For some time, I have been unable to provide my readers with any real data on the business of medical tourism, so that they could realize the value and potential of medical tourism, and how it can provide lower cost health care, with better quality of care.
I have tried to get cost comparisons for surgeries common to workers’ compensation, but that effort has been difficult at best, and extremely impossible, to say the least. It is either a closely guarded secret, or a threat to the business model of the medical tourism destination to reveal actual costs for surgeries.
But I came upon some rather interesting and revealing data today about international tourism that I think may help clarify and suggest why implementing medical tourism into workers’ compensation is a good idea. The data I found does not specifically concern medical tourism, per se; but for this article, I would like to transpose the word ‘travel’ for ‘tourism’, as I have already done in the title above.
As reported today in the International Medical Travel Journal (IMTJ), international tourism (travel), grew by 5% during the first half of 2013, compared to the same period last year, reaching almost 500 million travelers, according to the United Nations’ World Tourism Organization (UNWTO).
The IMTJ article also stated that growth was above the projection made at the beginning of the year, from +3% to +4%, and is also exceeding the trend as outlined in the UNWTO’s Tourism Towards 2030 long-term outlook, at +3.8% a year.
Breaking down by region, the best results were to be found in Europe (+5%), Central and Eastern Europe (+10%), Southern and Eastern Europe (+6%), Asia and the Pacific (+6%), with the Americas only improving +2%. Within the region, Central America performed above the region’s average at +4%.
To get a deeper and broader perspective on what this means for international tourism (travel), and to ascertain if there was any impact on medical tourism in this data, I downloaded the UNWTO’s UNWTO Tourism Highlights 2013 Edition report.
According to the UNWTO, international tourist arrivals (ITA) [i.e., overnight visitors], grew by 4% in 2012, topping the 1 billion mark globally for the first time in history. Asia and the Pacific had the fastest growth across all regions, with a growth rate of 7% in international arrivals, or 16 million more arrivals. The Americas experienced sustained growth at 5% in arrivals, or an increase of 7 million arrivals.
Within the Americas region, Central America led the way with an 8% increase in arrivals, or 9 million arrivals, South America realized a 5% increase in arrivals, or 26.7 million arrivals, and the Caribbean realized a 4% increase in arrivals, or 20.9 million arrivals.
I will concentrate on data for the Americas, with particular focus on the Caribbean, Central America and South America, for the reasons I have stated time and again in earlier posts about the region and about immigration.
The report also highlighted the reasons for travel in 2012, with just over half of all international tourist arrivals (52% or 536 million arrivals) for recreation and leisure activities. 14% reported traveling for business or professional reasons, and another 27% travelled for purposes ranging from visiting friends and relatives, religious reasons, and for the purposes of this article, health treatment.
While there is no specific data for how many people travelled for medical care, the fact that it is included in the second largest category is illustrative of how important medical tourism is to the overall global travel and tourism industry. It also suggests that the implementation of medical tourism into workers’ compensation can have a significant impact on the growth of travel abroad, especially to the regions within the Americas that a growing portion of the American workforce has emigrated from or will have connection to in the future.
To understand the financial impact of this growth in international travel, the report highlights the growth in international tourism receipts (ITR), which matches the growth already seen in arrivals. International tourism receipts grew by 4% in real terms in 2012, according to the UNWTO. That translates to a new record of US$ 1.075 billion. There is a strong correlation between both key indicators that monitors trends in international tourism (travel).
The Americas earned 20% share of the international receipts, with the Caribbean earning a 2.3% share, South America earning a 2.2% share, and Central America earning a .7% share. This translates to US$25 billion for the Caribbean, US$24 billion for South America, and US$ 8 billion for Central America. In total, the 20% share for the Americas represents US$ 213 billion.
Within each subregion of the Americas, the following countries had the strongest growth in arrivals: Nicaragua and Belize (+11%), Panama (+9%), and Costa Rica and Guatemala had arrivals increase by +7%.
South America had double-digit growth in Venezuela (+19%), Chile (+13%), Ecuador and Paraguay (+11%), and Peru (+10%).
The Caribbean nations that reported solid growth were Saint Maarten and Curaçao (+8%), the Dominican Republic (+6%), the Bahamas (+5%), and the Cayman Islands (home of the Cayman Spine Institute), Aruba and the British Virgin Islands with (+4%).
Outside of the Caribbean and Central and South America, Mexico, which is included in the North America region, had the weakest growth at 0%. Mexico stands out because of the immigration issue and because many Mexican-born workers in the US return to Mexico for treatment, so while there is no growth among international travelers, travel to the country by its citizens, or former citizens is still happening and should be of interest in the implementation of medical tourism into workers’ compensation.
As far as Mexico is concerned, the UNWTO reports the following data under the North America region in the table below.
To better understand the impact medical tourism can have on workers’ compensation if we confine ourselves to the Caribbean and Latin American regions, the following table will illustrate the growth in arrivals and receipts, the so-called “rising stars” that I mentioned in my first blog piece, What I Learned at the 5th World Medical Tourism & Global Healthcare Congress, and Why It Matters to the Workers’ Compensation Industry, as well as other nations in the region have experienced last year.
Source: UNWTO 2013
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The table shows that the region is in need of greater growth, and perhaps medical tourism from the US can provide some of that growth. Political and economic stabilization, especially in certain countries, will also go along way to providing that growth.
Much of what I have been discussing up to this point is involved with inbound tourism (travel), but outbound tourism (travel), which is the large majority of international travel, takes place within the region the traveler is from. About four out of five arrivals worldwide come from the same region, which is why I believe that sending injured workers to the Caribbean and Latin America region is the best choice if medical tourism is implemented into workers’ compensation.
The UNWTO’s UNWTO Tourism Towards 2030 long-term outlook and assessment of tourism (travel) development for the twenty years from 2010 to 2030, shows that the number of international tourist arrivals globally is expected to increase by an average of 3.3% a year during this period. While the rate of growth will slow, from 3.8% in 2012 to 2.9% in 2030, international tourist arrivals will increase by about 43 million a year, compared to an average increase of 28 million from 1995 to 2010. The projected pace of growth is expected to reach 1.4 billion by 2020, and 1.8 billion by 2030.
Arrivals will grow at double the pace (+4.4%) in Asia, Latin America, Central and Eastern Europe, Eastern Mediterranean Europe, the Middle East, and Africa, as that of advanced economies. Arrivals in emerging economies are expected to exceed those of advanced economies by 2015. In 203, 57% of arrivals will be in destinations in emerging economies, versus 43% in advanced economies.
For our concern, the Americas will grow more slowly, from 150 million to 248 million, and will see a decline in their share of travel from 16% to 14%. Whether or not the region will embrace more medical tourism to offset this decline is uncertain, but what can be seen is that there is tremendous opportunity for at least some of the countries in the region to take advantage of medical tourism and reverse the decline in growth over the next several years.
It was not my intention in writing this article to boost tourism to the region for the sake of leisure and recreational activities, but to take a hard look at some very interesting data on global travel that impact the region’s growth as a destination for travel and tourism, and to suggest that given the rise in the Latino population of the American workforce, it not only makes sense from a linguistic and cultural sense to explore medical tourism in the region. It also makes financial sense because with its close proximity to the US, the region does not have to compete with Asian medical tourism markets for business, and probably would welcome American insurance companies and employers spending US or local currency in their countries, and the cost of travel to the region would be less than traveling to Asia.
When you consider that travel for medical care is included in the second largest reason people travel abroad, 27%, then you must consider that medical tourism is a growing industry that will grow along with the growth in overall travel, and that fact is too big for the workers’ compensation and medical tourism industries to ignore.
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