medical hotel in the growth of global medical tourism

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Medical Hotel in the Growth of Global Medical Tourism Heesup Han & Sunghyup Sean Hyun Published online: 14 Apr 2014.

To cite this article: Heesup Han & Sunghyup Sean Hyun (2014) Medical Hotel in the Growth of Global Medical Tourism, Journal of Travel & Tourism Marketing, 31:3, 366-380, DOI: 10.1080/10548408.2013.876955 To link to this article: http://dx.doi.org/10.1080/10548408.2013.876955

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Journal of Travel & Tourism Marketing, 31:366–380, 2014 Copyright © Taylor & Francis Group, LLC ISSN: 1054-8408 print / 1540-7306 online DOI: 10.1080/10548408.2013.876955

MEDICAL HOTEL IN THE GROWTH OF GLOBAL MEDICAL TOURISM Heesup Han Sunghyup Sean Hyun

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ABSTRACT. This study was designed to identify international patient-travelers’ perceived advantages of staying at a medical hotel; to examine associations among perceived advantages, price perceptions, and willingness to stay by considering price perception as mediator; to investigate relative importance among advantage components; and to identify differences in study variables between firsttime international medical tourists and experienced/repeat travelers. Eleven advantages were identified in a qualitative study. Findings from a quantitative analysis indicated that dimensions of perceived advantages, price perception, and willingness to stay are, in general, significantly associated. In particular, among advantage components, a decisive role was found for physical convenience in willingness to stay and time/effort savings in perceived price. In addition, level of perceived advantages, price perception, and stay willingness were found to differ significantly between first-timers and repeaters. There has been limited research on the medical hotel. The findings provided valuable insights for both medical-tourism researchers and practitioners.

KEYWORDS. Medical hotel, medical tourism, price, willingness to stay

INTRODUCTION International medical tourism, which is a substantial topic in the recent tourism literature, is one of the fastest growing and most lucrative sectors in the tourism industry (Snyder, Crooks, Adams, Kingsbury, & Johnston, 2011; Sobo, 2009). International medical tourism is generally conceptualized as patient-customers who travel overseas for normally nonemergency medical treatment, health care, or aesthetic services (Crozier & Baylis, 2010; Snyder et al., 2011). In an effort to capitalize on this lucrative market, which has even greater potential for

further growth, numerous destination countries in the world, particularly in Asia, are eager to cultivate this international medical tourism market in order to strengthen their economies (Crozier & Baylis, 2010; Whittaker, 2008). Government involvement in developing medical tourism in destination countries and in promoting and advertising the superiority of their existing medical infrastructure is becoming typical (Whittaker, 2008). For these reasons, competition is becoming increasingly severe in the medical tourism market, while product and service differences among medical tourism destinations, particularly in

Heesup Han, PhD, is an Associate Professor in the College of Hospitality and Tourism Management, Sejong University, 98 Gunja-Dong, Gwanjin-Gu, Seoul 143–747 Korea (E-mail: [email protected]). Sunghyup Sean Hyun, PhD, is an Associate Professor in the Department of Tourism and Convention, Pusan National University, Jangjeon-Dong, San 30, Kumjung-Gu, Busan 609–735 Korea (E-mail: [email protected]). Address correspondence to: Sunghyup Sean Hyun, PhD, Assistant Professor, Department of Tourism and Convention, Pusan National University, Jangjeon-Dong, San 30, Kumjung-Gu, Busan 609–735 Korea (E-mail: [email protected]). 366


Heesup Han and Sunghyup Sean Hyun

Asia, are becoming less and less obvious. The design and development of good-quality medical hotels, which are not widely found throughout the world, are one way to differentiate medical tourism products/services from one specific destination from the next. A medical hotel, which is alternatively called Meditel, refers to a lodging firm that integrates the functions of a hospital and a hotel into one property to fulfill patient-travelers’ needs and wants (Han, 2013; Medical Hotels, 2012). Various facilities for medical treatment, health care, or aesthetic services and a variety of hotel products/services (e.g., F&B services, diverse types of room accommodations and restaurants, concierge, business center, room services, laundry services, hotel-style physical environments), which are unusual in regular health care clinics in many destinations, are available in this type of hotel segment (Docrates, 2012; GHN, 2012; Hume & DeMicco, 2007; Medical Hotels, 2012). Medical hotels tend to provide better physical conveniences, privacy and confidentiality, physical environments, room accommodations, menus, comfort levels, and services compared to other clinics (Bass, 1986; Docrates, 2012; Largent, 2012; Medical Hotels, 2012). Attempts have been made in the hospitality and tourism literature to explain medical tourists’ behaviors. However, little research has endeavored to identify international health care travelers’ perceived advantages and benefits of staying at a medical hotel—advantages not likely available at regular health care clinics. In addition, no research has yet examined the role of patienttravelers’ perceived advantages in influencing price perceptions and intentions to choose a medical hotel. That is, evidence on the impact of perceived advantages and benefits is rare. Further, researchers have continually stressed the importance of previous experience(s) in favorable decision making about a certain product/service, particularly in hospitality and tourism fields where customers tend to rely heavily on such experience (s) due to the relative lack of tangible attributes for evaluations compared to other sectors (Back, 2005; Han, Hsu, Lee, & Sheu, 2011; Kim, Lee, & Kim, 2012; Mohr, Backman, Gahan, & Backman, 1993; Ryu & Han, 2011). However, despite the significance of understanding the role

