MEDICAL TOURISM IN INDIA: A CASE STUDY OF APOLLO HOSPITALS

Babu P George, PhD

University of Southern Mississippi, Hattiesburg, MS, USA

Email: Babu.George@usm.edu

Introduction

Medical tourism is a silent revolution that has been sweeping across the healthcare

landscape of India for almost a decade. According to the Confederation of Indian

Industries (CII), India is unique as it offers holistic medicinal services. With yoga,

meditation, ayurveda, allopathy, and other systems of medicines, India offers a unique

basket of services to an individual that is difficult to match by other countries. Also,

clinical outcomes in India are at par with the world’s best centers, besides having

internationally qualified and experienced specialists. With the international media

constantly telecasting scenes of white people getting knees replaced, hips resurfaced, and

dental works done here by the West-trained doctors at throw-away prices, that too in the

ambience of a five star resort, the demand from the nationals of Western Europe and the

US for medial treatment in India is on an ever-increase.

The domestic medical industry in India is trying all out to grab its pie from the evolving

global health bazaar. Statistics suggest that the medical tourism industry in India is worth

$333 million. According to the Government of India, India's $17-billion-a-year health-

care industry could grow 13 per cent in each of the next six years, boosted by medical

tourism, which industry watchers say is growing at 30 per cent annually. It is forecasted

that medical tourism will fetch India $2.3 billion by 2012. If not many things go wrong, it

will become a major driver of the Indian economy along with information technology,

biotechnology, and technology enabled consumer services. Probably realizing the

potential, major corporate groups in the healthcare business have made significant

investments in setting up modern hospitals in major cities. Many have also designed

special packages for patients, including airport pickups, visa assistance and board and

lodging.

In the recent past, the health care sector in India has witnessed an enormous growth in

infrastructure in the private and voluntary sector. The private sector which was very

modest in the early stages has now become a flourishing industry equipped with the most

modern state-of-the-art technology at its disposal. It is estimated that 75-80% of health

care services and investments in India are now provided by the private sector. An added

plus had been that India has one of the largest pharmaceutical industries in the world. It is

self sufficient in drug production and exports drugs to more than 180 countries. Unlike

many of its competitors in medical tourism, India also has the domestic technological

sophistication and infrastructure to maintain its market niche, and Indian pharmaceuticals

meet the stringent requirements of the U.S. Food and Drug Administration.

The Apollo Group

The Apollo Hospitals Group, the largest healthcare group in Asia, is today recognized as

the Architect of Healthcare in India. With over 7000 beds in 38 hospitals, a string of

nursing and hospital management colleges, and dual lifelines of pharmacies and

diagnostic clinics providing a safety net across Asia, Apollo may be rechristened

metaphorically as a healthcare powerhouse. Its history of accomplishments, with its

unique ability of resource management and able deployment of technology and

knowledge to the service of mankind, justifies its recognition in India and abroad. Apollo

has got one of the largest and the most sophisticated sleep laboratories in the World. It

has pioneered orthopedic procedures like Total Hip and Knee Replacements, the Illizarov

procedure, and the Birmingham Hip Resurfacing technique. Its mission is to bring

healthcare of international standards within the reach of every individual. According to

Apollo, it is committed to the achievement and maintenance of excellence in education,

research and healthcare for the benefit of humanity.

Apollo's business began to grow in the 1990s, with the deregulation of the Indian

economy, which drastically cut the bureaucratic barriers to expansion and made it easier

to import the most modern medical equipment. The first patients were Indian expatriates

who returned home for treatment; major investment houses followed with money and

then patients from Europe, the Middle East and Canada began to arrive. Services

provided by the International Patient Service Centers of Apollo Group, located within

India and Abroad, include: local travel arrangements, airport transfers, co-ordination of

doctor's appointment, accommodation for relatives and attendants, locker facilities,

provision of cuisine options, provision of interpreters, arrangements with leading resort

chains for post-operative recuperation, among others.

