Edition: September 24, 2015 | Volume: 43 | No: 37
Private sector hospitals are all making major investments to be attract and service well the medical tourism visitor
The Puerto Rico government's aggressive push for medical tourism, headlined by the new Medical Tourism Corp. and a soon-to- be-unveiled concierge center, is expected to drive a significant increase in visiting patients and healthcare expenditures, stemming the exodus of doctors and prompting the investment of hundreds of millions of dollars in new healthcare infrastructure and services that will benefit local patients as well.
The potential benefits of medical tourism for Puerto Rico can't be understated. Studies show that global healthcare tourism generates $35 billion in economic activity annually and is growing at a faster rate than overall travel and tourism. A 2013 Medical Tourism Association (MTA) Medical Tourism Patient Survey found that nearly 27% of U.S. patients had previously traveled to a foreign country to receive medical care.
Almost 80% of the demand for medical travel is driven by cost savings. Medical tourists spend between $7,475 and $15,833 per medical travel trip, whether they have health insurance or not. Family members or friends who make the trip with the patients represent a further economic injection of almost $1,000 each person spent on lodging, meals and transportation.
To date, about 15,000 medical tourists come to Puerto Rico for treatment every year, spending an average of $10,000 per visit, according to the Medical Tourism Corp., translating into an annual spending of about $150 million. The commonwealth government hopes to double the number of medical tourists to the island to 30,000 people in the next three years. An Advantage Business Consulting study commissioned by the commonwealth government estimates that by implementing aggressive medical-tourism promotion initiatives, the total number of visiting patients over the next 10 years could reach 420,000, bringing with them expenditures of more than $2.3 billion in the same period. The study was completed in March 2014.
The same study projects that medical tourism could generate more than 2,600 jobs in healthcare and tourism in the next three years. New jobs would come from the growth of an ample ecosystem of needed suppliers from the tourism and healthcare industries, including hotels, hospitals, airlines, airports, taxis, restaurants, insurance companies, tour operators and specialized healthcare providers, among others.
As a world-class tourism destination, Puerto Rico can present an equally attractive offer for medical tourism for patients from the Caribbean, the U.S. and Latin America. The market for U.S. outbound medical tourism consists of the insured and the uninsured. According to the U.S. Census, there were about 263.2 million insured Americans in 2012. Of those insured, 198 million were covered by private insurance and over 85% had employment- based coverage. The rest, about 30.6 million, were covered by direct-purchase insurance.
Data from the U.S. Centers for Medicare & Medicaid Services (CMS) pegged the uninsured market at 48 million individuals, as of 2012. In addition, there is the growing Puerto Rican diaspora to the mainland U.S., and in many cases, many people travel back to the island for some medical procedures, such as dental care, as it is often more cost-effective to do so.
U.S. healthcare at international prices
Puerto Rico has a series of advantages that position it as an ideal destination for medical tourism. First, it has the most-advanced formal structure of healthcare integrated services in the Caribbean and Latin America. Second, the island is bound by the same standards and regulations that apply in the mainland U.S., with a great number of medical professionals who graduated from top medical universities stateside and have been accredited by their corresponding medical boards. In addition, the majority of medical staff are fully Spanish-English bilingual. Third, local prices on the island are 40% to 60% lower than what is offered in the mainland U.S. "So, it's really U.S. healthcare, but at international, affordable prices," said the MTA's CEO Jonathan Edelheit.
To ensure high standards of quality and services, Puerto Rico has become the first and only jurisdiction in the U.S. and globally to enact a certification process for medical-tourism providers. The Economic Development & Commerce Department (DDEC by its Spanish acronym) signed an agreement with the MTA to have the entity provide educational training aimed at obtaining certifications for service providers in Puerto Rico. "We want to be sure that Puerto Rico is a destination where the patient has one of the best experiences in medical tourism," Edelheit said. "We want to be certain that the providers, hotels and hospitals are trained." In that sense, the focus of the agreement is to certify a select group of providers in Puerto Rico—among them hotels, hospitals and laboratories as well as those participating in other aspects of services—tied to medical tourism.
"No other destiny in the Caribbean or even in Latin America has taken that approach. When you look at competing destinations such as Costa Rica, the government doesn't really support medical tourism," Edelheit said. "Mexico's government talks a lot about medical tourism, but they actually don't have a national strategy and the private stakeholders don't work together. In the past couple of years, Mexico has lost its positioning. This is a good opportunity for Puerto Rico to come in and take a lot of the business that has been going to those countries with a long-term strategy."