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of purchase experience/frequency, no study to date has examined differences between frequent medical tourists’ and first-timers’ medical hotel purchasing decisions and perceptions of the advantages of a medical hotel. Accordingly, this study was designed to answer the following primary research questions: (1) From the perspective of international medical tourists, what are the perceived advantages of staying at a medical hotel rather than a common health care clinic, and which components for the former are most attractive; (2) Do the perceived advantages of a medical hotel influence their perceptions of price and willingness to stay; (3) If so, what is the order of importance among identified perceived advantages; (4) Does price perception mediate the impact of perceived advantages on willingness to stay; and (5) How does each component of the advantages, price perceptions, and decisions differ across and between first-time international medical travelers and repeat medical tourists?

CONCEPTUAL FRAMEWORK Competitive Medical Tourism Market There is increasing importance to understanding the needs and wishes of new customers as well as repeat visitors’ decision-making processes and behaviors, especially as these affect the future of many businesses. This would be even more the case in a mature market where the dissimilarity of a product/service is low (Brunner, Stocklin, & Opwis, 2008). Due to the fact that an increasing number of countries are entering the international medical tourism market, dissimilarities in medical or health care products/services are lessening, while patient-customers are becoming more demanding and sophisticated. Indeed, researchers have predicted increased competition among destination countries for the medical tourism market share (Crozier & Baylis, 2010). Thus, it is not surprising that many medical tourism destinations have made the attraction and retention of patienttravelers a greater priority and are doing so by developing their medical and health care infrastructure as well as minimizing possible difficulties, inconveniences, and barriers that prevent

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their customers’ new or continuous purchase of health care services.


Medical Hotels Previous research has indicated that international patient-travelers often experience some difficulties and inconveniences (e.g., language, ineffective communication, inadequate followup care, physical inconveniences, low-quality care, uncomfortable physical environments, or low-quality services) when purchasing a medical tourism product (Gan & Frederick, 2011; Hume & DeMicco, 2007; Snyder et al., 2011; Sobo, 2009). Due to these difficulties, many medical tourism destinations frequently frustrate international patient-customers. Receiving medical treatment, health care, or aesthetic services at a medical hotel can possibly reduce such inconveniences. Further enhancements include effective communication with same-language staff with good medical knowledge, continuity of care, comfortable physical surroundings, good quality of care (e.g., nurse-patient ratio, more personalized care), physical conveniences (e.g., various medical/health facilities, rooms, and restaurants in the same property), and excellent levels of hotel services/products at a medical hotel (Bass, 1986; Docrates, 2012; Hume & DeMicco, 2007; Largent, 2012; Medical Hotels, 2012). In addition, most advantages and benefits are not normally available in regular medical/health care clinics. For instance, patient-travelers and their accompanying family, friends, and others choosing a medical hotel can enjoy all possible benefits of staying at a regular hotel, such as hotel level comfort and convenience (e.g., concierge, room service, valet service, laundry/dry cleaning service, business center), exercise facilities (e.g., fitness center, pool), hotel rooms of various sizes/types, and diverse types of hotel restaurants (Docrates, 2012; Hume & DeMicco, 2007; Largent, 2012; Medical Hotels, 2012; Yoon, 2012). As discussed earlier, despite these distinctive advantages, use of medical hotels in many destination countries remains infrequent. In addition, a medical hotel is one of the least identified sectors in the hotel industry, and

thus, there are not many of these unique hotels worldwide. This implies that their availability and distinctive advantages, as perceived by patient-travelers, may allow destination countries to edge out competitors in the competitive international medical tourism market. Some medical hotels in South Korea launched and sold a VIP package involving beautification (e.g., skincare, anti-aging, wrinkle removal, cosmetic-dentistry) and health care programs together (e.g., health inspection, medical spa, message) as well as luxury accommodation combined with five-star level meal services, which was distinctive from other clinics’ products (Lee, 2012; Yoon, 2012). A significant rise in their international patient-customers’ evaluation of medical tourism experiences, their favorable perception of the medical-hotel product, and their assessment of its performances was evident (Lee, 2012; Yoon, 2012). A medical hotel and its concept seem to have similar characteristics to that of nursing homes, ordinary hospital and medical institutions, or residence hotels with medical and relaxation facilities. However, a nursing home where nursing aides and well-trained nurses are available 24 hours a day and 7 days a week refers to a place of residence for individuals who don’t need to be in a hospital but require continuous nursing care (National Institutes of Health, 2012); a hospital or medical institution refers to a medical facility that is primarily devoted to the care and treatment of outpatients (Kennedy, 2012); and a residential hotel, which ranges from the economy to luxury in terms of price, generally indicates an apartment, offering basic hotel services (e.g., maid service, room meal service) and a dining room (Park, Park, Kong, & Park, 2007). That is, various and sophisticated hotel services/products (e.g., concierge, valet parking, recreation facilities) are not normally available in these types of accommodation facilities. In addition, the scope of a medical hotel seems to be greater than such accommodation facilities, covering most of their attributes. There are some concerning issues in regards to a medical hotel. Since medical-hotel operators should pay close attention to diverse attributes of hotel and hospital products together, the possibility of inefficient management can be higher than other clinics. In addition, a medical hotel and its



