Medical Travel: U.S. Pivotal to Global Market’s Growth
Yesterday the Wall Street Journal previewed a McKinsey & Co. research report that found that the global healthcare market only has 60,000 to 85,000 inpatient medical travelers a year.
McKinsey defines medical travel as a patient traveling for the explicit and primary purpose of receiving care outside of his home country.
McKinsey's Paul Mango distributed the report here at the Healthcare Globalization Summit in Las Vegas and gave a presentation based on some of his firm's findings. Although McKinsey's research concludes that there are fewer medical travelers than previous estimates, Mango said the potential for global healthcare growth is even greater than the movement's hype.
That's because McKinsey determined that U.S. residents make up only 7% of the world's medical travelers. With about one-third of uninsured Americans making over $55,000 per year, they represent global hospitals' best opportunity for future growth. In total, McKinsey estimates that 500,000 to 700,000 Americans meet the criteria to become international patients, said Mango.
"That's still 20 to 30 times what is leaving the U.S. now for care," he said. "The U.S., we think, will be the pivotal geography that will determine whether global medical travel will be a big industry or not."
In another positive finding for global hospitals, McKinsey found that international patients tend to be overall satisfied with their experiences, and global providers show better patient satisfaction metrics compared to U.S. hospitals.
But there remain significant barriers in attracting patients from the U.S., including …
- Payer resistance to medical travel
- Concerns over quality
- Lack of clarity on malpractice jurisdiction
- Lack of continuum of care between home country and destination country
- Geopolitical security concern
Payer participation in global health is necessary for growth, said Mango, but it is not a sufficient enough condition on its own to blow open the market. He recommends global hospitals to work as a coherent consortium to educate uninsured Americans about the comparative quality and low cost of medical travel. "No one has the heft to penetrate the U.S. market directly," he says.
At the same time that global hospitals ought to be pursing uninsured Americans, they should also prepare for a decrease in the number of medical travelers from the Middle East, which makes up 35% of the world's current medical travelers, according to McKinsey.
With governments in the region investing heavily to develop state-of-the-art hospitals, the number of Middle Easterners traveling expressly for medical care is likely to decrease. "It's a point of national pride," said Mango. "It's like [the U.S.] going to the moon."
- Why Is Healthcare Price Transparency So Hard?
- EHR Spending Continues, But Jury Still Out on ROI
- 5 Hot Healthcare Ideas from SXSW
- Adverse Events from Insulin Prescribing 'An Epidemic'
- Hospital Groups Strike Back at Hospital Rating Systems
- Care Coordination a Cost-Cutting Quality Driver
- Use of Locum Tenens Up 22% in One Year
- Payers Detail Strategies That Drive Consumer Satisfaction
- 4 Marketing Tactics for Hospitals on Instagram
- Hospital CEO Turnover Hits Record High