Hospitals take the lead
At a global scale, Puerto Rico has several competitive advantages visà- vis other competing players in the industry, indicated Grupo HIMASan Pablo Executive Vice President Armando Rodríguez. "Puerto Rico has a marked competitive advantage: it has to comply with strict federal standards and compete in terms of quality with basically every hospital in the [mainland] U.S. But we do this at a third of the price. In fact, when you compare the cost of healthcare in Puerto Rico to places such as Costa Rica, the Dominican Republic, India and Singapore, we have a cost advantage."
Since the 1960s, medicine in Puerto Rico is evidence-based, a product of the relationship between health plans and hospitals. The continuing friction between both parties and a desire to make things more efficient, have been the drivers of this cost-cutting process. "The Government Health Plan also helps in this regard, as it has placed a great deal of pressure on providers to keep costs low," Rodríguez said. "What a hospital administrator may call a problem, in medical tourism it's a blessing." In New York, a patient costs the system some $1,100 a month, while in Puerto Rico the figure is just $170.
"We are developing programs that otherwise you would have to access through academic centers," Rodríguez explained. For example, the endovascular neurosurgery program available in Caguas competes with similar programs stateside. "We have been able to create this program because there have been Puerto Ricans who have trained in the [mainland] U.S. and returned to practice medicine here. That has allowed us to get them all together. Today's medicine is very difficult to practice alone. Doctors practice in groups and each one has a specialty and a moment in the process to intervene.
"By making available this type of program to the entire Caribbean, we have embarked in the journey to offer medical tourism services," Rodríguez explained. HIMA-San Pablo is currently receiving patients from the Cayman Islands, Bahamas and the rest of the Caribbean.
To capture patients from outside jurisdictions, first the healthcare provider has to set up a network with external governments and insurance providers. "In our case, we already have contracts with insurance companies, otherwise you are invisible," Rodríguez said. The process of contracting with insurance companies is different in Puerto Rico than in the rest of the Caribbean islands or even the mainland U.S. In Puerto Rico, a service is contracted for a specific fee. "That is what you invoice and that is what you get paid," he said. In the Caribbean, you invoice based on charges. Based on those charges there is a discount structure. They are two different worlds."
Insurance companies in Puerto Rico set up provider networks. In other jurisdictions, insurance companies typically hire a third-party administrator, or TPA, to set up those networks.
The next step is to reach potential patients and let them know of available capabilities. "In our case, the communications strategy starts with an aggressive orientation of doctors. Once you reach doctors, you reach patients," Rodríguez said.
Hospitality component is key
Contact with the visiting patient starts long before he or she actually arrives on the island. For example, HIMA- San Pablo has its own concierge program that coordinates airfare, hotels and ground transportation for patients. "Many patients, when it was time to leave the hospital, started asking for shopping trips to Plaza Las Américas," Rodríguez said. Growth in this area has prompted HIMA-San Pablo to approach local medical-appointment transportation company Transcita for an alliance, since the hospital's employees dedicated to the transport of visiting patients aren't enough. "We are looking for operators to help deal with patient overflow," he explained.
One of the new practices implemented by HIMA-San Pablo for medical tourism that has found its way for all patients may seem unimportant at first glance, but has made a world of difference. As part of its strict protocols, HIMA-San Pablo has requested all doctors personally call all visiting patients set to undergo surgery on the day before. Many of those doctors have adopted the practice for local patients and call them directly on the night before surgery. They found out that through a two-minute phone call, they have identified problems that tend to cause delays if left for the day of the surgery.
Out of 150,000 patients a year for the entire Grupo HIMA-San Pablo system, some 3% to 4% are medical-tourism patients. In all CARIBBEAN BUSINESS interviews with hospitals conducted for this article, that figure ranged from 1% to 5%. While the volume of those patients can increase significantly, there are short-term limitations. Currently, HIMA-San Pablo "cancels" about half of visiting patients, particularly those seeking transfers for emergency procedures. "We have more capacity for coordinating elective procedures than for emergency transfers that depend on the availability of beds and other details, which for elective procedures can be coordinated in advance," Rodríguez explained. "The program could grow more if we had more capacity."
