September 2006
Health and the Filipino

And now, hospitals as tourist spots

One of the government’s newest revenue-raising schemes is medical tourism, but many health experts and activists remain skeptical.

MEDICAL TOURIST. Zoe de la Torre, a permanent resident of Italy, took a 16-hour flight to Manila to undergo operation for her cervical spine arthritis. [PCIJ photo]

ZOE DE la Torre didn’t mind that her surgery at the plush, marble-floored St. Luke’s Medical Center in Quezon City cost P700,000. Not even if she could have had the procedure in one of Italy’s government hospitals for free. As a permanent resident of Italy, where she has worked selling medical instruments for the last 25 years, she enjoys that privilege. But she says she would be undergoing a “very delicate” procedure, and she wanted to make sure she was comfortable.

A private facility in Italy was out; being uninsured, she says there was no way she could afford a bill that would be nearly twice that of St. Luke’s. Besides, the 55-year-old widow liked the charming St. Luke’s doctor better than the one she consulted in Bologna.

Both had diagnosed her as having cervical spine arthritis. But when de la Torre finally decided to proceed with the operation they said she needed, she opted to take a 16-hour flight to have it done by her U.S.-trained Filipino orthopedic surgeon at the private hospital that recently had President Gloria Macapagal-Arroyo among its patients.

“They have excellent and very caring doctors here,” said a happy and satisfied de la Torre on the bright August morning that she was discharged from St. Luke’s. “The hospital took care of me the moment I stepped through their doors.”

She added, “I’ll definitely tell my Filipino and Italian friends to come have their treatments here.”

Philippine officials certainly hope so. After all, they launched a medical-tourism program last January, and are set to have a bigger launch this November. The plan is to have as many tourists — and balikbayans like de la Torre — coming not only to see the sights, but also to have medical treatments that could range from cosmetic nips and tucks to major surgeries like that undergone by de la Torre.

For government officials and some hospital administrators, medical tourism is a win-win industry. Tourists would be able to enjoy medical services at a fraction of the price they would pay at home. (See table on comparative costs.) The Philippines would earn millions of dollars in revenue from a business that would also generate thousands of jobs. Even the International Trade Commission in Geneva says medical tourism could grow into a $188-billion global business by 2013.

Table 1: Comparative Cost of Treatments (in US$)
Source: PIDS

Cataract surgery 2,500-3,000 1,749 1,014 950 1,424
Total knee replacement 5,000 6,207 4,342 5,500 5,639
Liposuction 2,800-5,700 3,221 1,711 1,365 1,400
General medical check-up 5,000 500
Coronary bypass surgery 50,000 25,000
Kidney transplantation 150,000 25,000
Lasik eye surgery 3,000 1,000
Breast augmentation 5,000 2,000

Proponents of the medical-tourism program say it could only revitalize the country’s weak healthcare system, in large part through outright financial infusions. The problem is that with a framework and other vital components for the program still missing, it’s not clear how such infusions will be done.

That isn’t exactly comforting to those already wary about the program. Health activists and experts alike fear that with medical tourism, hospitals — government ones, most especially — could start shifting most of its attention, and most of its beds, to foreign patients. They also find it incongruous for the country to offer medical services to foreigners when thousands of Filipinos die each year because they could not afford treatment or lived too far from a health facility. And there is the nagging worry that organ-selling by the poor would escalate as tourists sign up for transplant operations.

Former health secretary Alberto Romualdez Jr. himself remarks, “The state of our public health is so inequitable. Unless we achieve a level of healthcare like that in Thailand, I don’t think we should be even catering to the needs of these tourists.”

Thailand is Asia’s forerunner in medical tourism, which has also attracted India and even Singapore and Malaysia. Last year, Thailand earned over a billion dollars from one million medical tourists. Its government, however, has also spent considerable sums on its citizens’ health. According to a 2006 World Health Organization report, Thailand’s government shouldered 60 percent of the country’s total health expenditure in 2003; of its total government expenditure, 13.6 percent went to health.

In comparison, health’s share of the Philippines’ total government expenditure was only 5.9 percent. Today barely three percent of the country’s GDP is being spent for health, even as the rising cost of healthcare has more and more Filipinos electing not to seek treatment for their illnesses.

