the money went. Now the situation has improved. In 2019, the market saw higher transparency. In Japan, for example, all the medical institutions have posted their programs’ prices on the internet. Today, more approaches are available for customers to get information. Supply chains in the market havew become mature. Salons and spas strive to introduce quality medical services to guests as well as to maintain their brand reputation.
Development Prospect of Overseas Medical Service
It seems that high-end customers who seek medical services have begun to feel bored with the online marketing. Meanwhile, the government has made policies to filter the content of search engine marketing on medical services. Furthermore, the cost for online marketing keeps increasing. As a result, offline medical services are expected to boom again. In particular, private bank and commercial insurance which plays an important role in the consumption structure of the high-net-worth group may become the major channels for marketing overseas medical products.
High quality health insurance is another important channel. High-end health insurance is closely relevant to medical services. Meanwhile, its main targets are also high-net-worth groups. Therefore, overseas medical services can be introduced into health insurance and give the latter an obvious added value.
Furthermore, we can see that overseas medical services have more and more penetrated into the second-tier and third-tier cities. In the past, overseas medical service agencies mainly targeted the first-tier cities and other cities always suffered a lack of medical resources. But as the economy and consumption levels rise in those cities, demand for diverse medical services also emerges. So the overseas medical service agencies have begun to shift their development focus to the second and third-tier cities such as Chengdu.
Since China has suffered from a lack of expert medical resources for long time and also because rich persons have started to change their minds concerning medical treatments, overseas medical services are drawing increasing attention in recent years. Many famous medical institutions abroad have signed cooperation with China’s institutions in order to transfer more China’s patients abroad for better treatment. In recent years, the number of patients who seek treatment abroad keeps increasing, from several hundred a year five years ago to several hundred thousand now. Among the rich persons in China, 60% of them have experienced medical tourism at least once.
When it comes to choosing the destination for overseas medical treatments, 70% say that in addition to medical techniques and service quality, they will also take into consideration how simple it is to apply for a visa, the convenience of transportation, as well as the climate and food factors in the country.
Limitation in Growth
However, overseas medical service mainly target high-income groups. Since 2019, China’s economic development has begun to slow down, which has had an impact on the growth of the overseas medical service industry.
Moreover, the major customers of overseas medical services now are those who seek cancer treatment and medical check-up. Especially the former occupies 40% of the entire group. They are the target of overseas medical institutions and insurance companies. But it’s hard to expect this type of patients to suddenly boom in number.
The reasons are obvious. Firstly, is the high cost. To receive medical treatment abroad is expensive in itself, and you should also consider the money paid by family members who go with you, living expenses in the foreign country, and the loss of income since you have to suspend or quit your job. Meanwhile, long-range travel is not good or often even unbearable for cancer patients. If the disease is very serious, you should not dream that the hospitals abroad can do miracles. Also, the difference in culture, climate and living styles may negatively influence the patient’s physical and mental conditions.
Secondly, though the intermediary agencies, including overseas medical service companies and travel agencies, as the main providers of overseas medical services nowadays, are able to make sound arrangements for the customers and acquire medical resources of the foreign country, they still need to rely on the channels in China to receive more patient customers. But the doctors in the hospitals where cancer patients normally go won’t recommend patients to seek treatments abroad unless the hospitals have cooperation with overseas medical institutions because to do so will directly affect the income of the hospitals. Even the private medical institutions that serve rich persons don’t have such motivation to advise their patients go abroad. Obviously, if they do so, they will lose the patients and related income. Therefore, it’s in fact very hard for the overseas medical service agencies to gain a lot of patient customers or expect the number to increase miraculously. Now, some China’s medical institutions begin to acquire overseas hospitals and make them part of their own business. Only in such a situation will they advise patients to visit certain hospitals abroad.
Thirdly, it is very hard to realize long-distance medical treatment, a new concept proposed by many. On one hand, long-distance medical treatment usually doesn’t target the core problem of the disease. On the other hand, such secondary diagnosis or overseas group consultation faces a lot of limitations. For example, the doctors are not able to see the patients face to face. Their prescription should conform to the regulations of their own country. So long-distance medical treatment is at the most a supplement instead of a direct solution. Meanwhile, it’s not an easy thing to put the overseas doctor’s suggestion into practice because it’s often a comprehensive procedure that includes drug accessibility, patient’s affordability and more.
Therefore, it can be concluded that the overseas medical market will grow, but it will not grow so rapidly. Taking into account the operational factors and huge expenses, the increase of the number of people who really go abroad for medical services will be limited.
From another perspective, we can see that in addition to the new drugs and advanced technology in the foreign countries, one of the main reasons for people to seek treatments abroad is that the doctors in China lack sufficient communications with the patients. The doctors haven’t devoted enough time and energy to treating the patients and thus cause the patients to lose trust in them.
In some other countries, the doctors will provide patients with more information. For example, they will give a clear explanation of the disease to the patients, make distinctive therapeutic schedules based on the individual’s condition and give guidance in terms of mentality, diet and daily life routines. Moreover, they boast a pleasant medical environment. Some medical institutions are even equipped with five-star resort and spa facilities which make the patients really relaxed and enjoyable in the treatment process. These may be the true charm of overseas medical services.