Medical Tourism in India: A Conceptual Framework Panchapakesan Padma, Assistant Researcher, Business Research Unit, Institute University of Lisbon Email:
[email protected] and Sonia Dahab Associate Professor Adjunct, Universidade Nova de Lisboa, School of Business and Economics Email:
[email protected]
Abstract The main objective of the current study is to analyze the perceptions of medical tourists on the various aspects of service they received in India. With globalization of economies, medical tourists are increasingly looking out for high quality services at affordable costs. India is one of the fastest growing medical tourist hubs in Asia along with Malaysia, Singapore and Thailand. The medical tourism industry in India is expected to grow steadily aided by the legal and infrastructural support provided by the government. An exhaustive review of the existing literature on medical tourism undertaken reveals that there is lack of empirical literature on the needs and preferences of international medical tourists in emerging markets, especially in Asia. Hence, the current study has proposed a conceptual framework to obtain the perceptions of medical tourists who received treatment in India regarding the level of service they received. It will also help policy planners, service providers, and facilitators to understand the needs of international tourists as well as to serve them better. Keywords Medical tourism, Perceived value, Healthcare, Tourists, India 1. Introduction With the globalization of industries and the shrinking distance between countries, medical tourism (MT) is a fast emerging phenomenon worldwide (Deloitte, 2008). Inaccessible care (long waiting time), increased consumerism, very high out of pocket expense and ageing population are some of the drivers which facilitate the travel of overseas patients from developed countries to emerging healthcare destinations (IBM, 2012). A study by McKinsey (2008) states that medical travel market has a huge potential to grow despite being currently in rudimentary stages. Many studies use the terms, ‘health tourism’, ‘wellness tourism’, ‘medical tourism’ and ‘medical travel’ interchangeably. Carrera and Bridges (2006) defined MT as a travel which is organized outside the country for maintaining, restoring or enhancing the body or the mind. Though initially the term medical tourism was used to describe the movement of patients traveling from under-developed countries to developed countries it is now viewed as the migration of international patients for the purpose receiving medical care (Hofer et al, 2012).
2. Motivation for the Study This paper focuses on the medical tourism in India as it is one of the leading service providers of MT (Lunt and Carrera, 2010). According to PricewaterhouseCoopers (2007), an estimated 180,000 medical tourists were treated at Indian facilities in 2004 (up from 10,000 just five years earlier), and the number has been growing at 25-30% annually. The report further shows that India thrives as a MT destination because of the country’s well educated, English-speaking medical staff, state-of-the art private hospitals and diagnostic facilities, and relatively low cost to address the spiraling healthcare costs of the western world. 3. Medical Tourism: A review of literature The phenomenon of MT has aroused the interest of many researchers recently. Many researchers attempted to find the motivations of medical tourists, etc. Some researchers investigate the concept of MT at a strategic level and examined the enablers and barriers of MT. () and (). Though a few researchers argue in favor of MT, others reveal its pitfalls. () and () There are some studies which focus on the factors impacting medical tourists’ intentions, e.g. (). However, a comprehensive research conceptualizing the service quality in MT is yet to be undertaken. This paper fills this void. Core and secondary aspects - define 4. Findings from the literature review and Objectives of the current study A review of literature in MT as well as SQ reveals the following: Emerging markets, especially Asian countries such as India, Thailand, Malaysia and Singapore are leading the MT industry. The governments in these countries have given special impetus to MT by framing favorable policies, e.g. issue of special visa called M-visa by Indian government to medical tourists. Medical tourists travel abroad for several reasons including cost advantage, high waiting time in their native country and cultural and religious reasons and high quality treatment. MT in the western countries has not been studied much in the literature as it is in its initial stages. There is sporadic empirical research on MT in the existing literature on both emerging as well as developed markets. Thus, the current study attempts to address this void by analyzing the perceptions of medical tourists in India. The main objective of this study is to propose a conceptual model of SQ which will facilitate its measurement. 5. Dimensions of Service Quality in Medical Tourism As the services consist of both technical and functional components, it is evident from the literature that healthcare service is the core component of MT whereas tourism acts as the functional aspect. Thus, this study conceptualizes service quality as a construct with the following components. a) Treatment Quality
b) c) d) e) f)
Image Trust Enjoyment Familiarity (and) Perceived Value.
