Medical Tourism in America (Part 1)

11 Feb

The healthcare systems of Europe, Canada and Australia find it difficult to beat the prices and quality offered in medical tourism destinations. However, the USA is fighting back.

International Medical Travel - infographic courtesy of http://www.blog.hulihealth.com

Thousands of Britons leave for medical treatment in countries such as the Philippines, Singapore, India, and Thailand each year, but the reverse is also true: foreign patients travel for medical treatment in London hospitals, particularly those with international reputations.

Some private and National Health Service (NHS) hospitals actively recruit international patients. For instance, Great Ormond Street Hospital for Children, The Princess Grace Hospital, is tapping the European, Asian and African markets.

The UK-based HCA International has offices in Lagos, Nicosia, Cairo, Abu Dhabi, Athens, Islamabad, Lahore and Karachi to promote its six London hospitals: The Harley Street Clinic, The Lister Hospital, London Bridge Hospital, The Portland Hospital for Women and Children, The Princess Grace Hospital and The Wellington Hospital.

Moorfields Eye Hospital has treated over 2000 patients since opening in 2007 in Dubai Healthcare City. There are no statistics, but the UK outflow is greater than its medical revenue from incoming patients.

This is because most English hospitals passively service only the patients that go to them. Also, the NHS’s reluctance to cooperate with international medical providers encourages domestic medical travel.

In 2008, more than 400,000 foreigners sought medical care in the U.S. and spent almost $5 billion but more than 750,000 Americans went overseas for less expensive medical treatments, said a report by Dr. Maria. K. Todd.

At an estimated average per case revenue of US$21,000, this means that 7569 U.S. hospitals lost – and overseas medical tourism destinations gained – US$15.75 million, the Todd report said.

“The number of outbound medical tourists is projected to rise to 15.75 million in 2017, representing a potential $30.3 to $79.5 billion spent abroad by Americans. As a result, the potential lost revenue for U.S. health care providers could top $228.5 to $599.5 billion,” the report said.

Americans are attracted by the much lower costs – up to 75 percent less – less waiting time, availability of treatments, better service, increasing quality of medical procedures, lure of adventure and new experiences, as well as friendlier and warmer service.

On the other hand, they must sign airtight waivers that free healthcare providers from liability for negligence or error, including the agents who arrange travel, visas, rooms and support services.

Also, patients cannot compare public data on outcomes, quality, complications and long-term recovery. Injured patients have no legal recourse.

Furthermore, some hospitals burnish their reputation via a U.S.-based hospital accreditation system, but these hospitals release no real data to help patients gauge hospital performance and quality.

Domestic legal coverage is the final safety net of patients in the USA. Patients need not fear the possible hang-ups of international legal procedures should a dispute arise.

For instance, inbound tourists who speak no English are protected by law. Title VI of the Civil Rights Act required hospitals to have an interpreter or else risk a malpractice lawsuit or a civil rights investigation “when mistakes from lack of communication result in injury or death,” Abramson reports.

The American healthcare and related service industries play on these factors to keep the dollars home, as well as the length of travel time and the psychological comforts of a familiar environment.

As a primary tactic to divert revenue to American health service providers, more U.S. hospitals are matching the prices of overseas medical procedures, particularly doctor-owned hospitals and surgeries.

DOMESTIC DEVELOPMENTS

It is true that President Obama’s promise to ease the crushing costs of healthcare by lowering hospital prices, reducing doctors’ salaries and introducing state insurance remains a promise.

It is true that increasing numbers of Americans go overseas for cheaper medical care overseas. It is true that more inter­national health insurers and medical concierge services make medical travel easier.

However, many foreigners believe in the superiority of U.S. medical care and U.S. patients – as well as their families and friends – prefer medical care closer to home.

U.S.A. Domestic Medical Tourism - infographic courtesy of http://www.inc.com

In response, hospitals and clinics as well as travel agents now offer easier payment options and savings with less travel.

“Traveling to a U.S. hospital is much less daunting than going overseas, where practical, medical and legal issues pose complex challenges for patients and employers,” said Mike Taylor of Towers Perrin, a global health-care consulting firm in the U.S.

Some hospitals now give domestic patients up to 75% discount for cash up front rather than chase insurance companies or third parties for payments, according to a report by www.medicaltourismguide.com.

Also, hospitals are forming networks and marketing directly to employers. Employers, in turn, are creating lists of approved hospitals where their employees can receive travel and lodging discounts as well as reduced co-payments.

