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Foreign Operations
Combining overseas travel with surgical procedures in foreign hospitals in order to curtail medical costs remains under close scrutiny on numerous fronts.
Surgery of any kind isn't fun. But the possibility of combining an orthopedic or cardiac procedure with a visit to an exotic destination and recuperation at a tropical resort may create enough allure to prompt patients to sign on for a surgical adventure. "Medical tourism," which involves travel for surgery to countries including India, Thailand and Mexico, is currently under scrutiny by employers, insurance companies and potential patients as an alternative to sky-high U.S. health-care costs. Before the idea of surgical outsourcing has even taken shape on the corporate drawing board, the United Steelworkers Union recently denounced this potential solution to rising health-care costs, insisting an elective surgery patient cancel his planned trip to India. The USW member had opted to undergo surgery in India to save his self-insured employer tens of thousands of dollars, according to the USW Web site. The proposed medical tourism, that would have allowed the employee to share in the cost-saving windfall, prompted Leo W. Gerard, international president of the USW to fire off letters to members of both the U.S. Senate and House of Representatives, calling for legislation to address the health-care crisis. In his letter Gerard deplores "all unwarranted risks to which Americans should not be subjected," citing concerns with international travel, potential exposure to sub-standard facilities and "forfeiture of legal rights." Even proponents of medical tourism recognize the need to proceed with caution. The concept is in its infancy, with no large employers currently signed on for wholesale employee subscription. But that will likely change as procedures are refined and insurance companies develop enticing surgical/vacation options and appealing incentives. The total price of this new surgical alternative, including travel and operation, might just seal the deal. In written testimony to the U.S. Senate Special Committee on Aging, Rajesh Rao, CEO of Raleigh, N.C.-based IndUShealth Inc. offered striking contrasts in pricing of U.S. procedures compared with identical procedures in India. Heart bypass surgery, costing from $55,000 to $86,000 in the U.S. costs $6,000 in India, according to Rao. A hip replacement, priced from $31,000 to $44,000 here, can be obtained in India for $5,000. And a spinal fusion, ranging from $42,000 to $76,000 in this country costs only $8,000 in India. Nonemergency orthopedic and cardiac procedures are the ones most likely to lend themselves to medical tourism, experts say. Pressure on both self-insured employers and insurance companies to find ways to make costly elective surgeries more accessible to patients may lead to a future surge in foreign medical travel. Over the past year or so, only a few patients have ventured outside the United States for surgery linked with a travel package, according to medical experts involved in laying the groundwork for U.S.-based medical tourism programs. Nevertheless, they expect such a system will catch on over the next several years among large employers. Arnold Milstein, chief physician at San Francisco-based Mercer Health and Benefits and medical director of the Pacific Business Group on Health, expects "eventual broad adoption of surgery outsourcing for specific procedures." "It's a substantial answer to rapidly rising health-care insurance costs," he says. "Health-care spending is outgrowing income by 2 percent to 3 percent a year." He suggests outsourcing surgery outside the U.S. is "worth doing," although it doesn't, in itself, present a solution to the skyrocketing costs. Combined costs of both surgeons and hospitals in India, for example, are typically 60 percent to 85 percent lower than insurer-negotiated charges in U.S. hospitals, Milstein says. Cost savings realized through outsourcing surgical procedures would not only offset costs of both travel and hotel accommodations for the patient and travel partner, but might also help fund incentives for patients who choose this option. The sponsoring employer also stands to benefit from substantial savings through lower provider premiums. As confidence in the quality of care and hospital accreditation grows, so also grows the appeal of outsourcing surgery, Milstein says. Many foreign hospitals have secured accreditation from the International Standards Organization, which certifies hospital quality-control procedures, and the Joint Commission on Accreditation of Healthcare Organizations, which accredits most U.S. hospitals. Equally comforting is the fact that, within many foreign hospitals, patients can now select a surgeon who has either trained or obtained board certification in the United States, or both. Procedures must be carefully scrutinized in terms of the accreditation, training and surgical outcomes, "which must be equal to or better than outcomes" in America, Milstein suggests. Major insurers, he adds, continue to evaluate hospital care and medical credentials overseas as interest increases. Although post-surgical follow-up varies by surgery, Milstein says, once a patient is out of the "post-op zone of complications," his or her care can easily be managed by a local physician once he or she returns home. A key player in such surgeries, he says, is a case manager. "You need an on-the-ground kind of meet-and-greet service," he says. Such a manager would be designated by the employer and would arrange everything from travel and hotel accommodations, transfer of medical records and hospital and surgical scheduling to post-op recuperation, return flight and follow-up by a U.S. physician after the patient arrives back home. Although the idea is, indeed, little more than an idea in terms of large-employer participation, it's gaining momentum, say health and benefits experts, and warrants due-diligence investigation by HR leaders regarding its viability as a health-care solution.
