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Medical Tourism: Wave of the Future?

July 28, 2010 By: George Dooley


Jack Schafer, president of GlobalSurgeryNetwork, is a man with a mission: building awareness among travel agents, consortia and the industry of the importance and potential of medical tourism. A former tour operator, Schafer sees enormous growth in medical tourism, in part, sparked by changes in federal health care policy.

Schafer 2007 recognized the potential of medical tourism in 2007, and became one of only seven accredited facilitators companies in the world. In 2009, he went from pioneer to visionary with his belief that facilitators cannot do the job efficiently without a distribution channel that included the travel industry to sell the product and handle the travel component. He then changed his business model from facilitator to becoming the first wholesale medical tour operator.

"I came into this because I believed in the future of outsourcing planned medical and surgical procedures that can save patients 60 percent or more off of U.S. prices." Schafer said. "This is validated by the fact that hospitals such as Johns Hopkins, Harvard Medical, The Mayo Clinic, and 18 major U.S medical schools were already affiliated with, owned, or operated hospitals outside of the U.S.”

Schafer is now developing the conduit to both the medical tourism and travel industry. Based on Forbes estimates he predicts that 5 million Americans will be going outside of the country for scheduled and planned medical and surgical procedures by 2012. The two industry groups need each other to handle the volume, Schafer says.

The Medical Tourism Association (MTA), a trade group that includes destinations, medical professionals, insurance companies, hospitals, facilitators and more, also forecasts strong growth in demand and opportunity.

"Medical tourism has been growing 'under the radar' of the travel community for the past few years, and those that have looked at it have been frightened off by the complexities and risk," Schafer said. "That is what has kept most travel providers away from trying to work as facilitators. Managing the risk is perhaps the biggest drawback if you do not know how. It would be like booking tours where you knew everyone was going to get sick or hurt somewhere in the middle, and trying to manage that upfront.

Neither the travel industry nor the medical tourism industry can efficiently be doing this without the other – thus the term wholesale medical tour operator, according to Schafer.

This, Schafer says, is similar to many other packaged tour products, with medical charges separate and paid directly by the client to the performing facility. Day-to-day tour packages on a per-diem basis with all services bundled and priced, are where the travel agent comes in.

"Patients and their agents need choice (legally and ethically), so we need to get more medical tourism wholesalers in place as well," Schafer says. "At this moment, however, I am consulting with companies in the travel industry that realize this opportunity exists and need a workable formula to become medical tourism agents."

Shafer estimates the market in 2012 to be at $20 plus billion in business. "The major growth in Medical Tourism will happen when self-insured employers and the insurance industry factor Medical Tourism into their policies, as 'test markets' of Blue Cross/ Blue Shield (and others) already have," Schafer reports. "The market is excited about the 60 percent cost savings in procedure costs, but they want local level representation (a home town agent), and this is perhaps the largest reason that the medical tourism facilitator needs to become the tour operator, and create this opportunity for travel professionals.

"The impact of newly passed health care legislation will be substantial," he contined. "Medical tourism (as an industry) actually started in countries that have socialized medicine in place. It's been common in Europe, Canada, and Australia. People have to go outside of the country in order to obtain many procedures that are needed. The U.S. is number 37 on the list of the World Healthcare Organization (WHO). Training of a medical tourism agent involves clearly defining the roles of the agent, the operator, and the provider.

"Understand, travel agents market travel, they don’t discuss how the airplane flies in order to book the flight, and with this new medical tourism distribution channel in place, that agency role does not absorb the risk or the product performance," Shafer continued. "They simply are a conduit between their client and the product their client selects. Again, very much the same as selecting a packaged tour.

"Literally hundreds of procedures (such as stem cell therapy and types of joint re-surfacing vs. replacement) are not approved in the U.S medical community," he argues. "Clearly 25 percent of our patients right now are going oversees for procedures that are not available here in the U.S. at any price!"

What is unique about Schafer’s approach to medical tourism? Aside from his expertise and enthusiasm, Schafer sees himself as a marriage maker between the travel industry and the medical/insurance industry who can help bridge gaps in understanding.

He sees professional travel agents providing a needed and potentially lucrative service with growth potential. He believes there is no option but to "doing medical tourism right" and neither industry can do it all alone. Travel agents local community branding and credibility may be a key element in the growth of medical tourism. "Growth minded travel agents should take a look at the potential," Schafer said. "The 'if' is gone, this is going to happen."

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