Growing Competition From Super Luxury Centers Opening Overseas  E-mail
Addiction Treatment Industry Newswire

04/12/2014 -ATIN - As the tsunami-like economic forces of globalization have swept through communities virtually everywhere, especially gutting and leaving as virtual ghost towns places like former steel powerhouse Gary, IN, whose economic bases were manufacturing one-trick ponies, the one sector of the economy that has stood out as a shining beacon of growth and opportunity has been medical services, growing far faster than the rate of inflation typically and at $2.7 trillion a year becoming by far the largest single slice of the national economic pie. What is not particularly widely noted and discussed is that medical services largely owes its singular position in the economic catbird seat to the fact that it has been virtually entirely shielded from the globalization tsunami that has swept through most of the rest of the economy, with medical services having been by virtue of regulation, reimbursement practices and deeply ingrained cultural consumer patterns basically totally protected from international competition. Bringing some competition for med surg - just around the edges, mind you: can you imagine The Blues ever letting a top Indian or Mexican provider in-network? - is a phenomenon called "medical tourism," where in places like Mexico, India and many other developing countries U.S. medical services consumers are being targeted with top quality care, say for example a hip-replacement, offered at discounts off stateside of 50 percent or more and a trip to exotic locales thrown in to boot. But what may remain just around the edges for med surg, for the orphan status addiction treatment industry, especially in the $10B to $15B a year higher end private side, the regulatory, reimbursement and consumer cultural protective barriers do not apply nearly as broadly, if at all, and thus growing foreign addictions medical tourism could represent, to borrow from the lexicon of national security, much more of a clear and present danger on the competition side.

Out of Malaysia... $20M Greenfield Center Development

The development of new private centers overseas in fact closely mirrors their development stateside here, a current example coming from Malaysia, a fast developing Southeast Asian archipelago nation with one large island where the capitol of Kuala Lumpur is located and over 60 other smaller islands. Malaysian authorities have seen medical tourism in general as a high value-added economic growth target and on the addictions side a 50-bed resort like center called The Solace Sabah will be opening its doors this summer, a major $20M greeenfield new center development. Just like often occurs here in the U.S., Solace Sabah is at its core driven by an entrepreneurial clinician with a vision who has linked up with a wealthy business partner themsleves with highly developed addictions philanthropic visions, together forming a partnership to realize on their mutual missions, visions and goals. The clinician CEO is a guy by the name of Prem Kumar Shanmugan, who has been for some time a major force in Southeast Asian addictions therapeutics, and on financial philanthropic side is a local businessman and acclaimed area charitable donor named Datuk Seri Ghulam Sayeed.  Solace Sabah has opened a small 6-12-bed center that has been in operation for about a year as the major resort project finishes up, with clientele from all over Asia and Australia so far. There is little doubt that Solace Sabah is a first class operation and at half the cost or less for similar luxury style, high quality clinical addictions care in the U.S., Solace Sabah would be a slam dunk for a certain style and class of more adventurous private pay clientele. In the last couple of years there have been similar openings of super luxurious addictions centers in Thailand and also neighboring Indonesia. Treatment Magazine has been following the development of luxury centers in less developed nations, and closer to home there has been an identifiable emergence of addictions "hubs" in Costa Rica and in Baja California. Much further away, the pace of new luxury center openings in India has been quite brisk leading to a bit of an addictions hub in that country as well. We at Treatment Magazine have talked to addictions entrepreneurs, who have highly competent and well developed addictions services products, from as far away as South Africa and beyond.

Addictions Globalization

Among the various medical services sectors there is probably not another one that is as much affected by international competition and influences as the tiny addictions services sector, estimated usually at just one percent of total medical spending in this country. Clearly the publicly funded side is pretty much not at all affected by international competition and what makes the private, higher end side so open is the fact that much of it is private pay, out-of-pocket reimbursed and thus the consumer has maximum flexibility of choice. A clear and present danger competitively? Probably not so much so now, but growing over time, especially as consumers become more aware of the option and they see pricing that is half to 90 percent less than that offered stateside. Of course, though, much depends on international stability and ease of travel. Today on CNN? An Eastern Ukrainian Russian-backed militia has taken over a police station near the border with Russia following President Vladimir Putin's takeover of the Crimea... emergency meeting of the Security Council ... etc... etc... With that kind of drumbeat going on in the background it's tough to predict a flood of Americans jumping on airplanes to go to treatment in foreign climes.

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Ted Jackson


Comments (1)Add Comment
great article
written by Rob Murphy, April 14, 2014
Interesting and well-written article, definitely generates some good ideas!
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