“Medical tourism, it’s like buying jewelry,” says Romualdez. “You don’t need it to survive as long as you can provide for your needs. Before you buy your jewelry, you should be able to provide for your basic needs first.”

A less poetic way of putting Romualdez’s argument is this: before lavishing attention on medical tourism, the government should strengthen the country’s basic health services first.

BUT IT’S not as if the government is actually pouring money into the program, says Dr. Paul Reganit, medical tourism officer of the Department of Health (DOH). He says the government’s role is only to create an environment where medical tourism can thrive.

“It’s really the hospitals who will develop themselves,” says Reganit. “All you need to do is to encourage these hospitals to improve their facilities. We’re only trying to organize the hospitals and other groups so that we can have a unified program.”

Perhaps if the program were a private-sector initiative, there would be few creased foreheads among the likes of Romualdez. But the Philippine Medical Tourism Program is not only a project spearheaded by the government, it also has government health facilities among its participants. In fact, of the 20 hospitals named as being part of the program’s first phase, nine are government-owned. (See list)

Reganit concedes that while the health department would not be giving these state hospitals extra money for the program, they are expected to spend on facility improvement. That could mean realigning hospital budgets. Theoretically, though, improved facilities would mean better services even for local patients who would continue to make up the bulk of the government hospitals’ clientele. According to Reganit, participating state hospitals are to allot a maximum of only 10 percent of their bed capacity to foreigners. Private hospitals — among them St. Luke’s — have been asked to increase their bed allotment to accommodate Filipino charity patients by 10 percent.

Reganit admits that they are still looking for ways to ensure that such rules would be strictly implemented. But he has said in a paper he wrote on the program: “The DOH remains committed to the delivery of public health services and would ensure that a possible two-tiered medical provision system between local and international patients is ideally avoided or realistically minimized. Any incident of discrimination against Filipino patients may affect the accreditation of partner hospitals and clinics.”

The DOH is one of the Philippine Medical Tourism Program’s lead agencies, along with the Department of Tourism and Department of Trade and Industry. The health department says medical tourism is a “multi-agency, multi-sectoral initiative” and a “public-private partnership” that requires collaborative work among government and private hospitals, specialty and wellness clinics, tourism associations, hotels and restaurants, retailers, transport and communication groups.

Created in 2004 through Executive Order 372, the program involves medical, surgical, and dental services; spa and wellness; traditional and alternative healthcare; and drug abuse treatment and rehabilitation. There will be “international medical zones” and “international retirement health zones.” And if Thailand has the likes of Phuket for recuperating medical tourists, the Philippines offers picturesque places such as Boracay, Palawan, and Batanes.

“Our regional competitors — India, Thailand, Singapore, and Malaysia — are way ahead of us,” says Reganit. “(But) the difference will be in the packages that we will offer (because) we do have exotic locales. So, once they had the surgery and they’re ready to be discharged, they can recuperate in our best tourist spots.”

Besides, despite a debilitating brain drain in the health sector, Reganit says the country can still boast of having some of the “best and the brightest” medical specialists who have had extensive training abroad.

De la Torre would probably agree; she says it was her doctor at St. Luke’s who had first diagnosed her illness, which had given her aches and pains in her neck, back, and arms for a decade. When she sent St. Luke’s findings to a friend in Cuba, which is known for its excellent healthcare system, the Cuban doctor who saw the hospital’s name on the papers told her friend, “You shouldn’t ask us anymore. They’re one of the best.”

THE DOH says that once a framework is in place and everything works right, then the country can expect about 125,000 medical tourists annually. That’s assuming at least 10 percent of the present total bed capacity of each of the program’s 17 “top facilities” (by DOH standards) will be foreigners.

If each visitor spends $1,000 each — a modest estimate, DOH says — that means at least $125 million a year going into local coffers. There would also be the employment needs that the industry is expected to generate: from doctors and nurses, to travel agents, telephone operators, and interpreters, to masseurs and spa therapists.

University of Asia and the Pacific Prof. Cherry Lyn Rodolfo, who co-wrote a forthcoming book on the trade and liberalization of health services in the country, says medical tourism could even stem the emigration of healthcare workers. With hospitals earning more, doctors and nurses will be better paid, she notes. More people may even be encouraged to take up medical and health sciences courses; except for nursing, the enrollment rate in these courses has been declining in the past five years, Rodolfo says.

