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Cost Feasibility of A Pre-checking Medical Tourism System for U.S. Patients Undertaking Joint Replacement Surgery in Taiwan

Keywords: medical tourism , joint replacement surgery , cost analysis , pricing

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Abstract:

Background: Medical tourism is a relatively recent global economic and political phenomenonthat has assumed increasing importance for developing countries, particularlyin Asia. In fact, Taiwan possesses a niche for developing medicaltourism because many hospitals provide state-of-the-art medicine in all disciplinesand many doctors are trained in the United States (US). Among themost common medical procedures outsourced, joint replacements such astotal knee replacement (TKR) and total hip replacement (THR) are two surgeriesoffered to US patients at a lower cost and shorter waiting time than inthe US.Methods: This paper proposed a pre-checking medical tourism system (PCMTS) andevaluated the cost feasibility of recruiting American clients traveling toTaiwan for joint replacement surgery. Cost analysis was used to estimate theprime costs for each stage in the proposed PCMTS. Sensitivity analysis wasimplemented to examine how different pricings for medical checking and asurgical operation (MC&SO) and recovery, can influence the surplus perpatient considering the PCMTS. Finally, the break-even method was adoptedto test the tradeoff between the sunk costs of investment in the PCMTS andthe annual surplus for participating hospitals.Results: A novel business plan was built showing that pre-checking stations in medicaltourism can provide post-operative care and recovery follow-up.Adjustable pricing for hospital administrators engaged in the PCMTS consistedof two main costs: US$3,700 for MC&SO and US$120 for the hospitalstay. Guidelines for pricing were provided to maximize the annual surplusfrom this plan with different number of patients participating in PCMTS. Themaximal profit margin from each American patient undertaking joint surgeryis about US$24,315.Conclusions: Using cost analysis, this article might be the first to evaluate the feasibility ofPCMTS for joint replacement surgeries. The research framework in this articleis applicable when hospital administrators evaluate the feasibility of outsourcedmedical procedures other than TKR and THR.

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