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Panama seeks to cash in on medical tourism boom

Panama City, Panama – With double-digit economic growth, canal expansion, subway construction, and an ever-thickening bristle of glass towers, Panama City is on the verge. Among those positioned to capitalize on Panama’s vision as a thriving “hub of the Americas” are the city’s four major private hospitals, variously boasting the latest, first, largest, and best in technologies, design, credentials, and affiliations. Panama is one of a growing number of countries exploring medical tourism as a promising import.

Guest contributor Jill Hodges is a Seattle-based writer and lead editor of a new book Risks and Challenges in Medical Tourism. This is the second of a series of posts (here’s the first) examining the broader implications of the globalization of the health industry.

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By Jill Hodges

Panama City, Panama – With double-digit economic growth, canal expansion, subway construction, and an ever-thickening bristle of glass towers, Panama City is on the verge.

Among those positioned to capitalize on Panama’s vision as a thriving “hub of the Americas” are the city’s four major private hospitals, variously boasting the latest, first, largest, and best in technologies, design, credentials, and affiliations.

Punta Pacifica Hospital, Panama City

Punta Pacifica Hospital, Panama City

The hospitals invested in these improvements, along with all manner of computer assisted diagnostics, robotics, and electronic medical records, with wealthy Panamanians and expats in mind. But to varying degrees, they’ve been upgrading with an eye toward medical tourists as well.

Last month, Panama held its first medical tourism conference, which included the roll-out of a government proposal for a “medical free trade zone” to support the country’s medical tourism industry. The proposal, which has been in the works for four years, includes tax breaks for foreign investors and a certification process for providers who want to treat medical tourists.

Panama is one of a growing number of countries exploring medical tourism as a promising import.

Medical tourists generally pay higher, out-of-pocket rates than local patients and also offer the prospect of spending tourism dollars on hotels, meals and even tours and entertainment for themselves and family members.

Panama’s medical tourism industry is young and small compared to the more developed initiatives in neighboring Colombia and Costa Rica, not to mention the well-established programs in popular destinations like Mexico, Brazil, Thailand and India.

While estimates of the number of people traveling globally for medical care range from hundreds of thousands to millions, there’s general agreement the industry is growing.

Panama’s private hospitals are at the ready. Hospital Nacional, for example, is just wrapping up a $25 million renovation, complete with a “hotel section” featuring a courtyard and rows of private suites in designer shades of electric orange blue, and green; a robot-operated pharmacy; and state-of-the art operating theaters.

A few miles away, seven-year-old Hospital Punta Pacifica, with its soaring glass-walled lobby and bustling fertility clinic, boasts an affiliation with Johns Hopkins and accreditation from JCI, the international arm of the US-based accreditation group. At Centro Médico Paitilla, they’re converting former hospital wards to private rooms, and patients and their families can stroll via skyway links to the Hard Rock Hotel and a shopping mall.

medical tourismUncertainty remains about what kind and how many medical tourists Panama may attract. Clínica Hospital San Fernando, also JCI-accredited, has created an international patient center to study the possibilities before diving in—for now that means one employee who dedicates part of her time.

CEO Elisa de la Guardia de Lewis said the hospital, which has been popular with expats since the days when the US controlled the Panama Canal, is not necessarily interested in focusing on the traditionally popular medical tourism procedures like cosmetic surgeries. “Perhaps that is why we have not been more aggressive,” she said.

Indeed, many of the tens of thousands of providers and dozens of countries plunging into the medical tourism market are eager to move beyond liposuction, breast enhancements, Lasik surgery and dental implants to attract medical tourists seeking more intensive (and lucrative) services, such as treatments for orthopedic, cancer, and heart conditions.

Similarly, entrants into the highly competitive market are exploring how to set themselves apart from the rest of their competitors, many of whom promise high quality care at lower costs. Some have forged collaborative regional initiatives, or “clusters.” Others offer special visas, tout their touristic appeal, or drop their prices to the point that medical tourists pay less than locals.

Pramod Goel, author of the Evolution of Medical Tourism – from Cottage Industry to Corporate World, said that part of the problem is that “everyone is trying to go after same pool of medical tourists.”

That pool includes the mythic “uninsured American.” Among the most frequently quoted statistics at medical tourism conferences is the number of people in the United States without health insurance (usually estimated at 45-50 million).

While some US residents lacking health insurance do embark on medical travel, the fact is that many who can’t pay for insurance also can’t afford to board a plane to access medical treatment. Medical tourists from the US are more likely to be traveling for procedures that aren’t covered by insurance, such as certain stem cell or fertility treatments or cosmetic procedures.

Goel, who also runs a business, PlacidWay, which links medical tourists with providers, suggests that a more promising strategy for expanding beyond the market for elective procedures is to identify nearby markets that lack the medical expertise or technology to treat their local populations.

National medical tourism strategies, typically carried out under the auspices of health, tourism or commerce ministries (or sometimes all three), may include tax breaks, promotional support, or infrastructure investments ranging from hospital facilities to health care towns.

These investments have come under criticism in some countries where there are concerns that they come at the expense of the public health system.

An article published by the World Health Organization concluded that in Thailand, one of the leading destinations for medical tourism, the industry generated $1.2-1.4 billion in 2008 (0.4% of the country’s GDP) while it also contributed to higher costs and a shortage of health workers available to treat local residents.

Similarly, in Israel, there has been an ongoing debate about whether the medical tourism market, which brings in roughly 30,000 patients a year primarily for cancer treatments, threatens to exacerbate health worker shortages and undermine the public health system.

Goel said he’s heard reports from hospitals in Turkey, which receives planeloads of government- funded patients from Iraq and Libya, of yet another unintended consequence—illegal immigration: Some patients step off the plane and never return home. Other European countries have reported similar problems with patients from Africa, he said.

By taking a systematic approach to developing its medical tourism industry, Panama may be better positioned to see these kind of problems coming.

That’s a good thing, since Panama’s public health system, like most others, is not without its challenges. The possibility of health worker migration from the public to the private sector is a concern here, where regulations requiring doctors to be Panamanian-born limits the number of available providers. Already there are shortages in some areas of the country.

And while the private hospitals boast state-of-the-art infection control and low infection rates, one of Panama City’s public hospitals recently experienced an outbreak of the drug-resistant bacteria Klebsiella pneumoniae carbapenemase (KPC) that spread to some 200 patients, resulting in 14 deaths and manslaughter charges against 11 health workers.

While health care providers are typically resistant to another layer of regulation, the monitoring entailed in Panama’s proposed and emerging medical tourism strategy may make it possible for Panama to identify and get ahead of potential problems and capitalize on the potential benefits to its national economy and health system.

On both a domestic and global scale, an international market for health care has the potential to undermine public health, or done right, to provide a market-based means to make better health care  available to more people.

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Jill Hodges is a health writer who focuses on the effects of globalization on individuals. She is a co-editor and a contributing author to Risks and Challenges in Medical Tourism: Understanding the Global Market for Health Services.  She was in Panama last month for the country’s first medical tourism conference.


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Humanosphere will sometimes post articles from authors from around the globe. Although these folks are not regular contributors, we hope you enjoy this change of pace.