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Sri Lanka seeks to carve out niche in medical tourism

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26 April 2017 11:41 am - 0     - {{hitsCtrl.values.hits}}

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By Oxford Business Group
The rising numbers of tourists from abroad and a state-led campaign to expand medical tourism could attract further investment to Sri Lanka’s healthcare sector, creating additional opportunities for its hospitality industry in the process. 
The country’s bid to become a centre for health and wellness is supported by improved connectivity and infrastructure, as well as its increased popularity as a tourism destination. Foreign arrivals were up 3.4 percent year-on-year in the first quarter, according to the Sri Lanka Tourism Development Authority.
In a sector update released in February, local brokerage and research firm NDB Securities said medical tourism could drive new demand for health services, catalysed by the three private hospitals in the country that are accredited by Joint Commission   International (JCI). 
JCI accreditation, which certifies that a hospital meets the same rigorous standards as in the US, is among the top growth drivers of medical tourism in emerging markets, according to the industry research firm Patients Beyond Borders.
Global market size 
Some 14 million people, it calculates, travel abroad each year expressly for medical treatment, from dentistry and transplants, to cancer and cosmetic surgery, spending a combined US $ 3800-6000 per visit on medical care, transport and accommodation. It estimates this market is growing by 15-25 percent per year.  
In a broader measure, revenues from medical tourism worldwide grew by 14 percent in 2015 to reach US $ 563 billion, according to the Global Wellness Institute, a figure that includes domestic and so-called secondary wellness tourists travelling primarily for non-medical reasons. Of this, US $ 111 billion was spent in the Asia-Pacific region, a lucrative and fast-growing market Sri Lanka hopes to tap. 
Another advantage for Sri Lanka is that its top-five source countries for tourists – India, China, the UK, Germany and France – represent a significant and potentially lucrative market for health provision. 
Since these already comprise a large chunk of foreign arrivals – about half of the 605,000 who came in the January-to-March period, according to government data – there is potential to market health services to them as well. 
Development potential 
The government has identified health tourism as a subsector that could help lift export earnings to the US $ 20 billion target it has set for 2020, building on the existing tourism and health infrastructure. 
To this end, it set up a Council for the Promotion of Medical Tourism in 2015, bringing together government officials, hospital directors and other sector stakeholders to discuss ways of developing the market, with its inaugural meeting held late that year. 
Potential to develop the niche is clear, according to Ajith Tudawe, Chairman of Durdans Hospital, one of the country’s oldest private health providers.
“Medical tourism is in its infancy, but has started out strongly with investments into cosmetic and dental care,” he told Oxford Business Group (OBG). 
In one promising development, he said private hospitals have pursued far greater utilisation of ICT, leading to better data-sharing and information transfer – a key service for attracting foreign patients. 
In mid-March Lanka Hospitals renewed its agreement with MyDoctor, a web-based advisory service that allows patients to upload their medical records for anonymous consultations with a hospital’s doctors, facilitating ease of access for international patients.
Such capacity building, Tudawe said, could have a positive impact on medical services and encourage improvements in the public health sector by raising standards and boosting competition. 
Assessment and strategy
To better understand the current state of the market, the Export Development Board (EDB) commissioned an evaluation of the country’s medical tourism services at the end of 2016 by the US-based Medical Travel Quality Alliance. 
The representatives of the alliance have begun to assess the quality of hospitals, clinics, traditional health facilities, hotels and spas, awarding international certification to those that comply with recognised standards and regulations. 
At a meeting with the EDB at the start of the year, the alliance identified core strengths Sri Lanka can use to develop health tourism, including its established network of hospitals with modern facilities, a large pool of English-speaking medical professionals and its strong tourism base. 
However, these strengths are being offset by other factors at present, the EDB said, including lack of a clear strategy to support health tourism, non-recognition of local service providers by international insurance firms and low brand awareness worldwide. 
Economic impact
As the country pushes ahead with efforts to address barriers to medical tourism growth, doors should also be opened for operators in travel and hospitality, where there is potential for tie-ins with health service providers. 
Hotels, resorts and other serviced accommodation could, for example, adapt their offerings to the needs of recuperating patients, such as special dietary foods, ease-of-mobility improvements and access to medical and rehabilitation personnel. 
While targeting the health and wellness segment would require some investment up-front, gaining a foothold in this market could bring strong advantages, including longer average stays, larger bookings for accompanying family and a higher share of clientele from the upper end of the tourism market. 
(Oxford Business Group (OBG) is a global research and consultancy firm, which publishes economic intelligence on the markets of Asia, Africa, the Middle East, Latin and Central America and the Caribbean)


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