Cost feasibility of a pre-checking medical tourism system for U.S. patients undertaking joint replacement surgery in Taiwan

Abstract

Background: Medical tourism is a relatively recent global economic and political phenomenon that has assumed increasing importance for developing countries, particularly in Asia. In fact, Taiwan possesses a niche for developing medical tourism because many hospitals provide state-of-the-art medicine in all disciplines and many doctors are trained in the United States (US). Among the most common medical procedures outsourced, joint replacements such as total knee replacement (TKR) and total hip replacement (THR) are two surgeries offered to US patients at a lower cost and shorter waiting time than in the US.

Methods: This paper proposed a pre-checking medical tourism system (PCMTS) and evaluated the cost feasibility of recruiting American clients traveling to Taiwan for joint replacement surgery. Cost analysis was used to estimate the prime costs for each stage in the proposed PCMTS. Sensitivity analysis was implemented to examine how different pricings for medical checking and a surgical operation (MC&SO) and recovery, can influence the surplus per patient considering the PCMTS. Finally, the break-even method was adopted to test the tradeoff between the sunk costs of investment in the PCMTS and the annual surplus for participating hospitals.

Results: A novel business plan was built showing that pre-checking stations in medical tourism can provide post-operative care and recovery follow-up. Adjustable pricing for hospital administrators engaged in the PCMTS consisted of two main costs: US$3,700 for MC&SO and US$120 for the hospital stay. Guidelines for pricing were provided to maximize the annual surplus from this plan with different number of patients participating in PCMTS. The maximal profit margin from each American patient undertaking joint surgery is about US$24,315.

Conclusions: Using cost analysis, this article might be the first to evaluate the feasibility of PCMTS for joint replacement surgeries. The research framework in this article is applicable when hospital administrators evaluate the feasibility of outsourced medical procedures other than TKR and THR.