A detailed description of these dimensions are as follows. a) Treatment Quality: The term ‘medical tourism’ refers to traveling abroad for seeking medical care (Balaban and Marano, 2010) as well as holidaying (Bookman and Bookman, 2007). However, the main motivation for the medical tourists is to avail medical treatment. Hence, medical care becomes the core component of MT. Many countries providing MT services have doctors with international qualification and experience (Wang, 2012). In the research on SQ in healthcare, clinical care is considered the main service offering (e.g. Padma et al., 2009) and this aspect of service is also difficult to evaluate (Rohini and Mahadevappa, 2006). Carman (2000) identified that the technical aspect of hospital service consisted of nursing care, physician care and outcome. Several other researchers (e.g. Andaleeb, 1998; Reidenbach and Smallwood, 1990; Rose et al, 2004; Pakdil and Harwood, 2005) found technical competence as a dimension of SQ in healthcare. Duggirala et al (2008) and Padma et al (2010), in their study on Indian healthcare, revealed that ‘process of clinical care’ is an essential dimension of hospital service quality. b) Image: Many researchers (Gronroos, 1990; Hong and Goo, 2004) have found that the reputation enjoyed by a service provider play a role in the SQ perceptions of customers. As services are intangible, for any service firm image is crucial (Bolton and Drew, 1991; Fornell, 1992). Padma et al (2010), in their study on healthcare services in India, found that hospital image significantly impacted patient satisfaction. Sirgy and Samli (1989) found a direct positive impact of image on customer loyalty. In tourism, positive images of destination significantly influenced the destination loyalty of tourists (Gibson et al, 2008; Hernandez-Lobato et al, 2006). Mechinda et al. (2010), in their study on MT in Thailand, revealed that positive reputation of destination positively impacted the customer loyalty. Hence, in MT, image of a destination as both healthcare and tourist service provider becomes essential. c) Trust: In the research on relationship marketing, several researchers have determined that brand trust positively influences behavioral loyalty (Sirdeshmukh et al, 2002). The ability to provide service as promised is considered to be a necessary aspect of service delivery (Parasuraman et al., 1985; Walters and Jones, 2001). Healthcare, being a credence service, trust is very essential (Padma et al, 2010; Bejou and Palmer, 1998). Trust impacts the attitudinal loyalty of consumers by reducing the transaction costs of searching information (Kramer, 1999) and by improving the sense of commitment towards the service provider (Ganesan, 1994). Lertwannawit and Gulid (2011), while examining the loyalty of medical tourists in Thailand found that brand trust is essential to generate favorable behavioral intentions of medical tourists and also plays an important role in reducing their uncertainty levels while making purchase decision. Trust, which is viewed as credibility (Padma et al., 2010), placing customer’s interest ahead of self-interest (Morgan and Hunt, 1994), and promptness and earnestness of service provider in solving issues (Hart et al,
1990), is found to be an important determinant of commitment to a service provider (Mechinda et al, 2009). d) Enjoyment: The opportunity to have fun makes the consumers highly involved and enables them to co-create their experiences, especially in services characterized by experience attributes such as sports, restaurants, movies, etc. In hospitality and travel industries, Duman and Mattila (2005) have found that the element of fun /enjoyment leads to sense gratification and thereby results in positive evaluation of service. MT is characterized by both utilitarian and hedonic components, with healthcare catering to the utilitarian needs and tourism appealing to the hedonic preferences of medical tourists. Lin et al. (2005) found that positive state of emotions impacted the consumption decisions significantly. Bookman and Bookman (2007) revealed