On 3/21/08, I wrote an article about the economic and technological implications of medical tourism.  True to our long tradition here at The Futurist, this article made predictions months before a major publication arrived at the same expectations.  The Economist has an article this week that predicts everything that by original article does, from a rapid increase in Americans going abroad, to the loss in revenue to the US healthcare system triggering overdue reforms.  I particularly like the following sentences from the article :

"Jagdish Bhagwati, an economist at Columbia University, thinks that the offshoring of, for instance, customer service and claims-processing could save America alone $70 billion-75 billion a year."

"By Deloitte’s reckoning, medical travel will represent $162 billion in lost spending on health care in America by 2012. "

"A bit of rivalry from top foreign facilities may introduce transparency and price competition into an inefficient system riddled with oligopolies and perverse incentives. "

If some people thought the outsourcing of technical support and software development was significant, then medical tourism promises to be several times larger by the middle of the next decade.  The Economist article provides a chart projecting the number of US patients expected to partake in medical tourism.  The number is expected to grow from under 1 million today to over 15 million by 2017.  By then, this could carve $250 Billion/year out of US healthcare spending, and pump $50 Billion/year into the destination countries, introducing $200 Billion/year of net deflationary benefit into the US economy.  Everyone will know someone who went abroad for a medical procedure, with many customers comparing their experiences in India vs. Thailand vs. Jamaica.   

To repeat the sequence of predicted events from the first article, they are :

1) Americans with no insurance are forced to make a life or death decision to get their surguries abroad, where the service meets or exceeds their expections.   

2) More insurance companies offer medical tourism with liability guarantees and cash/vacation incentives to American patients.  Only a small fraction of patients are adventurous enough to do this, but all insurance companies are compelled to offer these options.

3) Major centers for medical tourism, after a track record of about a decade, develop solid brands that can attract American patients. 

4) When we finally get to the point that 10% of Americans are traveling abroad for a wide array of procedures, the US will be forced to begin to take measures to reduce costs throughout the healthcare system.  Losing 10% of the market is all that it will take to force some positive changes.  This could begin to happen by 2020. 

This confluence of market forces, globalization, and biotechnology is about to bring overdue reform to one of the biggest and worst sectors of the US and global economies.  There are tremendous investment opportunities here, which I will write about in the near future.