Medical Tourism Eventually May Involve 4 Million To 8 Million Americans Annually

[LaoPo]

Mexico (and Thailand, LP) Gets Medical Tourists as Health Net Sends U.S. Patients

By Thomas Black

March 26 (Bloomberg) -- Antonia Siguenza, a 47-year-old purchasing agent living in Los Angeles, visited Mexico in 2006 with only one destination on her itinerary: Sanatorio San Francisco Hospital in Tijuana.

Siguenza made the trip after learning she needed surgery on a cyst. Having it treated in the U.S. would cost $800 out of her pocket under her insurance plan with Health Net Inc., in Woodland Hills, California. The company told her it would pay the entire bill if she had the procedure in Mexico.

Yielding to pressure from employers, health insurers such as Health Net, Aetna Inc. and Blue Cross Blue Shield of South Carolina are offering cost savings to policy holders who take their ailing backs, hips and knees to foreign countries for non- emergency medical treatment. Mexico has emerged as a favored place for American medical tourists because of its proximity and U.S. insurer incentives.

``People are voting with their feet, essentially,'' said Peter Maddox, 60, senior vice president of business strategy at Christus Health, a nonprofit health chain based in Irving, Texas, that owns six hospitals in Mexico. ``Employers are under huge competitive pressure globally. They are driving insurance companies to find alternative sources of care.''

About 180,000 Americans leave the country for medical treatment each year, said Josef Woodman, author of ``Patients Beyond Borders'' (Healthy Travel Media, 336 pages, $22.95). They spent about $2 billion on foreign health providers last year, Woodman said. He projected the total will climb 15 to 20 percent annually.

$2.2 Trillion

Driving the increase is a U.S. health-care system in which 47 million Americans don't have insurance. Total medical spending will outpace U.S. economic growth by about 2 percentage points a year, consuming $1 of every $5 spent by 2017, according to a study by economists for the government's Medicare program published in the journal Health Affairs.

Health-care costs made up 16 percent of the U.S. economy last year, totaling $2.2 trillion. That figure may double in a decade, according to the report.

To help curb the cost increases, employers and insurance companies are sending sick Americans to Mexico, Singapore and other emerging market countries where costs are lower.

Most of the insurer plans steering people to Mexico are offered in California and are designed for employers of Mexican immigrants, who dominate the ranks of those using the option. About 40,000 Americans traveled to Mexico for medical treatment last year, Woodman estimates.

Economic Forces

Medical tourism eventually may involve 4 million to 8 million Americans annually, or 10 to 20 percent of U.S. hospital admissions, said Paul Mango, a director in the Pittsburgh office of New York-based McKinsey & Co., who leads the firm's global health-care practice.

Lower salaries and cheaper supplies reduce health-care prices by 40 to 80 percent in Asia and Latin America, said David Boucher, an assistant vice president for health-care services at Blue Cross Blue Shield of South Carolina, in Columbia, South Carolina.

A hip replacement in Mexico or Thailand costs $12,000 compared with $43,000 to $63,000 in the U.S., according to a study by Christus Health published last year. Angioplasty, in which a surgeon uses a tiny balloon to open a blocked coronary artery, costs $10,000 in Mexico, compared with $57,000 to $82,000 at an American hospital.

Siguenza, who became a U.S. citizen after migrating to California in 1980 from Michoacan in southern Mexico, says she prefers returning to her native country for medical care because she saves money and receives better service than in the U.S.

Treatment in Tijuana

She initially had her cyst treated at a Los Angeles hospital. Her portion of the bill was $800, she said. When the incision failed to heal after several months and her U.S. doctor advised her to give it more time, she drove two and a half hours to get another opinion in Tijuana and elected to have a second procedure there.

Her cyst cleared up a few weeks after the surgery, she said.

``This has worked out well for me,'' Siguenza said. ``The attention Mexican doctors give me is better than it is here.''

