The Philippines should capitalize on the results of the recent study of Deloitte Consulting in its 2008 survey of health care consumers which says 40% of Americans would consider medical tourism if the price for the medical treatment was half and of comparable quality. To capture a significant portion of medical tourists from the US and in realizing the potential of US$ 1 Billion revenues annually for the medical tourism industry starting 2008, a host of coordination issues and bottlenecks in the areas of policy and program implementation concerning the industry should be resolved through a well-targeted and well sequenced intervention in the areas of transport, infrastructure, public-private sector engagement and overall improvement of the business environment.

Policy reforms should both address the macro-micro nexus of the medical tourism industry and how it can be competitive globally. It is imperative that the medical tourism industry should move beyond the usual promotional campaign approach to the tangible, real time deliverable service accessible for the widest market possible.

Since 2006, the medical tourism industry has earned $300 million from 200,000 medical tourists into the country. To fully understand the dynamics of the medical tourism in the country, it is helpful to begin by identifying key market indicators and drivers that point to the vibrancy and potential of this industry. The following indicators build on the attractiveness of the medical tourism as an industry in the country:

1. Indigenous market of overseas Filipinos as workers or immigrants in North America (USA and Canada), Europe, the Middle East, Australia and countries in the Asia-Pacific Region, specifically Japan, Singapore and Hongkong. There are currently 8.2 million Filipinos working and living abroad which are considered the organic and natural market for the medical tourism industry in the Philippines. Their contribution to the economy in remittances in 2007 reached $14.4 billion or 13 percent of the country’s GDP.
2. There is a huge pool of medical professionals in the country with 67,728 nursing graduates taking the professional licensure exam in 2007 while approximately 3,000 graduated with a degree in medicine.
3. The tourism industry in 2007 experienced an all-record high of three million foreign tourist arrivals with expenditure of $4.8 billion which is an impressive growth of 40.99 percent from the target of $3.872 billion.
4. Four state-of-the-art hospitals in Metro Manila (St. Luke’s MedicalCenter, MakatiMedicalCenter, AsianHospital and MedicalCenter and NewMedicalCity) and two high-end chains of cosmetic surgery clinics, the Belo Medical Group and Calayan Surgicenter, currently serve as the visible high-end cluster for the medical tourism industry in the country. AsianHospital and St. Luke’s MedicalCenter are both accredited by the Joint Commission International (JCI), USA, and the two cosmetic surgical clinics have the newest technology on cosmetics surgery and enjoy robust domestic demand.
5. The wellness and retirement industries are complementing the growth of medical tourism which is critical in the creation of externalities that may bring about innovation in the supporting industries.

There are immediate actionable policy options which can help raise the degree of competitiveness of the medical tourism industry within the medium term of 2-3 years. The following shall provide a well-sequenced approach in decoupling the problem areas of medical tourism to engender and foster its competitiveness:

I) Collaborative Engagement of Stakeholders

The Department of Tourism (DOT) and the Department of Health (DOH) should go beyond the ‘plat-forming” of the medical tourism industry via official promotions in the internet and conferences. While these activities are very helpful in marketing the industry, there is an urgent need for the DOT and DOH to form a consortium with the cluster of health providers, i.e., hospitals and clinics, to identify distinct and unique medical tourism packages which should promote the Philippines with unique brand of medical tourism apart from its competitors in the region such as Thailand, India, Singapore and Malaysia.

II) Coordination and Logistical Issues

The medical tourism industry principally draws on the strength of the coordination and logistical capability in providing value for both the tourism and medical industry. Since the medical tourism industry anchors on the reliable transportation network of the country and the effectiveness if its logistics resources, the DOT should provide a workable and actionable plan in coordination with the Department of Public Works and Highways (DPWH) on the following transport issues:

a) Evaluation of critical bottlenecks from the airports and seaports and the identification of immediate remedies to promote efficiencies in transport within a timetable of one year, including close supervision for the on-time implementation of priority infrastructure such as the current construction of new airports and ports for the country nautical highway; and

b) Revisit the infrastructure program of the DPWH and compare for consistency on the priority infrastructure locations vis-avis the priority tourist destination areas of the DOT

The potential of medical tourism as a key growth driver in the country is immense. All the input and demand factors and conditions in the economy are present. Now, all we need to do is to make it work--- this time with full commitment, hopefully.

From: Filipinas Herald/Economy/Medical Tourism/April 14, 2009/Manny de Vera

Mr. Manny de Vera is a graduate of the HarvardKennedySchool and is an adjunct professor of the Asian Institute of Management (AIM)