Medical Tourism: Surviving the Global Recession

As U.S. travelers rethink plans to seek medical care in Thailand, Bumrungrad Hospital has empty beds. Like many medical centers in Asia, Bangkok's Bumrungrad Hospital had big expectations for a global trend known as medical tourism. Administrators were especially eager to attract more patients from the U.S. keen on saving money by having hip replacements, cosmetic surgery, and other operations overseas.

For years, some of Asia's premier hospitals have been popular destinations for U.S. patients who either lack health insurance or can't get coverage for certain procedures. And recently there have been signs that insurance companies might start actively encouraging this trend to save on costs.

But Bumrungrad has been hit by a double whammy this year. First came the political unrest in Thailand, with anti-government protesters taking to the streets of Bangkok and constant rumors of a military coup. The prospect of instability seems to have discouraged would-be patients from making the trip.


Even more worrisome for Bumrungrad management, the financial crisis has suddenly made the cost of travel to Thailand from the U.S. more of a stretch for many Americans who might have considered choosing the Bangkok hospital in the past. "We are not predicting robust growth," concedes an understated Curtis J. Schroeder, chief executive of Bumrungrad, who says the hospital will take the occasion to refurbish its rooms, as many hospital beds are empty.

Analysts are more direct, some financial annalists predicts earnings will fall 9.2% this year and 20.9% in 2009. "We foresee the number of international and local patients to be scant," write the Singapore-based bank's analysts. "Patients [will] delay unnecessary or non-emergency treatments (i.e. plastic surgery, hip/knee replacement, etc.) and decrease length of stay, as the financial turmoil has caused significant cutback on expenses."