Oct 13, 2011 (Deloitte & Touche) - Consumers in search of value

Medical tourism – the process of “leaving home” for treatments and care abroad or elsewhere domestically – is an emerging phenomenon in the health care industry. The Deloitte 2008
Survey of Health Care Consumers, a nationally representative, online survey of more than 3,000 Americans, found that outbound medical tourism is expected to experience explosive growth
over the next three to five years. Consider the following:

• Health care costs are increasing at eight percent per year – well above the Consumer Price Index (CPI), thus eating into corporate profits and household disposable income.

• The safety and quality of care available in many offshore settings is no longer an issue: Organizations including the Joint Commission International (JCI) and others are accrediting these facilities.

• Consumers are willing to travel to obtain care that is both safe and less costly. In fact, two in five survey respondents said they would be interested in pursuing treatment abroad if quality was comparable and the
savings were 50 percent or more.

By contrast, inbound medical tourism and medical tourism across state lines will continue to be an interesting opportunity for specialty hubs with treatments unavailable elsewhere in the world or in a community setting. This report by the Deloitte Center for Health Solutions, part of Deloitte LLP, examines the growth of medical tourism: the hot spots for outbound and inbound programs, and factors important to the attractiveness of both.

Medical Tourism: Consumers in Search of Value is Deloitte’s latest report about innovations that might be considered disruptive to some in the U.S. health care system. Recent reports spotlighting retail clinics, the
medical home payment model and other innovations point to a common theme – CHANGE. The value proposition in a consumer transaction usually involves consideration about price, quality and
service. Distinct segments of the market value the three differently based on their needs and wants. In health care, price hasn’t been a factor to many since consumer out-of-pocket expenditures are only 19 percent of the total. However, that percentage is increasing and price sensitivity is soaring, especially for those with high-deductible insurance programs. The growth of medical tourism might be a signal as to how consumers calculate their value proposition weighing all three – price, quality and service.

Article Link: http://www.deloitte.com/assets/Dcom-unitedStates/Local%20Assets/Documents/us_chs_MedicalTourismStudy%283%29.pdf