Expert Analysis: Why Some Medical Tourism Clusters Have Failed to Deliver Expected Results

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Maria K Todd, PhD MHA

St George, Utah, USA | December 11, 2024 -- Medical tourism clusters, often imagined to become integrated ecosystems of healthcare providers, hospitality services, and support infrastructure, have been heralded as engines for economic growth and improved healthcare accessibility. However, not all clusters achieve targeted financial results. Many design flaws are the reason. Despite substantial investments in infrastructure, marketing, and stakeholder collaboration, in my career, the majority failed to meet their objectives. This leads to wasted investment of cash, time, and lots of frustration.

I've worked in medical tourism in more than 120 countries. Over the past 4 and a half decades, I've observed and archived the most frequently encountered reasons why some medical tourism clusters underperform and how these challenges can be addressed, remediated, revised or turned around. I've been archiving this so that when asked why I make the recommendations I do, I have citations and case examples. So these observations come from my Medical Tourism Post Mortems, shall we say.

Why Some Medical Tourism Clusters Have Failed to Deliver Expected Results

Medical tourism clusters, designed as integrated ecosystems of healthcare providers, hospitality services, and support infrastructure, have been heralded as engines for economic growth and improved healthcare accessibility. However, not all clusters achieve the expected results. Despite substantial investments in infrastructure, marketing, and stakeholder collaboration, some fail to meet their objectives. Here are the primary reasons why some medical tourism clusters underperform and how these challenges can be addressed.

1. Lack of Strategic Planning

One major reason for failure is inadequate strategic planning by inexperienced strategists. (or... those posing as strategists who simply want to sell conference sponsorships and rent stands to the providers and the governments with cheque books.) Many clusters are established without a proper, comprehensive feasibility analysis or clear understanding of how the cluster will connect with targeted source markets of patient/buyers. Decision-makers often overlooked critical factors such as:

I maintain that the number one problem we have in medical tourism is a standard method of medical tourism case enumeration (the protocol for establishing the number of something).

Demand Analysis:

Misjudging the demand for specific medical services in the targeted regions. Reading old propaganda on the internet instead of conducting present day analysis. For example, a Deloitte published report on Medical Tourism demand from around 2008 is one of the most quickly found online. It wasn't accurate then and it certainly isn't 7 years later.

- Solution: Conduct detailed, present day market research to identify demand for specific treatments and tailor services accordingly. Dig into the data for plausibility. I maintain that the number one problem we have in medical tourism is a standard method of medical tourism case enumeration (the protocol for establishing the number of something).

...one cannot differentiate if one didn't embed the differentiation in the product design concept from the beginning.

Competitive Positioning:

Failing to differentiate the cluster from established competitors in the relevant geographic market: Describe your differentiation in terms a 12 year old in the targeted source market can understand.

Capturing the highest share of voice and notoriety for what you do: what sets you apart and how will the public know this about you?

Determine what is not easily replicable or imitated.

- Solution: Develop a unique value proposition by highlighting exclusive services, certifications, or technologies early in the game. Determine what is not easily replicable or imitated. While differentiation awareness is an activity of branding, marketing, advertising and public relations, one cannot differentiate if one didn't embed the differentiation in the product design concept from the beginning.

Add medical tourism facility readiness training to the list of advantages and services the cluster can offer members and other providers seeking membership.

Sustainability:

Underestimating the resources needed to sustain long-term operations.

- Solution: Create a sustainable business model with phased growth plans and contingency funding. Invite those providers ready to participate. Add those not quite ready later on, only if you need them. Add medical tourism facility readiness training to the list of advantages and services the cluster can offer members and other providers seeking membership. Charge a nominal fee to collect revenue to sustain the cluster.

Clusters launched with a clear strategic vision and robust planning are more likely to succeed.

Weak Collaboration Among Stakeholders

Successful medical tourism clusters require seamless collaboration among healthcare providers, tourism operators, government agencies, and local businesses. Clusters often fail due to:

Work out the details about who gets what early in the game. If this cannot be settled up front, don't build the cluster.

Mistrust Among Partners:

Stakeholders competing against one another rather than collaborating for profits.

- Solution: Foster trust through transparent revenue-sharing agreements and regular stakeholder meetings. Work out the details about who gets what early in the game. If this cannot be settled up front, don't build the cluster.

The central coordinating body must know the mission of the cluster and be competent to guide execution and day to day operations.

Lack of Coordination:

Disjointed efforts that fail to create a unified patient experience.