Because sick employees face bankruptcy due to high medical costs, employers now offer financial incentives.

Some employers say overseas medical care options are more advantageous to their employees but others offer financial incentives that encourage employees to stay closer to home: co-payments, zero out-of-pocket costs, company-paid travel expenses, and access to concierge services, which can save patients thousands of dollars without leaving the country.

In addition to saving time and money, domestic medical travel offers the assurance of healthcare in regulated, recognized facilities by certified physicians.

For example MedToGo, a company owned and operated by US physicians, offers board-certified physicians in or near a number of top vacation destinations at up to 75% savings.  MedToGo’s website offers potential patients free price quotes and notes how close its facilities are (“from Houston only 1 hour and 37 minutes!”) to both outbound and inbound medical tourists.

In addition, US hospitals continue to establish overseas doctor relationships via institutional tie-ups. For instance, the Philadelphia International Medicine consortium is building a US$860-million hospital in Korea.

In another example, Duke Medical Center, Harvard Medical School, Johns Hopkins Medical Center and Columbia University Medical Center partner with international hospitals.

These partnerships spread goodwill and build consumer confidence in U.S. hospitals.

Infograpic courtesy of http://www.saintpetersblog.com

INBOUND MAGNETS

While cash-paying patients from South America, the Caribbean and Europe are a major portion of inbound patients, the largest group patients now traveling to the U.S. are those with international insurance policies that accept normal co-payments and deductibles.

US hospitals like this because reimbursement rates from commercial payers are higher than state-sponsored plans.

Richard Miller’s The Healthcare Business Market Research Handbook estimates that foreign patients spend more than US$1 billion a year for healthcare in the U.S. while a disputed Deloitte report said that inbound medical tourism in 2008 brought in approximately US$5 billion in revenue.

• Discounts and Concierges

U.S. hospitals now attract overseas patients with deeply discounted rates. “At the forefront are physician-owned hospitals, whose managers say they have the efficiency and flexibility to charge extremely low rates and still come out ahead,” Andi Atwater reports in The Wichita Eagle.

A new company, Healthplace America, makes in-country medical tourism easier, said John Goodman in his report Medical Tourism Reversing Course. The company offers “price and quality transparency” as well as a choice of 15 hospitals throughout the USA, with savings up to 50%.

• Alternative Treatments

Medical tourism destinations such as Thailand, the Philippines, India and Malaysia proudly package alternative and complementary treatments as well as traditional medicine.

In response, U.S. hospitals now offer similar treatments; the 18 hospitals chosen by U.S. News as “America’s Best Hospitals” provide complementary or alternative medicine services.

The 2006 annual survey of the American Hospital Association shows that 19.8% offer complementary or alternative medicine services.

• Lower Prices

“U.S. hospitals offer up front, package prices to foreigners who come to this country for medical care,” said John Goodman, “prices and packages they will not offer to American patients.”

Infographic courtesy of http://www.getbetterhealth.com

For instance, Galichia hospital stunned the US medical industry in February 2000 when they announced the $10,000 flat fee for a common open-heart surgery – instead of the usual $35,000.

The hospital plans to charge similarly low flat fees for orthopedic surgery, electrophysiology procedures such as pacemakers, certain open-heart surgeries and general surgery. The aim is to attract patients from countries such as Canada, which has overburdened government-run health care systems.

“Physician-owned hospitals, not typically saddled with layers of bureaucracy, are better equipped to operate at peak efficiency and offer comparatively low rates,” Atwater quotes Molly Sandvig, executive director of the 148-member hospital group Physician Hospitals of America.

“The reason our hospitals are efficient – the reason they cost less, frankly – is we know what our charges are, where the money is going,” Sandvig said. “Our goal is not to make a gigantic profit. Our goal is to offer services in the most efficient way possible while still being able to stay in business.”

The prime attraction of medical tourism – lower prices – has been taken to heart by American retailers, who continue to experiment with in-store clinics, cheap generics and benefits management expertise to find the most profitable formula.

CVS has Minute Clinics in more than half of its 6,200 stores. Walgreens has Take Care Health Clinics in many of their 5,700 branches, and Rite Aid has Instant Clinics in its 5,150 locations.

The Wal-Mart chain of stores has optometrists, pharmacists and now walk-in clinics at its many branches throughout the USA. These clinics use a standard format, are jointly branded with hospitals and medical groups, and are run by nurse practitioners who prescribe basic medications such as antibiotics. They take insurance, require a co-pay, render a diagnosis and write a prescription.