Apollo: A SWOT Analysis

The major strengths of Apollo are listed below:

Apollo is one of the earliest entrants into the medical tourism business in India and has

got the associated first mover advantages. Almost 70% of the Apollo doctors have been

trained, have studied or worked in institutions and hospitals in the West. Apollo has

recorded exceptionally good clinical outcomes and post-treatment success rates. Apollo

conducts itself in a conscientious manner in all transactions and deal with people

professionally and transparently, while maintaining privacy and confidentiality deserved

by its customers. Over the years, Apollo has successfully engineered trust, integrity, and

confidentiality to its unique advantage. Wherever admissible, Apollo tries to integrate the

diverse ancient healing traditions with the latest in modern medicine and this holistic

approach as got it a great deal of acclaim. With over 7000 beds in 38 hospitals, Apollo

has hospitals spread across the length and breadth of the country. Treatment can be

arranged in a particular unit which is geographically closer to a particular destination type

which the patient or the ones accompanying may want to see. Apollo offers unraveled

price-value advantage, too.

Apollo’s investment in the best and latest technology in the world is well appreciated.

Apollo Telemedicine Networking Foundation (ATNF), established in 1999, is the pioneer

in launching the first rural telemedicine center in the country. The telemedicine initiative

can in fact be employed to boost its medical tourism business. At this stage, Apollo

should try to integrate its medical tourism activities with the telemedicine initiatives since

the telemedicine offers a very good alternative for preliminary and post-treatment

consultations. It will give a big positive push to its patient relationship management too.

The Virtual Patient Visit scheme at Apollo offers the friends and relatives of patients

opportunity to gather frequently updated information about treatment progress, the

consultant’s opinion about the patient, patient’s remark, and a multi-media rich medium

to convey the messages to and fro both the sides. If the Virtual Patient Visit scheme and

the telemedicine initiative could somehow be integrated, the friends and relatives of the

patient can better understand the stage and the result of treatments being undergone.

However, it suffers from the following weaknesses:

Apollo’s patient relationship management program is almost flawless. However, one

significant weakness afflicting Apollo is its relative lack of understanding of the

accompanying persons also as customers to deal with. While the Virtual Patient Visit

scheme permits remotely located persons to get to know about the patient’s recovery

status, managing the experience of those physically accompanying and those who visit

from the host country in between are almost neglected. Apollo should either establish a

travel-cum-hospitality desk to provide hospitality and excursion facilities for these groups

or get into a suitable partnership scheme with an external service provider for the same.

Competitors have already identified this as an area of opportunity and have begun to

come forward with bundled offers for the accompanying persons as well.

To successfully run the medical tourism business, it is high time Apollo realizes that it

requires employees with domain expertise in tourism in addition to the traditional

medical support staff. However, this is a weak spot with Apollo and people with

qualifications in the areas of tourism and hospitality have to be recruited and assigned

important roles in medical tourist relations management.

If it wants to make a further positive difference, the opportunities for Apollo are:

Apollo has got the pioneering status in attracting medical tourists to India and has

developed over time unassailable brand equity. Now, it is faced with a great opportunity,

both to enrich and to expand the medical tourism business. Apollo should establish off-

campus centers equipped with telemedicine facilities, especially in countries like the US

and Canada from where it receives the majority of patient inflows. These off-campus

centers would be the preliminary points of contact between the patients and the hospital.

These contact centers, in addition to giving elementary care and clinical information, can

help to process the travel documentation, including arranging visas for the patients and

the ones accompanying them. For example, hospitals like Cromwell in the UK have

representatives in India and Pakistan, while hospitals in Singapore are also setting up

offices such as in Indonesia and the Middle-East. These agents help establish and

maintain relationships such as with local hospitals, doctors, embassies, sponsor

corporations, or insurers. Apollo can get into deals with middlemen agencies like Global

Health Tours (GHT) who help people decide and manage their treatments abroad.

E-marketing of medical tourism services provides an opportunity for Apollo to reach the

customer directly, bypassing the middlemen. This will help the firm to provide services at

a lower price, on-time, and in a highly customized manner. E-marketing clubbed with the

marketing initiatives though the patient contact centers to be established in the important

medical tourist originating countries can do a successful brick and mortar marketing job

for the Apollo. The staff at the various contact centers should ideally have sufficient

training in the cultural norms and expectations of the medical tourists of the respective

countries to tailor-make the service offerings. Since medical service is a credence service,

long term relationship building and maintaining the same will be the key to sustained

business. No firm that wants to continue in this business should look towards one-time

transaction-specific approaches. Firms should tap on referrals, positive words of mouth,

etc since these carry more credential that an impersonal advertisement.

Apollo has thus far concentrated upon curative medical care for the medical tourists.

