Healthy numbers: Low-cost and quality-assured health services provide the right formula

As an increasingly popular destination for health care, Turkish medical tourism has seen impressive growth over the last five years. A combination of rising standards in medical practice, along with higher incomes and government moves to let the private sector find its own feet, have created a good quality medical sector with prices still well below regional and international rivals.

The health tourism niche is also part of the Tourism Strategy 2023, a sector development plan extending until the Turkish republic’s centennial, as the industry seeks to diversify and attract more year-round, high income streams. As part of these efforts, the state authorities are looking to promote health and spa tourism. In early 2013, the government passed a new public-private partnership (PPP) law, which should encourage further private investment in the health sector, adding to a current surge in hospital building.

Seeking Custom

In 2003, the government embarked on a major initiative for health sector reform, the Health Transformation Programme. Carried out by the Ministry of Health (MoH), this eventually led to the establishment of a universal health insurance system (Genel Sağlık Siğortas›,GSS) combining several former social security systems under one umbrella, referred to as the Social Security Institute (SSI).

In 2008, the GSS scheme began, and this had an important knock-on effect for the private health care sector. Previously, health care provision in Turkey had been divided between several main types of providers: the MoH hospitals and clinics, university hospitals, military hospitals, health facilities provided by nongovernmental organisations and charities, and the private sector. In 2008, the country had 847 MoH hospitals, 57 university hospitals, some 400 private sector hospitals and 46 of all other types. The private sector provided services to the public sector on a contractual basis, as well as directly to private customers. Financing for the public system as a whole came largely from the Ministry of Finance, which funded each of the various public health schemes eventually united under the SSI. With the provision of GSS, and the unification of many different schemes under the SSI, a single buyer for private services was created. According to private sector players, in the years that followed, pricing quickly fell, leaving private hospitals, which were often modern facilities and therefore more expensive to operate, facing declining profitability. To counter this, many private health care providers started looking for other sources of income. “Medical tourism became a new market for expansion,” Dr Ruşen Yıldırım, chairman of the Health Tourism Business Council (SAİK), told OBG.

The sector was also able to leverage on the existing quality of its services, bringing in international bodies to receive the accreditation necessary for a successful cross-border medical sector. The key body here is Joint Commission International (JCI), which bestows US-standard certificates on hospitals around the world. Some 50 hospitals in Turkey are currently listed as JCI certified on the body’s website, mainly in Istanbul, but also in Ankara, Bursa, Izmir, Adana, Antalya and Izmit.

Versatility

The medical tourism sector has been able to capitalise on the fast-expanding network of global flights operating out of Istanbul – which provides feeder routes to cities across Turkey – and the development of more direct flights to cities such as Antalya and Izmir. Turkish Airlines now fly to 37 domestic and 182 global destinations, respectively, with the country’s location helping enormously; it is just a short flight from a number of countries in the broader region.

Medical ties have also long been in place between Turkey and some of its neighbours, with Arab, Balkan and Central Asian doctors and nurses often receiving their training in the country, creating a local familiarity with the Turkish medical scene. Then, of course, there are the prices. SAİK figures show the average cost of a heart bypass coming in at €50,440 in the US, €23, 280-25,608 in Singapore, €25,220 in Thailand and €34,606 in Switzerland. In Turkey, a private hospital will charge an average of €10,088-11,640. A hip replacement, meanwhile, which comes in at €34,920 in the US, or €13,308 in Israel, will cost around €8691 in Turkey. In general, prices for major operations are around a quarter to a half of their US costs. As such, it is certainly economically worthwhile to fly from the US to Turkey, stay in excellent accommodation, and even throw in a post-operative vacation, for half the cost of major surgery in the US. According to the most recent figures from the Union of Chambers and Commodity Exchanges of Turkey, in 2010 the country earned around €659.6m from health tourism. That year, the number of foreign patients stood at 109,678, according to SAİK, up around 48% on the 2008 total of 74,093. Some 94% of these patients were looked after by the private sector. SAİK aims to receive some 500,000 foreign patients by 2020, half from neighbouring countries, 100,000 from North America and the rest from Europe. In line with what the average patient spends, the sector is on course to become a €7.53bn industry by the end of this decade.

Different Strokes

Currently, most medical visitors to Turkey are from Europe, Central Asia and the Middle East. Europeans tend to visit for more cosmetic operations, or those for which the waiting list back home is proving too long. In addition, obtaining medical care that is not covered by insurance schemes in the home country can be a reason for visiting. Whereas visitors from Central Asia and the Middle East tend to come due to the lower quality of care at home or long waiting lists, or even the unavailability of certain specialist operations. There are also cosmetic surgery visitors from the Middle East, hair transplants being a particularly fast-growing area (see Health Chapter).

“Nowadays, we call it medical travel,” Dr Yıldırım told OBG. “The tourism part of this is not very significant, as it is really about trying to get health care,” he added. This means that destinations are chosen more for transport connectivity than scenery, therefore favouring large cities such as Istanbul.

Bubbling Potential

Meanwhile, there is considerable overlap with thermal and spa tourism. In fact, Turkey is home to the largest number of thermal springs in Europe, at around 1300. This segment is now one of the government’s main focal points in the roll-out of its Tourism Strategy 2023 master plan, with more promotion of these now under way. In early 2013, parliament passed a law on PPPs under which the state guarantees to rent city hospitals built and run by private sector outfits for 25 years, specifically for projects of more than TL500m (€215.9m) in investment. The new law will also cut red tape around such schemes. The likely outcome will be a surge in global private health investment and a bigger range and quantity of services available. In fact, in 2012, Malaysia’s state investment arm, Khazanah Nasional, bought a 75% stake in ASYH, which owns 92% of Acıbadem Health Care Group, owner of several JIC-certified private hospitals, while Italy’s Astaldi is also involved in new hospital construction. The future could also see greater specialisation in the variety of treatments being offered to medical travellers.