by Laura Carabello, Chief Creative Officer, CPR Strategic Marketing CommunicationsGlobal recession has produced dramatic changes in health care, bringing this year, bringing with it unexpected opportunities. Last year the medical travel health benefit option reached a crossroads, and this year it promises to take a bold new direction. Analysts predict an economic recovery in the coming year, and according to a report by the Deloitte Center for Health Solutions, this could spur a sustainable 35% annual growth rate for the medical tourism industry.
Significant forecasts: Paul Keckley, Ph.D., executive director of the Deloitte Center for Health Solutions, states that outbound medical tourism could reach upwards of 1.6 million patients by 2012. The Deloitte report’s other key findings include:
- Eight percent of respondents sought health care services outside their immediate community
- More than 40% said they would travel outside their immediate area for care if their physician recommended it or for a 50% cost savings
- The American Medical Association (AMA) has developed a set of nine guidelines for medical tourism for employers, insurance companies, and other organizations
- The Joint Commission International (JCI) increased the number of approved foreign medical sites from 76 in 2005 to more than 220 in 2008
- Several health insurers have launched medical tourism pilots as part of health benefit plans
- West Virginia and Colorado have attempted to pass legislation that would either require or incentivize insurers to incorporate medical tourism within their health benefits plans, demonstrating that state legislators have medical travel on their radar
- India’s medical tourism sector is expected to grow 30% annually from 2009 to 2015
- Health care reform could increase growth in the elective outpatient market, especially if expenditures are limited to $2,000 or less.
Domestic options: In the past few years, medical tourism has evolved into a premier option for elective care that will likely withstand the ebb and flow of global markets. As a way of enhancing this resiliency, there’s been a more concerted effort on the part of domestic providers to position themselves as a destination to more Americans.
In June 2009, BridgeHealth Medical unveiled its “World-Class Provider Network,” a network of more than 20 superior hospitals and hundreds of health professionals in more than a dozen states. This network offers an extensive range of high-demand medical procedures, a wide choice of top hospitals, and options for accessing expert providers at significant savings. BridgeHealth selects only top-rated hospitals. In fact each hospital must be in the top 10% in terms of overall quality as rated by The Delta Group and other ratings agencies.
As a result of such initiatives, more insurers and employers will encourage patients to travel (both within the country and out of the country) for lower-priced, higher-quality care. The resulting savings will be shared by the insurers and employers with the patients and will encourage U.S. facilities to compete differently in order to stay competitive.
Notably, Healthplace America, a surgery management company that negotiated fixedrate pricing with the health care providers in its network, closed last fall.
Innovative partnerships: This year, the country’s leading medical travel facilitators rolled out their response to the growing demand among employers, health plans, and other stakeholders for a comprehensive network of U.S.-based health care centers of excellence. This model offers an extensive range of high-demand medical procedures, a wide choice of top hospitals, and options for accessing expert providers at significant savings.
Liability issues: While a few years ago safety concerns appeared to be the largest hurdle for consumers to overcome, today it appears that liability issues have eclipsed this issue. Fortunately, companies are beginning to offer solutions. Liability insurance coverage is now available from companies such as Custom Assurance and Seven Corners. Satori World Medical formed a relationship with GreenWood International Insurance Services Inc. to offer medical stop loss underwriting services to employers that choose to offer Satori World Medical’s global health care program as an additional health plan benefit option for their employees. Medical travel facilitator Companion Global Healthcare Inc. formed a similar agreement with an insurer that allows its employer group clients to purchase low-cost insurance policies to cover possible liability. As more liability coverage becomes available, the comfort level among employers considering medical travel will increase.
Compelling cost savings: Health care decision-makers have only to look at the cost comparisons to understand why the widespread acceptance of medical travel is inevitable.
- Apollo Hospital in India charges $4,000 for cardiac surgery, compared with about $30,000 in the United States.
- Hospitals in Argentina, Singapore, or Thailand charge $8,000 to $12,000 for a partial hip replacement—one-half the price charged in Europe or the United States.
Global competition: As uncertainty lingers over the country’s financial future, so will awareness and demand for costefficiency and high quality. The bottom line hasn’t changed since the inception of medical travel—international hospitals’ cost savings exist because of:
- lower labor costs
- less or no involvement of third-party payers
- minimal cost-shifting of charity or indigent care to economically advantaged patients
- less stringent regulatory environments
- lower costs for malpractice insurance/litigation.
Until this global reality changes, medical travel will continue to serve patient needs. So, too, will a partnership with a medical travel intermediary. It’s the best approach for employers that want employees to have greater health care options. These services work like specialized travel agents, investigating providers to ensure quality and screening customers to assess those who are physically well enough to travel. They often have doctors and nurses on staff to assess the medical efficacy of procedures and help patients select physicians and hospitals.
Serious surgeries abroad: The most significant trend that will continue this year is the increase in patients traveling abroad for serious surgeries and procedures, including orthopedics and joint replacement, cardiac, in vitro fertilization, and bariatrics, as well as procedures not available in the United States such as stem cell transplants.
Growing awareness and popularity: Despite—or because of—an unpredictable health care landscape, the average U.S. consumer is ready for medical travel. A recent Gallup poll found that a sizable proportion of Americans would “consider traveling outside the United States for treatment in a foreign country” for a variety of procedures and medical treatments. Twenty-nine percent of respondents would consider traveling out of the United States for alternative medical treatments for a major medical problem, and 24% would seek cancer diagnosis and treatment abroad.
Provider acceptance: Provider buy-in remains a sticking point, but if providers are going to compete on price and quality, they need to re-evaluate how they do business, and they need economic incentives to change. Most doctors don’t think of themselves as competing in a marketplace, but in order to survive they will have to do just that.
What to expect in 2010: The widespread search for cost-efficient, high-quality alternatives in health care will continue, and medical travel will be at the top of the list, providing the added benefit of lower out-of-pocket expense and financial or time-off incentives. Right now, the medical travel option is beginning to penetrate the mainstream discussion, and, inevitably, it will become a de facto option for all Americans.
The impact health care reform will have remains unclear. Globalization of health care, however, has served as an impetus for change by shrinking revenue dollars back home, resulting in increased price transparency and a much-needed heads-up about the inefficiencies that have led to our current crisis. Greater medical options overseas have put U.S. health care providers on notice that their services and pricing must be competitive in order to attract Americans who are unable or unwilling to cover the outrageous costs of care.
The good news is that economists project recovery in 2010. In the meantime, medical travel quality will continue to be better defined; new business models will emerge; insurers, legislators, and employers will continue exploring pilots and programs; health care providers will become increasingly involved in coordinating care; and consumers will continue to benefit from the medical travel option.
Laura Carabello is chief creative officer, CPR Strategic Marketing Communications. She is publisher and managing editor of the leading online newsletters, Medical Travel Today (www.medicaltraveltoday.com) and Your Medical Travel (www.yourmedicaltravel.com). Laura has more than 25 years’ experience inhealth care marketing strategy, planning, and corporate communications. She may be reached at lcarabello[at]cpronline.com or 201-641-1911 ext. 12