Most efforts by healthcare organizations to recruit overseas business are intensive but small in scale, relying on word of mouth as much as they do on savvy marketing campaigns, according to the findings of a recent survey.
Yet healthcare providers see potential for significant growth in foreign markets.
The survey on the globalization of healthcare services was conducted in late 2000 by Chicago-based CHPS (Center for Health Policy Studies) Consulting and sponsored by Modern Healthcare. According to the survey, site visits-either to government offices or prospective patients in foreign countries-were the most important marketing vehicle for the pursuit of international business specifically mentioned by the respondents, scoring 1.9 on a scale of 1 to 5, with 1 the highest rating. Use of the Internet, advertising and networking via educational conferences all tied for second place, scoring 2.5. Contact with foreign governments drew a score of 2.7.
"Site visits along with consistent ongoing communication and follow-up help immeasurably," says Allan Fine, the CHPS vice president who supervised the study.
The survey was sent to 1,000 healthcare and pharmaceutical executives throughout the country, with 31 responses in total. Respondents to the survey included Nashville-based Vanderbilt University Medical Center; the Yale-New Haven Health System in New Haven, Conn.; Durham, N.C.-based Duke University Health System; and the international division of Baltimore-based Johns Hopkins Health System. Fine attributed the low response rate to trouble in correctly identifying executives who supervise overseas healthcare operations. Altogether, 79% of the respondents say they serve markets outside the U.S.
When it comes to international markets, the respondents ranked personal contacts and the cultivation of established relationships as the most important specific criteria, Fine says.
Regarding channels of opportunity for overseas business, patient and customer referrals from either foreign governments or other patients received a score of 2.2. The only other channel ranked higher was tertiary/specialty services, with a score of 2.
"In most instances, organizations will use a multitiered marketing strategy that includes physician relations, marketing through embassies and by U.S. employers overseas....The challenge for a lot of the organizations is to develop a focus of who they want to market to and how to most effectively leverage their service offerings," Fine says.
Ronald Chufo, director of the center for international relations at 11-hospital University Hospitals Health System in Cleveland, agreed that getting the word out on the system's oncology, orthopedic and spine surgery programs was the best way to drum up overseas business.
"We visit international universities, medical schools and foreign governments, and have doctors going to Eastern Europe by request to lecture, and we also send physicians to privately consult with patients around the world," Chufo says. The largest number of the system's patients come from the Middle East and Central and South America-the most common venues for foreign patients, according to the survey. Most of those patients are covered either by their governments' health plans or are wealthy self-payers. Chufo declined to disclose financials pertaining to University Hospitals' overseas business.
The potential of foreign markets is considered important enough to 879-bed Methodist Hospital in Houston that it has set up informational offices in Istanbul, Mexico City and Guatemala City, says Danielle Rizk, an assistant vice president at the hospital. Aside from dispensing information about the hospital-which attracts overseas business for its cardiac-care and organ transplant programs and its association with the Baylor Medical College-patients who are traveling to Methodist for surgery can be better prepared for their experience. "Patients abroad are more informed about our successes this way," Rizk says. The hospital also runs 30-minute infomercials on Latin American television stations about new procedures and medical advances it has developed. Methodist's revenue from overseas patients is about 4% of its total patient revenue and is growing, Rizk says.
Meanwhile, 1,860-bed Mount Sinai Medical Center in New York City has a distinct advantage in attracting foreign patients because of its proximity to the United Nations. "There are lots of government (representatives) we can meet, and it allows us to focus our efforts," says Ed Muraski, administrative director for the hospital's international services. Like Methodist, Mount Sinai attracts patients for its transplant and cardiac programs and draws many patients from the Middle East, particularly Israel. Muraski wouldn't disclose exact figures regarding the amount of revenue Mount Sinai generates from overseas patients, but his response to the survey indicated that it was less than 2% from each of the dozen international regions listed.
Looking to the future, the survey's respondents say that the ongoing development of medical technology will be the most important resource for developing overseas markets during the next five years. And as in any other business, the bottom line rules. The respondents say financial success was the single most important facet of developing overseas business, although specific margins weren't discussed.
Survey participants who expected revenue to grow from overseas sources over the next five years were relatively optimistic, projecting growth from new or existing markets to range from 2% to 10%.
Among the potential barriers discussed in the survey for developing overseas business were the difficulties in marketing to specific countries, competition and the availability of capital.
Fine noted that capital to greatly expand international marketing efforts might be hard to come by because many overseas programs are relatively small. Few of the respondents said their overseas business accounted for more than 5% of gross revenue, and those with revenue totals above that figure were the participating pharmaceutical companies.
"Most are trying to draw on internal resources and budgets, which can be challenging," Fine says.