facilities designed mainly for patient customers’ conveniences may not be comfortable enough for their accompanying family, friends, and others compared to regular hotels. Further, medical hotel certification (or labeling) is not yet widely available because of the limited number of medical hotels and related associations worldwide. It is also little known to the public. That is, a level of consistency in terms of medical-hotel product/ service performances can be another issue. Such certification and labeling is required for further growth of the medical hotel industry. In particular, generating meaningful, appropriate, and measurable standards that provide customers with a set of commitments, which can be referred to when assessing the hotel performances, may help customers know what outcomes they should expect and help providers alleviate ambiguity from the delivering process. Providing a certification, label, or seal of approval to the organizations that meet such standards will contribute to maintaining a level of consistency and be an essential procedure to advancing the industry.

Impact of Perceived Advantages While definitions vary, perceived advantages can be, in general, described as an individual’s level of perception that the attributes and resources of a specific product/service are more advantageous than the competing products/services (Chaharbaghi & Lynch, 1999; Porter, 1980). In other words, the term perceived advantages indicates superior gains that customers believe, obtained from a particular product/service over competitors’ offerings. Previous studies in marketing and consumer behavior indicate that individuals’ perceived level of outcomes and advantages gained from a particular behavior play a critical role in explaining their decisionmaking process and purchasing behaviors (Gwinner, Gremler, & Bitner, 1998; Han & Hyun, 2012; Hening-Thurau, Gwinner, & Gremler, 2002; Zeithaml, Berry, & Parasuraman, 1996). In a hospitality context, Han and Hyun (2012) observed customer-loyalty formation involving cognitive, affective, and conative components. Their findings showed that customers’ perceived advantages from a firm’s relational

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investment (e.g., confidence, social, special treatment) contribute to influencing their belief that a firm’s products/services are worth the price and thereby generate favorable intentions. In addition, some studies of a service context have indicated that customers who perceive superior benefits from their relationship with a particular provider likely shape positive attitudes toward and lead to favorable decisions regarding that provider (Gwinner et al., 1998; Hennig-Thurau et al., 2002; Zeithaml et al., 1996). On the basis of the above evidence, the following hypotheses were proposed in this study: H1: Price perception is a positive function of the components of perceived advantages. H2: Willingness to stay is a positive function of the components of perceived advantages.

Price Perception The price of a product/service is often considered one of the most significant marketplace cues in almost all purchasing and consumption situations (Zhou & Nakamoto, 2001). Particularly in the service/hospitality industry, uncertainty exists due to the intangible and variable nature of the products/services (Han & Ryu, 2009). In this regard, individuals frequently rely on price as a cue when evaluating their product/service experiences, shaping expectations of product/service performances, and making a purchasing decision (Han & Ryu, 2009; Varki & Colgate, 2001). Price can be described as “what is given up or sacrificed to obtain a product” (Zeithaml, 1988, p. 10). According to Zeithaml (1988) and Zhou and Nakamoto (2001), a higher price can either enhance individuals’ willingness to buy or diminish their intention to purchase in that a higher price of a product/service leads to higher perceived quality or higher perceived financial sacrifice. Researchers generally agree that customers tend to encode the perceived level of product/ service price after their subjective interpretation rather than the actual or objective price (Han & Ryu, 2009; Oh, 2000; Zeithaml, 1983). This phenomenon often occurs with a company that offers diverse products/services whose prices


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vary (e.g., restaurant, hotel) (Chen, Gupta, & Rom, 1994; Han & Ryu, 2009; Oh, 2000). Thus, utilization of individuals’ perceived level of price rather than actual price of a product/ service is more widespread in the hospitality industry (Han & Ryu, 2009; Oh, 2000). The existing literature on price perception in business and marketing indicates that forming a price perception about a product/service is a cognitive-evaluation procedure; individuals’ perceived price level affects their decision formation (e.g., Bolton & Lemon, 1999; Han & Ryu, 2009). In mobile-phone and entertainment-service contexts, Bolton and Lemon (1999) attempted to identify the role of perceived price. In their study, perceived price, which was evaluated as fair/unfair, was found to be significantly associated with customer satisfaction and behavioral intentions in both contexts. In a restaurant context, Han and Ryu (2009) proposed and tested the impact of price perception on diners’ decision formation. Their findings indicated that diners’ perceived price of a restaurant product is a significant predictor of intentions, and price perception has a significant mediating role in the relationship between physical environments and behavioral intentions. On the basis of this evidence, we proposed the following: H3: Willingness to stay is a positive function of price perception.

