Nicaragua bets on medical tourism

Medical tourism is still nascent in Nicaragua, but the country says it has the right conditions to compete with Costa Rica and Panama

In San Juan del Sur, there are plans for a new kind of hotel. It will boast 61 rooms, foreign chefs, ocean-view rooms, a four-star rating, and a whole floor dedicated to medical treatment for its guests. Speaking at this month’s Central American Advantage Conference in Managua, the owner of the proposed medical resort, Nelson Estrada, told the audience that his development will be the first of its kind in Nicaragua.

“No one else is offering this,” he said.

If Estrada can get the necessary investment, he says work will begin on “Solest MedResort, Hotel and Spa” by August and the project would open in 2015. Once completed, the medical resort will offer clients a boutique hotel and an extensive range of medical procedures all under one roof. The medical resort will specialize in elective cosmetic surgery, but Estrada hopes to expand available treatments in the future.

The planned development is just one aspect of Nicaragua’s growing participation in the global medical tourism industry. Medical tourism is defined as the process of travelling from a highly developed country to a lesser-developed country for more affordable medical treatment.

While medical tourism has become increasingly common in more developed neighboring nations such as Mexico, Costa Rica and Panama, the industry is still inchoate in Nicaragua. 

Competing with Costa Rica

Arlen Perez, manager of medical tourism at Managua’s Hospital Metropolitano Vivian Pellas, says there are a “limited number of places equipped for this industry within Nicaragua.” In the capital, only Hospital Metropolitano and Hospital Central are actively promoting themselves as medical-tourism options for foreign travellers.

Hospital Metropolitano, the country’s most modern health facility, says Nicaragua is ready to give Costa Rica a run for its medical-tourism money.

“Nicaragua has the same elements as Costa Rica to make medical tourism a success: safety, quality of doctors, logistical convenience—we are in the center of the Americas—and experience,” said Perez.

But Nicaragua has the added benefit of being less expensive than Costa Rica.

“The price is the most attractive reason for medical tourism here,” Perez said. For example, she says, a full annual check-up that includes blood tests, x-rays, cancer screens, an electrocardiogram, and much more, would normally cost upwards of $3,000 in the United States. In Nicaragua, it costs a little under $420, and is even less expensive for patients under 40. For most surgeries and medical procedures, healthcare in Nicaragua costs 70-80% less than it does in the United States, she says.

In addition to the reduced costs, various health insurance providers in the United States and Canada will cover medical bills in Nicaragua.

Inexpensive healthcare does not mean cheap treatment or poor facilities. The Joint Commission International, an internationally recognized authority for hospital standards, accredited the Hospital Metropolitano in 2010, making it the first recognized hospital in Nicaragua and the fifth in Central America. Many of the doctors who work at Hospital Metropolitano were trained in the United States and are bilingual.    

Medical tourism: a booster shot for the travel industry

According to Helen Korengold, author of the book “Medical Tourism Nicaragua,” the industry is still in its “infancy” compared to services provided in neighbouring Costa Rica, Mexico, Panama, and even Guatemala.

In 2011, the medial tourism industry in Costa Rica netted $400 million—more than Nicaragua’s entire tourism industry generated in revenue that year.

Doctors watch as a patient gets a CT scan in Hospital Metropolitano Vivian Pellas (photo/ Tim Rogers)

While Nicaragua has no statistics for medical tourism revenue, anecdotal evidence from Perez indicates that most of Hospital Metropolitano’s foreign clientele are expats who reside in either Managua or Granada. Most of the hospital’s foreign patients are from North America, and the most common form of treatment is dental work, orthopaedic and cosmetic surgery.

But as the tourism industry grows in Nicaragua, Perez is confident the hospital will soon reach its target of 50 medical tourists per month. To put that in a regional perspective, Costa Rica receives about 40,000 medial tourists per annum, up 25% in the past three years alone.

To catch up to its southern neighbour, Nicaragua needs more hospitals that can cater to medical tourists and a coordinated promotional campaign, Perez says. But Nicaragua is making a serious effort.

 “The government has been 200% behind us,” Perez said. “They come with us to international medical tourism symposiums, and they want us to work as a country instead of as individual hospitals.”      

The Nicaraguan Tourism Board (INTUR) is currently helping Nicaraguan hospitals to create a national association for the promotion of medical tourism.

So far, however, Nicaragua lacks the type of medical tourism infrastructure that allows Costa Rica to offer all-inclusive medical tourism vacation packages.

 Is medical tourism a drain on healthcare?

While Nicaragua’s top doctors and medical facilities cater increasingly to foreign patients, some wonder about the impact on the average Nicaraguan hospital and the type of services available to those who can’t afford to be medical tourists.