- Solution: Establish a central coordinating body to oversee operations and ensure alignment among all parties. The central coordinating body must know the mission of the cluster and be competent to guide execution and day to day operations. This may take special training. Don't skip this or all your work and investment will unravel in short order.

Teach providers how to be a successful cluster provider. They didn't come to be a member; they came to be successful attracting patients.

Insufficient Training:

Lack of standardized training across stakeholders, resulting in inconsistent service delivery.

- Solution: Implement cluster-wide training programs focused on customer service and operational excellence. Teach providers how to be a successful cluster provider. They didn't come to be a member; they came to be successful attracting patients.

With cohesive collaboration, clusters can provide an integrated and seamless experience for medical tourists.

Poor Infrastructure and Service Quality

A medical tourism cluster is only as strong as its weakest link. Inadequate infrastructure and substandard service quality can tarnish a cluster’s reputation. Common issues include:

Subpar Medical Facilities:

Outdated equipment or poorly maintained hospitals.

- Solution: Create a list of minimum standards and technology available. (e.g., standards for language fluency, minimum technologies present (e.g., 3.0 Tesla MRI, digital x-ray and PAACS) HVAC standards, seismic treatments (where applicable).

The cluster can sponsor training for the providers' dietary staff and executive chefs on cultural alignments based on the target source markets you seek to attract for treatment. The same for hoteliers in the cluster.

Limited Hospitality Options:

Insufficient high-quality accommodations and transportation services.

- Solution: Partner with premium hospitality providers and improve transportation networks to enhance patient comfort. Establish minimum standards for transportation vehicles keeping in mind the patients' needs based on the type of procedures that may be sought. The cluster can sponsor training for the providers' dietary staff and executive chefs on cultural alignments based on the target source markets you seek to attract for treatment. The same type of training can be offered to hoteliers in the cluster.

Not all accreditations and certifications that are sold are valuable or recognized. For healthcare facilities, to my way of thinking, "recognized" means by ISQua AND the consumer or insurer

Inconsistent Quality Standards:

Absence of internationally recognized accreditations. Make a list of recognized accreditation programs. Not all accreditations and certifications that are sold are valuable or recognized. For healthcare facilities, to my way of thinking, "recognized" means by ISQua AND the consumer or insurer

- Solution: Obtain accreditations that are recognized by the consumers or insurers in the target market to assure patients of consistent service quality. If you tout certifications and accreditations that your target audience does not value or recognize, your message fails to connect.

Being knowledgeable about and having helped many facilities in the USA and abroad pass their accreditation surveys under many ISQua-accredited schemes, my preference for "clusters" is ISO 9000:2015, as currently updated.

Prioritizing infrastructure improvements and quality assurance can enhance patient satisfaction and trust. Being knowledgeable about and having helped many facilities in the USA and abroad pass their accreditation surveys under many ISQua-accredited schemes, my preference for "clusters" is ISO 9000:2015, as currently updated. While the previous versions fell short on clinical quality management, the 2015 version is well adapted to both clinical and administrative quality management and will serve the cluster well.

Ineffective Marketing Strategies

Medical tourism clusters often fail due to poor marketing strategies that do not resonate with the target audience. Issues include:

Target your source markets with a laser beam.

Failure to target:

Campaigns that are blast to the world are ineffective. It is like shooting a pistol at the sky. What do you expect to hit? How? Why? How will you measure targeting results?

- Solution: Target your source markets with a laser beam. Start with one or two promising targets. When you pull traction-- add additional. Use the learnings from the early successes and failures to guide your next actions.

Remember what you are marketing: the cluster as an entity? or the individual providers?

Generic Campaigns:

Vague messages that do not highlight the cluster’s unique value proposition.

- Solution: Develop targeted marketing campaigns emphasizing the cluster’s unique strengths and benefits. Some messages should be placed and positioned strictly for brand awareness. Others should be positioned to tell stories and pre-sell the reader on your cluster's "why" story. Remember what you are marketing: the cluster as an entity? or the individual providers?

...decide what you are marketing: the individual providers or the cluster that is representing the destination as a whole.

Limited Digital Presence:

Failing to leverage SEO, social media, and online testimonials effectively.

- Solution: Build a strong digital presence using SEO-optimized content, social media engagement, and patient testimonials. Again, decide what you are marketing: the individual providers or the cluster that is representing the destination as a whole.

