Communities: Medical Travel
Medical Tourism: Implications for Participants in the US Health Care System
It’s common knowledge that US health care spending is out of control. Per capita costs are more than double the OECD median and continue to grow rapidly. Corporate leaders worry that health care costs make the US uncompetitive in the global market and voters rank health care as the single most important domestic issue. There’s growing awareness that the US doesn’t get what it pays for either. US public health indicators are near the bottom of international rankings, and customer service (euphemistically called “patient experience”) is inferior to other US service industries. Furthermore, close to 50 million people in the US lack health insurance.
Despite –and to some extent because of—health care reform, the cost problem is worsening. Most reform plans --including those proposed by Presidential candidates from both parties-- emphasize increasing access to health care through subsidized and/or mandated health insurance. Proponents often claim that universal health insurance will drive down costs as newly insured patients substitute visits with primary care physicians for expensive emergency room care. Actually, insured patients tend to consume more health care services and may be even more likely to visit the emergency room than the uninsured, according to a 2006 Health Affairs article.
Various reforms underway in the private sector, including the introduction of health care information technology, disease management, predictive modeling, wellness programs, pay for performance, cost sharing, consumer directed plans, and limitations on medical malpractice payouts are unlikely to have any real impact. As the general public begins to comprehend the limititions of existing initiatives, a search for new answers will ensue. Traveling abroad for medical care –a concept often called “medical tourism” — is one of the ideas they will discover.
Medical tourism is not a panacea. In fact there is no guarantee that it will become a central part of health care reform in the way that outsourcing has become a way of life in other industries. Nonetheless the time is ripe for US health care players to learn more about the topic. Medical tourism presents opportunities and threats for health plans, employers, pharmaceutical and device companies, providers, payers and patients. Those who understand the emerging market will be well-positioned to take the initiative and to benefit as the field evolves. The industry is still in a very early stage – and significant changes will transpire over the next few years.
The purpose of this white paper is to lay out the issues that US players should begin addressing now and to provide the context in which to evaluate them.
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