First-time and Repeat Customers Researchers agree that individuals’ previous consumption experience is particularly important for products such as hospitality and tourism (Back, 2005; Han et al., 2011). Indeed, one’s previous experience with a service/product has been frequently found to be influential in his/her decision formation and behavior, according to the hospitality/tourism literature (Han et al., 2011; Kim et al., 2012; Mohr et al., 1993; Ryu & Han, 2011). In particular, Ryu and Han (2011) examined differences between first-time customers and repeat visitors in their perceptions of physical environments in a restaurant setting. Their findings verified the significant differences in perceptions of the restaurant’s physical surroundings and in forming a

disconfirmation evaluation with restaurant services across first-time and experienced customer groups. Kim et al. (2012) investigated differences between first-time and repeat convention attendees’ perspectives of convention quality, value, and intentions. The empirical findings generally supported distinctions between the first-timer and repeater groups in multidimensional values and impact of these values on behavioral intentions. Compared to repeat customers, first-timers are less familiar with attributes of a particular hospitality/tourism product, and they have fewer cues to use in assessing the quality of the attributes due to unfamiliarity and incomplete evaluative information (Fakeye & Crompton, 1991; Petrick, 2004; Ryu & Han, 2011). Conversely, repeat customers with greater familiarity with a product as well as better information assess product performances, attributes, advantages, and benefits more precisely (Fakeye & Crompton, 1991; Petrick, 2004; Ryu & Han, 2011). Accordingly, compared to first-timers, patient-customers who have previous experience(s) with international medical travel are more likely to strongly perceive the possible advantages of a medical hotel and to build stronger perceptions of price and intention to stay there in light of its distinctive benefits. H4: Perceived levels of advantages between first-time medical travelers and experienced tourists differ significantly. H5: Perceived levels of price between firsttime medical travelers and experienced tourists differ significantly. H6: Willingness to stay between first-time medical travelers and experienced tourists differs significantly.

METHODS Procedure Used in Discovering Perceived Advantages of Medical Hotels To identify the perceived advantages of medical hotels over regular health care clinics for international patient-travelers, a focus group and literature review were conducted.



To recruit adequate participants, randomly selected members of a particular medical tourism association were approached by phone. After a brief explanation of the study purpose, several questions about a medical hotel, which were developed to find knowledgeable experts in the related topic, were asked (e.g., “Could you please describe a medical hotel?”, “What can be the possible benefits/advantages of staying at a medical hotel for health care/ medical treatment/aesthetic services”). A total of three hospitality and tourism academics and seven knowledgeable industry experts in the topic area (i.e., two medical-hotel operators, three medical-clinic managers, and two medical-tourism practitioners) were selected through the screening procedure and invited for this focus-group discussion. Examples from the relevant literature on this topic were provided for review prior to the focus group, and participants were asked to be well prepared for in-depth discussion. The participants freely shared their ideas, opinions, and knowledge about a medical hotel. This process identified 11 items distinctive to the medical hotel that were perceived by international medical customers as strong advantages of staying there (i.e., various hotel services, medical tourist package, better quality rooms, hotel rooms of various sizes/types, wide range of quality foods and beverages at a reasonable price, physical convenience, time and effort savings, in-room treatment, ease of communication, privacy and confidentiality, and postcare service). As a next step, measurement items that best reflected the identified advantages and experts’ opinions were generated during the focus group. This focus group discussion, which lasted for one and a half hours, was conducted at a southeastern university in Korea.

Measures The survey questionnaire included three sections. The first part contained a thorough description of a medical hotel to help survey participants understand what a medical hotel is; the second section included questions on perceived

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advantages, price perception, and willingness to stay; and the last section contained questions for demographic information. Measurement items for perceived advantages were assessed using a 7-point Likert-type scale ranging from 1 = Extremely Disagree to 7 = Extremely Agree. Other measurement items (i.e., price perception and willingness to stay) were generated by closely following previous studies (Kim & Han, 2008; Oh, 2000; Oliver, 1997; Varki & Colgate, 2001). Multiple items with a 7-point Likert-type scale were used. The measurement items used in the present study are shown in the Appendix. The questionnaire was finalized through a pretest with academics and after industry experts’ review.

Data Collection Procedure and Sample Characteristics A field survey was conducted to collect the data in Korea during the last week of October and the first week of November in 2011. The survey was distributed at four and two health care clinics located in Busan and Seoul, respectively. The major target customers in those clinics were international medical travelers, which was the criteria of selecting the clinics. Several different versions of the questionnaire were prepared (Chinese, English, Japanese, and Korean) since a majority of international customers can communicate in one of these languages. The questionnaires were translated using a blind back-translation method and thoroughly reviewed and perfected by academic experts. Well-trained graduate students who clearly understand the aim of this research conducted a survey in the seating area of the main lobby of the clinics. As a screening question, patient travelers were asked if the primary purpose of their trip was for medical treatment, health care, or aesthetic services/surgery. Only those who answered “yes” were asked to complete the survey questionnaire. Overall, 395 complete responses were gathered through this data collection process. After removing unusable responses, 387 cases were deemed appropriate for data analysis. Thus, these cases were used in further analyses. Of


