Washington Business Journal, "From Monuments to medicine: Why D.C. sees big bucks in medical tourism"

Published November 28, 2014

Monuments and medicine: Why D.C. sees big bucks in medical tourism

By: Tina Reed

Dr. Peter Lavine led a group of D.C. doctors on a trip two years ago to check out the multibillion-dollar medical tourism industry in Turkey. Officials there wanted the U.S. doctors to be so impressed, they'd refer their patients overseas for certain procedures.

They succeeded on one point: Lavine was stunned.

"I'd heard about Thailand and other places. But I had no idea," said the D.C.-based orthopedic surgeon who practices at the Centers for Advanced Orthopaedics. The hospitals were gorgeous and state of the art, he said. Some facilities had auxiliary rooms right beside patient rooms for family members to stay. Others were seaside with patient windows overlooking the beach. "They have an army of people who are basically tourism consultants who arrange hotel rooms and flights for people coming over."

All that, he pointed out, while offering procedures by U.S.-trained doctors at a third of the cost of U.S. hospitals.

Today, taking a page from some of those foreign locales, D.C. wants to turn itself into a more therapeutic destination. With D.C.'s top health official, Dr. Joxel Garcia, leading the economic development effort, the city imagines courting high-net-worth individuals from around the world with concierge packages that include medical care and tourist attractions.

Aside from hospitals, specialists and federal health agencies, "we have comprehensive options: the best hotels, the best restaurants, tourist attractions, we have all the monuments, all the museums," Garcia said. "We have a whole ecosystem here."

There is a lot of money at stake. The Health Department is working to hire a contractor next month to come up with an early assessment of D.C.'s capabilities and costs. At the very least, officials say they expect the program to be self-sustaining. But if it works, the city could carve out a healthy piece of the estimated $60 billion international medical tourism industry for itself. Florida, a growing hotbed of medical tourism, has seen tens of millions in economic impact, while further south, Costa Rican officials say 50,000 medical tourists generated upward of $338 million in revenue in 2012.

Still, the plan isn't without its skeptics in the D.C. medical community, several of whom praised the spirit behind the idea but doubt its feasibility. Having a program is far from a sure thing, experts warn, and reliable estimates of the impact in the U.S. are almost impossible to find because hospitals often do not want to report the size of their business from overseas travelers.

Many cities have been "drawn into the market, lured by medical tourism and overblown estimates of the size and nature of the market," cautioned Keith Pollard, managing editor of the International Medical Travel Journal. Those cities have struggled to generate a positive return on investment, most often because they attempt to be a destination that is all things to all people and sold on low cost, he said, referring to a study published earlier this year on the subject. "The market is poorly understood, destinations take bad advice (Las Vegas is probably the best U.S. example) and hence the strategy ends up being wrong from day one."

As for D.C., it can't compete on price with hospitals overseas and has sharp competition domestically for medical travelers searching for the best care. "People don't come on a medical tourism trip because they want to see museums and restaurants and shows. They are looking for a cost not available in the U.S.," Lavine said.

Garcia has heard the critics. But he's banking more heavily on the enthusiasm from hospitals and universities, hotels and restaurants alike.

The other destinations

It always seems to come back to Orlando.

Orlando is one of the top spots in the country when it comes to medical visitors and medical conference attendance. It's not the city's great medical institutions that bring in these visitors. It's Disney, said Christopher Shorter, chief operating officer of D.C. Department of Health. Las Vegas, Miami and Houston, too, all have growing reputations when it comes to medical tourism. People go to these places because they want to, medical procedure or no - and D.C. officials are convinced they'll want to visit Washington, too.

"We are the seat of the federal government for the United States," Shorter said. "The experience matters."

D.C. lags behind other U.S. cities that have already jumped on the bandwagon. But the District could have a leg up on some of those locations because it is taking the time to analyze the market and come up with a strategy before officially launching a program, said Medical Tourism Association President Renee-Marie Stephano.

Many cities, she said, have been promoting themselves first, doing their homework second. Las Vegas, for instance, faltered when it first introduced its medical tourism campaign without a major brand name health clinic in town.

Garcia insists he wants to do this right in the District. The health department put out a request for proposals to hire an expert contractor to conduct feasibility studies, lay out the costs of a comprehensive program and exactly what kind of return the city might expect. The department won't estimate projected revenue or spending until that contractor - expected to be announced within weeks - completes that report. Garcia doesn't want the analysis to drag out. Included in the RFP was a requirement the initial study take no more than 60 to 90 days. Once that feasibility study comes back, the department will move forward with its plan.

That said, Garcia was quick to get the city's tourism contingency on board. Destination D.C., the city's marketing arm, long identified international travelers as a niche worth pursuing.

"We have the product. But it's pulling it together and marrying it with our hospitals," said Theresa Belpulsi, Destination D.C.'s vice president of tourism and visitor services who's now steeped in medical tourism. She points to a key attribute that makes the District marketable: three nearby airports, two of them with direct international flights. Dulles International Airport alone has four flights a day to the United Arab Emirates - a potentially lucrative market for patients - more than any other airport in the country.

