Medical tourism, where people travel to another country for a medical procedure that is either too costly or too difficult to get at home, has become a regular fixture in the healthcare industry, fuelled by rising medical costs in developed countries, longer average lifespans, and uneven advances in medicine. As it turns out, its growth is also spawning related new ventures.
Medigo, a startup from Berlin that has built a marketplace to facilitate such medical travels, is today announcing a €5 million ($6.2 million) round of funding lead by Accel.
The funding is being announced at the same time that Medigo is opening for business in the U.S. and UK and looks to add more markets to the list. Medigo was founded a year ago, and so far it has added 400 hospitals and clinics to its platform, connecting some 1,500 patients with places where they can get the operations or other procedures — with the list of what gets done running the gamut from breast implants through to dental work and new treatments for cancer.
Medigo claims that in addition to giving patients health opportunities that they may not have closer to home, they are also potentially offering deep discounts.
“Many patients travel out of the United States, Australia, and United Kingdom and are able to save up to 80% on the costs of the medical treatment,” said Ugur Samut, Medigo CEO, in a statement. “For example, patients traveling out of the US save more than $40,000 for a hip replacement and patients from the UK save £12,000 for dental implants.”Accreditation of clinics and hospitals comes by way of organisations like the Joint Commission International (JCI).
Medigo has to date raised around $9 million (including a seed round led by Atlantic Internet and angel investors) and also counts Google Ventures’ Peter Read as an adviser but not investor. It does not charge prospective or connected patients for using the platform, or for hospitals or clinics to list. What it does is collect a referral fee for all procedures that do get booked via its platform, with the percentage varying depending on the type of procedure.
For now, it may sound like a relatively narrow business model, but as the business of medical tourism continues to grow, so potentially will Medigo.
The company today estimates that in the last year some 7 million people globally travelled from their homes for medical care.
Another would-be competitor to Medigo, Patients Without Borders, estimates that in the U.S. alone, some 1.2 million people will have travelled outside their country for medical care in 2014, paying an average of $3,500-$5,000 per visit (which includes medical costs, cross-border and local transport and accommodations). This works out to a market size of $38.5 billion to $55 billion.
Medigo pitches its service not so much as people turning their backs on healthcare at home, or the failings of more local services (although, essentially, that is the crux of the issue if you ask me). Rather, it sees it as the natural progression of consumer choice, made possible by technology.
“The response that we’ve seen shows just how many patients want to regain control of their healthcare,” Pawel Cebula, COO and co-founder, says. “We are empowering patients to get the treatments they need… and revolutionizing the industry by making price transparency for procedures a new standard in health care.”
Medigo, of course, is not coming out of a vacuum. In addition to Patients Without Borders, there are several other organizations that are emerging to fill the role of a marketplace connecting would-be patients with doctors in other parts of the world. And I wouldn’t be surprised if the big medical organisations and insurance companies that run a lot of health services in developed markets are also eyeing this opportunity — while at the same time, almost certainly, trying to figure out if there is a way of curtailing their growth because they are cutting into their incumbent businesses.
Medigo believes that its offering is unique for the degree of transparency it provides, allowing people to compare prices of medical treatment as well as book a medical procedure online.
“Medigo was built to ensure that patients have better oversight into quality of medical care, so that they can trust the doctor and hospital they choose is of highest possible standards,” Ieva Soblickaite, co-founder and CPO, said in a statement.
The rise of a startup like Medigo, attracting funding from the likes of Accel, speaks to a wider trend in the industry of applying tech to what are not traditionally thought of as “tech” issues or problems.
This has been seen impacting other verticals like cleaning and errands (Homejoy or TaskRabbit), transportation (Uber, Lyft, and many others), and accommodation (Airbnb), and the health industry has also not been immune, with elite incubators like Y Combinator also promoting the trend, backing startups that push the boundaries of consumer and enterprise tech beyond photo sharing, salesforce automation software and big data analytics.
While right now the focus is on building out the territories that it covers, Medigo tells me that its 2015 roadmap will also include medical complications insurance (which is being piloted right now) as well as the ability to book supplementary services, such as travel and accommodation to get to and from wherever your doctor awaits.