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the 387 survey participants, 37.7% were males and 62.3% were females. The average age was 37.1 years old. Approximately 31.3% of the participants’ annual household income was between $40,001 and $60,000; 29.1%, between $80,001 and $100,000; and 23.1%, under $40,000. The respondents were relatively well educated. The largest category was university graduates (49.1%), followed by high school graduates (20.5%), 2-year/some college (17.9%), and graduate degree (7.8%). Among participants, 30.4% reported that this was their first time traveling abroad for medical treatment, health care, or aesthetic services; 43.2%, their second time; and 26.4%, third or more times. A total of 16.5% of the participants indicated that they had previously experienced a medical hotel product. About 36.1% reported having heard of medical hotels prior to questionnaire completion. While the nationality of the participants varied, most participants were from Japan (30.0%), China (26.9%), and the United States (11.9%). The rest of the participants were from Canada (4.1%), Russia (3.9%), the Philippines (3.9%), and Taiwan (3.1%).

DATA ANALYSIS AND RESULTS Test of the Impact of Perceived Advantages A series of multiple regression analyses were used to investigate the impact of perceived advantages identified for price perception and willingness to stay at a medical hotel for medical treatment, health care, or aesthetic services, and to determine the relative importance among dimensions of perceived advantages. The present study followed Baron and Kenny’s (1986) procedure in order to identify the mediating role of price perception. That is, a total of four regression equations were formulated and tested (see the equations in Table 1). The findings are summarized in Table 1. The results indicated that medical tourist package (β = .123, t = 2.049), time and effort saving (β = .197, t = 2.557), ease of communication (β = .130, t = 2.107), and privacy and confidentiality (β = .172, t = 3.050) exerted a significant influence on price perception. Time and effort saving and privacy and confidentiality

were the two most important predictors of perceived price. The rest of the components were not significantly related to the perceived price. Thus, hypothesis 1 was partially supported. Findings also showed that various hotel services (β = .134, t = 2.292), medical tourist packages (β = .142, t = 2.661), physical convenience (β = .203, t = 2.924), in-room treatment (β = .184, t = 3.326), and post-care service (β = .169, t = 3.059) had a significant and positive impact on willingness to stay. Physical convenience and inroom treatment were the two most critical constructs among these predictors. However, the impact of the remaining components was not significant. Therefore, hypothesis 2 was partially supported. Price perception was found to be a significant antecedent of willingness to stay (β = .397, t = 8.671), supporting hypothesis 3. The 11 components of the perceived advantages explained a total of 39.5% and 42.9% of the total variance in price perception and willingness to stay, respectively. Both perceived advantages and price perception explained about 52.2% of the variance in willingness to stay. With regard to the mediation analysis, the relationships among medical tourist package, price perception, and willingness to stay met Baron and Kenny’s (1986) three basic conditions for testing mediation. Price perception partially mediated the impact of medical tourist package on willingness to stay in that the strength of the relationship between medical tourist package and willingness to stay in Equation 1 (β = .191, t = 3.283) drastically decreased in Equation 4 (β = .142, t = 2.661). However, the rest of the relationships involving other components of the perceived advantages did not satisfy Baron and Kenny’s (1986) requirements. Thus, price perception was not a mediator in the relationships between components of advantages and willingness to stay.

Test of Mean Differences An analysis of variance (ANOVA) was used to examine how identified perceived advantages and price perception and willingness to stay differed between first-time international medical travelers


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TABLE 1. Results of Multiple Regression Analysis Perceived Advantages (PA)

Mean

SD

PA1: Various hotel services

4.023 1.134

PA2: Medical tourist package

4.065 1.248

PA3: Better quality rooms

4.134 1.208


PA4: Hotel rooms of various 4.111 1.194 sizes/types PA5: Wide range of quality 4.047 1.146 F&Bs at a reasonable price PA6: Physical convenience 4.225 1.206 PA7: Time and effort saving

4.279 1.247

PA8: In-room treatment

4.243 1.271

PA9: Ease of communication

4.326 1.395

PA10: Privacy and confidentiality PA11: Post-care service

4.173 1.309

Price perception

4.062

4.212 1.252

Price perception Willingness to Willingness to Willingness to (Equation 2b) stay (Equation 3c) stay (Equation 4d) stay (Equation 1a) Beta (t-value)

Beta (t-value)

.152* (2.383) .191** (3.283) .068 (.908) .045 (.608) .035 (493) .240** (3.161) .021 (.277) .230** (3.817) .089 (1.492) .039 (.708) .172** (2.850)

.046 (.702) .123* (2.049) .067 (.874) .105 (1.383) .077 (1.041) .092 (1.184) .197* (2.557) .116 (1.867) .130* (2.107) .172** (3.050) .008 (.134)

.980

Beta (t-value)

Beta (t-value)

.627** (15.802)

.134* (2.292) .142** (2.661) .041 (.602) .003 (.046) .066 (1.004) .203** (2.924) .058 (.835) .184** (3.326) .038 (.685) .030 (.584) .169** (3.059) .397** (8.671)

