How PPP model benefits the medical tourism industry

The medical tourism industry has seen a sudden spike in recent years owing to skyrocketing healthcare costs in Western countries and the easy access to quality healthcare facilities in developing countries.

quality of healthcare Of late, the PPP model design has been making waves in the healthcare market and has been adopted by many medical tourism destinations around the world. Termed as Public Private Partnership, the PPP model strives to improve the quality of healthcare in countries by combining efficient services with innovative delivery models. The PPP model also aims to bridge the gap between public and private players in the medical tourism industry, encouraging them to work together in order to attract more medical tourists to their destination. Statistics reveal that if done so, medical tourism destinations around the world that adopt the PPP model can anticipate a growth of nearly 25.6% in the next few years.

The main reasons for public private partnerships would be to utilize the strengths of both sectors in order to achieve a long-term goal. For instance, in olden days, the public sector used to handle all the services, resources, finances, infrastructure and development, etc. of a specific industry with the aim of improve the living conditions of the locals. With the PPP model, however, the public sector can delegate certain provisions like infrastructure, finances, development, etc. to the private sector for a certain period. This would enable both sectors to work together in order to improve that specific industry as a whole.

Benefits for both Parties

revenues

The PPP model can benefit both the concerned parties. For instance, the government can benefit from private financing in infrastructure investment (preventing international debts) as well as the innovativeness and improved management in the private sector. The private sector on the other hand, can gain business opportunities in newer areas, thereby creating additional sources of revenues for the organizations involved. The private sector can also largely benefit from the knowledge banks that the public sector maintains in order to get a deeper understanding of the concerned industries.

PPP Principles

A PPP model can successful only if it benefits both the parties involved in it. As such, it would need to be designed on the following basic principles.

Equal Treatment:

equal opportunities to all the concerned partiesIt allows equal opportunities to all the concerned parties, so that all operators can reap the dividends fairly.

Non-discrimination:

It provides equal conditions for all private and public agencies to participate in the partnerships, regardless of their nationalities.

Transparency:

TransparencyAll information needs to be disclosed publicly to all parties involved in the partnership.

Efficient Use of Funds:

Sustainable development needs to be the major criteria, thereby ensuring that all contracts and procedures should benefit the tenders without harming the environment in any way.

Accountability:

professionalismIt ensures professionalism, independent decision-making capabilities and impartiality to all the concerned parties.

Importance of PPP in medical tourism:

Medical tourism involves the treatment of foreign nationals that presents a more complex scenario bounded by a number of protocols, policies, activities, visa, rules, immigration and other issues. It demands continuous intervention and support from the Ministry of tourism, health, commerce and external affairs.

In the current scenario of the fast-growing medical tourism market, the role of PPP to provide sustainability cannot be downplayed. On the contrary, it has become imperative to meet the requirements of the ever growing global medical tourist base bringing in innovative service delivery across the board.

Where medical tourism market is by and large driven by liquidity of funds and availability of world class expertise, the adoption of PPP becomes more relevant. The demand for improvement in service delivery quality and expertise development is continuous in the healthcare sector.

Therefore, the importance of PPP model can be well realized where enough supply of skilled manpower, expertise in treatments and super class service delivery is imperative to create a sustainable market amidst tough competition. Countries having high healthcare expenditure are also fast accepting PPP models to stand out in the competition.

Considering the global vista of medical tourism not only national PPP, but GPPP models (Global Public Private Partnership) are also significant. GPPP models foster tie-ups between the globally leading public and private stakeholders enabling global transferability related to medical insurances for overseas treatment and legal and ethical issues. This would safeguard the travelers’ interest and help in winning their confidence. They will get the feel that they are in the safe hands while availing medical treatments in foreign soil.

It is interesting to note that many top ranked as well as emerging medical tourism destinations like Brazil, Costa Rica, Hungary, India, Malaysia, Mexico, Singapore, Republic of Korea, Turkey etc. are bent towards PPP models to foster sustainability in medical tourism market.