To address the issue, Rodríguez revealed to CARIBBEAN BUSINESS that HIMA-San Pablo plans to invest $150 million to build a new hospital in the municipality of Humacao next to Palmas del Mar to serve primarily the medical-tourism market. "We thought about the Palmas del Mar location because it provides the infrastructure necessary for medical tourism and it allows us to build a hospital specifically for this market, incorporating details that regular hospitals don't have," he stated. The new hospital would be better prepared to handle emergency transfer cases. Still in the design stages, the new hospital should begin construction in about six months and begin operations in 2018-2019. The project will be financed by a U.S. real-estate company and leased by HIMA-San Pablo.
"This model has become very popular in the U.S. It is a form of financing of which there is a lot of availability. We are currently handling other projects using that type of financing arrangement," Rodríguez explained. Those projects include housing for elderly people, wellness projects, holistic care and research.
A hospital that was created with medical tourism since its planning stages is the renowned Cardiovascular Center of Puerto Rico & the Caribbean, a fact reflected in the institution's very own name. From day one, the hospital's fourth floor has operated as a hotel under the Howard Johnson flag. The hotel has 30 rooms including suites, its own reception area, meeting rooms, gym and internet access. Guests are mainly patients undergoing medical evaluations before surgery or their family members.
The center, accredited by the Joint Commission and CMS among others, has 202 beds to accommodate cardiology and surgery patients in intensive care, and in critical and intermediate care. Its six operating rooms are especially designed for quick response in emergency situations during surgery. The entire medical faculty is board-certified, a requirement established in the institution's bylaws. "The center is ready to receive any cardiovascular patient. We have the most-advanced technology available on the island. What we need is more international exposure," stated Cardiovascular Center Executive Director Waleska Crespo-Rivera.
Its management has set an aggressive goal of increasing medical-tourism patients from less than 5% up to 20% in the next two years. "That is an increase that we can handle without limiting the access and availability of care for local patients," Crespo-Rivera said. About half of current patients from abroad are tourists visiting the island who have cardiac emergencies, while the rest are people who travel specifically to undergo a procedure at the center.
The Cardiovascular Center will inaugurate in the next few weeks a new space for the office of admissions, which will also house its new medical-tourism office. Using a $250,000 grant from the Francisco Carvajal Foundation, through the Friends of the Cardiovascular Foundation, the new office will allow the center to integrate all services for medical-tourism patients and enhance their experience. The service to those patients will change as well, by providing easier access to all preadmission procedures.
Rivera-Crespo made a call to the private sector to take advantage of the opportunity to work together and communicate the services offered by each healthcare institution. "This is a unique opportunity to bring more patients to the island. If we are successful, this initiative will produce spectacular results for everyone," she said.
Radiological service Medscan is one of the specialized healthcare-service providers entering the medical-tourism space. Its 12 radiologists are certified by the American Board of Radiology (ACR). At an investment of more than $150,000, Medscan has just implemented a new Carestream medical imaging system that allows patients and their doctors to view and download radiological images through the cloud. The service is available to all patients at no additional cost. In addition, the patient doesn't have to visit Medscan to coordinate an appointment. "The patient can send us the medical insurance-card information and the doctor's prescription via fax, email or even text message, without ever having to visit the offi ce," explained Medscan's Dr. William Cruz.
Franceschi Method creator Dr. Carmen Báez-Franceschi has been treating patients from as far away as India, with the help of electronic health-record technology and videoconferencing, making her a believer in the power of technology, specifically telemedicine, to support medical-tourism efforts. "We had an autistic patient who we began treating via videoconference before he traveled to our office to receive therapy. When he arrived at our office, he no longer qualified to be labeled as autistic," Báez-Franceschi said. She said 90% of autistic children treated with the Franceschi method are speaking in six months or less.
Dietrich Dental's Dr. René Dietrich incorporated into his practice a new webpage with a link to a secure Health Insurance Portability & Accountability Act (Hipaa) compliant portal, where medical-tourism patients can transfer their medical information before traveling to the island. Dietrich explained that his office responds to medical-tourism inquiries on the same day via email. He currently treats many Puerto Ricans who have moved to the mainland U.S. and are now living in places such as Orlando and Miami, in the state of Florida, New York City and the state of Virginia.
The push for medical tourism
In recognition of medical tourism's significant potential upside, DDEC has stepped up its efforts to jumpstart growth in the sector.