Intention to stay 3.863 .998 R2 (Adjusted): Willingness to stay (Equation 1) = .429 Price perception (Equation 2) = .395 Willingness to stay (Equation 3) = .392 Willingness to stay (Equation 4) = .523 *p < .05, **p < .01 Note1. All Beta values are standardized. Note2. Only one component of perceived advantages met Baron & Kenny’s (1986) three basic requirements for testing mediation (i.e., medical tourist package). Note3. Coefficient-alpha values for price perception and willingness to stay were .849 and .895, respectively. a Equation 1: Willingnesstostay ¼ β 0 þ β1 PA1 þ β2 PA2 þ β3 PA3 þ β4 PA4 þ β5 PA5 þ β6 PA6 þ β7 PA7 þ β8 PA8 þ β9 PA9 þ β10 PA10 þ β11 PA11 þ " b Equation 2: Priceperception ¼ β 0 þ β1 PA1 þ β2 PA2 þ β3 PA3 þ β4 PA4 þ β5 PA5 þ β6 PA6 þ β7 PA7 þ β8 PA8 þ β9 PA9 þ β10 PA10 þ β11 PA11 þ" c Equation 3: Willingnesstostay ¼ β0 þ β1 PricePerception þ " d Equation 4: Willingnesstostay ¼ β0 þβ1 PA1 þ β2 PA2 þ β3 PA3 þ β4 PA4 þ β5 PA5 þ β6 PA6 þ β7 PA7 þ β8 PA8 þ β9 PA9 þ β10 PA10 þ β11 PA11 þ β12 PricePerception þ "

and second-time, or more frequent tourists. First, Levene’s test was conducted to assess the equality of variances in different samples. The results of Levene’s test for equality of variance showed that variances for first-timers and repeaters did not significantly differ on the components of perceived advantages, price perception, and willingness to stay (p > .05). That is, there was no significant difference between the variances in

the population (George & Mallery, 2001). As a next step, an ANOVA was conducted. Table 2 and Figure 1 present the summary of findings from the ANOVA tests. Results revealed significant differences in most of the perceived-advantage components (medical tourist package: F (1, 385) = 10.080, p = .002; better quality rooms: F (1, 385) = 8.290, p = .004; hotel rooms of various

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TABLE 2. ANOVA Results Variables

First-timers (n = 118) vs. Repeaters (n = 269)

Various hotel services

First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters First-timers Repeaters

Medical tourist package Better quality rooms Hotel rooms of various sizes/types Wide range of quality F&Bs at a reasonable price Physical convenience

In-room treatment Ease of communication Privacy and confidentiality Post-care service Price perception Willingness to stay

3.876 4.104 3.796 4.212 3.898 4.264 3.861 4.248 3.832 4.164 4.022 4.336 4.015 4.424 3.985 4.384 4.058 4.472 3.934 4.304 3.920 4.372 3.766 4.224 3.645 3.983

(1.160) (1.134) (1.207) (1.248) (1.220) (1.183) (1.208) (1.166) (1.186) (1.109) (1.280) (1.151) (1.328) (1.177) (1.317) (1.224) (1.413) (1.366) (1.285) (1.306) (1.207) (1.249) (.887) (.992) (.915) (1.023)

F-value

p-value

3.602

.058

10.080

.002**

8.290

.004**

9.488

.002**

7.545

.006**

6.082

.014*

9.762

.002**

8.888

.003**

7.921

.005**

7.172

.008**

11.884

.001**

20.268

.001**

10.387

.001**

*p < .05, **p < .01.

FIGURE 1. Differences Across First-timers and Repeaters First-timers

Repeaters

7 6 5 Mean


Time and effort saving

Mean (SD)

4

4.472 4.424 4.384 4.304 4.264 4.248 4.212 4.104 4.164 4.0224.336 4.015 4.058 3.985 3.934 3.876 3.898 3.832 3.861 3.796

4.372 4.224 3.92 3.766

3.983 3.645

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PP

WS

Note. VHS = Various Hotel Services; MTP = Medical Tourist Package; BQR = Better Quality Rooms; HRVST = Hotel Rooms of Various Sizes/Types; WRQFBRP = Wide Range of Quality F&Bs at a reasonable price; PHC = Physical convenience; TES = Time and Effort Saving; IT = In-room Treatment; EC = Ease of Communication; PC = Privacy and Confidentiality; PS = Post-care Service; PP = Price Perception; and WS = Willingness to Stay.

sizes/types: F (1, 385) = 9.488, p = .002; wide range of quality F&Bs at a reasonable rate: F (1, 385) = 7.545, p = .006; physical convenience: F

