Explosive Growth in Medical Tourism and Rise of Retail Clinics Provide Huge Cost...

Wed Jul 30, 2008 10:23am EDT

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Explosive Growth in Medical Tourism and Rise of Retail Clinics Provide Huge
Cost Savings for Patients

Disruptive Innovations Challenge the Status Quo of U.S. Health Care System,
According to Deloitte Center for Health Solutions Research Series

WASHINGTON, July 30 /PRNewswire-USNewswire/ -- More than 750,000 Americans
left the country last year for less expensive medical treatments, a number
projected to grow to six million by 2010, potentially costing the U.S. health
care system billions.   The number of retail clinics in operation has also
soared by 220 percent from just 250 clinics in 2006 to more than 800 serving
patients by the end of 2007.  Both trends suggest that these new innovations
are challenging the status quo of the traditional U.S. health care system as
consumers seek better care, and greater access at lower costs, according to
the results of a series of research released today by the Deloitte Center for
Health Solutions.

"The emergence of disruptive health care innovations, such as medical tourism,
retail clinics, medical homes, alternative medicines and cyber visits, present
an industry paradigm with new players, new delivery models, new ways of
partnering and new value propositions," said Paul Keckley, Ph.D., executive
director of the Deloitte Center for Health Solutions.   "Our research suggests
that while traditional roles in the health care delivery system are being
threatened by these innovations -- creating initial worries for physicians,
hospitals and allied health professionals -- they may also provide new and
rewarding opportunities."

The Deloitte Center for Health Solutions research series includes a body of
reports centered on disruptive innovations that are creating a shift from
conventional models of service delivery and payment to a consumer-centric
system of care in which price, quality and service delivery are key.   
The three latest reports from the series include: 

-- "Medical Tourism: Consumers in Search of Value," forecasts explosive growth
in medical tourism over the next five years in outbound patient traffic
(www.deloitte.com/us/medicaltourism)
-- "Retail Clinics: Facts, Trends and Implications," projects a rise in the
number of retail clinics opened and used by consumers
(www.deloitte.com/us/retailclinics)
-- "Disease Management and Retail Pharmacies, a Convergence Opportunity,"
outlines the rapid growth of the disease management market and new
opportunities for retail pharmacies to include these services to attract and
retain consumers (www.deloitte.com/us/retailconvergence)

Among the key findings from the reports:
-- Outbound medical tourism currently represents $2.1 billion spent by
Americans overseas for care -- $15.9 billion in lost revenue for U.S. health
care providers.  Americans primarily seek this sort of care for elective
surgical procedures.
-- The number of outbound medical tourists is projected to rise to 15.75
million in 2017, representing a potential $30.3 to $79.5 billion spent abroad
by Americans.  As a result, the potential lost revenue for U.S. health care
providers could top $228.5 to $599.5 billion. 
-- Medical care in countries like India, Thailand and Singapore can cost as
little as 10 percent of the cost of comparable U.S. care, often including
airfare and a stay at a resort.
-- In 2008, more than 400,000 non-U.S. residents will seek care in the United
States, known as inbound medical tourism, and spend almost $5 billion for
health services.
-- Many leading U.S. academic medical centers and major health systems are
already seizing the opportunity to capture the medical tourism market by
leveraging their strong brands and collaborating with international providers.
-- Consumers are flocking to retail clinics not only for convenience, but also
for the relative low price differences associated with visiting their primary
care physicians for the same treatments.  The cost of services provided by
retail clinics range from $50 to $75, with the majority priced at $59,
compared to a physician's office visit, which can cost from $55 to $250.
Additionally, the cost for a retail clinic physical, at $25 to $49, can also
result in savings compared to a physical at a physician's office that can cost
anywhere from $50 to $200.
-- The U.S. market for disease management services is projected to reach $30
billion by 2013, providing convergence opportunities for retail pharmacies to
add disease management services to attract consumers to their stores for
cross-selling opportunities, providing one-stop shopping for health care
services.
-- Retail clinics and pharmacies positioned for market success may also
include pharmacy benefit management (PBM) services that could also attract
significant market share, particularly for disease management services to
treat chronic conditions.

"Hospitals, physicians and health plans will need to quickly adapt to the
competition from non-traditional players and develop long-term strategies,
such as M&A, alliances and partnerships, to capture market success," said
Keckley.  "Those that factor in the unique attitudes and preferences of
consumers as they make strategic decisions about partnering and developing new
business models and care delivery networks will have a huge opportunity to win
the consumer market."

Deloitte's new analysis expands on its "2008 Survey of Health Care Consumers"
(www.deloitte.com/us/consumerism), which initially exposed several disruptive
trends, including consumers' growing appetite for medical tourism, use of
retail clinics, alternative therapies and tools and technology to
self-navigate the health care system.   Two in five respondents surveyed said
they were interested in pursuing treatment abroad if quality was comparable
and the savings were 50 percent or more. Additionally, 16 percent of consumers
have already used a walk-in clinic in a pharmacy, shopping center, store or
other retail setting, and 34 percent said they might do so in the future. 
Consumers also expressed interest in seeking care from alternative providers
(38 percent) connecting with their doctors via e-mail (76 percent), accessing
online medical records and test results (78 percent), as well as using
self-monitoring devices at home (88 percent), if they were to develop a
condition that required regular monitoring.

Additional reports from the Deloitte Center for Health Solutions research
series on "disruptive innovations" in health care previously released include:

-- "The Medical Home: Disruptive Innovation for a New Primary Care Model,"
profiled a new payment method for primary care practices that focuses on
results for coordination of care. Available online at
www.deloitte.com/us/medicalhome.
-- "Connected Care: Technology-enabled Care at Home," presented two
applications of in-home technologies that reduce unnecessary visits and
hospitalizations and improve care. Available online at
www.deloitte.com/us/connectedcareathome.

Note to Editors: The Deloitte Center for Health Solutions will host a Webcast
titled "The Rise of Retail Clinics: Facts, Trends, and Implications," on July
30th at 2:00 p.m. EDT. To register for the Webcast, please visit:
www.deloitte.com/us/retailclinics/dbrief.

About Deloitte
As used in this document, "Deloitte" means Deloitte LLP and Deloitte Services
LP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a
detailed description of the legal structure of Deloitte LLP and its
subsidiaries.

About the Deloitte Center for Health Solutions The Deloitte Center for Health
Solutions is a part of Deloitte LLP. For more on the Center and its work, see
www.deloitte.com/centerforhealthsolutions.

CONTACT:  Marykate Reese, Public Relations of Deloitte, +1-203-257-0452,
mareese@deloitte.com



SOURCE  Deloitte

Marykate Reese, Public Relations of Deloitte, +1-203-257-0452,
mareese@deloitte.com
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