Joining forces: The public and private sectors are working together to develop medical tourism

Competitive prices, proximity to high-potential markets and a number of hospitals recognised by the Joint Commission International are some of the factors that make Mexico a key player in the global medical tourism industry. According to the investment promotion agency ProMéxico, the segment has posted continuous growth for almost a decade, reaching an estimated $3.08bn in revenues in 2014, up 8% from $2.84bn in 2013, and nearly double the revenues reached in 2006 ($1.55bn).

With its sights set on becoming a global reference country in the segment, Mexican authorities, in conjunction with the private sector, are working to develop a coherent strategy to boost industry growth.

Evolving Industry

Mexico’s medical tourism industry has experienced significant development in recent years, with the industry evolving from a destination primarily for dental, eye and cosmetic surgeries in border cities to a more diversified offering across a number of Mexican states. Figures from ProMéxico show the country attracted around 1m medical tourists in 2013, the largest share of which came from the US – in particular border states such as California, Texas and Arizona – followed by Canada and the UK. According to the agency, Mexico has become the favoured destination for US citizens undertaking cosmetic and dental surgery abroad. While proximity is a selling point, Mexico’s main competitive advantage is its prices for medical services, which, depending on the procedure, can be anywhere from 36-89% less expensive than in the US, according to the Medical Tourism Association. Demand is particularly high for cosmetic procedures and reconstructive surgery, dentistry and bariatric surgery, though Mexico offers other specialities, including cardiology and fertility treatments.

Privately Growing

The expansion of medical infrastructure in Mexico has contributed to the industry’s growth. Since 2007 the private health care sector has registered unprecedented growth. Several private clinics are active in the industry, including Christus Muguerza, Grupo Ángeles, Star Médica, Doctors Hospital, Centro Médico Excel and Galenia. Mexico now boasts 20 clusters specialised in medical tourism across the country as well as nine clinics accredited by the Joint Commission International. Mexico City is home to four of these, Chihuahua has three, and Cancún and Nuevo León each have one. An additional 122 institutions are certified by the Ministry of Health, under which the General Health Council certifies establishments that comply with the standards to provide quality services.

Competitive States

According to ProMéxico, 12 states are particularly competitive in the medical tourism industry: Baja California, Baja California Sur, Chihuahua, Guanajuato, Jalisco, Nuevo León, Querétaro, Quintana Roo, Sonora, Tamaulipas, Veracruz and Yucatán.

Baja California, where medical tourism is more developed, attracts over 500,000 medical tourists per year, with another 600,000 accompanying tourists. The vast majority of arrivals – some 83% – come from the US, followed by Canada. According to local authorities, the industry generates annual revenues of around $400m. The state is home to four medical tourism clusters, three of which are located in Tijuana (Baja Medical Tourism, Turismo de Salud and Medical Trip). Among the top medical tourist destinations in the country, Tijuana attracted roughly 650,000 medical and accompanying tourists in 2013, according to local authorities.

The fourth cluster in Baja California – Mexicali Health Care – is in Mexicali, where health and wellness tourism accounts for $500m in total annual revenues, according to local authorities. The city has now made medical care its primary tourist attraction. In April 2012 it opened a medical fast lane to facilitate the return of patients to the US. According to local authorities, development of the medical tourism industry will remain a priority in 2015. The city is investing MXN17.5m ($1.2m) in tourism infrastructure projects, which will benefit the medical tourism industry and increase its competitiveness. In 2015 at least MXN2.35m ($158,155) will be allocated to promotional efforts in both Mexico and the US, primarily for participation in industry events.

Quintana Roo

Another state where the medical tourism industry is posting dynamic growth is Quintana Roo. In Cancún alone, the industry is estimated to have surpassed $12m in revenues in 2014, according to local tourism authorities, which project an increase in arrivals in this segment by around 30% in 2015. In 2011 Med Travel Mexico, a state-level medical tourism association, was created to promote Cancún, Cozumel and Playa del Carmen as competitive destinations in medical tourism on the international stage. Recently, the state, which is also home to the medical tourism cluster Medical Travel Mexico saw the completion of its first hotel next to a hospital. The Four Points hotel, a facility in the Starwood chain opened in February 2015, is located next to the JCC-accredited Hospital Galenia, and offers convenient features for persons with disabilities. The state offers complete packages, which include hotel and transportation to the airport, at competitive prices.

One firm looking to take advantage of the medical services on offer in Cancún is Miami-based World of Health and Medical Tourism, which is set to begin commercialising discounted medical treatments for US citizens. One of the initiatives the company is launching is the issuance of discount cards at a cost of $99, which guarantee preferential prices in clinics in Cancún.

Strategies

The sector stands to be very profitable, both in terms of revenues and investment. According to ProMéxico, a medical tourist spends on average between $5000 and $20,000 in the country, compared to $1200 by a leisure tourist. José Campillo García, the executive president of the Mexican Health Foundation, told OBG, “Medical tourism is today a key niche market not only for domestic investment but also for foreign investment. With a properly integrated policy for development, the medical tourism industry could triple in coming years.” Since 2013, authorities and private entities in the tourism, health and economy sectors have been working to develop a national strategy to further boost growth. In 2013 The Ministry of Tourism announced the design of a comprehensive strategy to strengthen Mexico’s image as a service provider, generate an information knowledge system to measure the flow of medical tourists as well as the industry’s economic impact. As part of the efforts to develop the segment, the ministry aims to establish strategic alliances between Mexican health service providers and international insurance providers, an important step in streamlining operations and making the process smoother for patients. Some international insurers already have dealings with Mexican hospitals, including Aetna, Conventry Health Care, UnitedHealth and Allianz. A step forward in the development of human resources in the industry was the introduction of a medical tourism degree in 2014 by the Universidad Anáhuac, which covers topics including service management, protocols and quality standards. Efforts like these are likely to have an impact in raising the professionalisation of medical services in the medium-term.

Support Bodies

A number of agencies have been established to support sector growth. In 2013 industry professionals created the Mexican Board for the Medical Tourism Industry to act as a lobby group to influence national policy. In addition, Turismo Médico Coparmex project has also been ongoing since 2013. Led by Coparmex, (Employer’s Confederation, Confederación Patronal), the initiative seeks to bring together government representatives, tourist agencies and private sector groups, like the hotel industry, to develop a national model for the promotion of the medical tourism industry. The first pilot project was launched in Matamoros, Tamaulipas, and seeks to attract higher numbers of medical tourists. In a second phase the project will extend to beach destinations such as Cancún, Acapulco and Puerto Vallarta and a number of other cities. The initiative is expected to benefit small and medium-sized businesses in the services sector.

If successful, these and other efforts could enable growth in Mexico’s medical tourism industry to accelerate significantly in the coming years. According to ProMéxico, the industry is expected to post annual growth of approximately 7% between 2013 and 2016, when the value of the industry is set to surpass $3.5bn.