Author: Chiara Bell

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Medical Tourism Has Appeal, but Requires Homework

medical tourism
Medical tourism has its advantages but comes with risks as well.

I magine this scenario: An employee schedules a meeting with you because she needs immediate spinal surgery and can’t cover the out-of-pocket costs. She informs you that she is thinking about taking a trip overseas and having the procedure done by an accredited hospital and physician in India. She wants to know if the company will cover any of the costs.

If it hasn’t happened already, it’s only a matter of time before someone in your organization asks you about the company’s policy on medical tourism.

Employees covered under high-deductible plans or those with no insurance at all can save a great deal of money by seeking medical care abroad. According to the Medical Tourism Association, most procedures abroad cost half of what they would in the United States.

The cost of a heart bypass in Thailand costs $11,000, compared with up to $130,000 in the United States. Spinal fusion in India costs $5,500, compared with $60,000 stateside. A knee replacement in Singapore is about $17,800, or around half the U.S. price.

In 2005, an estimated 500,000 Americans went abroad for health care. In 2006, the medical tourism industry grossed about $60 billion worldwide. McKinsey & Co. estimates that this total will rise to $100 billion by 2012.

Insurers and employers have slowly begun to accept the international practice of medicine by forming medical tourism subsidiaries and considering policies to cover workers who travel to a foreign country for treatment. For example, insurance companies are beginning to form subsidiary companies that provide international coverage and manage travel arrangements for beneficiaries seeking care abroad.

These developments have raised concerns among HR directors and benefit managers. Their questions include issues of proper credentialing, comparative provider training and access to quality post-operative care. They want to know how the quality of care is measured. How are physicians credentialed? How are provider hospitals regulated? What happens in a post-operative emergency? What is the employer’s liability if something goes wrong?

The global economy is allowing for some answers to these concerns. Foreign health care providers often have physicians with international credentials, and many were in fact trained in the United States. More than 120 hospitals abroad are accredited by the Joint Commission International, which accredits American hospitals participating in Medicare; another 20 are accredited through the International Standards Organization. Other countries have begun creating independent accrediting rules and regulations.

The U.S. health care consumer today also has different perceptions regarding “cheap” health care abroad. The informed consumer now realizes that prices for treatment are lower in foreign hospitals for a number of reasons. Labor costs are lower, third parties (insurance and government) are less involved in health care delivery, or are not involved at all. There is less regulation and malpractice litigation costs are significantly lower.

Because there are solid market justifications for the significant price difference in health care services overseas, some fail to assess the impact that the lack of regulatory oversight may have on provider services. Employers and employees need to be aware of the level of regulation and conduct additional research in any country they may be considering as a treatment location.

When it comes to post-operative care, which is another area of concern, telemedicine is providing answers. Because potential medical tourists must first be evaluated remotely, most medical intermediaries for patients use electronic medical records to store and access patient files. Patients can then discuss the procedures with potential physicians via conference call.

Patient electronic medical records can be transferred back and forth, managing the continuum of care from pre-operative assessment to post-operative care. Such modes of communication enhance the continuity of patient care and can eliminate concerns about a patient’s recovery at home from an overseas procedure. In the United States, by contrast, only about one out of four U.S. hospitals store medical records electronically.

So how would you advise the employee described at the beginning of this article? The facility abroad is highly accredited. The physician is U.S. trained. Staffing levels are greater. Her records can be transferred digitally for post-operative care. And the employee’s costs will be reduced significantly.

With globalization quickly moving into health care services, employers providing health care benefits must begin to reassess their approach to this new treatment option. Employees know about medical tourism—they’ve seen it on the news, or perhaps they’ll even read about it in one of this summer’s beach books, Robin Cook’s Foreign Body (where a New Delhi hip replacement doesn’t turn out that well).

And although only 11 percent of organizations offer medical tourism as an option for covered medical care now, more will likely join the trend. It appears to be a viable, safe option—under the proper circumstances. Your organization should be in a position to tell employees why you do—or don’t—want to make it an option for them.

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Changehealthcare Could Offer the Change We Need

In 2000, as vice president of HR at a health care management firm, I would stand before our employees and conduct meetings about the company’s health care program.