Role of private players in Medical Tourism:

It is the private players that often dominate the healthcare and tourism sector in most of the countries making a substantial contribution to the government exchequer. In such a scenario, without the active participation of these players, it is quite unlikely to frame a sustainable architecture in medical tourism.

Medical tourism support system is not only confined to health clinics/hospitals and expert medical specialists and staff. Much of the basic support that comes from facilitators, travel operators, concierge, insurance services and hotels/resorts are private players. A well-coordinated support system from the base to apex can form an ideal medical tourism business model.

Success of PPP model in medical tourism:

India:

India (ranked 5th in the MTI) is a bright example of adopting PPP models successfully. Launching “Incredible India” program with the support of private players, India has risen fast in the global rankings past few years. Accreditations from internationally recognized medical tourism bodies like International Society of Quality in Health Care (ISQUAH), Joint Commission International (JCI) were highly emphasized.

Indian government invited 100% FDI in developing medical infrastructure and research along with the announcement of attractive fiscal incentives to medical service support sector. State governments in collaboration with FICCI, Travel and Tourism Council and public and private hospitals have been able to create a model business environment in medical tourism. India’s medical tourism market is predicted to reach $7-8million by 2020 from $3billion as observed in 2015.

Dubai:

Dubai has welcomed PPP models to diversify its existing medical and wellness tourism infrastructure. The health authorities of this country along with renowned private players are working in tandem in creating attractive medical and wellness packages including more value added services. DHA (Dubai Health Authority) admits the importance the public- private coordination and has rightly included 30 members from the private healthcare sector in its Medical Tourism Club.

Malaysia:

The Malaysian government is also highly supportive of PPP model that has propelled the medical tourism growth. The Malaysia Healthcare Travel Council (MHTC) has been working in close coordination with the Association of Private Hospitals in Malaysia in bringing the country’s medical tourism market under global limelight. With strong government support, leading medical companies could make their presence felt strongly in the market.  As per the reports of Transparency Market Research (TMR), Malaysian medical tourism is set to touch $3.5 billion by 2024 from the recorded valuation of $424.96 million (as in 2016). [http://www.ttrweekly.com/site/2017/03/malaysia-enjoys-medical-tourism-boom/]

Philippines:

Philippines, another highly ranked Asian medical tourism destination has taken to public-private partnership in spearheading country’s medical tourism growth. With the launching of Philippines Medical Tourism Program (PMTP), the government has brought the department of Health, Tourism, Trade &Industry, Foreign Affairs and the reputed private players from medical and wellness sector and real estate under one cover to develop a concrete map for sustainable medical tourism.

Brazil:

Brazil, the country spending high on healthcare expenditure has benefitted from PPP business models that have helped the country in securing a respectable position among the Latin American medical tourism destinations. The country adopted an innovative PPP model that created an environment of performance oriented incentives and accountability. This resulted in improvement in efficiency and service quality and reduced the treatment expenditure at the same time.

PPP business models too have their own share of disadvantages especially related to high costs associated with long term projects. Since the stake is quite high, lack of transparency in financing and agreements can invite disaster. Medical tourism encompasses such a wide ambit of support system that demands more active participation from the private players. Therefore, a well framed PPP model is the only way to sustain its robust growth.

Summary

The Public Private Partnership (PPP) model has become quite common in many medical tourism destinations today. More benefits for the economy can be expected with the public and private sector joining hands in many industries, including medical tourism. If medical tourism destinations stick to the basic principles that rule the PPP model, then they can surely reap the benefits on a short as well as long-term basis.

Dr Prem Jagyasi (c)

Dr Prem is an award winning strategic leader, renowned author, publisher and highly acclaimed global speaker. Aside from publishing a bevy of life improvement guides, Dr Prem runs a network of 50 niche websites that attracts millions of readers across the globe. Thus far, Dr Prem has traveled to more than 40 countries, addressed numerous international conferences and offered his expert training and consultancy services to more than 150 international organizations. He also owns and leads a web services and technology business, supervised and managed by his eminent team. Dr Prem further takes great delight in travel photography.

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