Will Israel Become a Major Center for Medical Tourism?

U.S. medical costs are so high that American insurance companies often find it worthwhile to send their customers abroad for medical procedures.

Could Israel become a hub for medical tourism? Many in the Israeli medical establishment believe it can. At a conference held last week in Tel Aviv, people in the health and tourism industries agreed that to promote Israel as a leading destination for medical tourism from developed countries, there is a need to join forces under a single brand for the country's entire medical system, not to invest in marketing each individual medical center separately.

Hospital - Nir Keidar
Nir Keidar

Medical tourism, in which foreigners travel to a country for treatment, brings in about NIS 400 million a year. This is a big amount for local hospitals, which have a hard time finding funds and breaking even.

The biggest centers for medical tourism are also the largest hospitals: Sheba Medical Center, Tel Hashomer; Ichilov Hospital in Tel Aviv; Rambam Medical Center, Haifa; Hadassah University Hospital, Ein Karem and Rabin Medical Center in Petah Tikva. Two private hospitals also attract such tourists: Assouta Medical Center in Tel Aviv and the Herzliya Medical Center.

Israel has advantages in attracting foreigners looking for treatment: It has some of the most respected centers in fields such as oncology, fertility treatments, bone marrow transplants and orthopedics. Israeli health care prices are also lower than in many Western countries, though costlier than Eastern Europe.

Amitai Rotem, marketing director at the Hadassah Medical Organization, says Hadassah's revenues from medical tourism in 2009 reached NIS 60 million. He said Hadassah started in 2003 with NIS 3.5 million in revenues, and has been growing by dozens of percentage points a year since. Hadassah actively seeks patients abroad for its two hospitals in Jerusalem.

Four-fold growth

Other hospitals also report growth in the numbers of such patients, and revenues. Assouta has seen four-fold growth over the past four years and now pulls in NIS 50 million a year. Sheba took in NIS 60 million in the last year from medical tourism, a 50% increase from 2009.

The medical centers charge 50% more for treating foreigners than they receive for treating Israelis.

Despite the impressive numbers, many involved think the potential is far greater: Global medical tourism is a $40 billion a year business, and is considered a growing field. Countries such as India, Turkey and Thailand have already taken notice of the trend and have declared the industry as national priorities.

Most of the medical tourists in Israel come from Eastern Europe. Russians and Ukranians often prefer Israel due to large number of professionals here who speak the language and understand the culture. But the economic potential of the industry is still concentrated in the West, a market which Israel has yet to penetrate.

"We want to reach markets such as the United States, England and Canada, which we have no relationship with today," said Nathalie Steiner, the head of ISI, the Israeli branch of the U.S.-based Medical Tourism Association. "The forecast is that within two years 1.6 million medical tourists will leave the U.S. for treatments all over the world."

She said that U.S. medical costs are so high that insurance companies often find it worthwhile to send their customers abroad, and even with the cost of the airfare, stay and additional compensation, it is often still cheaper.