Over the years, economic improvements tremendously enhanced the lifestyle and health of the world's population.
According to a Pricewaterhouse Coopers study, 24 OECD countries spent $2.7 trillion on healthcare in 2002. The same study estimated that if this increasing trend in spending continues, the 2002 level will more than triple to $10 billion by 2020.
Meanwhile, dramatic changes in demographics are unfolding. Within the next two decades, the global population aged 65 and over will grow by an astonishing 88 percent, or almost a million people a month.
Back in 2000, 7 percent of the world population (or 420 million people) were over the age of 65. This is projected to double in 2025, when people over 65 will make up 10 percent of the world population (or a total of 800 million people).
These two developments are interrelated. As the population ages, there is more demand for healthcare which in turn, drives the cost of healthcare spending higher.
For every dollar, or yen or pound spent on healthcare, this means one less spent on computers, travel and other personal/consumable items.
While health expenditures increase with growth, reducing these expenditures may be a key factor to fuel economic growth.
Dilemma
Therein lies the dilemma for developed countries. How can they continue to sustain their health systems while battling with the double whammy of rising healthcare cost and aging population?
Globalization offered a solution.
For years, a global convergence in healthcare continues to unfold and already, it has radically altered the way this is managed and delivered.
From its early precursor of pharmaceutical companies who sought to broaden their market base by establishing global partnerships as a means of expanding their market reach, we now see a variety of global solutions employed to solve many local health problems.
The first to ride this wave is the Philippines. Our nurses were among and still the most aggressively recruited staff as many countries experience shortages of skilled health personnel.
Today, delivering the best healthcare is no longer defined by national boundaries.
It is not uncommon now for US physicians to receive training in foreign medical schools. Public private partnerships are making possible the establishment of new hospitals and clinics in more than 50 countries like Brazil, Gulf States, Sweden, Australia, Malaysia and UAE.
The already huge global expenditure for healthcare does not show signs of abating.
Countries are competing for the chance to serve the growing market - and Philippines is one of them.
What business opportunities have emerged or are emerging where Philippines can potentially compete in? These four areas show a lot of promise:
- Medical Travel/Tourism
- Retirement Destination
- Outsourcing opportunities
- Health human resource provider
Medical Tourism
Lauren Garret wrote: "In the newly globalized economy of the 21st century, no part of the planet is too remote, too exotic or too forbidding for travelers or business development."
This is truly opening up the global market for travel in pursuit of health and wellness.
Medical travel is now an attractive alternative to take advantage of health services that would normally be too expensive or too inaccessible because of long waiting lines in a patient's country of origin.
Services sought range from the simple ones like spa and wellness, dermatological services, aesthetic surgeries, executive check-ups and dental make-overs to the more complex ones like hip replacement and organ transplants.
Success stories keep getting repeated in various publications and on the Internet.
Among Asean countries, the early mover was Singapore, which is still working hard to increase its 200,000 tourists a year to a million by 2012 pushing the sector's GDP contribution above $1.6 billion.
Thailand is a serious competitor and has recorded at least 600,000 patients' arrivals a year. This year alone, it is expecting to earn more than $1 billion.
Malaysia, which treated more than a hundred thousand tourist-patients in 2005, is expecting to make $590 million in five years. India's medical tourism business is growing at the rate of 30 percent a year and projected to make at least $2.2 billion a year by 2012.
Let us not forget that these four countries expect to generate more than $4.4 billion by 2012. That is a lot of money for their economies.
The increase in medical tourism market has already overtaken the 4-6- percent growth in general travel bookings predicted for 2006 with the number of medical travelers swelling by 20-30 percent a year. The Philippines is moving to join the bandwagon.
Philippines is a natural for medical travel. Already, we are among the preferred tourist destinations with our amazing beaches, tropical weather, historical landmarks, golf courses and hospitality among many other enticements that tourists find attractive.