Plus, "there's plenty to do here," said Bob Malson, president of the D.C. Hospital Association. "It's not like going to Omaha."

D.C.'s specialties

Garcia doesn't pretend D.C. hospitals can compete with overseas hospitals on price. There's too much overhead, too many regulations in the U.S. to make it feasible. But he thinks they can compete in catering to well-heeled patients, providing concierge services that help arrange their doctor's appointments, transportation and trips to local restaurants or entertainment venues.

"But at the heart of medical tourism is cost," argued Lavine, the D.C. orthopedic surgeon. "Quality is important, but the driver is the cost. If it cost the same, no one would travel."

Others in the D.C. medical field couldn't disagree more.

"With medical tourism, it is the medicine that comes first," Malson said. "We have some of the best facilities in the world here."

For instance, MedStar Heart Institute affiliated with Cleveland Clinic last year and has begun fielding complex heart patients from that network around the U.S. "Brand strength is a factor. The strength of our brand is what got us together with the Cleveland Clinic," said Ann Nickels, a spokeswoman for MedStar Health.

U.S. hospitals have to compete by specializing in care that patients can't find in any other part of the world, said Stephano of the Medical Tourism Association. "A general hospital is not what these patients are looking for. These patients are looking for the best of the best."

The District's likely market would include orthopedics, cardiology, gynecology, gastroenterology, cancer and the executive complete exam. It would offer patient packages promoting its sports, entertainment and even its powerful people, Garcia said.

There is a business model that would help the District compete on cost, driven in part by large self-insured employers seeking better deals and individual patients with high-deductible insurance plans and health savings accounts: bundled pricing. That means everything from a patient's admission to discharge, including overnight stays and anesthesia, has a prenegotiated price.

Rockville-based SurgiPrice LLC, for example, provides an online marketplace to help patients negotiate with health providers for bundled pricing. CEO Sanjay Prasad cheers the possibilities of a formal medical tourism program. He's seen international travelers from Canada who want to get around long waits for surgery and who have the means to pay out of pocket for a surgery. "D.C. is a very rich environment in the international market. There are a lot of patients we could connect with through the embassies and bid those procedures out internationally," Prasad said. "I don't see a downside to this."

Several years ago, major employers such as Lowe's Cos. Inc. and PepsiCo Inc. began incentivizing their employees to travel to Centers of Excellence for certain procedures to contain costs. But now, companies like Austin, Texas-based consultancy EmployerDirect Healthcare focus on arranging bundles with highly qualified doctors or surgeons on a more regional basis.

"You don't have to go to a Cleveland Clinic," said Tom Johnston, CEO of EmployerDirect. "You just have to make sure you're picking the right surgeon."

Hospitals on their own

While there's been no formal citywide program, there has been some medical tourism in the District.

"People do find D.C. an attractive place for medical care if they have some other sort of connection to the city," said Dr. John Larsen, president of the D.C. Medical Society and chairman of obstetrics and gynecology for George Washington University Medical Faculty Associates.

For instance, the State Department or Peace Corps often bring foreign service workers back to the U.S. for medical care, such as when a pregnant worker is 32 weeks along. "They may need to be in town for a number of months," he said. "It's not exactly medical tourism the way one might think of going to a cheaper and enjoyable location. But that's what we see here. There's something that brings the patient here."

Likewise, MedStar officials said Georgetown University Hospital has strong relationships with embassies around the District and regularly helps international patients traveling in for care.

And many health providers, including George Washington University Hospital, Children's National Health System and most notably Johns Hopkins Health System, have established smaller-scale medical tourism programs of their own.

"People ask, 'Why does Children's National have a Global Services program,'" said Dr. Gerard Martin, the medical director for the program. "It's part of our mission to be leaders in pediatric care, not only in the U.S., but around the globe."

About 1 to 2 percent of Children's overall business comes from global medical tourism, in particular from such Gulf region countries as the United Arab Emirates, Kuwait, Saudi Arabia and Qatar, Martin said. But the hospital also regularly receives patients from Bolivia, South Africa and Sudan. "We have a very diverse portfolio," he said.

That portfolio has been built by carefully cultivated relationships. Children's allows physicians and nurses from around the world to visit and observe. It also sends its experts overseas to exchange medical information and work with patients. "It's when those individuals go back home and say, 'Gee, I've got this patient with something I can't help them with or that patient is interested in travel to get the best care in the world,'" Martin said. "If they've been here and they know our doctors, they'll be more likely to send those patients here."

The health system has also been able to recruit top doctors and nurses from around the globe, he said.

Children's has been pushing to change one major barrier to these relationships, asking the District's Board of Medicine to allow expanded licenses to allow visiting doctors and nurses to participate more in certain medical settings.

"All major hospitals in the District would like to see doctors and nurses come here for a more meaningful experience," Martin said.

'No other Washington, D.C.'

