Transformation Vacation

With healthcare costs soaring, some people have chosen to get expensive procedures performed outside the United States, but are employers really following?

Saturday, November 1, 2008
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While laying down for a relaxing nap on a Sunday afternoon last summer, David Jones never suspected that his life was about to change. In his sleep, Jones, a self-employed housing contractor and independent insurance adjuster, had a heart attack. In an instant, he went from healthy to ailing.

At the hospital, the 46-year-old Katy, Texas, resident found out he needed a triple bypass, but without medical insurance, Jones' greatest challenge would be paying for the procedure, not surviving it.

Because he was uninsured, the doctors could only stabilize him.

"They put me in the ICU for four days, medicated me and sent me home," says Jones.

A week later, his heart gave out again. This time, thankfully, it was just a mild attack. He soon found out that he had three arteries that were fully or mostly blocked and a triple bypass was now imperative.

The clock was ticking. He needed surgery immediately.

"The bottom half of my heart wasn't even working anymore," he says. "It wasn't functioning."

Jones, once again in the ICU, found himself faced with some tough choices: Pay $80,000 up front, then finance another $170,000 to pay for the surgery, or risk death or serious complications.

"The surgeon came in and said, 'David, I can keep you alive on pills for one to five years, so see what you can do,' " he says.

Although his Southern Baptist church group helped him raise money, there was no way he could get close to the amount he needed. He couldn't even qualify for any financial-aid services from the government because his wife still held her part-time job working for the church for modest pay.

With his back against the wall, Jones found out about a third option from a friend -- having his surgery in India, where procedures are far less expensive.

"It wasn't an option for me when I first heard it. I said, 'There ain't no way.' I mean, that's crazy. [India is] 7,000 miles away," says Jones, who recently spoke about his experience at the World Medical Tourism & Global Health Congress, held in mid-September in San Francisco.

But then he started doing the math: The surgery would cost $11,000. Adding in round-trip airfare along with food and accommodations at the hospital for himself and his brother brought the grand total to $16,000 -- easily more manageable than $250,000 in the United States.

Just like Jones, employers facing increasing healthcare costs have been exploring the option of medical tourism -- the act of sending patients abroad for medical procedures. While the option proved a good fit for an uninsured individual such as Jones, could it be a solution for employers faced with ever-increasing healthcare costs?

So far, employers have not made medical tourism a common practice. In a survey of 400 companies of varying sizes and industries by the International Foundation of Employee Benefit Plans, 11 percent offer a medical tourism benefit. However, while the bulk of large employers are not yet offering the overseas option, 9 percent are either interested or very interested in the practice, according to another survey of 3,000 employers released in April by New York-based Mercer.

Weighing the Option

At the San Francisco conference -- the first of its kind, according to organizers -- Jones discussed working with Healthbase, a Newton, Mass.-based medical tourism facilitator that coordinated his entire trip -- from booking the flight to providing pictures and information about the hospital, to getting him in contact with other patients who had undergone similar procedures in India. They even set up a conference phone call with the Indian surgeon.

On Aug. 11, Jones landed in an airport in New Delhi.

More than a year later, he is healthy and back to his contracting work. Yes, the New Delhi hospital looked a bit older than the American hospitals he's accustomed to, but the constant nursing care, affordable price and -- perhaps most importantly -- qualified surgeon made it all worthwhile, Jones says.

The conference also featured four days of talks by healthcare experts, medical-tourism facilitators and representatives from hospitals in more than 20 countries around the world, most hoping to show that overseas facilities offer the same level of quality at a fraction of the cost.

Alex Piper, keynote speaker at the conference, who formerly served as marketing service manager at DaimlerChrysler and is now president of the Royal Oak, Mich.-based consultancy One World Global Healthcare Solutions, says medical tourism could flourish as a result of industries that are experiencing an economic downturn.

"[For example,] the auto industry is bad," he says, "[and is] a market that is right [for this option]." The oil industry, however, is not a likely market, he adds, because "they are focused on making money, not saving money."

Employers with large populations of foreign-born workers -- such as companies in California with large numbers of Hispanic employees -- have also benefited from medical tourism, says Piper.

"They don't have an aversion to travel. They grew up in another country, so they are open to it," he says, noting that almost every Fortune 500 company has operations in more than one country, and that at least some of those employees would undoubtedly feel comfortable with medical tourism.

But why are surgical costs so low in other countries? Is it a lack of malpractice liability?

Piper says no. "I am not aware of countries where you cannot sue for malpractice," he says. Nor has he ever encountered an employer that would allow an employee or family member to venture into such an unprotected situation. Procedures abroad, he says, generally are accompanied by contracts that specify the legal recourses available to patients in case something goes wrong.

One company that has implemented medical tourism is Hannaford Bros. Co., a Portland, Maine-based supermarket chain with stores across the northeastern United States. Hannaford started with medical tourism after assessing its rising healthcare costs and calculating the potential savings without sacrificing quality, says Peter Hayes, the company's director of associate health and wellness, who also spoke at the conference.

So far, the company only offers a medical tourism option for knee or hip replacements at one specific hospital in Singapore.

A hip replacement, for example, costs $50,000 in the United States, but only $10,000 to $15,000 outside the country, says Hayes. When you take an employee's deductible under a conventional domestic network into account, a hip replacement in the United States would cost about $2,000 to $3,000 out of pocket. If a Hannaford employee or family member elects to have the surgery in Singapore, however, they won't have to pay anything.