Under her Health Net coverage, Siguenza pays a minimum of $20 to see an American doctor and nothing to go to one in Mexico. Admission at her local medical center costs at least $250, while staying at a Mexican hospital entails no out-of- pocket expense.

Siguenza's employer purchased Health Net's coverage for its 140 workers because of the Mexican care option, says Alba Pinedo, who with her husband owns Cisco Brothers, a furniture maker in Los Angeles.

Mexican Option

About 20,000 customers have the Mexican coverage, said Ana Andrade, vice president of Latino programs at the insurer. They save about 40 percent on premiums, she said.

Rudy Palacio, 53, a warehouse worker for Lakeside Poultry Ranch near San Diego, used his employer's Health Net policy to get knee surgery in a Tijuana hospital in April 2006. The operation and overnight stay at Hospital Guadalajara, a 45- minute drive from his home in the U.S., cost him $10 out of pocket. His medicines totaled $5. His right knee hasn't bothered him since.

``I could barely walk, and now I walk fine,'' said Palacios, who came to the U.S. in 1972 from the western Mexican state of Jalisco and became a citizen six years later.

Deborah Brzezinski, 58, who owns Lakeside with her husband, had knee surgery about a month before Palacio and chose a U.S. hospital. Her procedure, which had her in and out on the same day, cost her $250 out of pocket and about $50 for medicines, said Charles Brzezinski, her husband.

Grocery Chain in Maine

While the Health Net policies cater mostly to Hispanics who live within driving distance of the Mexico border, similar provisions may become common in five to 10 years as U.S. medical costs increase and foreign hospitals raise quality, said Arnold Milstein, chief physician of Mercer Human Resource Consulting, in San Francisco.

``There are a number of employers that feel globalization can have a similar competitive effect on health care in the U.S.,'' said Charles Cutler, Aetna's chief medical director for national accounts.

Hannaford Brothers Co., a Portland, Maine-based grocery chain owned by Belgium's Delhaize Group, added an option Jan. 1 for the 9,000 employees it covers under an Aetna plan to have hip and knee replacements in Singapore. The option calls for paying business-class travel expenses for the patient and a companion to Singapore General Hospital and waiving as much as $3,000 of out-of-pocket expenses, said Peter Hayes, director of associate health and wellness for the grocer.

U.S. hospitals and doctors should take Hannaford's move as a wake-up call, Hayes said.

Push for Medical Tourism

``We're really trying to say that in a global market going forward, they really need to think how they can deliver services that are competitive,'' Hayes said. ``We're spending far more and getting far less. That's a paradigm that has to change.''

Employers are pushing health insurers to implement medical- tourism options, said Milstein, who testified before the U.S. Senate on the issue earlier last year. Insurance companies such as Hartford, Connecticut-based Aetna and Philadelphia-based Cigna Corp. are studying overseas options at the behest of employers.

``You can expect that the innovators are going to be in industries that are under survival pressure due to foreign competition,'' Milstein said.

Boucher, 49, of Blue Cross Blue Shield of South Carolina, has visited hospitals in Thailand, India, Turkey, Singapore and Mexico that promise high-quality health care at lower costs. His company signed an agreement with Bangkok-based Bumrungrad Hospital PCL as an option for members' out-of-network surgeries. It's the first step toward adding medical tourism as an option in his company's health plans, said Boucher, a former chief executive of two South Carolina hospitals.

Quality Concerns

Critics warn that medical tourism raises safety concerns as foreign hospitals lure patients based on lower costs. Overseas treatment also makes follow-up care difficult, said William Plested III, a past president of the American Medical Association, the largest U.S. physicians group.

``Price should not be the only concern,'' Plested said. ``Safeguarding your health is of utmost importance, and the decision of where and from whom to receive this care should not be arrived at lightly.''

Complicating the issue is the lack of data to support either advocates or critics of traveling abroad for medical treatment.

``It's very, very hard to put your finger on the number of problems that have arisen when Americans have sought medical care overseas,'' said Joel Miller, senior vice president at the National Coalition on Health Care, based in Washington.