A piecemeal approach to medical tourism causes hospitals to miss out on bigger opportunities, D.C. Health Department's Garcia contends. Individual District hospitals have indicated they treat between 100 and 250 patients from abroad a year, he said. Meanwhile, at least one small Florida hospital pulls in more than 10,000 international patients a year, largely because of its proximity to Miami International Airport and a larger medical tourism campaign.

In D.C., "it's been done in a siloed way," Garcia said, "not a systematic approach."

In terms of mission, Garcia says this isn't just about attracting a few more wealthy patients.

This is about growing D.C.'s reputation as a medical innovation hub. Creating Centers of Excellence at local hospitals and building research tools, such as a large-scale tissue bank or repository of human tissue to encourage research.

It's pulling together its attributes - the Food and Drug Administration, Department of Health and Human Services, National Institutes of Health, World Health Organization, World Bank and foreign embassies - with its hospitality industry to better promote what it has to offer and attract researchers and doctors to study, find full-time jobs or hold their high-dollar conferences here, drawing still more researchers and experts.

That might increase the number of businesses that want to locate here. "This is much more than medical tourism," Garcia said.

And there's the economic development potential from a patient's coterie. Their families can spend between $1,000 and $4,000 on the local economy, not counting hotel or airfare, according to D.C. Health Department research.

In Florida, the economic impact of medical tourism hit $23 million last year in Jacksonville, according to that city's tourism marketing arm. Much of that is because the University of Florida's proton therapy institute and a Mayo Clinic campus, but it has also benefited other hospitals in the region.

Detractors still wonder about the oversell.

Why would a marketing campaign, they ask, drive that much new interest? After all, D.C. is hardly new to being the seat of the federal government.

Garcia ignores the naysayers. His voice grows more and more animated as he discusses the possibilities. "The beauty is, there's no other Washington, D.C. I mean, I love New York City, I love San Francisco. I love Chicago. But D.C. is D.C., it's a completely different thing," Garcia said. "We are the capital of the world. There is no other city in the world, including New York, that is more recognizable than D.C."

Culture and cardiology

What sort of "medical tourism" packages might D.C. offer? Here are a few examples:

Cultural package: This might include tours of local museums along with your hotel stay and hospital care.

Power package: For those interested in meeting D.C.'s power brokers, a patient's package might entail a visit with a delegation or a member of Congress.

Sports package: Sports fans would get tickets to see a home Wizards or Nats game with their hospital and hotel accommodations.

In Florida: In comparison, Florida has one of the most established medical tourism programs in the U.S., even considering legislation earlier this year to pour money into boosting those efforts. For example, a patient might travel to Orlando for care and plan a trip to Disney World before or after his or her procedure.

Pros and cons

Here are some attributes that might make or break D.C.'s planned medical tourism industry.

What it has

  • High-quality medical care that includes some of the latest technology, such as proton beam therapy for cancer treatment, or a big-name partnership, such as MedStar Heart Institute's alliance with the Cleveland Clinic
  • Three airports, two with direct international flights, and a robust public transit system
  • Proximity to embassies, international nonprofits and national and world health organizations
  • Tourism draws such as monuments, museums, restaurants and proximity to U.S. power brokers

What it lacks

  • A Center of Excellence or a significant presence or headquarters of a provider carrying the national cachet of a Mayo or Cleveland Clinic
  • Cheaper prices often found overseas
  • Lack of competition
  • A warm, sunny climate; beautiful sandy beaches; or, let's face it, Disney

Medical attractions

In positioning the District as a medical tourism destination, city health officials plan to work with Georgetown University and Children's National Health System as early partners. The D.C. Health Department has also received strong initial interest from George Washington University Hospital and Sibley Memorial Hospital, which is owned by Johns Hopkins Health System. Here are some of the medical draws at these facilities.

MedStar Health

  • The MedStar Heart & Vascular Institute and its affiliation with the Cleveland Clinic Heart and Vascular Institute
  • MedStar Georgetown University Hospital Lombardi Comprehensive Cancer Center, one of 41 such centers designated by the National Cancer Institute
  • MedStar Georgetown University Hospital Transplant Institute
  • The National Rehabilitation Network Hospital, where a patient above gets help walking through a harness often used in spinal injury cases

Children's National Health System

  • Sheikh Zayed Institute for Pediatric Surgical Innovation
  • Children's Research Institute, a top-ranked pediatric research institution in terms of overall National Institutes of Health funding
  • Cardiology, neurology and genetics, among the biggest draws for international patients
  • The 54-bed Children's National Neonatal Intensive Care Unit, the region's only Level IV NICU, housed in new facilities with private patient rooms

George Washington University Hospital

  • George Washington University Hospital Heart and Vascular Institute
  • GWUH Radiation and Oncology Center

Sibley Memorial Hospital

  • Sibley Memorial Cancer Center, featuring new proton beam therapy in partnership with Children's National Health System to treat adult and pediatric patients next year
  • Its parent, Johns Hopkins Health System, has its own well-established medical tourism program

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