Japan Wants To Build Medical Tourism Market

Posted by: Kenji Hall on July 27, 2009

Japan’s government has come up with a not-so-new idea for creating jobs in its healthcare sector: competing for medical tourists against Singapore, Thailand, the Philippines and India. For months, a panel of experts has been meeting at the Ministry of Economy, Trade and Industry (METI) behind closed doors to discuss the merits of luring wealthy patients from Asia and Russia to Japan for top-notch medical treatment. When I first heard of the proposal a couple of months ago, the ministry official who told me about it asked that I not write about it yet.

At the time, officials worried about a backlash. In recent years, there have been reports of hospitals turning away thousands of pregnant Japanese women who required emergency services; a few women even died because they didn’t receive the care they needed. The concern was that promoting medical tourism would seem as if the government was putting foreign patients before Japanese.

Now the ministry is moving ahead with its plans. METI hopes the idea will help Japan’s hospitals—many of which are losing money—add to their revenues, says Koji Fujimoto, the ministry’s director of the service industry. The ministry will oversee a small-scale project that’s expected to start in September at 10 of the nation’s largest hospitals. Travel agencies and translation-service companies will participate in the tour packages, which will combine medical checkups with sightseeing trips. The one- to two-year project is expected to cost about $1 million.

Japan won't have an easy time luring patients from overseas. Countries such as India, Singapore and Thailand are already a popular destination for Americans, Europeans and Japanese who are looking for specialized medical procedures but don't want to pay the high costs. Japan won't be able to compete on price. After all, a heart procedure that costs $100,000 in the U.S. or Japan can be done for a mere $10,000 to $20,000 at the top private hospitals in Asia.

But Japan thinks there's an opportunity in cancer treatments, gene analysis and other high-tech medical services that aren't available in less advanced countries. The METI panel found that even Americans would consider flying to Japan to receive medical treatment that, in some cases, costs some 60% less than similar services in U.S. hospitals. Japan's reputation for safety and cleanliness bolsters its appeal. And you can expect a lot of pampering in the way that only the Japanese have perfected.

Japanese hospitals and clinics could use the extra cash. They rely mainly on national health insurance payouts from the government. Currently about 80% of Japan's annual medical costs are paid for by the state. The result:
Many hospitals and clinics are struggling to make ends meet.

Any extra business would help Japan's medical system at this point. Japan's national insurance system is just as hard-up for money. With the population graying, the number of workers paying for insurance has dwindled, to the point where the payments no longer cover the annual costs.

There's no guarantee that the medical-tourism plan will succeed. For one thing, the country has few doctors who are bilingual. Hiring translators wouldn't be cheap. It's also unclear how patients from abroad will pay for their medical bills in Japan and whether insurance companies will offer to help out. And before hospitals in Japan offer services they are likely to require some kind of accreditation from Joint Commission International. Typically hospitals that offer services to medical tourists have been approved by JCI, which is part of the same nonprofit organization that accredits American hospitals.

Another hurdle: Japan's shortage of doctors. According to the OECD's Health Data 2009, Japan has fewer doctors per capita than most other major countries. In 2006, Japan had 2.1 doctors per 1,000 people--below the OECD average of 3. (The U.S. per capita figure is also low, at 2.4 doctors.) The scarcity is partly due to the government's annual limits on the number of spots available at the nation's medical schools. Many doctors complain about paperwork and clinical duties that have nothing to do with their field of specialty. To recruit more doctors, particularly outside the largest cities, Japan has already raised the limit and is planning to spend more public money on doctor education and recruitment programs. (How the government plans to reconcile already soaring medical costs and the higher outlays to increase the number of working doctors is unclear.)

Where patients from other parts of Asia might feel a sense of security is in the long lives that many Japanese lead. They have clearly benefited from high-quality healthcare.

Note: The original entry was updated with confirmation from the Ministry of Economy, Trade and Industry and new details throughout.