Medical Tourism
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Ten years ago, the term “medical tourism” referred to non-U.S. citizens seeking health care in the United States, because the health care systems in their own countries either couldn’t give them what they needed in a timely way, or couldn’t give it to them at all.
What a difference a decade makes. Today, more often than not, medical tourism refers to people leaving the United States to access care that’s every bit as high quality as it is in the United States — but much, much cheaper — in foreign countries. According to a study by the Deloitte Center for Health Solutions — which I first saw referenced in the May 5th edition of Modern Healthcare — the number of people leaving the US to access care in other countries is now growing at a faster rate than the number of people coming from other countries to the US to seek care. A lot faster.
And it’s not just a question of large growth off of a small base. Deloitte estimates over 700,000 people left the US to seek care elsewhere in 2007 — almost twice as many people as the 420,000 who came to the US from other countries seeking care. Deloitte estimates that by 2010, as many as 6 million people will be accessing care outside the US — a 700 percent increase — while the number of non-US citizens accessing care in the United States will grow by only about 10 percent over the same period of time.
How big a deal is this? According to the study, US health care providers will lose almost $16 billion in revenue in 2007 to outbound medical tourism. If Deloitte’s trends are correct, the size of that loss will grow to almost $70 billion by 2010 — as much as 10% of total revenues by 2010.
What’s driving this? Two things, mainly. First of all, the cost of many medical procedures in other countries is dramatically lower than it is in the US. Modern Healthcare references the Deloitte study on several procedures where the variation is gigantic. Hip replacements that run from $30,000 to $75,000 in the US are done in other countries for under $15,000. Heart bypass surgery that goes for $100,000 to $200,000 in the US can be done elsewhere for $10,000.
Secondly, the quality of care in other countries is catching up to the US. More and more of the providers in these countries are being accredited and certified by international agencies, like the Joint Commission International.
If it’s for real, this trend could turn several old trends upside down. For years, many US hospitals used high priced fees paid by foreigners to offset operating deficits. That opportunity is unlikely to grow — and may shrink going forward — if US patients leave the US as often as foreigners arrive. The US also benefited for years from an influx of foreign-born medical talent, who chose to practice in the US instead of in their home countries. If more of these folks stay home, because the systems and facilities are as strong as anything they might find in the US, it will create staffing constraints for US providers.
I haven’t read Deloitte’s report, but my historical perspective had been that most of the folks pursuing care outside their home country were coming to the states to avoid waiting in line back home. I’ve read that India picked up some of the European business that used to come to the US to avoid long waits, because the care is good, and it’s much cheaper. I also know that some US care providers are joint venturing with care delivery systems in other countries, thereby expanding their own footprint — but also bringing up the international reputations of their so-called international competitors.
So — is this “bleeding edge” or “leading edge”? I don’t know. But it does raise interesting questions about whether or not health care in the future — which everyone’s always called a “local market” — will continue to operate that way down the road.
Charlie, I think the answer to your last question is clear, that health care is both a local and a global market. The next question is: how do we, as a country, as a company, as individual consumers, act? Can global competition for high quality/low cost health care be an opportunity for us to strengthen the US health care model? What are the opportunities and pitfalls for health care companies operating in this environment? How can individuals make the best choices for their own care, in an increasingly complex situation? I’ve experienced the health care systems in the US and in India, and know the answers are not easy. Thanks for writing a thought-provoking piece.
Mr. Baker,
Thanks for the perceptive and timely blog post. I’ve noted before that Harvard Pilgrim tends to be a leader in considering and addressing change on the frontier of healthcare and I am glad to see that medical travel and tourism is on your radar.
At BridgeHealth International, the potential of medical travel to both lower costs and improve care for patients in the United States and around the world is something in which we deeply believe, as a provider of international medical services. However, we are cognizant, as you are, that growing international competition for providing medical services may have profound consequences for the delivery of healthcare services in the U.S.
Our first concern is, of course, for patients and the patient population. On an individual basis, it is hard to find a downside for medical travel. Patients pay less for similar or better care; they get surgery and procedures that they could not otherwise afford. For payers and employers, offering medical travel options is a win-win proposition.
That under this scenario there will be a loss of revenue to hospitals and facilities in the U.S., over time, cannot be denied. We think it is urgent for the U.S. healthcare industry to anticipate the changing profile of what it provides in order to optimize local patient care. American healthcare is entering a transition that is driven by consumer demand and a global marketplace. We’re wondering – in what venue do you see this entirely necessary conversation taking place?
Stephanie Sulger RN, MS
VP Consumer Division
BridgeHealth International
http://www.bridgehealthinternational.com
I’ve heard mixed reviews of medical tourism. Is plastic surgery really safe in Thailand? Are Indian doctors qualified? Is Medical Tourism for Me? But now…the scenario is different, as you rightly said “What a difference a decade makes”. Nice Article, thanks.
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Prakash
http://www.healism.com
All — The question under consideration is a simple one - Is this a bleeding edge or a leading edge trend? I don’t know. What I note about this trend that makes me think it’s leading edge is the investment various health care organizations and institutions that are U.S.-based are making in this endeavor - and the work that’s been done by systems in other countries to measure outcomes and promote their success in delivering on benchmarks. The best way to convince a skeptical audience is to monitor, measure, and publish - using independent analysis. Many of the providers in other countries are doing just that.
Thanks for the comments.
yes, this indeed can be the beginning of healthcare without boundaries. Isnt it what consumer driven healthcare is about? The best treatment at the best price that the consumer seems deem. However, there needs to be openness and clarity over the benchmarks set for comparison based on which the patient is to make an intelligent choice. Not an easy task for hospitals or medical tourism companies to put across without a common platform unifying them. A successful step in the direction has been the Virtual global healthcare ecosystem by eMedsol - where all entities (hospitals, medical tourism companies, insurance companies, employers) in the domain can grade services, network, exchange information, and implement an end to end process towards delivering the service to the patient.
You have seen the change that has happened in a decade to the concept of medical tourism. Now (calling out to hospitals, medical tourism companies, employers, insurance providers) come and be part of this online platform that can take your business and healthcare decades
ahead.
Priya Brijesh
Public Relations
e-Medsol Pvt Ltd
http://www.emedsol.biz