Roman Kononov, CEO and Founder of Recomed, a concierge service, specialising in Russian patients travelling abroad, gives his honest view of the current state of the outbound market from Russia.
The medical tourism market, especially in Russia, is plagued by speculation and myth. For Russia, as with most source and destination markets, there are no official statistics. Many start-up businesses attract investment off the back of inflated market estimates, often including spa and wellness tourism into medical tourism to create a larger market.
So, what is the actual size of the medical tourism market in Russia today?
From my own experience and the inside information that we get from clinics abroad, as well as from the available public sources, we can estimate that around 20 to 30 thousand patients travel each year outside of Russia. "Accidental medical tourists", who slip and injure themselves on holiday in Egypt, are not to be included in my estimates; it's a different kind of business.
It is important to realise that almost half of the outbound business consists of independent tourists who do not have problems with the language barrier, and prefer to work directly with the clinics. Due to the large number of former compatriots in countries such as Israel and Germany, communication with the destination country is often in Russian.
A personalised service
As a medical tourism agency, Recomed has been operating in the Russian market for more than eight years. During this time, we have accumulated a lot of statistics and data in different ways. There are more than 800 clinics in 40 countries around the world in Recomeds's database. We gather information from the senior management of these clinics, and meet many personally before sending patients for treatment.
The basis of the Recomed approach is providing an individualised service to each patient. We realise that each medical case is unique, especially in oncology. That’s why we don’t offer treatment “packages” with a fixed cost without prior consultation of the doctors.
Before establishing a price, we consider many factors, such as the stage of disease, the treatment strategy and, if a surgical procedure is required, the amount of operating theatre time, the time in recovery, the number of days of hospitalisation as well as the composition and dosage of chemotherapy, etc. Therefore, every patient has to provide medical records, which are translated and sent to the doctors.
If the patient agrees with the proposed approach to treatment tactics and the cost estimates, we assist in booking flights and hotels near the clinic, obtaining a visa, finding a proper interpreter and a patient coordinator in the country of treatment, Sometimes we also provide air ambulance services for transporting seriously ill patients.
It is important to note that the patient makes all payments for treatment, exclusively in cash directly to the clinic, based on the hospital prices.
Every year, we research focus groups. 97% to 99% of the patients study information on the Internet about clinics and doctors, even if they have been recommended by friends or colleagues. The search engine analysis provided by wordstat.yandex.ru provides an indicator of the "online demand" for medical tourism in general in Russia. (See chart)
In January 2016, there were 13 000 "treatment in Israel," enquiries. Unlike other markets where Google domiates, Yandex is the most used search engine in Russia. The share of Yandex search in the Russian-speaking Internet is about 60-70%; the remainder, is mostly Google. So, Yandex searches give us a strong indicator of the interest in terms of medical tourism. All medical tourism related searches have fallen significantly.
It should be noted that the number of web site visitors who complete a treatment enquiry via the web site or via the telephone does not exceed 5-7%. Of these enquiry leads, one in 15 to 20 converts to a paying customer.
How has the recent crisis influenced country selection?
The concept of medical tourism is driven by the motivation to access treatments that are not available on the local market, and also to obtain better services at better prices. The Russian consumer's need for treatment abroad is primarily driven by a distrust of domestic medicine, and only then - with a desire to gain access to technology and competence. Recomed often deals with enquiries such as "We want to get to the doctor, who has been involved into development of a vaccine against brain cancer."
The overall demand for treatment abroad has fallen significantly; for destinations such as the USA and Turkey, the demand has almost disappeared due to the political conflicts, covered by the media.
For citizens from the European part of Russia, the most popular destinations are still Israel (45% of medical tourists from the Russian Federation) and Germany (35%). In third place, it used to be Turkey. Residents of the Far Eastern part of Russia prefer Korea, China, Thailand and Japan.
How do politics affect choice in medical tourism? The Turkey example
After Turkey brought down a Russian military jet on November 28, 2015, Vladimir Putin signed an "Executive Order On Measures to Ensure the National Security of the Russian Federation and the Protection of Citizens of the Russian Federation against Criminal and Other Illegal Acts and on the Application of Special Economic Measures Against the Turkish Republic".
The Executive Order states that travel agents and operators are to suspend the sale to Russian citizens of products that encourage travel to the territory of the Turkish Republic.
Since that moment, as a medical tourism agency, it is forbidden for us to send Russian citizens for any kind of tourism including medical tourism to Turkey. However, is there any demand? The example below shows that Russians are not even requesting this destination now.
There was a major fall in the number of enquiries for IVF, childbirth, dentistry, aesthetic surgery, and medical check-ups. As a result of the crisis, Russians go abroad mainly for the treatment of complex cases in surgery, oncology, and genetic diseases.
The average treatment bill for the Russian patient has fallen by around two and a half times.
Today, many people go abroad for a check-up and diagnosis to determine further treatment and then continue their treatment locally. Based on our observations, the expected redistribution of patients to low cost destinations, such as India, Poland, Hungary and the Baltic States, has not happened. Due to the perceived stereotypes (often justified), patients still prefer to be treated in Russia, rather than to go to India.
Despite the fall in the market and the closure of many small agencies, a redistribution of the outbound market in favour of the strongest players has taken place in Russia. Recomed is well prepared for this, having the largest database of clinics and delivering a high quality service. 37% of our monthly sales derive from the so-called "loyalty channel": customers who recommend us to friends and those who come back again. And we still see the potential for redirecting patient traffic “high price players” to other more affordable destinations with the support of national tourism offices.