Health tourism has good earning potential here

Published in the Jamaica Gleaner: Sunday | August 26, 2007

Keith Collister, Business Writer

It is no accident that both the governing People's National Party (PNP) and the Opposition Jamaica Labour Party (JLP) specifically mention health tourism in their manifestos as an area for emphasis in their future administrations.

Jamaica appears to be unusually well placed to benefit from the worldwide growth of this industry, as long as it moves quickly before the already emerging world competition.

Apart from a very brief mention in the tourism section, the PNP's manifesto more clearly outlines its plans for health tourism in the "Social Agenda" section. The party states that it intends to "aggressively develop a medical procedures industry, targeting markets that have challenges with costs or length of waiting time, and incorporate recuperation and rehabilitation programmes to attract those who wish to recover in an environment that provides high-quality care in an idyllic setting."

Diversifying the tourism industry

The JLP manifesto, under the heading "Diversifying the Tourism Industry", puts it very succinctly: "Attract health-care entrepreneurs to establish medical facilities offering clinical and surgical procedures to foreign patients."

The facility, Caribbean Heart Institute, owned by one such health-care entrepreneur, is mentioned specifically in the PNP's manifesto as one of the "centres of excellence", which they want to encourage by "the granting of the required incentives to allow such developments".

In assessing the potential opportunity for Jamaica, an excellent start is to listen to the words of Dr. Ernst Madu, the owner and driving force behind the technologically advanced Heart Institute of the Caribbean, based on Balmoral Avenue, Kingston 10.

Dr. Madu, who is originally from Nigeria, is married to a Jamaican, but now lives in the United States a doctor by profession, he is also a very focused businessman with hospitals in the U.S., Nigeria and now Jamaica.

Dr. Madu sees the potential for health tourism in Jamaica as huge, but believes at this point that there is only potential. He pointed out that it was not an opportunity that will be there forever and Jamaicans must therefore decide quickly if it is here or some other Caribbean country that should take advantage of this opportunity.

He believes, however, that if we as a country take up this opportunity, it could have a transforming effect on Jamaica. In his view, the Jamaican medical community is ready, but we need some "enabling conditions" that can only be dealt with by those in power.

The Health Tourism Opportunity

Being at the back door of the greatest economy in the world, Jamaica is not only physically very close to America, it is also linguistically and culturally very similar.

According to Dr. Madu, unlike some of the other developing countries offering cheaper medical services, there is no culture shock for a U.S. citizen visiting Jamaica, nor is there any need for them to change their lifestyle.

While the country has some challenges with violence and its obvious effect on discouraging people from coming here, the most important issue people worry about in health is the quality of service. Jamaica's doctors are among the best in the world, so intellectual capital is not a problem.

In the U.S., their "baby boom" generation is demanding more and better health care services. This U.S. generation is more knowledgeable about health care than any preceding generation, but the health care service business model in the U.S. is broken due to its very high costs.

There are an estimated 80 million underinsured persons and another 40 million people without health insurance in the U.S. who will seek healthcare overseas if it is easily accessible, affordable and of comparable quality. These are not poor people but people who will pay for services if they are reasonably priced and of good quality. The issue, according to Dr. Madu, is how to create a quality service staffed by highly trained professionals.

The Technology Challenge - The Role of Government

According to Heart Institute owner, the biggest problem preventing Jamaica taking advantage of this opportunity is to pay for appropriate technology that is fit for our environment, affordable and maintainable. In Jamaica, our low GDP means we can't price services anywhere close to U.S. levels, but if we have to buy our inputs at the same cost as in the U.S., pay high taxes and importduties and bring expensive technicians from overseas we can't offer our medial services at the correct price levels to expand access. We are competing with Nashville in the U.S. where there are no duties - a very significant advantage in a very capital intensive area like nuclear medicine.

In addition to the cost of capital equipment, getting the right expertise for Jamaica for such a speciality costs a lot of money. In Dr. Madu's view, Jamaica must make the price attractive enough to make medical services affordable if we want to expand access. There is also a strong need to streamline the taxation and duty of health products, as the uncertainty of the system of granting duty concessions makes it almost impossible to plan as you don't know what concessions you are going to get.

The Size of the Opportunity

We need to create an enabling environment to make health tourism succeed as an industry. Americans currently fly to Thailand and India (a very long way) so even with the violence they will come to Jamaica. One Hospital in Burumgrad Thailand sees 1000 international patients a day, many of whom are from North America.

In 2004 India generated US$350 million from health tourism, with the potential to generate an estimated US$3 billion by 2012. Many Caribbean nationals living in the U.S., who are already familiar with the high quality of our doctors, will come to Jamaica if they have confidence that technology based advances in medicine can be obtained locally. This is already happening with dentistry, whilst Americans go to Mexico for plastic surgery. The key is they have to believe the quality of the product they are accessing is comparable to the U.S.

Dr. Madu believes the "essential" industry status of the health sector, which is critical to maintaining a healthy labour force, should make it eligible for special tax incentives. These concessions need not just be tax breaks, but could include Government concessions on land for development.

The Government could also recover its investment in many different ways, such as through guaranteed hospital access to patients without the ability to pay, thereby taking pressure off government hospitals. Other ways could include training employees at Government hospitals in specialist skills that are not easy to acquire, or providing specialists whose cost would be too much for the Government. This type o thinking is even more useful as both parties move towards offering health care for free, or nearly free.

keithcollister@cwjamaica.com