Medical Tourism: Boom or Bust during Economic Turmoil?

Medical Tourism: Boom or Bust during Economic Turmoil?

Medical tourism used to be the way individuals without insurance saved significant money on surgery. Today, more and more employers are offering a medical tourism option as a way to beat back their ever-increasing health plan expenses.

While medical tourism facilitators are seeing a dip in requests for non-urgent procedures–like tummy tucks, chiseled noses and dental veneers, they report a corresponding uptick in patients who need serious surgery–such as knee replacements, bypass surgery, spine fusion, hip resurfacing.

A California-based medical facilitator recently completed a study on procedures completed and found that over 90 percent would have been covered if the patient had a typical employer-provided policy. With employer-provided insurance slipping away or costing individuals more, combined with most procedures costing 85% less overseas than near home, medical tourism is expecting a continued upsurge in patients who find medical tourism their most attractive option.

It’s not just individual patients who are attracted to the significant savings of overseas care. Employers and insurance companies are forced to more closely examine their health plans to protect against health insurance premiums that have risen 73 percent since 2000, according to the National Coalition on Health Care. This has spurred some employers to cover fewer employees, perhaps by eliminating benefits for retirees or imposing longer gaps between hiring date and benefit eligibility. Others have been steadily increasing co-pays and co-premiums (employee contributions increased 145 percent since 2000 according to NCHC). Other employers have narrowed the list of covered procedures.

Progressive companies are finding there’s another, better way: adding a medical tourism option into their health plans. By providing incentives for employees to travel overseas for costly procedures, there are big savings for employers, plus expanded options and the potential of shared-savings for employees: an all around win. Savings in the range of 85 percent is hard to ignore during the best of times, and imperative to examine during perilous times.

In 2008, significant events signaled heightened commercial interest in medical tourism. One milestone event was Swiss Re Commercial Insurance launching a medical travel option as part of its stop loss policy to clients in all 50 states, partnering with a single medical tourism facilitator to coordinate all logistics for their clients’ employees. Commercial interest in medical tourism has been percolating from coast to coast ever since, and is unlikely to abate until Congress enacts stem-to-stern health care reform.

More employers would likely offer medical tourism were it not for three misperceptions that the medical tourism industry is working hard to overcome. First is the perception that only the U.S. is capable of high quality medicine, that savings equate to reduced quality, and that it’s too complex to add a medical tourism component into existing health plans.

As to quality, as long as a company partners with a reputable facilitator, its employees will gain access to doctors at the top of their field worldwide and be able to select a facility that has achieved a world-recognized standard of excellence. Patients who travel for care frequently find far more advanced technology than what’s available at their hometown hospital and experience a very high staff to patient ratio. A reputable facilitator will have performed multi-day on-site visits with each medical facility–including in-depth interviews with the key surgeons and top administrators–before admitting them into its controlled network of providers. A facilitator that doesn’t do due diligence to ensure that the quality of care its patients receive is on par with or better than the care they’d receive at the top U.S. facilities, they’d quickly be out of business.

Savings overseas come from many factors. McKinsey Global Institute found recently that costs at U.S. hospitals are nearly twice as high as in the 13 industrial nations studied. Significantly higher salaries, insurance and the costs of equipment and administration are the leading reasons for the disparity.

The third hurdle–employers worrying about the complexity of setting up and implementing a medical tourism component–can be broken into three simple steps, according to Hoeberechts.

Employers, insurance brokers and individual patients considering medical travel all must first do their homework on the industry and create a short list of the most reputable facilitators that can help them. Second is to interview and assess each potential facilitator against a clear set of criteria, and third is to select the one that’s most capable of creating a tailored plan and delivering a smooth and easy process.

Medical travel is here to stay until the issues of affordability, access and efficiency of health care delivery are substantially improved. While legislators have put these issues on the fast track, so too have lobbyists and special interest groups who are enjoying the status quo.