According to Perez, medical tourism will increase tourism revenue and encourage other local hospitals to “try to be better and keep higher standards to compete with us.”

But studies from other countries with medical tourism industries show the opposite can also happen. A study funded by the World Health Organisation entitled “The effects of medical tourism: Thailand’s experience,” found that “foreigners’ demand for health-care services could undermine local patients’ access to quality health care” by luring highly skilled physicians and specialists out of the public and teaching hospitals and relegating most Thais to “health-care services of lesser quality.”

Another study, published in 2010 in the International Journal for Equity in Health, reached similar conclusions.

“The argument that destination countries should view investment into technology-intensive infrastructure for medical tourists as beneficial is undermined when the types of services being offered by hospitals are contrasted with the pressing health care needs of the local population,” the report said. “This contrast is all the more troubling when public money that could be used for wide-reaching, inexpensive primary health care initiatives is used to incentivize private investment into expensive tertiary care with a more limited impact.”

While medical tourism will undoubtedly provide an added value to Nicaragua’s steadily growing tourism industry, the challenge will be to manage that growth in a way that’s sustainable and beneficial to the country, without excluding the many to benefit the few.

Editor’s note: the statistics in the tenth paragraph have been corrected. Healthcare costs in Nicaragua are 70-80% less expensive than they are in the United States.

  • ells

    great article. At first glance I thought this was going to be about the amount of medical professionals who travel here to provide medical aid. I am sure that has to be some form of medical tourism?

  • Darrell Bushnell

    Logical idea waiting to happen in Nicaragua. Put the hotel in Granada instead of SJDS. Much closer to the hospitals of Managua and the Managua doctors can then commute to Granada easily to service the clients.

    • Fred

      I do agree 100% with Darrell. What a great idea and given patients aren’t going to be cavorting in the ocean a great view of Mombacho and Isletas should sell just as easily. The lower cost of infrastructure and access to Managua Hospitals makes it more of a ‘slam dunk’ than SJDS.

  • Jim Lynch

    Excellent article, although I believe Arlen Perez may have been slightly misquoted. The article states “health care in Nicaragua costs 20-30% less than it does in the United States.” From our personal experience after living in Granada for two and a half years, the cost of medical care here is approximately 20-30% OF the cost in the United States, in other words, 70-80% less. As an example: Last September, at the Vivian Pellas hospital, I had two stents placed in my heart. This would have cost about $60,000 in the U.S. Total bill here was just over $17,000. And as a final thought, the hospital is fortunate to have Arlen Perez as their supervisor of medical tourism. A more capable young lady would be very hard to find.

  • Southpaw

    I don’t feel good about this. As a frequent traveler to Nicaragua with friends there, and as a family friend of someone who went to Managua in the Autumn 2012 for a project to perform knee replacements on locals… This won’t improve the lives of the locals. In fact it will make it worse.

    The project was called Project Walk, and my friend with their staff replaced 49 knees in two days on local Nicaraguans for free. They came from the USA and Canada to do this. The thing is, the knee replacements apparently could not be done by the hospital (in Managua) and the patients were coming from all over Nicaragua for this, having been on a waitlist for years. So if the biggest hospital in the country doesn’t have the capacity to take care of its people, how in the world can they expect to accommodate tourists? I am really happy for the Americans who have come to Central American on medical tourism successfully, really I am happy for you, but as the bottom of the article states this industry causes major economic problems for the locals of the host country. I would like to hear what locals have to say on this, not expats with more disposable income.

    • Fred

      Southpaw I see what you are saying but at the moment the kind of emergency medical care which can save lives is pretty much non existent in Granada. Just being able to have a facility primarily supported and paid for by ‘tourist dollars’ which can provide emergency care here instead of ambulance (or taxi) into Managua would save lives.

      The sooner treatment can start for a stroke, head injury, electrical shock etc. the easier and more likely the recovery. I’m not even sure where you’d find oxygen or a defibrillator in Granada let alone someone trained in it’s use.

      Of course one has to ensure there is a tradeoff involved in that a mandated portion of facility, equipement and medical staff is allotted to local care programs. Vivian Pellas may leave most of that kind of care to other Managua Hospitals or do some themselves, I don’t know, for Granada it would be a necessity since there is no one else to preform that kind of care.

    • Ken

      I think the secret lies in finding the right balance. As I understand it, to some extent medical tourism does (or at least can) improve healthcare for locals by retaining more and better doctors, financing equipment, providing more experience for practitioners, etc. The difficulty is that these same things can siphon off resources from the locals and worsen their healthcare.

      The realist (cynic?) in me says that worsening healthcare for the locals is the most likely outcome, and the article nicely points out that this has been the experience of other countries.

