Create a web portal that promotes medical tourism among patients in the US and Western Europe. The portal will help users in benefiting from the lower cost of medical treatment in certain countries. The business would include screening patients and connecting them to healthcare institutions across the globe that offer quality treatment at significantly lower rates.
Business Overview :
Build a medical tourism portal that would serve as a broker between medical tourists, and medical service-providers worldwide. Another potential revenue stream could involve facilitating travel arrangements, and taking a margin. The portal would aim to become a part of the nip-tuck tourism, where travelers combine pleasure with procedures.
The basic premise of the business would be to enable customers to take advantage of the cost differences in medical treatments in the US & Western Europe and other parts of the world like Malaysia, Singapore, India and South Africa, where similar treatments could be availed at a fraction of the domestic cost.
Product Service Description :
. Screening patients and digitizing their medical records.
. Helping them in selecting physicians, healthcare institutions and destinations.
.Coordinating between client and physicians/healthcare institutions to determine the procedure for which medical travel is required.
The site must be categorized in the following manner:
Procedures – This would list the various categories for which people may require treatments, for example Orthopedics, Dental, Weight Loss etc.
Destinations - China, India, Mexico, Singapore, Thailand, Costa Rica, Taiwan, Malaysia etc.
Hospitals – This section would contain profiles of the hospitals, where treatments can be availed.
Doctors – Similar to the above section, it would contain profiles of doctors registered with the portal.
The global market for medical tourism is quite substantial and growing. Medical tourism grossed around $40 billion worldwide in 2004, $60 billion in 2006 and is expected to touch $100 billion, by 2012. Around half a million Americans traveled abroad for treatment in 2005. Mexico and Latin America were among the hot spots. Americans also formed a significant part of 250,000 foreign patients who traveled to Singapore, 500,000 patients who traveled to India and another million who visited Thailand, seeking health care outside their homeland.
The most significant advantage of traveling abroad for a medical procedure is cost saving.
The following table gives a glimpse of the comparative cost advantage, that patients may get by seeking treatment outside US, or western Europe:
There is significant competition in this field. Some established websites are:
a. www.bridgehealthintl.com
b. www.healthbase.com
c. www.planethospital.com
d. www.medretreat.com
e. www.medicalnomad.com
Since global medical tourism is itself poised for growth, a start-up can expect a good market, if promoted well.
1.The website can be primarily promoted through Ads put on hotel booking sites, airline service providing websites, health information sites, healthcare blogs etc.
2.Designing a variety of packages that cater to varied needs
3.Giving loyalty rewards to customers and corporate customers by providing special discounts.
4.Press and blog relations.
5.Search engine advertising for relevant terms
6.Search engine optimization
7.Affiliate programs
The revenue would primarily come from the service fee, which would be a percentage of the cost of treatment.
Customers can contact the business, with the help of promotional leads, through the website or telephone.
The business would act as a medical tourism intermediary that connects patients to international healthcare providers.
The business would refer patients only to providers that have recognized credentials and meet American standards.
Providers failing to live up to the service standards would be dropped from the referral network.
Initial patient screening would consist of the following steps:
1.The medical staff of the portal would review a patient’s medical history and determine whether he or she is well enough to travel.
2.The client would then be assisted in selecting the appropriate physician or healthcare provider in a suitable destination.
3. The medical records and history of the client would be digitized and uploaded online, to allow physicians in the destination country to review them.
4. The web-portal would then arrange a conference call, between the potential patient and physician to discuss the procedure.
5. Once the patient selects a physician, the portal would arrange for an agent from the destination country, to make arrangements for the procedure, and other requirements like cell phone service, transportation, airport transfers etc.
The revenue would primarily come from a service fee, which would be a percentage of the cost of treatment.
Assuming that the average cost of treatment ranges from $4000 to $5000 per client and the service fee ranges from 5% - 10%. If the business generates 200 clients in the 1st year, then one can expect the following revenue. (We have assumed a growth of 25% per year, for the client base and a profit margin of around 30 %).
Category | Year 1 | Year 2 | Year 3 | Comments |
Revenue | $ 400,000 | $ 560,000 | $ 728,000 | Growth of 40% in 2nd year and 30% in 3rd year. |
Cost of Services | $ 300,000 | $ 420,000 | $ 546,000 | 80% of total revenue |
Gross profit | $ 100,000 | $ 140,000 | $ 182,000 |
|
Expenses : - |
|
|
|
|
Payroll | $ 30,000 | $ 40,000 | $ 50,000 |
|
Rent | $ 5,000 | $ 5,000 | $ 5,000 | Rent for a 400 square foot area. |
Advertising | $ 5,000 | $ 6,000 | $ 8,000 |
|
Telephone & Electricity | $ 10,000 | $ 12,000 | $ 15,000 |
|
Other expenses | $ 4,000 | $ 5,000 | $ 6,000 | This includes depreciation for equipments, legal expenses, conveyance charges etc. |
Total Expenses | $ 54,000 | $ 68,000 | $ 84,000 |
|
Net operating Income | $ 46,000 | $ 72,000 | $ 98,000 |
|
Other Income | - | - | - |
|
Net Income / (loss) | $ 46,000 | $ 72,000 | $ 98,000 |
|
Capital Needs Analysis
Start up cost would be based on the following factors:
Creating the website.
Promotional expenses.
Networking with medical service providers and doctors.
System set up including software costs.
The capital outlay would range in the region of $30,000 to $40,000. A major expenditure would be incurred in networking abroad with healthcare service providers, and physicians.
Working Capital would primarily be based on:
Data base administrator
Medical staff
Telephone operator
Rent
Travel
Agent commission
Etc.
Operating expenses would range from $50,000 to $60,000. Assuming that 20%-25% of the operating expenses will be required as working capital, which amounts to around $10,000 to $15,000.
Risks and Challenges- Primary risk is the quality of healthcare services. This industry relies more on word of mouth advertising for its survival than anything else. So a single mishap can cause a big dent to marketability. It would take significant effort to visit hospital officials, verify accreditations and negotiate prices. Primary risk is the quality of healthcare services. This industry relies more on word of mouth advertising for its survival than anything else. So a single mishap can cause a big dent to marketability. It would take significant effort to visit hospital officials, verify accreditations and negotiate prices.
- The spread of any medical epidemic affects medical tourism negatively. The impact of SARS stands as a good illustration for the same.
- The main challenge would be acquiring and retaining customers and also ensuring that they are satisfied with the quality of service.
- Lawsuits by customers can lead to significant losses.
This business has good growth opportunities, so exiting would not be desirable. However business owners may require venture assistance and for that they can liquidate their stakes.
Tips for SuccessFocus on the quality of healthcare services.
Network with quality global healthcare service providers.
Focus on enhancing the quality of the network by adding leading hospitals.
| ISBN NO | Book Title | Author |
| 979107903 | Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism | Josef Woodman |
| 1934716006 | The Medical Tourism Travel Guide | Paul Gahlinger |
| 230600069 | NEW Medical Tourism in Developing Countries | Karla R. Bookman, Milica Zarkovic B |
| 323048854 | NEW Health Information for International Travel 2007... | Ava W. Navin, Paul M. Arguin M.D., |
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