According to one report, the medical tourism market was estimated to be worth $105 billion in 2019. Despite the global shutdown in 2020 and 2021, it is estimated that the industry is still very much growing, albeit at a slower pace. By 2025, it is estimated to balloon to $182 billion, at a CAGR of 9.7%.
Whether that figure is reached or not remains to be seen, but one thing is for certain – medical tourism will grow. The industry has over the past decade rapidly morphed into a greatly organised and professionally-run sector and has become a key strategy for governments to drive revenue. It goes without saying, therefore, that medical tourism has a bright future, despite the headwinds brought on by current geopolitical and economic conditions.
As we head into 2023, there’s no denying that things are extremely uncertain and challenging. Most economists predict that we will see a recession this year. As noted by The World Bank, “the currently expected trajectory of interest-rate increases and other policy actions may not be sufficient to bring global inflation back down to levels seen before the pandemic.” To add to that, we must also consider the consequences of Russia’s continued war in Ukraine. While the conflict is yet to spill over into Europe at large, the pressure on the oil markets remains. Conflicts are also raging and expected to break out in several other regions, while COVID-19 appears to reemerge in Asia.
These are all realities we must contend with, whether we like it or not. They are also realities that will have severe consequences for all sectors – especially travel. Medical tourism is an industry that sits at the confluence of travel and healthcare. Should even one suffer, the industry as a whole takes a hit. Given that, it is an appropriate question to ask – will medical tourism really sustain in 2023? The answer is a resounding yes.
In every situation, no matter how bad, there exists an opportunity. The same can be said for medical tourism. There are two key factors here that are at play. For one, medical tourism encompasses both developed and developing nations equally. People in developed nations travel to developing nations for lower-cost healthcare, and people in developing countries travel to developed countries for better quality care. Secondly, no matter how bad the global economy is, people will never put off spending on healthcare. Demand for technology, luxury goods, vehicles, and homes may drop, but the demand for healthcare never will. Especially in the aftermath of COVID-19. People are, and will take their health seriously, so much so that spending on it will be considered an investment, more than an expense.
Knowing these two factors, it is easy to see how medical tourism can sustain itself amidst the brewing crises. Even if recession should hit, hospitals in developing countries like India, Mexico, Tunisia, Turkiye, and Poland can offer treatments at far more economic costs than developed countries. Developed nations meanwhile will reportedly see “health expenditure growth exceed economic growth by up to 5.9 percentage points in 2023, creating enormous affordability pressure.” For the cost of treatment, many residents in developed countries will find greater value in travelling to developed nations to obtain treatment, even if the costs of healthcare and travel are inflated in these countries.
Secondly, developed countries like Canada, the UK and the USA are all seeing extreme pressure on their public health systems. Despite the absence of COVID-19 levels of admissions, a combination of stagnant/falling wages, routine overtime, rising inflation, and lack of adequate facilities has led to widespread discontentment in public health. A new report found that 4 in 10 junior doctors plan to quit the National Health Services (NHS) in the UK “as soon as they can.” In March 2022, the American Hospital Association noted in a public letter to the House Energy and Commerce Committee that it projected a shortfall of 1.1 million nurses by the end of the year. Under such conditions, millions of citizens will be left without access to critical care. However, that does not mean they can’t do anything about it. Medical tourism exists to bridge this exact gap, so therefore there is no lack of opportunity.
Movement from developed nations is likely to remain limited, especially in light of a recession which is likely to cause currencies to fall against the US Dollar. However, that does not mean there is no opportunity. Nations like India, Ghana, Nigeria, and Ethiopia are quickly seeing a growing upper-middle class, with rising disposable incomes and demand for better quality services. Medical tourism can cater to these populations as well, by offering reasonably priced services in nations with strong medical tourism initiatives like Turkiye.
With that in mind, suffice it to say 2023 will be a good year for medical tourism. It is unclear what the new year will bring, but what we can say with certainty is that it will bring plenty of opportunities for medical tourism. Every single stakeholder, no matter where they are and how big/small their operations will have a chance to benefit. If they do, it is very likely we may exceed the current CAGR and unlock a whole new world of healthcare options.
Sources
Consultancy-Me, The World Bank, Mckinsey & Company, The Guardian, US News,
