Overseas Medical Tourism: A Blue Ocean Opportunity in a Red Ocean Market

Seeking cancer treatment in the United States, cosmetic surgery in South Korea, health check-ups in Japan, and anti-aging therapies in Switzerland... such forms of overseas medical tourism have seemingly become an unstoppable trend.

According to a research report released earlier this year by the U.S. market consulting firm Transparency Market Research, the global medical tourism market is projected to grow from its current size of $10 billion to $30 billion by 2019, with a compound annual growth rate (CAGR) of 17.9% from 2013 to 2019.

According to the definition by the World Tourism Organization, medical tourism primarily refers toTourism Centered on Medical Care, Disease and Health, and Rehabilitation and Convalescenceservices. According to industry insiders,In ten years, China’s outbound medical tourism market may become as developed as today’s study-abroad market.

According to incomplete statistics from VCBeat, there are currently numerous large and smallOver a thousandOverseas medical service agencies, most of which are in economically developedBeijing, Shanghai, and Guangzhou. It is mainly divided into three major categories:

Among them, “medical escort companies” are mostlyValue-Added Services of Traditional Travel Intermediaries, so they generally only assist with appointments and translation, without providing other services. Characteristics of “referral agencies”: haveReferral Cooperation Agreement, but mostlyCollaboration with Overseas Medical Intermediary Agencies. Meanwhile, “new-type medical service institutions” generally have overseas branches,Directly Liaise with Healthcare Institutions/Clinical Experts, to maximally meet patients' medical needs.

Although they differ significantly in overall scope despite some superficial similarities, their focus on overseas healthcare projects is highly concentrated. The top ten are (in no particular order):

Among the top ten overseas medical tourism products,Physical Examination, OncologyThis category accounts for the largest share, approximately 60%, followed by wellness and recuperation programs.However, the costs of these products vary widely; for instance, Japanese health checkup packages range from RMB 10,000 to RMB 100,000.

Furthermore, the primary medical tourism destinations for outbound travel areJapan, South Korea, Thailand, and the United States. For instance, cancer and disease screening services emerging in Japan in recent years, medical cosmetic and plastic surgery procedures in South Korea, as well as oncology treatments and in vitro fertilization (IVF) services in the United States. During extended holidays, the departure rates for these overseas medical tourism packages are consistently high.

According to a survey by Stanford University in the United States, the global medical tourism industry has grown at an average annual rate of 9.9% over the past five years, twice the growth rate of the global tourism industry. It is expected to generate $678.5 billion in revenue by 2017, accounting for 16% of the world's total tourism revenue.

We have identified several representative organizations in China that are driving this global advancement, to examine how they interface with overseas medical resources.



Based on the products (services) provided, the primary focus isOverseas Medical Treatment, International Second Medical Opinion, Health Checkupsprojects, with the primary target population beingMid-to-high-endprimarily,Patients with moderate-to-severe conditions or the general population(Sub-health) as the primary focus.

Furthermore, the overseas hospitals involved in these partnerships are primarily concentrated among prestigious U.S. institutions, including MD Anderson Cancer Center, Cleveland Clinic, Mayo Clinic, Johns Hopkins Hospital, Boston Children’s Hospital, and Massachusetts General Hospital. However, even among these renowned international medical centers, there are distinctions in the nature of their collaborations. For instance, some maintain official partnership agreements, others hold exclusive partnership status, while others have only general cooperative relationships. According to our compiled data, most current arrangements fall under either official or general partnerships. Industry insiders reveal that truly exclusive partnerships are virtually nonexistent.

In overseas medical tourism centered on patients and individuals in a sub-health state, the main participants includePatients, Overseas Medical Service Providers(including some travel agencies),Overseas Hospitals, these are the three main parties. And what about the relationships among them? We have created a diagram to illustrate this.

As shown in the figure, patients of overseas medical service institutions currently mainly come fromPatient-Initiated Search(Automatic Door-to-Door Service),Patient Portal Platform(such as Haodf Online),Online Patient Communities(e.g., oncology patient communities),Medical(Physical Examination) Institution,Acquaintance Doctor-Patient Relationshipetc., with hospitals remaining the primary source; through hospital referrals, service providers directly obtain patients’ medical records.

After overseas medical service providers obtain users' medical records, there are many different approaches for liaising with overseas hospitals. Based on the three major categories mentioned earlier, engagement with overseas hospitals is generally conducted throughOverseas Medical Facilitators, Overseas Branches of Service Agencies, and International Departments of Hospitalsetc. In the meantime, one point that needs to be clear to users is that the “one-stop” services offered by many institutions are likely justMulti-tiered Outsourcing, no one will be held accountable if something goes wrong.

Therefore, regarding the major stakeholders mentioned above, our analysis identifies the current profit models as primarily consisting of:

1)UserRevenue from overseas medical consultation services (including remote video consultations and translation);
2) Domestic and InternationalHospitalplatform promotion revenue;
3) The Industry Centered on Overseas Medical Tourism(Travel, Air Tickets, Hotels, Insurance)Promotional advertising revenue;
4)Third-Party Medical Service ProvidersAdvertising revenue from platform promotions;

However, this is merely our conjecture based on intersecting indicators; according to industry insiders, the specifics of implementation and operation remain unclear.

Furthermore, our analysis has revealed that some foreign-invested innovative healthcare service providers are clearly struggling to adapt to the local market.Some have ceased updates after operating for only two months.Therefore, for foreign companies, in addition to leveraging their overseas resource advantages, strengthening localized promotion and collaborating with high-quality domestic resources are essential to avoid a "quiet retreat."

Another challenge facing overseas medical tourism is that someCross-Border Healthcare Involvement of Internet Medical Platforms, they prioritize “medical care” over “tourism.” For instance, Haodf, Tangren Health, JiuYi160, and Chunyu International are also venturing into overseas medical services, offering users multi-country telemedicine consultations, overseas health checkups, diagnosis and treatment, and one-stop cross-border medical services.

and some original, long-established competitors, such as high-end medical institutions like the Mayo Clinic and Massachusetts General Hospital, have established important localized platforms in China through collaborations with domestic hospitals or capital.

Therefore, in addition to addressing long-standing industry criticisms such as opaque pricing and substandard service quality, overseas medical service providers must also carefully consider whether to form alliances or collaborate with their “competitors.”

However, having said that, before the competitionThe most lacking element is still the entry barrier., currently, China has not yet enacted laws and regulations specifically targeting overseas medical tourism, such as those ensuring access to extensive overseas medical resources and establishing necessary follow-up systems.