Medical Tourism: The Hospitality View

Alan D’Mello - Mumbai

Health tourism has many characteristics to endear itself to the hotelier. The fact that it is not an impulse market is the most endearing. In such an environment, the willingness to spend is high as the cost in India to somebody from big source markets like the UK is as low as 1/15th of what he would have to pay in his country. Thus, initial studies on spending patterns indicate that the monetary aspect, though an important decision influencer in coming to India, is no longer an issue. However, this is dependent on the source market. Patients from the USA benefit from a strong exchange rate, while patients from Africa may be more conservative.

Health tourism is also non-seasonal. This attribute can either be used to buffer seasonal business for resorts and location-specific properties, or as the main business itself. The latter has a few proponents in Thailand and the UK, where hotels have been custom-built to this requirement. The non-requirement for custom-builds is a strong characteristic in favour of the hotels. Both Kanjilal and Pandya agree that the family rather than the patient stay in hotels. "Other than the pre-operative period, patients are either in the hospital or the nursing home for post operative care," says Kanjilal. Unlike the short stays of traditional corporate and MICE guests, the average stay of a 'health tourist' is long, between seven to 15 days, depending upon the procedure. For example, the thumb rule for a procedure as complex as Open Heart Surgery including post operative care is 10 days.

The stay also exerts its multiplier effect. The 'mystical allure' of India and the low costs, entice many to complete their purpose to India with a visit to alteast one resort. "The effort is to make a holiday out of a trip for treatment," writes Menck. This tendency is already being optimised upon by tour operators.

Though the exchange rate is in their favour, not all patients and their families want to spend on luxury rooms since often the time spent in the room is at a minimum. The segment thus has the capability to cater to the entire hotel spectrum, especially mid-market operators.

Pre-payment is another good characteristic. Standard procedures such as cataracts do not require customised itinerary. This has increased the popularity of off-the-shelf packages from agents such as Kuoni and New Delhi-based Always Travels. Usually, the long stay creates good and often long-standing relationships between the patient's family and the hotel. Successful procedures only strengthen the bond. Lucrative repeat business is often derived from this, as many medical procedures are not one time affairs. This strong bond, also gives rise to an equally strong reference, which all hoteliers know is better than discounts and advertising.

Meet the demand

"Hotels will have a large role to play in making the tourism forecast possible. This is a segment with far more potential than what is apparent," feels Dr Ajay Dhankar, principal author of 'Healthcare In India: The Road Ahead'. Though the October 2002 report researched in partnership with the CII and the Indian Healthcare Federation, focused mainly on the healthcare segment, it highlights the macro projection of allied arms like hotels and travel service providers. Dhankar admits that though research into this segment of the health tourism juggernaut was not part of the brief, it was included in the report because of the need to highlight the immense potential of the segment. Analysts like Dhankar and Pritam Pandya, director designate, FICCI, Western Regional Council, are convinced of the inevitable growth of health tourism because it is a service catering to a strong need market. Says Pandya, "People will travel for treatment only when they are compelled to and do so after great planning," says Pandya who is in the process of completing his own research on the subject. And Gautam Naha, former advisor to the ministry of tourism, Andhra Pradesh, can vouch for the rise in demand. Naha who conceptualised the programme for Andhra Pradesh says, "From January 2001, we have 20 healthcare providers on board catering to 2,000 patients. Now hotels are being enlisted to join the programme."

Dependency factor

While health tourism offers the pot of gold at the rainbow, the reality of hoteliers being dependent on the largely unorganised sector does not bode well. The Indian healthcare segment is in dire need for improvement and standardisation by service providers, especially hospitals. The Medical Tourism Council of Maharashtra (MTCM) is trying to acquire a JCAHO accreditation, so if 10 hospitals get together to get accredited, the cost incurred by each hospital would be much less. Some have tried getting ratings and standardisation through rating agency CRISIL, but the problem is that CRISIL is not recognised abroad.

Dr Rajendra Sharma, director administration of Bombay Hospital and Medical Research Centre says, "Our government should plan an accreditation body and a gradation procedure for our hospitals. We should have our own benchmarks and criteria to judge organisations. Why should we depend on the United States for it?"When asked if other countries will recognise Indian gradation procedures, Dr Sharma said, "Our degrees like DM and MCH and our nurses are recognised abroad. Then why not our gradation procedure?" In India, awareness about healthcare is poor. Rules of reimbursement are stringent, performance of third party administrators (TPA) are not satisfactory. Discharge details, disease codings, ICD codings and handling of medical records are not in place, making hampering growth.

Speedy recovery

Concerted efforts like that by FICCI's Western chapter are being made. Sushil Jiwarajka, chairman, FICCI Western India, is spearheading the drive to get all the segment's service providers under one banner. The MTCM is in the middle of a six-month plan. It recently set up its website, www.mahamedtour.com, an informative site for hospitals and hotels. The tourism departments of Maharashtra, Kerala and Andhra Pradesh too have created its own site to promote the state's services.

The effort is being made, the potential is there to be exploited. The one fear analysts have is that the hospitality industry, currently reaping the whirlwind, may not sow the seed for the future. The industry's co-operation is important; foresight and patience for this new segment, still in incubation period (especially of the healthcare segment's attempts to streamline), makes the future rosy and healthy.