in their study on MT in developing countries that countries such as India and South Africa offered their medical tourists with learning activities, e.g. cooking, photography, to provide affective gratification. In services with experience or hedonic attributes, e.g. entertainment and tourism, the possibility of having fun, improves the perceptions of service delivery. Poon and Low (2005) in their study on Malaysian hotels, suggested that recreation and entertainment as a factor impacting customer satisfaction. Narayan et al (2008) determined in their study on tourists in India that hedonic factors such as food and pubs to be components of service quality in tourism. Wang (2012) found that perceived enjoyment was a significant predictor of perceived value in MT in Taiwan. e) Familiarity: Being familiar with the service provider helps to reduce the risk perceptions of consumers (Gitelson and Crompton, 1984). Familiarity reduces the search effort of travelers (Gursoy and McCleary, 2004) and hence tends to increase the attractiveness of a destination (Hu and Ritchie, 1993). Narayan et al. (2008) found significant differences in the perceptions of tourists in India with respect to their prior experience. Similarly, many researchers found that familiarity positively impacted destination choice and increased the likelihood to revisit (Milman and Pizam, 1995; Chen, 1997). Mechinda et al. (2010) have found that familiarity with the service provider positively impacts the future purchase intentions of medical tourists. Niederman et al. (1996) found that experienced information system users tended to be more satisfied with the service while novice users complained more about interpersonal issues because of their anxiety about the new technology. As previous experience makes the knowledge stored in memory easier to retrieve, it helps in eliciting satisfaction and trust in the users (Taylor and Todd, 1995). Lin and Ding (2005), in their study on internet service providers in Taiwan found that relational selling behavior influenced satisfaction and trust of inexperienced users much more than the experienced users, given their low internet aptitude and high anxiety. f) Perceived Value: Zeithaml (1988) determined that value is measured based on the perceptions of what benefits consumers receive for what they give. Monroe (1990) stated that ‘perceived value’ was a trade-off between benefit and sacrifice. Customers did not always necessarily buy the highest quality service (de Ruyter et al., 1997); in business markets as purchase managers bought for economic reasons than emotional reasons. Hence, Service firms focus on achieving customer satisfaction and loyalty by delivering superior value, an underlying source of competitive advantage (Woodruff, 1997). Cronin et al (2000) revealed that perceived value is a significant predictor of re-purchase
intentions. Bolton and Drew (1991) found that customers’ perceptions of value were influenced by monetary costs, non-monetary costs, personal taste and demographics. Dennett et al. (2000) showed that value-added services serve as differentiators of offerings in the airline industry. Many medical travelers and medical tourist cite low cost as a reason for availing medical care abroad. Glinos and Baeten (2006) revealed from their research that sometimes people travel to a different country because they perceive some advantage when compared to their native country. Wang (2012) determined in their study on Chinese medical tourists in Taiwan that ‘perceived value’ is an important driver of MT. Mechinda et al (2009) found significant impact of perceived value on medical tourists’ loyalty in Thailand. This paper proposes a research model (shown in Figure 1) to conceptualize service quality in MT in terms of its component dimensions, which have been discussed in the previous section. Thus, the current research tests the following hypothesis for conceptualizing SQ. H1: Service quality in MT is a six- dimensional framework, consisting of treatment quality, image, trust, enjoyment, familiarity and perceived value.
