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Viewing cable 05BANGKOK6098, MEDICAL TOURISM: OUTSOURCE YOUR KNEE SURGERY TO

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Reference ID Created Released Classification Origin
05BANGKOK6098 2005-09-23 10:04 2011-08-25 00:00 UNCLASSIFIED Embassy Bangkok
This record is a partial extract of the original cable. The full text of the original cable is not available.

231004Z Sep 05
UNCLAS SECTION 01 OF 03 BANGKOK 006098 
 
SIPDIS 
 
DEPARTMENT PASS USTR FOR BWEISEL AND LCOEN 
COMMERCE FOR ITA JBENDER AND JKELLY 
 
E.O. 12958: N/A 
TAGS: ECON ETRD
SUBJECT: MEDICAL TOURISM: OUTSOURCE YOUR KNEE SURGERY TO 
THAILAND 
 
 
1. Summary:  Low costs and high quality medical treatment in 
Thailand are bringing in a new breed of visitor, the medical 
tourist traveling overseas for treatment unavailable or too 
expensive in their own country.  Thai hospitals are positioning 
themselves to be the regional destination of choice for medical 
treatment and are marketing their services to the large number 
of uninsured Americans seeking affordable medical care. 
Advantages in a combination of price, access, and quality are 
driving what could soon be a billion dollar industry for 
Thailand.  End Summary. 
 
2. Thai hospitals have entered in a big way into what has been 
dubbed medical tourism, marketing themselves as a cheap source 
for medical procedures with a bit of international adventure 
thrown in as well.  Over one million international patients, 
including 118,000 Americans, visited Thai hospitals in 2004 for 
everything from hernias to heart surgery, more than double the 
number from 2001.  Most of these patients were expatriates 
living in Thailand or nearby in the region, but approximately 
one-third came to Thailand specifically for medical treatment. 
The Department of Export Promotion estimates that international 
patients spent USD 550 million on health services alone in 
2003.  When other expenditures such as hotels, post-operation 
travel and other purchases are factored in, the industry is 
estimated to soon be approaching nearly USD one billion per year 
for Thailand. 
 
3. The center of medical tourism in Thailand is Bumrungrad 
Hospital, an internationally accredited hospital and the largest 
private hospital in Southeast Asia.  Bumrungrad treated 360,000 
foreign patients in 2004, including 50,000 Americans, a number 
projected to grow by 30 percent in 2005.  Ruben Toral, 
Bumrungrad's Marketing Director, pitches the hospital abroad as 
a source of low-cost medical treatment by internationally 
trained doctors in a state-of-the-art facility that more 
resembles a five-star hotel than a hospital, complete with a 
Starbucks coffee shop in the lobby.  Post-op recovery at a spa 
on nearby beaches is an added attraction. 
 
4. Patients traveling in from overseas for medical treatment 
typically come for what Bumrungrad calls the mechanical parts of 
surgery:  non-emergency medical procedures.  Initially, Thai 
hospitals were popular for cosmetic surgery and became noted for 
their expertise in performing sex change operations, still one 
of the top ten surgeries for international patients. 
Eventually, however, the hospitals branched into promoting 
routine operations such as hip replacements, knee surgery and 
vision correction surgery, and have also moved into advanced 
heart surgery.  Bangkok Hospital recently cut the ribbon on a 
new 104-bed heart hospital with international patients very much 
on their mind. 
 
5. Thailand's medical tourism industry got a jumpstart after the 
1997 Asian financial crisis forced many hospitals into 
bankruptcy.  The government cooperated with remaining hospitals 
to promote their facilities abroad, searching for a market 
unaffected by the crisis.  Nearly 30 hospitals now cooperate 
with Thailand's Department of Export Promotion (DEP), pitching 
Thailand's international quality hospitals together with its 
rock-bottom prices for treatment.  The DEP took Thai hospitals 
on a road show this year to promote their services, including a 
three-day stand as part of the Thai Exhibition at the L.A. 
Convention Center this June.  The largest Thai hospitals are now 
acquiring agents and taking over their own promotion, and DEP is 
moving on to promoting Thailand's burgeoning spa services 
industry. 
 
Why replace your hip in Bangkok? 
-------------------------------- 
 
6. The overwhelming reason for visitors coming to Thailand for 
medical treatment is price, particularly for those without 
insurance.  According to Bumrungrad's Toral, the ranks of the 
approximately 43 million uninsured in the U.S. include not just 
the poorest of the nation, but also a large number of 
independent contractors, self-employed, and other small 
businesspeople who have substantial resources but for one reason 
or another found it too difficult or expensive to obtain 
standard medical insurance.  For the uninsured in the U.S., a 
heart bypass operation might cost from USD 40,000 to over USD 
100,000.  In Thailand, the same operation would run up a bill of 
only about twelve thousand dollars, including the cost of 
airfare from the U.S.  Although Bumrungrad does deal with 
insurance companies for those patients who have insurance, Mr. 
Toral noted that over 70 percent of their payments are handled 
in cash. 
 