(1, 385) = 6.082, p = .014; time and effort saving: F (1, 385) = 9.762, p = .002; in-room treatment: F (1, 385) = 8.888, p = .003; ease of



communication: F (1, 385) = 7.921, p = .005; privacy and confidentiality: F (1, 385) = 7.172, p = .008; and post-care service: F (1, 385) = 11.884, p = .001). Thus, hypothesis 4 was generally supported. Mean score for each component was higher for the repeater group than the first-timer group (medical tourist package: M repeaters = 4.212 vs. M first-timers = 3.796; better quality rooms: M repeaters = 4.264 vs. M first-timers = 3.898; hotel rooms of various sizes/ types: M repeaters = 4.248 vs. M first-timers = 3.861; wide range of quality F&Bs at a reasonable rate: M repeaters = 4.164 vs. M first-timers = 3.832; physical convenience: M repeaters = 4.336 vs. M firsttimers = 4.022; time and effort saving: M repeaters = 4.424 vs. M first-timers = 4.015; in-room treatment: M repeaters = 4.384 vs. M firsttimers = 3.985; ease of communication: M repeaters = 4.472 vs. M first-timers = 4.058; privacy and confidentiality: M repeaters = 4.304 vs. M firsttimers = 3.920; and post-care service: M repeaters = 4.372 vs. M first-timers = 3.920). However, although the repeater group had a greater mean value (M repeaters = 4.104 vs. M first-timers = 3.876), no statistical difference was found between groups in various hotel services (F (1, 385) = 3.602, p = .058). Findings also showed that price perception and willingness to stay were statistically and significantly different between groups (price perception: F (1, 385) = 20.268, p = .001; and willingness to stay: F (1, 385) = 10.387, p = .001), supporting hypotheses 5 and 6. The mean score for the first-timer group was lower than for the repeater group (price perception: M repeaters = 4.224 vs. M firsttimers = 3.776; and willingness to stay: M repeaters = 3.983 vs. M first-timers = 3.645).

DISCUSSION Despite a growing body of work in the area of medical tourism, the existing literature has provided a limited view of medical hotels. This study takes an important step toward filling this gap by identifying the perceived components and advantages of a medical hotel according to international patient-travelers—qualities that are not commonly found in regular health care clinics, by testing the impact identified

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advantages on price perception and willingness to stay, by examining the mediating role of price perception, and by investigating differences in perceived advantages, price perception, and willingness to stay across first-time and repeat international medical travelers. The present study contributes to existing research on medical tourism by successfully identifying patient-customers’ perceived advantages of a medical hotel. These findings can be utilized in subsequent research. In addition, preliminary evidence of theoretical relationships among study variables and differences in perceived levels of advantages and in decision formation processes based on previous medical tourism experience were identified, which can be useful in conceptualizing and in subsequent studies about medical tourists’ decisions and behaviors related to medical hotels.

Implications and Conclusion A look at perceived advantages as well as price perception offered satisfactory information on international medical tourists’ willingness to stay at a medical hotel (52.2%). Among the perceived-advantage components, various hotel services, medical tourist package, physical convenience, in-room treatment, and post-care service were highly associated with willingness to stay. This finding implied that: (1) providing a variety of services at a hotel (e.g., room service, concierge service, valet parking), (2) developing various tourist packages involving medical treatment/health care, hotel room use, and meal (or F&B) services, (3) providing physical conveniences by effectively designing a hotel and its rooms, restaurants, and facilities to suit patient-customers’ needs, (4) offering comfortable and reliable in-room treatment, and (5) providing reliable post-care services that help customers remain in a hotel longer if necessary contribute to inducing international patient-customers’ willingness to stay at a medical hotel for medical treatment, health care, or aesthetic services. It is noteworthy that the prominent role of two variables (i.e., physical convenience and in-room treatment) in generating


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such willingness was verified. Accordingly, to actively encourage international medical tourists to visit a medical hotel, it is most effective to point out conveniences in such locations and to provide good-quality inroom treatment available by reliable medical experts. Medical tourist package, time and effort savings, ease of communication, and privacy and confidentiality to price perception were found to be important to decision making of staying at a medical hotel. International tourists’ perceived advantages explained relatively well the total variance in price perception (39.5%). Time and effort saving and privacy and confidentiality were the two most critical constructs among perceived advantages in shaping their perception of price adequateness. These findings implied that from a managerial perspective, (1) developing an attractive package(s) for international medical customers, (2) reducing their search costs (time and effort costs) by facilitating diverse health care clinics within the operation, and (3) providing greater privacy and confidentiality than at regular clinics influence patient customers’ decision making regarding the costs of staying at a medical hotel rather than a regular clinic. As these empirical findings indicate, helping international medical tourists save time and effort and enjoy privacy and confidentiality are particularly critical in building adequate price perceptions. Previous studies have indicated the importance of previous experience with a service/ product in explaining customer decision formation and post-purchase behavior (Han et al., 2011; Mohr et al., 1993; Ryu & Han, 2011). In line with the previous literature, our findings from the ANOVA analysis showed significant differences between the first-time international medical tourist group and experienced group in ratings of perceived-advantage dimensions (medical tourist package, better quality rooms, hotel rooms of various sizes/ types, wide range of quality F&Bs at a reasonable rate, physical convenience, time and effort saving, in-room treatment, ease of communication, privacy and confidentiality, and post-care service). In addition, our results