Wal-Mart has also bought out the ASDA supermarket chain, which has 169 in-store pharmacies across England and Wales. The chain has started 24-hour open pharmacies, in-store general practitioners, and general surgeries are coming up next. Sainsbury’s approximately 200 stores have begun to offer the same services to the public.

Although healthcare becomes more accessible to more people at reasonable prices, patients with more serious health conditions must seek further care from a physician.

These developments do not affect the medical tourism market, which caters to people with more financial sources and more complex medical needs.

OVERSEAS ATTRACTION

International medical travel remains a viable option for many, as well it should.

Financial benefits, time, timeliness, bedside manner, luxury, and convenience will continue to be factors weighed those facing medical decisions in the future, and the more choices available to them, the better chance that they have to receive the best possible care.

However, the trend of lowering health care cost continues and affects hospitals, clinics, medical malpractice lawyers, health insurance agencies as well as travel and travel insurance agencies, particularly in the USA, where price-cutting and increasing offerings are luring American patients to local instead of international travel for healthcare services.

The American Medical Association said that more Americans seek overseas medical procedures. The country’s 46 million people with no health insurance need affordable treatment; as well, American companies seek cheaper ways to provide quality medical care to their employees.

Several major insurers now cover treatment programs in Mexico and Thailand, the AMA said.

BETTER BEDSIDE MANNERS

Infographic courtesy of courtesy of dailyinfographic.com

While U.S. doctors rush and spend little time with patients, foreign doctors are appreciated for their leisurely approach.

Since many Americans have no close relationship with their physicians and since many doctors in the U.S. are foreign, Americans are comfortable with foreign doctors today, the report says.

Rolando D. Rodriguez, who heads the Greater Miami Chamber of Commerce, said that – since international patients are paying top rates and Medicaid and Medicare paying low rates for U.S. citizens. For instance, Jackson Hospital may save money by sending some local patients overseas for treatment.

MORE INSURERS

Also, insurer interest in overseas medical tourism is increasing: The Blue Cross website offers the Blue Cross Companion Global Healthcare, a travel planner and overseas healthcare network for individuals and employers in South Carolina, Judy Dugan reports in Los Angeles Times.

In California, Blue Shield and HealthNet offer plans for employers of Mexican immigrants for treatment in Mexico.

When the dollar rebounds, will America’s inbound medical tourism market falter? No – the hospitals will only try harder, perhaps even borrowing from successful strategies used by overseas medical institutions.

“Don’t expect that flow of foreign patients to stop anytime soon, even as the value of the dollar rebounds,” Yastine reports.

“Analysts say the slowing U.S. economy means fewer U.S. patients are opting for those elective procedures, which means hospitals, surgeons, and other specialists have to keep the flow of foreign patients coming just to help pay the bills.”


NOTE: This Part 1 of a three-part article by Jaime Cabrera was first published in the international magazine Medica Tourism in December 2010.
 
SOURCES: Andi Atwater can be reached at aatwater@wichitaeagle.com. The Wichita Eagle website is at www.kansas.com. For more details about Richard Miller’s The Healthcare Business Market Research Handbook, see www.epmcom.com. For Hilary Abramson’s full report, visit http://news. newamericamedia.org. The Greater Miami Chamber of Commerce website is MiamiHealthCare.org. John Dorschner can be contacted at jdorschner@MiamiHerald. com, his full report is at www.miamiherald.com. The press archive at http://www.pbs.org contains Jeff Yastine’s report, Medical Tourists Flock to U.S. The www.john-goodman-blog.com has John Goodman’s full report, Medical Tourism Reversing Course. For Medical Tourism ~ An Economic Boost to the United States by Dr. Jose Quesada, visit http://www.medicaltourismassociation. com or contact him at jquesada3@med.miami.edu. Dale Van Demark’s report, How will the medical tourism industry in the United States develop? is at http://trusted.md. For information about Economic Report: Inbound Medical Tourism in the United States, contact authors Dr. David G. Vequist IV at vequist@uiwtx.edu or Erika Valdez at eri.valort@gmail.com. For Victoria Stagg Elliott’s More Hospitals Looking to Merge, Buy Physician Groups, visit www.ama-assn.org. For Judy Dugan’s full report, see Medical tourism: Outsourcing your health at www.latimes.com. For the full report An Overview of Medical Tourism and Its Effects on US Providers” by Dr. Maria K. Todd, visit www.floridahfma.org/documents/Maria_Todds_Mini-Handout.pdf.
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