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, October 26, 2009 — 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:
“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.”
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