“You create the opportunities locally and you create the opportunity to earn the dollar locally,” she says. “At the same time, you keep your people here.”

Then again, she says this may also cause an “internal brain drain,” wherein rural doctors and health workers leave their barrios for dollar-earning hospitals in the city. She says, however, that these are “risks” that may not happen. At least, she points out, these issues are already being discussed. “It’s up to us how we can manage or reduce these risks,” she says.

Rodolfo agrees with Reganit that medical tourism could “improve the local healthcare situation.” But that, she says, is hinged on the program proponents’ ability to find “a mechanism where some of these earnings can be channeled back to the public health sector.”

“We would not want to arrive at a situation where we’re earning billions of dollars from medical tourism and the local healthcare budget is declining or the poor’s access to health services is not improving,” she says.

Which is exactly what Romualdez is afraid of. “We don’t know if we’ll actually gain from this,” he says. “We cannot quantify, for example, how much money will come in and how much will be lost to incentives.”

THE DOH says the government is still looking into fiscal and non-fiscal incentives it could offer to medical-tourism enterprises. But to Dr. Enrique Ona, the facility upgrade and improved services the medical-tourism program would make possible for his hospital are incentive enough.

Ona is the executive director of the National Kidney and Transplant Institute (NKTI) in Quezon City, one of the government hospitals included in the program. The sprawling, 266-bed NKTI is currently the only tertiary government hospital in the country that has an ISO global seal of quality standard. When Ona says the NKTI would be able to upgrade because of medical tourists, he means the hospital would be able to afford more improvements. Six years ago, the NKTI had already sunk in sizeable sums to spruce up its facilities-and has since been attracting patients from abroad.

“We practically service the renal care of the whole of Micronesia,” says Ona. “Through our website, these patients saw our facilities and cheap rates and they decided to come.” Other patients have flown in from Canada, Israel, several Arab states, the United Kingdom, and Australia.

The NKTI is best known for its transplant program for the kidney, liver, pancreas, stem cell, and bone marrow. But to many health activists, this specialization makes its inclusion in the medical-tourism scheme suspect.

Activists say a government-sanctioned program that encourages foreigners to have transplant operations here may not only mean Filipinos in need of the same organs would be pushed down the waiting list. Some of them say it could also lead to an organ-selling spree among the desperate poor who are hardly in perfect health themselves. For sure, the current “black market” rates for kidneys from live “donors” are already tempting: P75,000 to P150,000 each, of which P30,000 usually goes to a middleman. The Kidney Foundation of the Philippines, however, says the fair rate is actually P300,000, which covers costs for the screening process and the post-operative care of the donor for 10 years.

Ona admits there are moral and ethical issues involved with organ donations. He tries to explain the situation this way: Under the Filipino organ-donation program, the first option is always an organ from a relative. Next is from a deceased donor. The third and last option is from a living donor not related to the patient. Ona says they make sure the donor from this set understands that his or her organs are not being bought, although there would be what Ona calls a “gratitudinal gift” for donating.

At least the Kidney Foundation says it now has guidelines for its donor program to stop “profiteering clinics” from encouraging organ-selling. The DOH, for its part, wants all living, “non-related” donors to pass through the Foundation’s screening process to ensure no one is just trying to make a buck.

Ona says that despite the medical-tourism program, Filipino patients will always be given priority in the organ transplant list. He adds that this is supported in part by DOH guidelines on transplant operations involving foreign patients. Ona also points out that under the Philippine Organ Donation Program, foreign and well-off Filipino patients are asked to donate to the Kidney Foundation to help those who cannot afford a transplant operation. The donations can run up to $12,000 (some P612,000) per foreign patient; a transplant operation costs from P500,000 to P1 million.

Hospital administrator Blesilda Gutierrez notes that the yearly government subsidy of P185 million for the NKTI’s charity patients has barely increased since 2003. She also says that before 2005, NKTI had to use part of that subsidy for other operational expenses. But because of improved revenues — partly due to its modestly sized yet steady stream of foreign patients (109 in 2005 and 105 in 2004) — the hospital was able to spend more on its indigent patients last year, and even put into the charity pot 20 centavos for every peso it received from the government.