Accredited Hospitals

Insurers are concerned about the quality of foreign hospitals and doctors, the safety of the blood supply and legal recourse in case of malpractice, said Jacquelyn Aube, vice president of product management at Cigna.

The Joint Commission, a nonprofit organization based in Oakbrook Terrace, Illinois, sets quality standards for U.S. and foreign hospitals and certifies those that meet its criteria. The group has accredited 15 hospitals in Turkey, 15 in Saudi Arabia, 11 in Singapore, 9 in Brazil and 2 in Mexico: Hospital San Jose and Christus Muguerza Alta Especialidad, both in Monterrey.

Aos Assurance Co., a Barbados-based start-up company, is offering malpractice policies for American medical tourists, working with Atlanta-based Crawford & Co. as a claims adjuster. The insurance pays settlements for malpractice without involving foreign courts or lawyers, said Paul Laverty, a former insurance consultant who co-founded the start-up company.

Malpractice Coverage

An American traveling abroad for medical care, for example, could purchase a $500 policy from Aos that would pay up to $100,000 in case of malpractice on a surgical procedure or spend $2,430 for coverage up to $1 million. Group programs could run from less than a dollar to $5 a month per employee, Laverty said.

For Mexico to take full advantage of its geography and gain in the medical tourism industry, the country must have as many accredited hospitals as countries like Brazil and Singapore, keep costs low even as quality rises and design a mechanism for handling malpractice cases, said Russell Bennett, vice president of Latino health solutions for Minnetonka, Minnesota-based UnitedHealth Group Inc. Those factors are beginning to converge, he said.

``I think that we're not more than three to five years away,'' Bennett said. ``Depending on how it plays out, it could move quickly.''

http://www.bloomberg.com/apps/news?pid=206...&refer=asia

LaoPo

[Dakhar]

Trouble is, a lot of "procedures" require follow up visits etc. So it is not a cut and dry situation.

[jumnien]

Let's hope the US doesn't ship its unemployed, unemployable, insane, criminal and uneducated over here as well as its infirm!

[PeaceBlondie]

What the article does not mention is that one large federal insurance program, for the million or so federal employees and their families, covers overseas medical treatment at 90%. It formerly covered at only 70%. Disabled veterans and retired military are also covered overseas, but not the Social Security Medicare system for seniors.

My FEHBP coverage paid for my major surgical expenses in private and public hospitals in Thailand. My stroke in May was so cheap I covered it out of pocket and did not bother to submit a claim.

[thaigene2]

One more thing LaoPo..

Whilst I agree with you that this is a growing industry and Thailand will profit from it..

It's not going to be Americans or Europeans that will feed most of the growth (IMHO). It will be middle-easterns, rich Africans and some south-asians who will come here.

The news report you quote says it all really. If I'm American (or Canadian who wants elective surgery without the wait) I'd go to Mexico because it's much closer and almost certain to have AT LEAST as professional Doctors as Thailand in big private hospitals.

If you were sick, would you travel 15 - 17 hours oversees to Thailand - where English language skills are poor - when you could go to Mexico or Costa Rica? I wouldn't.

[Jingthing]

Happily, this because may dry up when Americans elect a democratic government and adopt universal health care. Hip replacement is not optional sugery.

[PeaceBlondie]

Already, the famed Tex-Mex border is filled with Canadian and Minnesotan "Winter Texans" who cross the Rio Grande to get cheap drugs without prescriptions. I advised one guy in south Florida who flew to Brownsville to get dental treatment on the other side. He saved over a thousand dollars. Yes, it is simple geography. My buddy got excellent emergency nasal and stomach surgeries in the poorest state of Mexico, at a fraction of the cost in Ohio. When I mailed in my claims for the two shoulder surgeries to my insurance company, there was no nickel-and-diming of the claimed amounts. I think Susie joked to Maybelline, "You are never going to believe how cheap it was for PeaceBlondie to get surgery in Chiang Mai!"