revealed that customers’ perceived price and willingness to stay significantly differed between first-timer and repeater groups. Mean values for the perceived advantage components, price perception, and willingness to stay were greater for the experienced group than the first-timer group. These findings implied that first-time international medical tourists who travel abroad to receive medical treatment, health care, or aesthetic services are less likely to perceive advantages of a medical hotel than are those who have previously traveled to these destinations. Our empirical evidence also indicated that the existence of previous international medical tourism experience(s) is strongly related to patient-customers’ favorable cognitive evaluation and decision making regarding staying at a medical hotel. From a managerial perspective, medical hotel marketers should be proactive in providing information on the various advantages, particularly to first-timers, in order to ensure sufficient information for evaluation and comparison. To ensure repeat business, medical hotels must make continuous monetary and non-monetary investments in facilities, rooms, restaurants, services, and staff skills. Such efforts will help frequent international medical travelers to maintain their belief in the supreme advantages of a medical hotel, thereby increasing their willingness to stay. To test the mediating role of price perception between identified advantages and willingness to stay, the present study followed Baron and Kenny’s (1986) guidelines involving three required conditions. Findings from a series of multiple regression analyses indicated that most of the components of perceived advantages did not meet Baron and Kenny’s (1986) conditions. That is, price perception did not act as a mediator in associations among study variables. Nevertheless, the relationship between medical tourist package and willingness to stay was partially mediated by medical tourists’ perceived level of price. Based on this finding, it can be concluded that effective strategizing regarding price perceptions will enhance international-patient-travelers’ willingness to stay.



Limitations and Future Research The present study had some limitations, which reveal opportunities for future research. First, the survey was distributed at health care clinics where a majority of patients were international medical travelers. While the focus of this study was on general international patient-travelers’ perceptions/decision formation related to a medical-hotel product, in the present study, only 16.5% of the respondents reported that they had ever stayed at a medical hotel and 36.1% had ever heard of it. Future research should address this limitation by collecting data at actual medical hotels. Examining the proposed associations mainly including general medical-hotel customers may complement the sampling limitation. Second, levels of hotels were not considered in the present study (e.g., luxury/ world-class, mid-scale/mid-range, and economy/budget). A description of general medical hotels was provided to customers during the survey. It is true that quality of product/ service provided differs by hotel level. Future research should examine the generalizability of the study results to these levels. Third, patient travelers’ decision formation and perceived advantages based on their purpose of medical travel, such as medical treatment, health care, and aesthetic services/surgery (e.g., hip replacement, nose job), which were not reflected in this study, may not be the same. It would be worthwhile to examine medical tourists’ purchasing behaviors/decision-making process and perceived level of advantages based on their purpose of medical travel (or the nature of the medical treatment) in future studies. Lastly, the present study mainly focused on identifying perceived advantages of a medical hotel and examined their role in the formation of willingness to stay. Since there are few academic studies in this area, this study can be a valuable starting point for more rigorous and meaningful studies on medical hotels. Future theoretical and empirical studies should further identify critical variables in a medical hotel context and test their associations with constructs employed in this study. Such efforts would

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help researchers and practitioners gain deeper knowledge of international medical travelers’ purchasing decisions and behavior related to the medical hotel.

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SUBMITTED: August 18, 2012 FINAL REVISION SUBMITTED: December 13, 2012 ACCEPTED: January 3, 2013 REFEREED ANONYMOUSLY

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APPENDIX

Perceived Advantages Staying in a medical hotel when traveling abroad for health care, medical treatment, or aesthetic services would enable me to: (1) possibly use various hotel services (e.g., room service, concierge service, business center, valet parking) (Various hotel services). (2) use a medical tourist package that relates medical treatment and health care to hotel room use and meal services to suit my individual needs (Medical tourist package). (3) stay in a hotel room of better quality than other clinics (Better quality rooms). (4) stay in comfortable hotel rooms of various sizes/types with my family, friends, and others if necessary (Hotel rooms of various sizes/types). (5) enjoy a wider range of quality foods and beverages at a reasonable price (Wide range of quality F&Bs at a reasonable price). (6) enjoy physical convenience because of the relatively short distance between medical treatment and health care facilities and rooms and restaurants (Physical convenience). (7) reduce the time and effort needed to find various medical or health care clinics and hotels separately (Time and effort saving). (8) possibly receive treatment in my room from high trained professionals (In-room treatment). (9) easily communicate using my own language because of capable, specially trained medical tourism translators (Ease of communication). (10) have greater privacy and confidentiality for surgery (e.g., cosmetic/plastic surgery) and aesthetic health care (e.g., diet programs) than other clinics (Privacy and confidentiality). (11) receive reliable post-care service, remaining in the hotel longer if necessary (Post-care service). Price Perception Given the description of a medical hotel: (a) its price would be reasonable. (b) the medical treatment, health care, and aesthetic services in a medical hotel would be worth the price I paid. Willingness to Stay I am willing to stay at a medical hotel when traveling abroad for medical treatment, health care, or aesthetic services. I plan to stay at a medical hotel when traveling abroad for medical treatment, health care, or aesthetic services. I will make an effort to stay at a medical hotel traveling abroad for medical treatment, health care, or aesthetic services.