On the service delivery side, we have very competent doctors practicing in well-equipped hospitals. We are already a recognized global brand in healthcare and chances are, these tourists have been cared for by either Filipino nurses or doctors in their own countries.
We speak English fluently and what we lack in resources, we make up with our smiles and trademark hospitality. Surely we can give our competitors a run for their money.
An effort is also being made to enable the local players to enter the market. The DOT conceptualized the Philippine Medical Tourism Program in accordance with its mandate to promote and develop tourism as a major socioeconomic activity to generate foreign exchange and employment.
Other agencies likewise supported the initiative among them, the Board of Investments, which included medical tourism in the 2007 Investment Priority Plan, the Development Bank of the Philippines through its Health and Wellness Enhancement Access Loan Program and the Philippine Export Zone Authority through the establishment of medical tourism zones.
BOI, DBP and PEZA had already issued guidelines on how these incentives can be enjoyed by those desiring to invest in medical tourism activities.
Retirement
From a short stay medical travel, we move to a more long-term opportunity for the Philippines as a retirement destination and as a service provider for geriatric care. We are living in a graying world and projections show just how challenging this will be for the planet.
The current estimated over-65 population in US is roughly 13 percent of the total population or about 35 million persons. By 2025, this age group is expected to be almost 63 million, nearly 19 percent of the total population.
Aging population
In Europe, one in five Europeans will be more than 65 years old by year 2025. In Asia - Southeast Asian region, Japan will have the most number of elderly population.
A paper by Misako Ito revealed that the elderly population aged 65 years and older reached 25.33 million in 2005 - one out of every five people is at least 65 years of age.
Between 2000 and 2025, China's 65+ population will grow by 3.5 percent per year while its under-15 population will decrease by 25 percent. By 2015, the percentage of the 65+ population will reach 9 percent in China and Thailand; 10 percent in South Korea; 11 percent in Taiwan; and 15 percent in Hong Kong.
In 1985, children under 15 outnumbered people aged 65 and older by 5 to 1 in East Asia and 10 to 1 in Southeast Asia. These ratios will plummet to 2 to 1 and 4 to 1 respectively, by 2015.
Baby boomers
Why is there so much concern about the aging of the population especially in developed countries?
Two or three decades ago, the baby boomers were active members of the workforce and their contribution to the social fund is enough to support those who were retiring--a much smaller number in relation to the younger ones.
Today, the baby boomers are themselves about to retire--and the deceleration of population growth has considerably reduced the number of younger age group who should be taking over their place in the hierarchy to continue providing support through pension fund contribution.
Countries now face an inverted pyramid scenario with funding support diminishing while retiring employees are increasing, straining its ability to take care of their elderlies.
Governments are now forced to consider alternatives to maximize the depleting pension funds and 'outsourcing' may show them the way out: scout for locations where their retirees can avail of appropriate and affordable housing, enjoy greater independence and better quality of life--and all within their pension allotment.
The growing popularity of medical tourism is hastening the 'buy-in' for the "relocation" of retirement facilities in countries that will have the resources to build such communities and provide the required services that will support the needs of its residents.
Again, Philippines is presenting itself as an ideal second home for the growing retirement market. The cost of living is relatively low (at least, when you consider that foreign retirees will get more pesos for their dollars or euros) and the climate is pleasant and conducive to a more laid-back lifestyle.
The availability of healthcare services is also a major selling point. Retirees are in that age bracket where health worries abound and the presence of many health facilities is a competitive advantage.
The business imperative is to develop and implement a world-class retirement community that will be able to combine the best features in terms of physical infrastructure and use this to create a seamless yet flexible network of health and lifestyle services that will be in step with the age transitions of its senior residents from active to increasingly bed-bound condition.
Outsourcing opportunities
Another area that the Philippines can also explore is outsourcing engagements such as support services for healthcare.
Many disease management programs abroad make use of the services of call centers for monitoring and follow-ups. Our country is already a call center hub--we can extend the service coverage to include healthcare. Medical transcription is already an accepted outsourcing area and we can likewise capitalize on the English proficiency of our manpower to further increase the market.