Since OECD and Friendship, Commerce, and Navigation (FCN) treaties and Antikickback regulations (bilateral agreements that establish the framework for economic relations between countries or trading partners in those countries) often prohibit bribes and touts, fee splits and kickbacks as commission-based payments to referral sources, this method of compensation should be avoided.

Inadequate Outreach:

Neglecting to establish collaboration agreements with highly-qualified facilitators and insurers who are proven drivers of patient referrals. Instead, establishing agreements with facilitators who are underqualified, under-capitalized, and have no brand of their own established.

- Solution: Collaborate with highly-qualified medical tourism facilitators, insurance companies and TPAs, and international travel agencies to expand outreach. Define the standards for highly-qualified facilitators. There should be an interview, an exam, on your terms, relevant to your business and your target market(s). The interview should cover branding, marketing, advertising, public relations and clinical coordination and patient movement, including knowledge of anatomy, physiology, altitude physiology, medical terminology, geography, connecting hub airports and airlines, and travel agency booking knowledge.

Since OECD and Friendship, Commerce, and Navigation (FCN) treaties and Antikickback regulations (bilateral agreements that establish the framework for economic relations between countries or trading partners in those countries) often prohibit bribes and touts, fee splits and kickbacks as commission-based payments to referral sources, this method of compensation should be avoided.

Effective, focused and measurable / quantifiable marketing strategies can help attract a steady flow of international patients.

Overdependence on One Market Segment

Clusters often fail because they rely heavily on a single market segment, such as cosmetic surgery, cancer treatment, transplants, or dental care. This overdependence leaves them vulnerable to market fluctuations and regulatory changes.

- Solution: Diversify services to include all marketable specialties, such as orthopedics, cardiac, cosmetic surgery, obesity treatment, clinical trials, fertility treatments, and wellness programs, to attract a broader patient base and mitigate risks.

Create inclusion criteria before onboarding the first providers. That way, if a subpar facility wishes to offer certain procedures through the cluster, there is a documented privileging criteria for facilities and their providers. You'll also defend against accusations of favoritism later on.

Regulatory and Legal Barriers

Regulatory hurdles and legal complexities can impede the growth of medical tourism clusters. Common issues include:

Cross-Border Legal Disputes:

Complications arising from varying legal systems and patient rights.

- Solution: Establish clear legal frameworks and contracts to minimize disputes. Establish a specialized arbitration or mediation panel that is outside the tort or transactional (contracts) courts system. Create a standardized contract for medical tourism services that has been reviewed by legal counsel. So many I encounter are plagiarized copies and templates that are not enforceable, bilaterally.

Government Policy Changes:

Shifting priorities or lack of support from local governments.

- Solution: Engage in active dialogue with policymakers to ensure supportive regulatory alignment in visa and immigration, foreign direct investment, taxation, public health, finance, tourism and over-tourism mitigation, aviation and airport operations, taxi standards, and more.

Addressing regulatory challenges proactively can strengthen trust and attract patients.

If you are targeting Chinese patients, train on Mandarin and Cantonese. If you are seeking Muslim female patients, make sure you have adequate female practitioners and nurses.

Cultural and Language Barriers

Patients often seek care from providers in clusters where they feel culturally comfortable and understood. Failure to accommodate cultural sensitivities or provide multilingual services can deter patients.

- Solution: Employ multilingual staff and offer cultural sensitivity training to ensure patients feel welcomed and understood. Train the rest. Target the most significant languages you expect from targeted source markets. For example, if you are seeking to attract Italian patients, don't focus on English primarily. If you are targeting Chinese patients, train on Mandarin and Cantonese. If you are seeking Muslim female patients, make sure you have adequate female practitioners and nurses. You can't just train on English and aim at American cultural norms.

Economic and Political Instability

Economic downturns, political unrest, alleged malpractice, an unexpected medical travel death, or sudden changes in government policies (and administrations) can disrupt medical tourism cluster business. These external factors often deter patients from traveling to affected regions. This is a public relations emergency. It must be planned for and the protocol executable on short notice.

- Solution: Diversify the cluster’s patient base geographically to reduce dependency on a single destination. Additionally, build contingency plans to navigate economic or political uncertainties.

By redesigning approaches and addressing the challenges I've listed above, your medical tourism clusters can thrive and provide sustainable benefits to patients, providers, and local economies alike.

Take the first step toward ensuring your success as a medical tourism cluster. Contact me today to bring your vision to life and unlock the full potential of your medical tourism cluster or PPP initiative. +1.800.727.4160

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