      Off the top of my head, I would therefore recommend something like an ALBA strategy of say taxing medical tourism (probably all private healthcare) at something like 25% and earmarking those funds for the public system. A measure like this would be crude, but it would I’m afraid be necessary to enable the private initiatives to grow the society as a whole rather than grow apart from and at the expense of the society.

  • Fred

    Can’t seem to get Darrell’s approach out of my head since it has so many things in it’s favor. For one thing working with Vivian Pellas hospital and their already excellent reputation and facilities would both lower costs as well as benefit both.

    No reason Granada couldn’t be primarily a pre and after surgery recovery facility without operating rooms but emergency care and support. Located in one of the lovely areas just out of Granada it would provide emergency care for residents as well as just a wonderful recovery experience for medical tourists. Add dental into the package and hard to see it not paying it’s way.

    It’s the kind of operation one would love to see local politicians get behind and funded primarily but Nicaraguan’s and not get rich quick developers.

  • http://no Damian

    What about life saving emergency services? Vivian Pellas (or other) needs a helipad and offer a helicopter medical service so that people inside Nicaragua can get to the hospital within 1-2 hours. Imagine tourists in Tola, Guacalito, Ometepe or other remote areas that are becoming more popular with tourists and nationals. If an emergency happens it can take 3-5 hours to reach Managua by road. What if the ferries don’t run because of the high winds or the River in Tola becomes too wild to pass through ( after rains around the catchment area ) – Waiting time can take a whole 24 hours. Hopefully, this need for nationals and tourists is the next logical step.

    • Fred

      Air Ambulance is an extremely expensive service to provide since even if not on a run it has to be available all the time which means expensive salaries, maintenance and equipment. Yes if you need it AND have the money to pay for it a life could be saved. However even a tourist would question $10,000 a pickup and locals would be left on the ground because the Government could hope to fund such a service. I’m not sure that $10,000 a pickup would even cover the year round costs involved.

      Funding a series of equipped emergency care and stabilization clinics around the Country would likely cost less and give a lot more care to locals as well as servicing tourists who could pay for care.

      • http://no Damian

        Insurance companies could calculate the costs, their risks and profits and if feasible they offer it as part of their premium package. So the cost depends on your insurance.

        It has to make economical sense otherwise we wait in line for charity.

        An other idea would be: Tourists could purchase Nicaragua INTUR holiday insurance that offers them emergency helicopter service or ambulance, Vivian Pellas hospital, doctor bill, x-rays, medicine etc… If I would be going on a 2 week holiday in a 3rd world adventure country, I would definitely pay US$50 extra for that peace of mind.

        Of the 1million tourists let’s say 30% are 1st world tourists with disposable income. Let’s say 1/2 of them want the insurance. 150,000 x US$50 = US$7.5 million. I think there is room to cover the costs and still make a profit.

        • Fred

          One problem with your ‘back of the envelope’ calculations and that is that unless it’s mandatory (yeah like we really want all the money to be handled by Nicaraguan Government) then somebody has to SELL this to the tourists. Given that no reliable service exists who in their right mind would pay anything.

          Then question is ‘how much for Corn Island vs Granada, vs SJDS, vs Esteli” all of which have different transportation challenges and costs. Then comes question as to who makes the call as to what kind of emergency gets pickup?

          Interesting idea but needs a lot of work.

  • Clint Hanley

    I offer fixed wing aviation transport for the Nicaraguan people of the Atlantic coast in Northeast corner. It is from remote communities where it takes a day or more to reach the hospital. So Nicaragua does have such a service! However, the hospital system on the Atlantic coast is in much need of financial help. I am not sure the tourist industry, which is on the Pacific side only, would be any help to the people who really need the medical care. Right now medical teams offering free care to poverty areas are having a very hard time passing through customs (ADUANA).

    • Patrick Perry

      Why would the customs people hassle such teams, seems off the charts even for government types.

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  • Carlos M.

    In this conversation, is there the possibility for American retires to use their Medicare in Nicaragua? This will be great and very benefic for all parts.

  • Nicaraguan

    The location should be the decision of the developers and their investors. It is their money at risk. Of course we would all like to have such a facility in our own neighborhood. For example, Mr. Bushnell lives in Granada so of course he would rather see it set up there. Fair enough. So make it happen in your neighborhoods instead of just being armchair critics. Find investors in your area and start the process. It is an expanding area of business opportunity.

  • Mike @ Farmstay El Portón Verde

    Good article. Seems like the world is starting to take notice of a great opportunity to get excellent health care and at a huge price savings! I was recently part of an NPR (US public radio) story that featured both Arlen Perez and Carlos Estrada. That and more can be found on my blog…