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Last Updated : Dec 10, 2019 06:40 PM IST | Source: Moneycontrol.com

Medical tourists help Indian hospitals beat slump in domestic market

According to EY, India has 38 Joint Commission International- accredited hospitals, the fourth highest after Brazil, Thailand and Turkey.

 
 
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Karen Angavu (name changed), 40, hailing from Nairobi, was diagnosed with breast cancer. The treatment required her to undergo mastectomy - a surgery to remove the entire breast. Angavu was deeply shaken.

Angavu's doctor advised her to go to India for surgery under the Kenyan government’s National Hospital Insurance Fund (NHIF). The NHIF covers up to a maximum of 5,00,000 Kenyan Shillings (or Rs 3.5 lakh) for individuals seeking treatment abroad.

A patient is referred abroad for treatment by the Kenyan government if there is evidence that the hospitals in Kenya lack the infrastructure for treatment of the disease and treatment cost is comparatively affordable.

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Once the referral is approved, Magnus Medi, the Mumbai-based medical value travel company takes over. Magnus Medi's office in Nairobi assists the patient in choosing the hospital, arranging visas, tickets and accommodation. It also facilitates medical appointments and supports patients during surgery, while also providing timely follow-ups.

Angavu underwent surgery in Apollo Hospitals in Navi Mumbai and was discharged. She got her follow-up treatment in Kenya, and is now doing fine with her cancer in remission.

The Medical travel value facilitator gets fees from the hospital. Magnus Medi is accredited by National Accreditation Board for Hospital and Healthcare (NABH) and International Air Transport Association (IATA).

The facilitators are the major business sourcing channel for the hospitals. They have deep penetration in different markets from where they generate leads.

Magnus Medi, to start with was a travel agent – that quickly transformed itself into medical tourism facilitator. It is estimated that more than 200 medical facilitators have mushroomed, of which only 20 percent are accredited facilitator like Magnus Medi that operational.

The remaining 80 percent medical travel business comes from unorganized segment that includes students, translators, tourists, and unaccredited facilitators.

According to insiders the commissions range anywhere between 10 percent and 40 percent, varying from city to hospital.

Lure of medical tourism

According to EY, India has 38 Joint Commission International- accredited hospitals, the fourth highest after Brazil, Thailand and Turkey, but the savings of medical treatment costs in India with respect to US, is the highest at 65-90 percent.

India is viewed as one of the preferred destinations for medical tourism and holds 5th position among 41 major medical tourism destinations, as per Medical Tourism Index Overall ranking, 2016 .

The Indian medical tourism industry is growing at 18% CAGR year on year and is expected to be worth $9 billion by 2020.

The major destination cities in India are Delhi, Mumbai, Chennai, Bangalore, Hyderabad and Kolkata. A total of 27 percent of medical travellers visit Maharashtra out of which 80 percent goes to Mumbai, Chennai attracts nearly 15 percent while Kerala handles around 5-7 percent.

According to a recent FICCI report, the number of patients coming to India for medical treatment from Bangladesh has grown from 60,000 in 2014 to 225,000 in 2017; from Iraq, it has increased from just 758 in 2014 to 47,640 in 2017 From Oman, the number has gone up from 5,000 to 28,000 (2014-2017).

Better margins for hospitals

For big corporate hospitals with five star like facilities medical tourists are blessing in disguise at time when hospitals are going through tough environment of rising operational expenses, price controls and lower package rate.

The average revenue per occupied bed (ARPOB) from medical travelers is double than the local patient. Since most patients meet the expense out-of-pocket, hospitals will get instant payment without relying on insurance, where the package rates are low and payments are delayed.

Big hospital chains like Apollo Hospitals, Fortis Healthcare, Max Healthcare, Aster DM HealthcareNarayana Health among others are earning around high single to low teens from medical travelers.

Multispecialty hospital chain Aster DM Healthcare, which has deep presence in Gulf Cooperation Council (GCC) region is a major player in Indian medical travel. The healthcare provider’s Aster Medcity hospital in Kochi gets about 15-20 percent revenues from medical tourists, while CMI hospital in Bengaluru earns about 10 percent from patients abroad.

"The ARPOB of these patients is higher than the local population. Medical travel is growing, it is our focus area and we are now we're seeing traction. We are now promoting our doctors to go to GCC countries and conduct OPD (outpatient services) in our own hospitals and also conduct awareness among local doctors and public about the top notch facilities available in India. So that there will be more people coming," Dr Azad Moopen, Chairman of Aster, told Moneycontrol.

Aster, given its long and extensive presence in GCC, relies on direct referral of patients. The company has nurses and doctors who speak Arabic and has deep understanding regarding the cultural habits of GCC nations, helping it to attract medical tourists from Oman and UAE.

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First Published on Dec 9, 2019 08:55 pm
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