Recession Slows Growth of Medical Tourism from 2007-2009: Deloitte Center for Health Solutions Report

Recession Slows Growth of Medical Tourism from 2007-2009: Deloitte Center for
Health Solutions Report

Economic Recovery Likely to Result in 35 Percent Annual Growth Rate for
Medical Tourism by 2010

LOS ANGELES, Oct. 26, 2009 /PRNewswire-USNewswire/ -- While the economic
recession has eroded the growth rate for medical tourism by approximately 13.6
percent from 2007 to 2009, the economic recovery may help spur a sustainable
35 percent annual growth rate for the medical tourism industry by 2010,
according to a new report released today (www.deloitte.com/us/medicaltourism)
by the Deloitte Center for Health Solutions at the World Medical Tourism and
Global Health Congress in Los Angeles, California.

"Barring any tempering factors, such as supply constraints, resistance from
health plans, increased domestic competition or government policies, we
project that outbound medical tourism could reach upwards of 1.6 million
patients by 2012," said Paul Keckley, Ph.D. and executive director, Deloitte
Center for Health Solutions, based in Washington, D.C. "Medical tourism has
transitioned from a cottage industry to an acceptable alternative for elective
care that, despite the setbacks of the economic downturn, may begin to recover
in 2010, as quality is better defined, new business models emerge, insurers,
legislators and employers explore pilots and programs, health care providers
become increasingly involved in coordinating care and consumers continue to
test it out to explore savings."

According to the Deloitte Center report, "Medical Tourism: Update and
Implications," in 2007, more than 750,000 Americans traveled abroad for
outbound medical care. Since 2007, medical tourism has experienced a slow
down driven by the economic recession and consumers putting off elective
medical procedures over the past two years with an estimated 540,000 Americans
traveling abroad for medical care in 2008 (a 20 percent decrease) and a
projected 648,000 (a 10 percent decrease) doing so in 2009.

"The prolonged U.S. recession has had a significant impact on patients'
ability to afford medical care, and by extension their use of medical
tourism," added Keckley. "Pent-up consumer demand for elective procedures,
especially outpatient dental and cosmetic procedures, will help fuel increased
demand for medical tourism again. Health reform efforts in the near term will
also likely contribute to medical tourism's growth, though in the long run it
is difficult to assess given uncertainty about the public option, employer and
individual mandates."

Among the additional key findings highlighted in the report:

-- Inbound medical tourism, or foreigners visiting the U.S. to receive
medical care, will see relatively slow growth to report up to 561,000
travelers by 2017.
-- Eight percent of respondents sought health care services outside of
their immediate community; more than 40 percent said they would travel
outside of their immediate area for care if their physician
recommended
it or for a 50 percent cost savings; 1 percent reported using an
offshore health care provider; 9 percent said they'd be likely to do
so;
and 69 percent said they'd be unlikely to do so.
-- The American Medical Association (AMA) has developed a set of nine
guidelines for medical tourism for employers, insurance companies and
other entities that facilitate medical care outside of the U.S.
-- Several health insurers have launched medical tourism pilots as part
of
health benefit plans. An overview of these programs and affiliations
with foreign medical sites is included, and it is yet to be determined
if these pilots will be adopted on a broad scale and whether employers
or patients will receive the benefits of cost savings via reduced
premiums, co-payments or deductibles.
-- West Virginia and Colorado have attempted to pass legislation that
would
either require or incentivize insurers to incorporate medical tourism
within their health benefits plans. Although both bills did not pass,
they demonstrate that state legislators are paying more attention to
the
value of medical tourism.
-- The Joint Commission International (JCI) has increased the number of
approved foreign medical sites from 76 in 2005 to more than 220 in
2008.

-- India's medical tourism sector is expected to grow 30 percent annually
from 2009 to 2015.Health care reform will likely propel growth in the
elective outpatient market, particularly if flex account expenditures
are limited to $2,000 or less, and elective cosmetic and dental
procedures are not considered "basic benefits."

"With health care costs increasing at the rate of 6 percent per year for the
next decade, and medical tourism offering savings of up to 70 percent after
travel expenses, there is no question that it will remain an important option
for consumers who need care, but increasingly lack adequate out-of-pocket
funds to afford a procedure in the U.S.," added Keckley. "As the industry
continues to respond to the needs of this population, we expect to see an
increase in medical tourism pilots and involvement by employers, insurers and
physicians to help create a backdrop for sustainable, healthy growth in this
sector."

Related Content:
Report: 2009 Medical Tourism Report (www.deloitte.com/us/medicaltourism)
Report: 2008 Medical Tourism Report (www.deloitte.com/us/2008medicaltourism)
Profile: Meet Paul Keckley, Ph.D. (www.deloitte.com/us/paulkeckley)
Overview: Health Care Reform (www.deloitte.com/us/healthcarereform)
Overview: Deloitte Center for Health Solutions
(www.deloitte.com/centerforhealthsolutions)

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.

Contact:

Marykate Reese
Senior Manager
Deloitte
+1 203 257 0452
mareese@deloitte.com

Sean Leous
Vice President
Hill & Knowlton
+1 212 885 0549
Sean.leous@hillandknowlton.com

SOURCE Deloitte

Marykate Reese of Deloitte, +1-203-257-0452, mareese@deloitte.com or Sean
Leous, +1-212-885-0549, Sean.leous@hillandknowlton.com for Deloitte