7. Thai hospitals are wooing not just the uninsured, but also 
those from countries which either have backlogs for 
non-emergency medical procedures or do not have the facilities 
to perform complicated surgery.  Countries with universal health 
insurance can often require patients to wait on lists for over a 
year for certain procedures, procedures that can be done in 
Thailand with only a few days notice.  Bangkok Hospital, one of 
Bumrungrad's biggest competitors in the medical tourism 
industry, has begun working on developing insurance plans with 
European nations which see the benefit of reducing waiting lists 
for operations at home at a relatively low cost. 
 
8. According to the Thai Private Hospital Association, the 
fastest growing group of medical tourists to Thailand is from 
the Middle East.  Patients who formerly might have flown to the 
U.S. or Europe for medical treatment have found that 
post-September 11, 2001, visas are harder to come by and the 
welcome mat not always out.  From negligible numbers in 2001, 
Thai hospitals treated 71,000 Middle Eastern patients in 2004. 
Bumrungrad Hospital is taking a 49 percent share in a USD 40 
million health care complex in Dubai, intended to be a medical 
hub for the Middle East and North Africa. 
 
9. One of the factors keeping costs down in Thailand is the 
relative paucity of malpractice lawsuits.  Malpractice law does 
exist in Thailand, and hospitals and doctors carry insurance for 
the eventuality, but actual lawsuits are rare and settlements 
are low.  According to Bumrungrad, the largest malpractice 
settlement recorded in Thailand was for one million Baht, about 
USD 25,000.  Other hospitals couldn't remember having ever faced 
a lawsuit.  As a result, hospitals and doctors are able to keep 
medical disputes out of court and negotiate a satisfactory 
settlement directly with the aggrieved patient, thereby keeping 
insurance costs low. 
 
It's not just the money 
----------------------- 
 
10. Thai hospitals have made their pitch not just in lower 
prices, but also superior quality.  More than half of Bumrungrad 
Hospital's 700 physicians and dentists are internationally 
trained, including 200 who are board-certified in the U.S.  Many 
doctors at Bumrungrad are Thais who had previously practiced in 
the U.S. or elsewhere overseas, but despite the prospect of much 
lower salaries were lured back to Bangkok by the attraction of 
practicing in an international quality hospital in their home 
country.  Some local critics have alleged that the increase in 
medical tourism has stolen away the best Thai doctors to treat 
foreign patients, but Bumrungrad places more of the blame for 
the doctor shortage on Thailand's 30 Baht Health Care Program 
where patients can make a hospital visit for less than a 
dollar.  They claim the decline in salaries for doctors in 
public hospitals has inspired many Thai doctors to practice in 
the more remunerative private hospitals. 
 
11. The vast majority of doctors in Thai hospitals are Thai 
nationals.  Foreign doctors are allowed to practice in Thailand 
as long as they are able to pass the Thai medical board exams; 
the catch is the exams are only given in the Thai language.  In 
practice, only a handful of foreign doctors practice in 
Thailand, though hospitals are able to maintain non-practicing 
foreign doctors on the staff as consultants. 
 
Not the only players in the game 
-------------------------------- 
 
12. According to the Thai Private Hospital Association, 
Singapore's high quality hospitals have traditionally been the 
destination of choice for the region for medical treatment. 
Thailand has made inroads into Singapore's business with their 
offer of substantially lower prices, but the Thais have not been 
the only ones in the region to notice the comparative advantage 
of developing nations in this industry.  India's Apollo 
Hospitals Group has made a similar bid for international 
patients, though Bumrungrad feels Thailand has an advantage in 
image over India, "the cows in the streets issue", as Mr. Toral 
puts it.  China looms large as a potential future competitor for 
medical tourism as the Chinese find a way to translate their 
low-cost advantage into yet another industry. 
 
13. Although the avian flu epidemic had a limited effect on the 
number of medical tourist visitors to Thailand, Thai hospitals 
fear that a spread of the separatist violence in Thailand's 
southern provinces to Bangkok or other parts of Thailand could 
easily paint the country as an unsafe destination and divert the 
stream of medical tourists to other countries. 
 
Trade opportunities 
------------------- 
 
14. The expansion in medical services has driven a correlating 
expansion in imports of medical equipment and pharmaceutical 
products from the U.S.  A Department of Commerce study predicted 
that the market for medical devices in Thailand, estimated at 
USD 518 million for 2004, would grow 15 percent over the next 
two years.  The U.S. leads the import market with a 34 percent 
share.  Thai private hospitals import 70 percent of the 
pharmaceuticals that they use as well.  Ironically, the 
pharmaceutical industry's differential pricing policy to keep 
prices lower for developing countries is yet another factor 
keeping medical service costs down for visiting international 
patients. 
BOYCE