Medical tourism as a new developing branch of economy
The aim of this analysis is to comment on the concept of medical tourism, find out consequences of the latter’s development on the social-economic level of the country (as a receiving country) in the RA, raise the existing problems of the development of the sphere.
First of all let us try to understand what medical tourism is.
Medical tourism refers to people traveling from one country (region) to another country (region) with the purpose of obtaining treatment. It is clear that this phenomenon is meaningful only when price-quality ratio of corresponding medical service is the best in the receiving country. More descriptive definition of medical tourism is when a resident of a country wants to receive treatment in another country which offers more accessible, high quality and fast medical services.
During treatment a tourist has an opportunity to enjoy his/her holiday and organize a good time: to make use of tour packages of the receiving country, to visit different places of interest, to see historical- cultural values, etc. All this is often twice as cheap as just to make use of any medical service in his/her own country.
It turns out that due to medical tourism with the same amount of money (let us suppose that the same money is enough to receive only treatment in his/her own country) a person choosing another country, receives both efficient medical services and an opportunity to travel. Of course this phenomenon has its negative side: the ailing person needs a support, spiritual warmth, while he/she is out of his/her own country, far from relatives. Although this branch is still in its initial stage of development, there are already some statisctical data. We will introduce them below.
So, a considerable part of the universal medical tourism falls to the following receiving countries: Costa Rica, Israel, India, Mexico, Singapore, Thailand, Taiwan, Turkey, South Korea, the USA. The ratio of the development of this sphere in Bulgaria is remarkable: in virtue of certain state starategy and effictive investment policy this country was able to become “paradise” of medical tourism for the Western European countries in a short period of time, being atractive with the price-quality ratio of medical services. As a result in recent years a part of state budget of Bulgaria is filled with incomes of this sphere.
Medical service is a whole package which has necessary elements such as, for example, private and state investments in the sphere of health service, actions devoted to maintaining a high level of quality and transparency, influx of international visitors, accessibility of medical services, careful attitude of medical personnel, developed tourism substructure (accessible and comfortable hotels, developed urban and interurban transportation node, etc.), political and social stability, high quality of hospital services, innovations in the health service sphere, availability of innovations and medical personnel oriented to tourist. Investigations show that as a result of medical tourism it is basically expected to receive cosmetic surgical, dental, cardiovascular, orthopedic, oncological, women’s reproductive and medical examination services. In 2015 the number of tourists whose aim was to receive treatment was 14 million, who spent 45,5- 70 milliard US dollars. Specialists predict the development of this field year by year and increase in digital data.
How attractive is Armenia from the aspect of medical tourism?
At first sight most of the Armenians can insist confidently that Armenia has medical tourism: all of the Armenians have relatives, who, living abroad, sometimes visit Armenia during which they make use of different medical services- medical examination, plastic surgery, dental services, etc.
Until 2013-2014, not often, but we could notice non-Armenian “tourists” (especially from neighbor Georgia and non-central regions of the RF) who were visiting Armenia with the aim of receiving cardiac and plastic services.
What has changed during this period? What problems arose that contributed to the regress of medical tourism in Armenia. What happened that even a large number of people of Diaspora prefer to receive dental services and heart surgery in neighbor Georgia.
In fact only 2-3 of preconditions enumerated in the first part exist in Armenia: yes, the prices of medical services are accessible enough if compared to the Western and Central Europe, the United States, and then again, yes, there are doctors who have high level and qualification of education in Armenia.
But we think that all this is not enough in order to say for sure that medical tourism develops in Armenia. On the contrary, having no decisive strategy in this sphere, not making investments and systematic purposeful projects, state figures must not hope that this branch will be developed, being doomed to neglect.
The activity of the company which imports medical equipments is not liberalized, the institutions of private clinics are not stable, there are no legislative changes aimed at reducing taxes in the sphere of health service, marketing campaigns advertizing medical institutions of Armenia are not held abroad (of statewide). These are perhaps the actions by virtue of which it is possible to make Armenia attractive for tourists seeking treatment in a foreign country.
An important fact, at the beginning of 2013 the government made changes in the RA law on “Patent fee” according to which in dental office rent for each dental chair is 80.000 AMD. Commenting on tax changes, head of the government proudly mentioned that Armenia is one of the leading countries with dental surgery and dentists per capita, and people come to Armenia from different countries to make use of those services as they are cheap, and specialists provide good services. So, it means, that if there is a sphere where services are more attractive than in other countries, we must think how to correct “the mistake” by increasing the tax, creating unequal conditions for importers…
In the same year’s summer “Dental Tourism to Armenia” project was undertaken. It is a part of medical tourism and it is considered to be quite a serious and prosperous sphere which should have a positive impact and should stimulate the development of the economy of the country. We think it is not wise to increase the tax on entrepreneurs of a sphere in order to develop it.
During this year, several medical centers in Armenia reduced the prices of heart stent placement about two times. A question arises, whether there was super profit before reducing the prices? The leaders of MCs (Medical Centers) took such step in order to determine competitive prices (in Georgia the prices of heart surgery and stent placement are accessible enough).
As a result during the last 3-4 years the number of foreigners receiving dental services and heart surgery decreased dramatically in Armenia, and most of them go to Turkey and Georgia (unfortunately there are no statistical data on this sphere in Armenia). Since 1997 Georgia adopted a low, which defines necessary steps for the development of medical tourism up to state financing and international cooperation. And during recent years the processes referring to the development of this sphere have gained new momentum in the neighboring country (both on state and private levels). In order to improve certain necessary directions for the development of medical tourism some steps were taken, the important of which, in our opinion, are the participation of the state in the development of medical tourism, and steps aimed at increasing the quality of clinical services in order to include international tourists, who need medical services.
As we see, medical tourism has a very narrow distribution in the RA (as a receiving country) and in order to activate the sphere it is necessary to make both foreign and local investments (private and state). And an attractive factor for investments is the level of taxes and transparency of taxes. Of course there are no less important factors, which have also an important impact on the development of the sphere, such as the creation of tourism infrastructures and the development of existing ones. The fact that the prices of air tickets remain unreasonably high, which is conditioned mainly by the state of monopoly in the air market, hinders the development. Moreover, most of the Armenians prefer to get Tbilisi from Armenia, to take an airplane and travel to Europe and Asian countries: this phenomenon gives occasion to think.
We think the government must study carefully the perspectives of the development of this sphere in the RA and take practical steps making use of the experience of Bulgaria, where large grants are provided on the state level, foreign investments are stimulated in order to develop medical tourism in the country.
Author: Narek Muradyan. © All rights are reserved.
Translator: Lusine Barkhoyan.