While specialization has its own advantages, there is a lucrative market out there for the

preventive cure as well. Research has revealed that especially those who accompany a

curative patient would like to undergo preventive treatment during their stay in India.

Significantly enough, preventive medical treatments given in the alternative tradition like

ayurveda and homoeopathy are the ones utmost in demand. If Apollo cannot cater to this

demand, it should further examine the potential of outsourcing the same to another

provider under a licensing agreement. Yet, it seems fairly feasible for Apollo to manage

itself the demand for allopathic preventive medical treatment.

Another lucrative opportunity waiting to be exploited by Apollo is to get into the area of

medical insurance. Critics of medical tourism warn that traveling patients put themselves

at risk. Should complications arise, patients might not be covered by insurance or be able

to seek adequate compensation via malpractice lawsuits. This decision, again, depends

upon whether it wants to get into an altogether different business. It may be noted that a

sister concern of Apollo, Apollo Health Street already is in the business of remotely

executing the non-core health information management activities of foreign healthcare

groups such as medical transcription, coding, revenue cycle management and claims

processing.

Yet Apollo faces the following threats:

One of the major threats for Apollo, like any other large scale private initiative in India,

comes from citizen’s groups: a widely held perception is that it does not care for the

disadvantaged sections of the society. Many critics cite that medical tourism by the

corporate hospitals like Apollo has unleashed a range of unhealthy and unethical

practices. Apollo rebuffs the criticism raised by various groups that it has neglected

India's millions of poor. The official website says that it has set aside free beds for those

who can't afford care, has set up a trust fund and is pioneering remote, satellite-linked

telemedicine across India. Even from a purely rational economic point of view, it is in the

interest of Apollo to cater to the needs of the bottom of the pyramid, since the economies

of scale derivable from the same can make it a cost leader as well.

Of course, Apollo face stiff competition from hospital groups like the Escorts,

Wockhardt, Fortis, Manipal, Christian Medical College, Tatas, Birlas, Aravind, Leelavati,

and so on. Some of these competitors have specialized in certain sub-domains like eye

care, dental care, knee care, heart care, etc and hence offer superior treatment for these

diseases. The benefits of comprehensive care offered by Apollo are somehow to be

blended with the advantages of specialization to successfully overcome the threat factor.

The threat from the public sector hospitals that strive to fill the deficit caused by reduced

governmental funding is also significant. For example, public sector hospitals like All

India Institute of Medical Sciences (AIIMS) have been receiving patients from over 16

countries including European nations and there is a steady increase in the number of

patients, mainly for complex surgical procedures. The AIIMS has also initiated a

dedicated International Healthcare Service team, which will take care of the patient right

from arrival till their departure coordinating all aspects of medical treatment.

Conclusion

Apollo's capabilities have received international acclaim resulting in the replication of its

Indian models at international locations. Apollo group is also in talks with private

healthcare groups and government authorities in Nigeria, South Africa, Tanzania,

Mauritius, Yemen, Muscat, Bahrain, Vietnam, Malaysia, Thailand and other neighboring

countries to establish its presence in world class clinical efficiencies. The question now is

from here to where?

Since competitive advantages for the different components of the medical tourism system

lie with different players, forming inter-organizational networks with a common

marketing front might turn out to be a great idea for Apollo. This coordinated move will

synergize the operations and minimize the scope of service failures. For example, with

the objective of promoting and establishing Kerala, one of the most sought after tourist

destinations in India, as a medical tourism destination, Kerala Tourism Development

Corporation (KTDC), Amrita Institute of Medical Sciences and Intersight Tours have

already signed a MoU. The consortium plans to promote Kerala as a medical tourism

destination, where medical treatment will be provided at AIMS, holiday options will be

provided by KTDC and the logistics of travel will be provided by Intersight. Cooperation

often is a more sustainable strategy than a confrontational approach.

What is called International Patient Care is already a seamless process, with the guests

buying inclusive arrangements that feature air travel, local transportation, translation

services, air-conditioned five-star accommodation, together with their personalized

choice of global cuisine. To attract foreign patients, healthcare providers may consider

leveraging on both business and clinical considerations. Also, well coordinated efforts

among the travel, the hospitality, and the healthcare trade are imperative for the

sustainable growth of this business. A sincere commitment to these coordinated moves

allows each stakeholder to focus on its own competencies and may even alleviate the

level of competition – allowing for better long run revenues throughout the entire sector.