"We will pay 100 percent," says Hayes. In fact, the Singapore hospital offers the company such a cost break, he adds, that "we will waive that $3,000 you otherwise would have had to pay in deductibles and out of pocket. We'll pay for travel and we'll pay for travel for a significant other."

Hannaford settled on the hospital in Singapore because it knows that many employees speak English there, and that the hospital has passed rigorous tests and has been recognized as a quality facility by the company's insurance provider, Aetna.

When Hayes announced the program to the company's 26,000 employees -- it took effect on Jan. 1, 2008 -- the response was overwhelmingly positive. A big reason employees accepted medical tourism as an option, he says, was because Hannaford did not take any benefits out of its existing package -- it just added the medical-tourism option.

"It was really embraced; it was really well-accepted," says Hayes.

While the employees enjoyed the idea of a price break without losing quality, many also liked the program because it meant the chance to see a different culture, which they might not otherwise get the opportunity to do.

"If they had the chance to get really good healthcare and see a different part of the world and experience a different culture, that would be intriguing," says Hayes, noting that many of the workers figured they would never leave their home state, let alone go on a trip abroad -- even if for medical reasons.

Another reason for offering medical tourism is because area hospitals seemed to have no intention of lowering prices.

"We had hospitals in our system, in our networks, in our footprint say, 'We really don't have to worry about what prices or values are in Boston or across the country, because we don't think a single patient's going to move out of our hospital service area,' " Hayes says.

So far, Hayes doesn't know of any employees that have taken the company's medical tourism offer; however, it has already had a positive effect on the company's relations with medical centers here at home. After newspaper articles surfaced about the plan, Hayes says, hospitals called Hannaford Bros. ready to offer better deals.

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Wait and See

Officials from other companies who spoke at the conference were not quite as sold on medical tourism and planned to take a wait-and-see approach before offering the benefit to their workers.

Sandra Morris, senior manager of healthcare benefits at Cincinnati-based Procter & Gamble, said her company understands the role that medical tourism plays, but it's just not right for P&G, a large company that already gets good coverage for a good price.

"There is absolutely no question there is a need for cost-efficient care in the United States for the uninsured and the underinsured," she said during a panel discussion at the conference, "but our employees and family members have very rich coverage."

Before Procter & Gamble would consider adding a medical-tourism component, the quality and safety of overseas procedures would need to be addressed, she said, noting the need for accreditation, FDA approval and hospitals being recognized as "centers of excellence."

Other questions have "gone unaddressed" so far, she said. Can a patient sue for malpractice? If there are complications and the patient needs to stay abroad longer, should an employer pay for that? Who pays for travel costs for a companion? If the patient dies, is the employer responsible for paying to transfer the body back to the United States?

"It only takes one key person to have complications develop ... for this whole concept to go right down the drain in terms of people's perceptions of it," Morris warned. "If one person has a disastrous result, the outcome of that result can be communicated on a worldwide basis.

"P&G has made a choice to step back," she said, noting that the company will keep its eye on the development of the industry. "Other large employers are choosing to do the same thing."

The company would consider changing its mind if some quality and legal questions were answered or if healthcare here became much more expensive, said Morris.

Colleen DePadua, manager of insurance programs for Towson, Md.-based Black & Decker, said in an interview after her formal remarks that the idea is interesting, but the company doesn't plan to pursue it anytime soon. One reason, she said, is that the numbers often don't add up.

"You can talk about the differential between the $10,000 procedure in India and the supposed $100,000 procedure here, but the $100,000 procedure is . . . really retail," she said, noting that large companies such as Black & Decker are able to negotiate better prices, thanks to their size. She estimates that a $100,000 procedure would probably cost Black & Decker around $50,000 or $60,000.

She added that the $10,000 price tag for the procedure in India may not include travel expenses.

"Give me an all-in cost," said DePadua.

One concern she did not mention was quality of care.

"I do think that the quality is extremely good [at hospitals overseas]," she said, adding that many countries abroad have electronic medical records, something the United States still does not have.

For now, Black & Decker, much like Procter & Gamble, is staying out of the medical tourism game, preferring to let other, perhaps smaller employers, test the waters first.

"We'll seriously start to consider it when ... the large insurance carriers start to get into this business," she said.

"Hip" to the Game

While employers may still have questions, recovered patients seem convinced. Fremont, Calif. resident Vicky Marlow, who also spoke at the conference as part of a panel with other medical tourism patients, can now cross her legs, sit on the floor "Indian style" and bend down to pick things off the floor. Just three years ago, she couldn't imagine doing any of those things because her hip was so damaged that she needed a cane to walk.

Doctors in the United States told her she needed a full hip replacement, something that can limit mobility and is prone to dislocations. Searching online, Marlow found out about "bone conserving" hip resurfacing surgery, whereby surgeons cover a hip's ball and socket with smooth metal, rather than cutting away and replacing damaged bone.

Instead of having the surgery in Los Angeles, which would have cost her $24,000, she chose to go to India, where the entire process -- including flight, surgery and accommodations -- cost less than $12,000.

"[Americans] have a complete misconception of reality, because I know the normal American would think, 'Oh my God, India, the care is nowhere near as good as the U.S.,' " says Marlow. "When it's exactly the opposite."

Now, a few years later, her mobility is excellent.

"There's no limitation at all," she says.

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