Not Ready for Prime Time While outsourcing surgery is "far from being an accepted norm," according to Ted Nussbaum, director of North American health-care consulting at Stamford, Conn.-based Watson Wyatt Worldwide, "over the next several years it could get a lot more traction and a lot more focus." Acceptance of the concept requires education and communication for large employers to launch significant interest, Nussbaum says. It's likely inevitable, he says. "We have globalized every other industry, why wouldn't we globalize health care?" A major benefit of surgical outsourcing, he says, would be the pressure globalization would exert on the United States to improve consistency, cost-effectiveness and quality in health care. Outsourcing surgical procedures has certainly become a topic of interest among health insurers. "Plan sponsors are starting to ask questions and talk about it," says Jim Coates, senior medical director for Hartford-based Aetna. The number of advertised facilities [offshore] has continued to increase, he says. "We are trying to figure out how it will affect our plan sponsors." A basic concern shared among insurance companies focuses on quality. "We try to be very careful delivering health care to patients," he says. "[In India] it's not a risk-free initiative." Coates indicated the need to carefully evaluate hospitals, structure, processes and outcomes. He noted the importance of sharing information and medical data between domestic and overseas physicians. "Any good referring physician knows that you've got to keep the lines of communications open," he says, adding that possible language barriers may present cause for concern. "We definitely feel that we understand the international health-care arena," says Martha Temple, head of Aetna Global Benefits. With providers located in more than 95 countries that deal with more than 300 medical emergencies among American travelers each year, offshore hospitals are not unfamiliar to Aetna. Although Aetna is "not ready to start implementing it," a surgical outsourcing option would "need to be driven by plan sponsors and member needs," according to Temple. She expects "boutique companies" would work with insurance companies and members to make necessary arrangements. Special care would be directed toward getting "members into hospitals that meet our quality standards." Though medical tourism doesn't likely present a health-care solution in the immediate future, its time is no doubt coming. Outsourcing surgery to offshore hospitals "could conceivably be mainstream ten years from now," says Nussbaum. "This has probably got a 5- to 10-year horizon." If one large U.S. employer subscribes to the concept, Nussbaum suggests, maybe another will try it. "The infrastructure has to be built for all of this to work." "This is very consistent with the whole consumerism movement," he says. "We're trying to make the general population better consumers of health care."
What It Would Require Companies contemplating the launch of medical tourism as an employee benefit will need to focus on how it's managed, says David Frazzini, a San Francisco-based principal with Mercer Health and Benefits. HR executives, he says, will need access to foreign providers and will need to be able to negotiate with those providers "to even get started." As discussed, proper HR management will encompass everything from transfer of medical records and coordination of travel arrangements to organizing an English-speaking staff on the ground at the destination, Frazzini says. Companies are likely to make use of a concierge service, of sorts, to facilitate necessary arrangements. Companies would need to develop ways to identify candidates for such programs. "It may be completely voluntary or by employer preference, depending on how hard [the company] wants to push it," says Frazzini. Integral to its implementation is employee incentive, Frazzini says. "Incentives are going to be absolutely necessary," he says. Employees may potentially elect to waive their deductibles or receive cash payments. "Members of employer-sponsored programs are so insulated from the real costs that, without real incentives, there's no reason for them to take this adventure." Administration of the claims process has yet to be addressed, according to Frazzini. Employers will need to facilitate the debit portion of the plan sponsor's account "so, like with U.S. plans, the patient doesn't go out of pocket generally," Frazzini says. Companies will also be tasked with developing methods for confirming employee eligibility and implementing fraud and abuse protections. None of these solutions, he adds, has been entirely mapped out or defined. Taxing benefits could also get a bit dicey, Frazzini says. For instance, an employer could pay for specified travel, but "if a patient opts for side trips, a portion of travel may not be covered." Risk management could present problems as well. Most plan sponsors feel a responsibility to protect their employees and their families, he says. With limited legal options [in foreign countries] in the event of a bad outcome, employers would need to seek "special risk coverage for recourse," he says. "That's probably an insurance product that doesn't exist today." Such a venture requires an "adventurous plan sponsor," Frazzini says. "[Potential sponsors] need to have their eyes wide open, think hard and proceed with care."
Planes, Trains and Hospitals Some companies are creating a niche market looking to capitalize on the need for special expertise in navigating foreign travel and medical systems in the event outsourced surgeries become more of a norm. Incorporated in April 2005, Raleigh, N.C.-based IndUShealth began last December to send uninsured patients to India for various procedures. IndUShealth has partnered with India-based Apollo Hospitals and Wockhardt Hospitals Ltd., operating a number of JCI-accredited surgical facilities there. Candidates for medical tourism need to show both a high potential for recovery and the ability to travel following surgery, according to Keesling. "The Indian hospitals know that their handiwork on a patient is receiving international scrutiny," he says, noting that Indian physicians are eager to achieve patient satisfaction. Nursing care-to-patient ratios are one-to-one in India, according to Keesling and two-to-one in the intensive-care units. Post-op, there's no rush to discharge patients, as is typical in U.S. hospitals, Keesling says. Upon hospital discharge, he says, "it's nice to recuperate with the palm trees."
Navigating the Pitfalls In business for the past two years, Albuquerque, N.M.-based Global Choice sent its first patients offshore for surgery within the past few months, according to Lyn Fox, vice president of sales. Partnered with the Fortis Hospital System in India and Parkway Holdings Ltd. in Singapore, Global Choice personnel are "learning the issues hospital by hospital," he says. Major diagnostic testing can also be done inexpensively offshore, he says. One package in the works -- "executive check-up" -- would allow executives to combine travel with a colonoscopy, stress test and other diagnostic screenings at significantly discounted prices. Although Global Choice has no contracts yet, according to Fox, "we've been talking to lots and lots of people," gauging interest and listening closely to what benefits consultants have to say. Feedback has been positive from patients, not covered in benefit plans, who experienced surgical adventures halfway around the world, Fox says. "People are able to have surgery done that they simply couldn't afford in this country."
November 1, 2006 Copyright 2006© LRP Publications |
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