In the health education sector, we are already linked with countries like Korea and China, which are sending their students for nursing degrees.
Health human resource provider
All three preceding business opportunities require foreign nationals to come to our country to avail themselves of those services. Not all will be comfortable taking this route though because of strong family and cultural ties. Why not reverse the process and explore the opportunity of having our services made available to other countries on a fixed period/rotation basis?
One of the major worries of countries employing staff from overseas is that eventually, they will become citizens with all the entitlements. This, to their view, will strain further their already shrinking social services budget.
The "rotation model" will allow us to deploy staff in a host country where they will work for one to two years then come back to the Philippines who will then send a new batch as replacement. Rotation in the form of fixed employment period will minimize the adverse effects of migration such as shortage of skills for our own health system requirements and the social consequences of family separations.
At the same time, the skills that will be learned from the host country can improve the quality of our healthcare delivery at home. It's a win-win situation and the host countries can continue enjoying the benefits of well-staffed health facilities.
The bottom line is that healthcare is creating new market spaces and is opening up new doors where investments can come in, among them in these two major areas:
1. Infrastructure
Putting up more health and wellness facilities that are geographically dispersed over regions already considered as tourist destinations from spas, specialty clinics to hospitals;
Expansion of tourist accommodation facilities such as hotels, inns, etc.
Establishment of retirement communities including long-term care facilities
2. Services
Operation of transportation facilities
Schools and other facilities for health human resource development and workforce re-training
Operation of boutique travel agencies that cater to this specialized market
Operation of companies that can provide telemedicine services
Operation of lifestyle service companies to provide support services
Now is the time to take advantage of opportunities. Through the joint efforts of agencies such as DTI, BOI, Peza, DOT and DOH, investing in health and wellness initiatives are made more attractive through incentives ranging from income tax holidays to tax exemptions on customs duties ad importation.
In fact, our hospital, St. Frances Cabrini Medical Center has been recently proclaimed by the President of the Philippines as the first Medical Tourism Special Economic Zone—and our hospital has likewise been approved as the first enterprise-locator in this special medical zone.
Growing market
How then can the Philippines penetrate and seize leadership of the growing market in healthcare?
First, we need an engaged travel and tourism industry fully cognizant that medical tourism is a new game where old rules may not apply.
There is a need therefore for new synergies, a retraining of workforce and learning new skills that will allow proper handling of patients' inquiries, complaints and condition.
Second, we need to go beyond great slogans and classy brochures to translate every healthcare service requirement into an excellent experience for the medical travelers from the time of arrival till their exit.
The process flow must be seamless and hassle-free. This means better airport facilities, better coordination between and among government, health facilities and support services.
Third, we must establish track record through consistent performance and delivery. Quality must be a top priority.
It has been said that the healthcare system of the 21st century is a public-private partnership that harnesses the creative impulses of the private sector with the social justice function of the public sector. A public-private partnership has the potential of combining the innovations of the competitive marketplace with the larger social values of solidarity and health justice.
Countries who have successfully positioned themselves in this robust healthcare market leveraging on this partnership went on to reap economic benefits.
The Philippines can likewise become a beneficiary of this niche market.
Beyond profitability, the dollar earning potential of this market offers a unique opportunity to ensure that the gains will redound to the benefit of our countrymen who have poor access to quality healthcare.
The most tangible manifestation will be seen in a bigger budget allocation for health to upgrade and expand public health facilities ensuring equitable access to quality health services.
With the patronage and business from our international partners and clients, we can make this happen.
Healthcare has succeeded in breaking down barriers and making this planet an increasingly borderless world—because we all realize that at the end of the day, caring, healing, empathy and alleviation of pain recognizes neither color, money, country nor race.
So, expect tourists to go home from their travels bringing not only a couple of Batangas balisong, Cebu keychains or Boracay shirts but also a new hip or yes, a brand new face.
