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Medical Tourism Taking Flight?
Although medical tourism as a healthcare alternative has emerged on corporate radar screens, the unknown aspects of adopting it as an employee benefit have kept it from being embraced on a large scale.
For some U.S. workers, the opportunity to undergo hip replacement or cardiac surgery in foreign countries at rates significantly discounted from U.S. hospitals holds great appeal. But relatively few American companies have signed on to offer medical tourism as a healthcare benefit. A recent survey, Health Care Benefits: Eligibility, Coverage and Exclusions, by the International Foundation of Employee Benefit Plans found that medical tourism, a relatively new benefits concept, is covered by 11 percent of organizations surveyed. Respondents represented a variety of U.S. companies, industries and regions. "We're at the innovator stage of this market," says Dr. Arnold Milstein, chief physician for Mercer Health and Benefits in San Francisco. He says the price arbitrage -- the difference between the lowest U.S. prices for procedures and offshore prices at "hospitals with very strong quality credentials, is more than 50 percent." For that reason, he says, "the degree to which medical tourism will affect American health-benefits purchasing 10 years from now is probably underestimated." Even for companies that have begun to implement medical tourism as an employee benefit, it will likely be at least a year "before they know on a net basis that it worked," he says. Ted Nussbaum, director of healthcare consulting in North America for Watson Wyatt in Stamford, Conn., says widespread adoption of such a benefit will take quite a while. "It's a concept that has a tremendous amount of possibilities," he says. "But it's a concept that is not, in my opinion, going to be a mainstream part of health-benefit programs in the near future even though there's a fair amount of appeal." Part of the problem is "the fear of the unknown," Nussbaum says. When faced with a serious illness or condition, finding the right provider involves a certain amount of stress and anxiety. He says there's at least some measure of comfort to the patient in knowing a procedure can be performed close to home and family. While it falls in line with the expanding healthcare consumerism movement, patients are unlikely to explore or embrace medical tourism without a financial stake in the costs involved, he says. "There needs to be a significant financial incentive for employees to consider medical tourism more seriously." Adoption of medical tourism will require both behavioral and cultural changes, Nussbaum says. The healthcare system has "a long way to go to gain acceptance within mainstream corporate America influencing their populations to use higher quality providers within the United States, much less to take them out of the United States to a foreign country." "The initial uptake is going to be much slower than most headlines suggested," Milstein says. But he believes that medical tourism does offer a viable employee healthcare benefit. "The fundamental economics are extremely favorable," he says. Among the benefits Nussbaum sees is the number of high-quality facilities outside the United States that can "provide the same quality or even better quality than some U.S. hospitals for a half or a third of the cost." And physician competence is often a non-issue. "Many of the physicians are U.S.-trained," he says. However, the concept of medical tourism involves a serious liability concern for employers that is difficult to assess or predict. Since medical tourism would be voluntary, that element may have some impact on liability. But to what degree, Nussbaum says, one can only speculate. Insurers currently establish healthcare networks, then direct employees to the networks by providing higher rates of reimbursement, Nussbaum says. A similar network could be used to implement medical tourism practices. At the core of the entire issue, however, he says, is how to provide the best healthcare quality at the best price, with the most efficient service. And most insurers are reluctant "to go first," particularly in light of "the obvious PR risks," Milstein says. There are both "real and psychological hurdles" that need to be cleared in order for medical tourism to be embraced, he says. Increasing globalization lends itself to medical tourism, Nussbaum says. "The world has gotten smaller for the purchasing of most goods and services. There is no rational explanation for it not becoming smaller for the purchase of healthcare services." He notes that "there are enormous opportunities if we just focus here in the U.S. If you can get employees to consider global opportunities, the potential benefits are even that much greater."
January 24, 2008 Copyright 2008© LRP Publications |
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