Treatment Quality Image Trust
Service Quality
Enjoyment Familiarity Perceived Value
Figure 1 A Conceptual Framework to measure Service Quality in Medical Tourism 6. Methodology For the purpose of carrying out research, data will be collected from medical tourists who travel to India for medical treatment. There are many private hospitals in India which provide medical care to patients from abroad. The rules of membership for the patients and/or hospitals are as follows. The hospitals which provide medical care to patients from abroad should be registered and offer only services legally approved in India Patients can be of any nationality (except Indians) Patients must be taking up tourism before or after the treatment Data will be collected from medical tourists who will be undergoing treatment /underwent treatment in India. A sample size of around 150-200 respondents is expected in this study as it allows the use of multi-variate statistical methods. The responses
obtained will be analyzed using Structural Equation Modeling to conceptualize service quality in medical tourism. An instrument to measure SQ perceptions of medical tourists based on the conceptual model discussed in Section 4 is provided in Appendix. All the items are measured on a seven-point Likert scale from ranging from ‘very low’ to ‘very high’. 7. Summary, implications and conclusions This research would be possibly the first of its kind to arrive at a factor structure for Service Quality in MT industry. This study would also be the first study possibly to find the perceptions of medical tourists in India. The Service Quality model with its component dimensions will be useful to measure the level of perceived service. It is also helpful to the service providers to benchmark their services with their peers and competitors. It will also help policy planners, service providers, and facilitators to understand the needs of international tourists as well as to serve them better. This study, in future could be undertaken in other emerging countries which provide MT services, e.g. Brazil, China, etc. The study could also be extended by including the perspectives of hospital administrators, physicians and tourist agencies offering MT services. References Glinos, I.A. and Baeten, R. (2006), “A literature review of cross-border patient mobility in the European Union”, available at: http://www.ose.be/files/publication/health/WP12_lit_review_final.pdf (accessed 23 December 2010). Wang, H. Y. (2012), “Value as a medical tourism driver”, Managing Service Quality, Vol. 22, accessed online. Padma, P., Rajendran, C. and Sai, L.P. (2009), “A conceptual framework of service quality in healthcare: perspectives of Indian patients and their attendants”, Benchmarking: An International Journal, Vol. 16, pp. 157-91. Rohini, R. and Mahadevappa, B. (2006), “Service quality in Bangalore hospitals – an empirical study”, Journal of services Research, Vol. 6, pp. 59-85. Gro¨nroos, C. (1990), Service Management and Marketing, Lexington Books, Lexington, MA. Hong, S. C. and Goo, Y. J. J. (2004), “A causal model of customer loyalty in professional service firms: an empirical study”, International Journal of Management, Vol. 21, No. 4, pp. 531-541. Padma, P., Rajendran, C. and Lokachari, P.S. (2010), Service quality and its impact on customer satisfaction in Indian hospitals: perspectives of patients and their attendants, Benchmarking: an international journal, 17, pp. 807-841. Parasuraman, A., Zeithaml, V. A. and Berry, L. L. (1985), “A conceptual model of service quality and its implications for future research”, Journal of Marketing, Vol. 49, pp. 41-50.
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Hofer, S., Honegger, F. and Hubeli, J. (2012), Health tourism: a definition focused on the Swiss market and conceptualization of health(i)ness. Journal of Health Organization and Management, 26, 60-80. PricewaterhouseCoopers (2007), Healthcare in India: emerging market report. Carrera, P.M. and Bridges, J.F.P. (2006), Globalization and healthcare: understanding health and medical tourism. Expert Review of Pharmacoeconomics & Outcomes Research, 6, 447-454. Appendix: An instrument to measure medical tourists perceptions This section provides some important items which measure the variables described in Section 5. A 7-point scale is used to measure the patients’ perception of services provided by the hospital, where ‘1’ indicates ‘very low’ level of service and ‘7’ indicates ‘very high’ level of service. 1. Treatment Quality • India’s doctors have high skill standards. • India’s hospitals can compete with other countries in terms of medical expertise. • Participating in India’s medical tourism puts my life at risk owing to the lack of post-operative care. • Participating in India’s medical tourism puts my life at risk owing to the possible occurrence of side effects. 2. Image • India is a safe place to visit • The hospital enjoys a good reputation • Local people are friendly and helpful. 3. Trust • Presence of correct, accurate and reliable billing system in the hospital • The hospital cares for your benefit and welfare • Trustworthiness of staff at place of stay • Hospital provided services as promised and on time. 4. Enjoyment • There are beautiful places to visit and relax. • There are many interesting events and festivals to participate. • Food is exotic and delicious. 5. Familiarity • I would consider myself knowledgeable about the places to visit in India. • I would consider myself familiar about the culture of India. • I would consider myself informed about medical procedures in India. 6. Perceived Value • Compared to the potential risk I bear, India’s medical tourism is worthwhile to me. • Price worthiness of the place of stay • Compared to the fee I am asked to pay, Taiwan’s medical tourism offers value for money.
