Medical Tourism: Why It’s a Smart and Growing Option For Your Employees

What are your thoughts on medical tourism?

Would you travel abroad for a medical/surgical procedure? Would you do it if you could save 50 percent or more? Would you do it if the quality of care was the same if not better than the U.S?

A report by the consulting firm Deloitte estimates 878,000 U.S. travelers in 2010 went overseas for medical treatment of some kind, and they predicted this would rise to 1.6 million by 2012.

Many surgeons abroad are U.S. trained

As word has spread about the high-quality care and cut-rate surgery available in such countries as India, Thailand, Singapore and Malaysia, a growing stream of uninsured and underinsured Americans are boarding planes not for the typical face-lift or tummy tuck but for discount hip replacements and sophisticated heart surgeries. Thailand saw its stream of American patients climb to 55,000 in 2009, a 30 percent rise over 2008. Meanwhile, India’s trade in international patients is increasing at a fast pace as well.

Many of the tourist hospitals teem with surgeons who have trained in the U.S. or Britain, which is a great comfort to American patients. The irony is that 25 percent of physicians in the U.S. got their M.D’s abroad. Escorts Heart Institute and Research Center in Delhi, for instance, was founded by an authority on robotic cardiac surgery, Dr. Naresh Trehan, formerly of New York University.

Patients usually stay in a country a total of 15 to 17 days to allow medical treatment, recovery and follow-up. Conference calls are held with the patient’s U.S physician and the international physician prior to and after the patient gets home. All the follow-up care in the U.S. is scheduled with the patient’s home country physician, even before the patient leaves the country.

But what about legal problems that might arise if something goes wrong?

Insurance is a complex subject and subject to many laws, regulations and limitations. It depends, in part, on which country a person lives in and the country where treatment is taking place. Medical travel breaks country boundaries, and this can mean that different country regulations clash and are contradictory. The recent increase in medical travel is new and not something that laws or insurance regulations have had much time to adjust to, so there is no case law that settles uncertainties. In other words, buyer beware!

Cost differences can be substantial

The difference in cost of procedures among countries is astonishing. For example, the cost of a knee replacement procedure can vary like this:

  • U.S. —  $65,918
  • Turkey — $10,000 – $11,000
  • India — $8,000 – $10,000
  • Thailand — $10,500 – $14,000
  • Mexico — $10,000 – $11,000

Or, a heart bypass procedure can vary even more:

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  • U.S. —  $144,317
  • Turkey — $12,000 – $17,000
  • India — $8,500 – $10,500
  • Thailand — $23,000 – $25,000
  • Mexico — $30,000 – $33,000

The accounting behind the interest in medical tourism isn’t complicated. Many major employers in the U.S. are self-insured, which means they pick up the tab for much of their employees’ medical care. So company cost is greatly decreased by its use.

Some companies will share up to 25 percent of savings with their employees that is saved from the outsourcing. Get a new hip — and a rebate. Sounds like a bargain, but would people actually travel 10,000 miles for medical care just to make a few bucks? You bet.

Some U.S. insurers are covering medical travel

Polls commissioned by Milstein suggest that few consumers would opt for surgery abroad for incentives below $1,000. But raise the ante above $1,000, and the equation changes. Among people who have sick family members, about 45 percent of the underinsured or uninsured declare they would get on the plane; even 19 percent of those who have insurance say they’re game. Above $5,000, the percentage of takers climbs to 61 percent for underinsured/uninsured and 40 percent for insured.

Companies with traditional plans are also taking the initiative. Over the past few years, some U.S. insurance companies — dismayed at losing income from uninsured Americans who get cheap surgeries abroad or clients who choose to pay out of pocket for discount foreign surgeries rather than expensive in-network co-pays — have announced plans to include foreign medical procedures among those covered by health plans.

The bottom line: If more private payers send patients abroad for medical treatment, the savings could be enormous. “This has the potential of doing to the U.S. health-care system what the Japanese auto industry did to American carmakers,” says Princeton University healthcare economist Uwe Reinhardt.

“Flight 2318 is now boarding for Bangkok!”

Jacque Vilet, president of Vilet International, has more than 20 years’ experience in international human resources with major multinationals such as Intel, National Semiconductor, and Seagate Technology. She has managed both local/ in-country national and expatriate programs and has been an expat twice during her career. She has also been a speaker in the U.S., Asia, and Europe, and is a regular contributor to various HR and talent management publications. Contact her at jvilet@viletinternational.com.

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