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AIS's Health Business Daily
Featured Story January 17, 2008 Once an Indulgence of Hollywood Jet-Setters, Medical Tourism Is Now Going Places Reprinted from INSIDE CONSUMER-DIRECTED CARE, a biweekly newsletter with timely news and insightful analysis of benefit design, contracts, market strategies and financial results. Medical tourism, once an indulgence of Hollywood jet-setters who wanted a discreet facelift or the desperately ill seeking unconventional treatments, is poised to enter the mainstream as a component of consumer-directed health (CDH). For medical services provided outside of the U.S., HSA-eligible expenses generally include inpatient care — including waiver of copayments, coinsurance and deductibles — inpatient meals, outpatient care, and other expenses associated with obtaining treatment overseas such as passport and visa expenses, translation services, and communication with U.S. providers while hospitalized. Other benefits and incentives offered by the health plan, including travel for the employee and/or companion, long-term lodging, cash incentives and paid vacation, are taxable, according to Towers Perrin. Each year, about 150,000 Americans travel overseas for medical care, according to Josef D. Woodman, author of the book Patients Beyond Borders. Medical tourism has "mushroomed in the last few years" and is growing at a rate of about 20% annually, Woodman tells ICDC. Increasing numbers of Americans — the vast majority of whom are uninsured or want care not covered by their health plan — are discovering that procedures can be done by board-certified surgeons in hospitals that meet or exceed standards set by the Joint Commission, the main hospital accrediting body for American hospitals and health systems. And many procedures can be performed at a fraction of the cost charged in the U.S. Case in point: A hip replacement that costs as much as $80,000 in the U.S. can be obtained in Singapore or Thailand for $12,000, according to an internal Towers Perrin memo. A prostatectomy costing $60,000 in the U.S. can be done in India for $7,000. Such price differences have caught the eye of money-conscious privately paying patients, as well as health plans and companies that offer HSAs or health reimbursement arrangements to their employees. "It's only a matter of time" before medical tourism takes hold in the CDH market, says Jay Savan, an employee benefits consultant in the St. Louis office of Towers Perrin. "This is very new territory, particularly for self-funded plan sponsors," Savan says. "It's something that's been talked about, but nobody's put it in practice yet." At the International Medical Tourism Conference, part of the Consumer Health World meeting Dec. 3-5 in Arlington, Va., representatives from overseas medical centers mingled with insurers, bankers and medical-tourism consultants. Participants networked and talked with interest, trying to figure out how to get the pieces to work together. "There's a lot of wait-and-see going on," says Woodman. "Large plans are getting the pieces in place." A few health plans have made forays into medical tourism. California-based Health Net offers beneficiaries lower-cost procedures in Mexico. In March 2007, BlueCross BlueShield of South Carolina launched Columbia-based Global Companion Healthcare to facilitate medical tourism among its beneficiaries. "We're helping our 1.5 million members travel abroad," says David Boucher, assistant vice president of health care services for the South Carolina Blues and Companion Global Healthcare. "Many of our self-insured and fully insured groups have said this is something they wanted to look at." Travel 'Makes Sense' for HDHP Enrollees In major cities around the world — from Central and South America, through the Middle East and Asia — hospitals are building tourist-friendly facilities to lure American patients. Joint Commission International (JCI), an affiliate of the Joint Commission, began accrediting foreign hospitals in 1998. Nearly 140 overseas medical facilities have been accredited by JCI to date. Woodman tells ICDC that foreign "centers of excellence" achieve quality and outcomes measures that are comparable to U.S. medical centers. Nonetheless, some patients and health plans are hesitant about going halfway around the globe for medical care. "Will there be people who recoil from medical tourism? Of course there will," says Savan. "The answer is, 'Okay, go get your $40,000 knee replacement and pay your $2,500 [deductible]. That's the alternative." Medical tourism isn't intended to serve every medical need, and it isn't the best option for every case. Ideally, treatment may be sought overseas for non-emergent conditions in which treatment can be scheduled on an elective basis. Types of procedures commonly performed overseas include joint replacement, hip-joint resurfacing, cosmetic surgery, dental reconstructive surgery, and in vitro fertilization. Woodman says that medical tourism makes the most sense for individuals with high-deductible health plan (HDHP) coverage and small- to medium-size employers, where a small number of expensive outlier cases can dramatically skew costs for the whole group. Employers offering HDHP benefits have a variety of options available to provide further incentive for patients to elect overseas treatment. An employer or payer can offer a cash bonus or pay for travel and lodging for a companion — all of which are taxable but still help blunt the economic impact of treatment. Savan suggests that companies consider waiving the deductible if treatment is sought at a foreign medical center, or giving the employee paid days off rather than using up sick or vacation time. Medical tourism "makes all the sense in the world," says Savan. "The employer gets a windfall, and the patient gets very good care. You have as good or better care as you'd get in the U.S., and a financial advantage." Other observers suggest that the emergence of medical tourism into the CDH market may be slower than some predict. Medical tourism "isn't on my radar yet, although I expect it to be soon," says former White House health policy adviser Roy Ramthun, now president of HSA Consulting Services, Silver Spring, Md. "I think most payers and health plans are taking a 'wait and see' attitude," he says. "The more advanced are looking at 'domestic' tourism through centers of excellence across the country. A few are offering
travel benefits to make it more attractive. Of course, the person with
an HSA can use his or her dollars to pay for many things insurance won't
cover. "Uninsured patients have nothing to lose by doing medical
tourism, but they aren't being controlled by a payer either," Ramthun
says. |
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