A Theoretical Model on Medical Tourism Destination and Quality Provision

Abstract

Abstract:
Medical Tourism has become a major industry in the global arena. In the view of the fact that there is a great potential of the industry in India, it is essential to pay more attention to this subdirectory of tourism and reap the economic benefits for the host country. The present paper shall give a theoretical background for the development of medical tourism destination. We have developed a theoretical model that determines the optimal quality of medical service, incorporating the medical sector and an allied sector, providing all the goods and services that make the stay in a destination possible. This scenario is examined when quality of the medical service is (a) homogenous, provided by a monopoly hospital sector, (b) differentiated, provided by high-type and low-type hospitals, in a duopoly market structure. Finally, we compared the quality of medical service provided under. This is true for both homogeneous and vertically differentiated service-quality cases. An inferior quality of medical service being provided under coordination setup, implies lower service charge and greater demand of the same. This in turn ensures a sustainable profit for the allied sector.