Here in the U.S., the big news is that the financial crisis pushed the Dow Jones Industrial Average below 10,000 yesterday for the first time in four years, but the damage has hardly been limited to Wall Street.
When the economic outlook points to scarce credit and frightened consumers with less cash on hand, how does a global destination healthcare provider determine whether this is a time to scale back growth projections or exploit weaknesses in other regions?
When half of your business comes from outside your host country, like Thailand's Bumrungrad International, for example, you are exposed to the world's economic and geopolitical events.
"Since we are the hospital to the world, we are more affected by world events than totally local hospitals," Bumrungrad's Group CEO Curtis J. Schroeder told me in a phone interview recently. "Some of those are positive, and some are negative. After the events of 9/11 in New York, we saw a complete shift in the Middle Eastern business from America and Europe to Asia, and we have been the prime recipient of that diversion of business and that drove us to open hospitals in the Middle East as well."
"[I]f something happens to the local economy that pushes down demand from Thais, I still have half of my business coming from the outside," adds Schroeder. "An example of that is when we had a devaluation of the Thai baht. The Thais were stressed, but we simply became cheaper to the rest of the world, so we were able to offset."
Certainly, global destination hospitals need to deal with the pros and cons of their diverse patient populations. For instance, the struggling U.S. economy could continue to pressure U.S. employers to aggressively cut healthcare costs, which are not showing signs of slowing down. As employers seek to limit costs, medical travel to value-based healthcare providers could become a more attractive option. For sure, employers are watching the early adopters of medical travel plans closely. Reports recently that Hannaford Bros. Co.'s medical travel benefit has led to cost cutting by local providers is sure to get the attention of other employers searching for strategies to force healthcare costs down.
In addition, with U.S. taxpayers funding a $700 billion bailout, any plans that either presidential candidate has for expanding health coverage in America will not likely happen in the next president's first term. Those who believe that America's 47 million uninsured represent medical tourism's best opportunity for future growth can be comforted in the knowledge that relief for uncovered Americans is nowhere in sight.
On the downside, global destination hospitals that support medical travel tend to count on service lines that provide elective procedures. With less cash and credit available to consumers, it is safe to anticipate they will forgo even necessary procedures, like spine care, hip, and joint replacement surgery, and bariatric surgery.
Although gloom and doom headlines jump off the business pages these days, the true picture of healthcare businesses that span the globe is complex and fluid. For sure, providers should expect to deal with a long-lasting recession, so it's the perfect time to analyze your organization's strengths and weaknesses in the face of a tough economy worldwide.
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