[justin54]

If you were sick, would you travel 15 - 17 hours oversees to Thailand - where English language skills are poor - when you could go to Mexico or Costa Rica? I wouldn't.

Yes, for complicated surgeries, people are travelling to Asia. While Thailand is a leader (in numbers) in the medical tourism field, India is about a step and a half behind. And gaining... fast. India's Apollo hospital group has put them on the map. Thailand has put some serious marketing muscle into medical tourism and it will pay off (already has). Combining inexpensive [very] procedures with an increasing number of JCI accredited facilities, India is a serious competitor.

As this is my field of work, I could go on for pages, but I won't.

All I will say is, would you rather recover in India... or Thailand? I wish I could be this blunt with my clients.

JL

[thaigene2]

If you were sick, would you travel 15 - 17 hours oversees to Thailand - where English language skills are poor - when you could go to Mexico or Costa Rica? I wouldn't.

Yes, for complicated surgeries, people are travelling to Asia. While Thailand is a leader (in numbers) in the medical tourism field, India is about a step and a half behind. And gaining... fast. India's Apollo hospital group has put them on the map. Thailand has put some serious marketing muscle into medical tourism and it will pay off (already has). Combining inexpensive [very] procedures with an increasing number of JCI accredited facilities, India is a serious competitor.

As this is my field of work, I could go on for pages, but I won't.

All I will say is, would you rather recover in India... or Thailand? I wish I could be this blunt with my clients.

JL

Agreed. But you took my quote out of context. I said North Americans are more likely to go to a cheaper country much closer to home than fly all the way to Thailand. So the middle-easterns etc will come here - like PeaceBlondie said it's about simple geography.

(yes I'd choose Thailand over India as well - though some of the Indian doctors are probably better than their Thai counterparts and have worked in Europe and N America before returning to their homeland to set up shop).

[PhilHarries]

During my recent stay in Bumrungrad hospital I would estimate 75+% of non-Thai patients are from the Middle East and the meals menu reflects this ethnic customer base by offering halal options daily.

As for the quality of the doctors, the two that looked after me were first rate and their English language skills were better than a lot of native English speakers (and 'm talking one's of Anglo Saxon descent).

But when it comes to the crunch IMO the medical tourism market is chiefly about non-essential procedures. If someone had a serious, life threatening, condition the chances are they'd get it done as close to home as possible. But things like hip replacements down to cosmetic surgery is the area where Thailand, and other countries, can provide a service. However, as someone else pointed out, follow up visits start to complicate things and I'm not sure any doctor in the patient's home country would take on that part of the treatment for fear of litigation if something went wrong.

[thaigene2]

During my recent stay in Bumrungrad hospital I would estimate 75+% of non-Thai patients are from the Middle East and the meals menu reflects this ethnic customer base by offering halal options daily.

As for the quality of the doctors, the two that looked after me were first rate and their English language skills were better than a lot of native English speakers (and 'm talking one's of Anglo Saxon descent).

But when it comes to the crunch IMO the medical tourism market is chiefly about non-essential procedures. If someone had a serious, life threatening, condition the chances are they'd get it done as close to home as possible. But things like hip replacements down to cosmetic surgery is the area where Thailand, and other countries, can provide a service. However, as someone else pointed out, follow up visits start to complicate things and I'm not sure any doctor in the patient's home country would take on that part of the treatment for fear of litigation if something went wrong.

Yes - I think your last point is a good one. And it reinforces the idea that anything complicated would deter one from going far afield - for those of us already here in LOS, I - like you - am comfortable with the Thai Doctors - (after doing research of course and finding the "right" one). But for those farther away? Big "?" I reckon...no?

[justin54]

But things like hip replacements down to cosmetic surgery is the area where Thailand, and other countries, can provide a service.

Exactly.

JL

[londonthai]

there are those who come to thailand with serious medical conditions and stay at rented accommodation for many months after the operation for the follow up treatments and recovery. They wouldn't be able to work back home - and living is cheap in thailand.