The commonwealth government has set its sights on creating a medical-tourism ecosystem, where neither the healthcare nor the tourism sector dominates. "For the past 20 years, there have been many forces that have tried to dominate medical tourism and have slowed its progress," said DDEC Secretary Alberto Bacó.
The plan aims to create up to 3,000 new jobs in the medical-tourism sector in the next five years, and increase foreign patients to 30,000 a year, up from the current estimate of 15,000 people. In addition, the plan intends to grow the sector's impact on the economy to at least $300 million a year. "We understand an important government role is to open new markets," Bacó said.
The strategy to achieve the above-mentioned goals rests on three strategic pillars: the differentiation of the destination through the MTA certification program for providers; a multimedia marketing and communications campaign directed at the target patient markets; and the creation of a new concierge center to coordinate all services for visiting patients facilitating the process. "Without the validation element, we will be just another medical-tourism destination," Bacó explained.
The concierge center, slated to begin operations at some point in the next two months, is expected to play a crucial role to enhance and standardize the visiting-patient experience. "We are receiving patients without the concierge. However, the feedback says that a third party is needed to handle those services," Bacó explained. A new local entity that will receive initial seed capital from DDEC, the concierge center will serve as intermediary between the patient, the insurance company and healthcare providers. Among other things, it will transfer he patient's medical information to the center where healthcare services are to be received. It will also administer a call center available 24 hours a day, seven days a week.
A digital platform will connect all certified providers with the patient concierge center. At no additional cost to providers, the platform will measure several key statistics of patients, including country of origin, type of procedure and economic impact of procedure elected, indicated Medical Tourism Corp. Executive Director Francisco Bonet. "We will measure everything," Bacó added.
The government's aggressive efforts in combination with the incentives of Acts 20 and 22, now applicable to medical tourism, have attracted great interest from doctors, telemedicine providers, clinical groups and laboratories to set up operations in Puerto Rico. "We have three groups for ambulatory medical services looking to attract patients from abroad, the same type of clinics as those in Cleveland and Boston," Bacó revealed.
DDEC has invested $3 million in the past year-and-a-half to propel the growth of medical tourism. "When you compare this number to the potential benefits, it is a small investment," Bacó said. Going forward, he sees future investment in promoting medical tourism as a mix of equal parts public and private investment. While public investment will seek to strengthen Puerto Rico's brand in the medical-tourism sector, the private sector will be investing in generating its own clientele.
In response to heightened international attention to Puerto Rico's fiscal situation, marketing efforts have been redoubled to explain that the government's fiscal matters will be resolved and that there is a great opportunity in medical tourism. "We are answering all questions. At the end of the day, we are seeing that if we continue the outreach process, we will benefit from receiving so much exposure. A lot of doors have opened with people who are now willing to hear our message about the opportunities in Puerto Rico," Bacó explained.
A new market niche
"The new part of the strategy for Puerto Rico is the institutional recognition of medical tourism as a market niche for development," said Puerto Rico Tourism Co. (PRTC) Executive Director Ingrid Rivera. The PRTC sees medical tourism in the same way as luxury tourism, sports tourism or adventure tourism: as a potential source of a sizable influx of funds from abroad. The PRTC even offers incentives for taxi operators who want to adapt their vehicles to transport travelers with disabilities.
Strategic targets in terms of visiting patients include residents of other Caribbean islands who may have an urgent need and lack access to needed procedures and services. However, the new strategy embraces as potential clients those self-insured individuals facing high costs from undergoing elective procedures in the mainland U.S. and who may save considerably from selecting Puerto Rico. In addition, there are many private companies, which are self-insured and who have chosen to cover their employees' medical expenses. They are seeking savings and high-quality healthcare for the employees. Furthermore, medical insurance under the Patient Protection & Affordable Care Act (also known as Obamacare) doesn't cover dental procedures; therefore, those patients could have dental procedures done locally in Puerto Rico at significant savings.
The Advantage Business Consulting study identified a wealth of opportunities in a variety of medical specialties, including dental, cardiology, orthopedics, bariatric surgery, cancer treatment, neurosurgery, gynecology and infertility, pediatrics, ophthalmology and certain cosmetic procedures.
There are currently just two hotels on the island that are certified for medical tourism, the Caribe Hilton and Condado Plaza Hilton. However, Rivera indicated that there are 10 hotels currently undergoing the certification process, including the Hyatt Place in Manatí and Bayamón. The latter two are presently marketing themselves as wellness hotels.