   Instead of giving the traditional speech about how the national costs of health care are increasing an average of 8 percent per year, I told the group what was happening among co-workers and members covered under our own health care plan.

    I kicked off the enrollment meetings by handing out copies of monthly claims and drug utilization reports. All of the information was presented anonymously. Employees received data from our claims history reports that outlined the company’s claim cost by diagnosis and procedure.


    I shared employees’ prescription drug purchasing and utilization patterns. They saw the total number of heart attacks, catastrophic injuries, costs of ER visits, cost of physician visits and costs of all outpatient procedures. I showed them the percentage of covered employees identified as smokers, overweight and high risk.

    I told them the story of an employee going to the ER for a “hangnail” that cost over $1,000. I provided simple numbers illustrating drug purchasing behavior and the cost impact on our group by having a low generic utilization rate.


    And after the data was presented, I did my best “consumer-driven” health care pitch in an attempt to draw a simplified correlation between access to information and using that information to be better consumers of health care.
Perfect, right? Wrong. I assumed that because there were consumer sites for other large purchases like buying a car or a house, there were similar sites for health care.


    Looking for a new car? On Sites like Vehix.com or Cars.com, you can find expert advice, compare different manufacturers and models, read buying guides and search listings for new and used cars. Buying a new house? Zillow.com, an online real estate service, provides you with a slew of information—all the things you would want to review before signing on the dotted line and buying a house. You can find estimated housing valuations, comparable pricing and neighborhood information.


   But if you need to compare prescription drug costs with local pharmacies, there is little information. Want to compare the cost of an outpatient procedure in two community hospitals? Nothing.


    It never hit me that all of the educating and small group meetings had limited impact because of the scarcity of resources to help employees when they really needed it—usually during a health-related event or episode.


    I preached to employees about data and using information before they made a health care purchase, yet at the time of their prescription purchase, doctor visit or scheduled surgery, the employee had nowhere to compare pricing, physicians or quality of services.


   Enter Change:healthcare. Recently relaunched, the company began by providing a service that lets users enter their medical bills and track actual costs, including out-of-pocket charges, co-pays and deductibles. The new site includes information channels that allow consumers to compare the cost and performance of local and national health care providers, insurers and pharmacies, all with a focused effort to fill the information void for health care consumers.


    Critical to the Change:healthcare database is the aggregation of employer claims data. The company’s strategy is to sell its service to employer groups and collect their claims history to build a national repository of health care purchasing information. It is a bold move. Unlike the public information used to seed sites like Zillow and Vehix, Change:healthcare hopes to partner with employers, access employee claim history, make the data anonymous and integrate it within their database.


   Should covered employees feel open enough to allow a third party access to employee claims data? Will employees be notified of an employer’s partnership with companies such as Change:healthcare? Is employee privacy really being safeguarded? Privacy concerns are important and we should tread lightly when taking individual claims data and extrapolating information for open review. But if a company has guaranteed heightened privacy measures and is committed to ensuring that privacy standards are upheld, I believe it is time we embrace an open platform for general health care purchasing information.


    Internet sites such as DailyStrength and PatientsLikeMe demonstrate that health care information can be shared without compromising a user’s privacy expectations. In fact, these sites show that more people want to share their health care experiences, struggles and wisdom with one another in an open, community environment.


    Daily Strength, for example, is a social network that provides a place for people with a wide variety of medical, psychological and life conditions to discuss their struggles and the treatments. The site has more than 50,000 members and 500 support groups for every health issue and life challenge.


    PatientsLikeMe uses a social networking platform and takes it much further. On the site, patients enter very specific data regarding individual symptoms, treatments and therapies. Patients can then select other patients with a similar diagnosis and compare their treatments and outcomes. The site currently has more than 7,000 patients and continues to develop disease-specific groups.


    It will be interesting to see just how far employers and benefit managers will go in an effort to educate and promote employee knowledge of health care costs. Change:healthcare has begun pilot projects with several employers and expects to continue to build its database with claims data from these covered groups. With guarantees from participating employers and Change:healthcare that the data used will not be exploited and the privacy of consumers will be protected, I champion the effort to bring greater transparency and trustworthy health care information to all of us.