The second Johns Hopkins Medicine International Hospital in Panama is under construction in the Panama City suburb of Costa del Este and it promises to promote even further, medical tourism in Panama. It is estimated that 2.2 million citizens from the United States alone will travel internationally in 2020 for medical procedures and thousands of those will come to Panama for everything from In Vitro Fertilization (IVF) treatment to hip replacement surgery.
The New Medical Dubai
According to health-tourism.com, a leading provider of information about health care providers worldwide, “Panama has earned the title as the ‘Hong Kong’ or ‘Dubai’ of the Americas. This is mainly because of its significantly lower cost of living and fully ‘Americanized’ culture. Panama is becoming one of the top medical tourism destinations, attracting US and Canadian health travelers and the reasons for that is easy to understand: proximity, excellent healthcare services, US trained and certified medical staff and its attractive natural beauty.”
The first Hopkins-affiliated hospital in Panama, Punta Pacifico Hospital, opened in 2006 and immediately started attracting attention when it achieved accreditation from the Joint Commission International. The Joint Commission, based in the United States, accredits over 22,000 hospitals and healthcare facilities domestically and is considered the gold standard for maintaining rigorous quality of care. International hospitals and healthcare providers who gain accreditation, must adhere to those same high standards found in the top-rated hospitals in the United States.
Part of the reason Punta Pacifico Hospital is so highly regarded is, in part, because they are affiliated with the world-renowned Johns Hopkins Medicine even before architectural plans had been developed. The partnership provided and continues to provide Punta Pacifico Hospital with staff training, access to world-renowned medical specialists and top-ranked protocols for patient safety and care.
First Heart Transplant in Panama
The affiliation has resulted in impressive milestones, such as performing the first heart transplant in Panama in 2016 and implementing clinical initiatives including a new stroke program and pediatric emergency department. The Costa del Este Hospital will become the second Hopkins affiliated hospital in Panama when it opens it’s doors, scheduled for late 2020. Accreditation by The Joint Commission is expected as soon as possible.
Even with the highest standards of patient care and procedures, the costs associated with health care performed in Panama are routinely 50 to 80% less than the same procedure and outcome in the United States. For example, Punta Pacifico, posts on it’s website a ‘Fly-In & Expat Patient Hip Replacement Package” including a five-day hospital stay for $20,000. In the United States, with a 23-hour stay in the hospital, a total hip replacement, on average, costs around $125,000.
Medicare will not pay for almost all procedures performed in non-US facilities, so the patient may have to self-pay or find an international insurance policy. There are some US-based insurance companies including United Healthcare and Blue Cross and Blue Shield who have started testing options allowing patients to go to foreign countries for medical procedures.
A North Carolina company, who manufactures furniture, has offered employees the option of going abroad for procedures since 2007. Not only do they pay the medical costs, they also fund every expense associated with the trip—plane tickets, a resort stay, concierge-level assistance and a patient advocate who translates and makes sure the patient is comfortable. Then, they bonus the employee, on average, $2,500 for going abroad for the procedure! According to their website, the program “has saved millions over the years!”
There aren’t a lot of companies —yet—offering the option of medical tourism, so many of the procedures are ones that aren’t routinely covered by insurance, such as In Vitro Fertilization (IVF). Depending on the clinic and geographic location, a single IVF procedure will cost between $9,000 and $18,000, but in Panama the cost is $4,000 to $6,000. Of the two physicians performing IVF treatments at Punta Pacifico Hospital they both received specialty training in New York. With a bit of research, a couple can take a vacation, save thousands of dollars and complete an IVF treatment by coming to Panama.
Built Toward Medical Tourism
The new Costa del Este Hospital will have more of a slant toward medical tourism than the Punta Pacifico facility. The hospital is being constructed as part of the TownCenter Mall, which has high-end retail, great restaurants, specialty grocery stores and upscale medical offices with shared services such as radiology and MRI departments. A JW Marriott is part of the project and has been built with an eye toward the medical tourist and their trailing families.
Other real estate developments in Costa del Este, cater to individuals who will be coming to Panama for medical treatment including cataract surgery ($2,000-$3,000 in Panama vs. $5,500-$6,500 in the US) and a root canal ($250-$350 in Panama vs. $900-$1,100 in the US). If you have a herniated disc, it will cost you between $6,000 and $8,000 in the States, but at the new Costa del Este Hospital it will ring in somewhere between $2,500 to $3,500.
Presenting an Investment Opportunity
The residential tower, Arcadia, will provide long- and short-term rental units for medical tourism patients as well as the international executive on assignment in Panama. Located a short walk from the new Costa del Este Hospital, Arcadia currently has on offer, apartments with 818 square feet for $294,500. A little over 8% return on investment (ROI) is expected for those units, with a rate of 75% occupancy and management fees of 12%. The realized annual income would be $23,608.80 on the single unit. With on-site property management, included in the up-front fees, Arcadia offers a nice revenue stream.
It is important to remember Panamanian physicians are certainly responsible for their performance, but they are not required to carry as much malpractice insurance as is required in the United States because Panama is not a litigious society.
As Costa del Este continues to develop as a business hub for multi-national companies as well as a premiere destination for medical tourism, real estate there offers long-term, income producing streams and a solid opportunity to diversify investment portfolios.