Medical tourism has been growing rapidly since the Asia financial crisis in 1997, and its market value is around US$40 billion per year. Several Asia countries like Thailand, Singapore, Malaysia, and India have been recognized as leading medical tourism destinations and enjoying revenues generated from medical tourists. With a good healthcare system, advanced medical skills and affordable pricing, Taiwan has a potential of becoming a leading medical tourism destination, but the number of international patients treated and the revenue received in 2009, and the projected numbers for 2010-2013 are well below those of the leading medical tourism destinations. This study reviews, and analyzes challenges faced by Taiwan and it concludes with some suggestions on dealing with these challenges.