The fourth in a series of articles on the US medical tourism market.
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There is one country where an increasing number of Americans are flocking for treatment, and the number could quickly exceed the total going to all the Latin American and South American countries. That country is the USA. The country is huge and the distance from one coast to the other is longer than traveling across a dozen or more European countries. Domestic medical tourism is gathering pace as more and more Americans are now crossing state borders to take advantage of cheaper prices available for quality health care out-of-state.
This article is written by Ian Youngman, a specialist researcher and publisher of detailed research reports on insurance and medical tourism.
In its second annual study on healthcare trends, Deloitte found a favourable shift towards intra-bound medical tourism among Americans who would consider seeking treatment in another US city than going abroad. In this year’s results, 43 percent of Americans say they are prepared to travel out of their local area to undergo a test, procedure, or treatment if it would cost 50 percent or less than when done in their home city.
Eight percent have travelled for care outside of their local community as medical tourists. Out of local area does not automatically mean going overseas as less than one percent say they have gone abroad for treatment. The findings suggest that a growing number of consumers want to be actively engaged. They see variance in service, quality and costs. They are comparing doctors, hospitals, medications, devices, health plans and self remedies. They are exploring alternatives to conventional approaches and spending money to achieve their health goals.
Deloitte’s report entitled Medical Tourism: Consumers in Search of Value also estimated that in 2008 over 400,000 people came into the US for medical treatment, and that numbers were growing. A much faster growing trend, but as yet with no statistics, is domestic or internal medical tourism where Americans travel within the US for medical treatment.
Uninsured Americans are shopping around for surgery in the US in record numbers, and using new services such as Healthbase, one of several medical tourism agencies that are either offering the US as an option, or see so much potential in inbound that they have followed Healthplace America in ceasing to offer treatment overseas. Other agencies now offer similar services, but individuals paying for their own treatment tend to deal direct with hospitals, which is why estimating numbers is so difficult.
Healthplace America offers self-insured employers access to a specialty network of 31 US hospitals and clinics. It has signed contracts covering a total of 600,000 workers at companies since January 2008. Chief Executive Ken Erickson expects 1500 employees to use the network in 2009. Healthplace America’s network can offer self-insured savings of 30 to 50 percent over rates negotiated by traditional insurers because the company pays the providers up front in cash based on fixed per-case rates. Typically, insurers pay providers after the surgery has been done. The company offers institutional healthcare buyers access to medical facilities on a fixed rate pricing basis, eliminating the cost and complexity of billing and claims adjudication and delivering significant savings as compared to prevailing negotiated costs of U.S. providers.
US employers are encouraging workers to travel domestically for medical care to take advantage of geographical variations in the quality and cost of healthcare within the US. Most of the activity is focused on surgical procedures, such as hip and knee replacement, and cardiac bypasses. Employers are offering financial incentives, such as no out-of-pocket costs, which can save workers thousands of dollars, money for travel expenses, and access to concierge services that schedule appointments and organize travel arrangements, as enticements. Travelling to a US hospital is much less daunting than going overseas, where practical, medical and legal issues pose complex challenges for employers. An increasing number of US hospitals trying to compete for consumers using a value-based approach to medicine are setting up networks. Employers are setting up approved hospital lists where employees get reimbursed for travel and lodging and reduced co-payments. Otherwise, they get the company's standard insurance coverage.
Boston-based medical tourism company Healthbase has established partnerships with several US healthcare providers to make affordable high quality medical care available to patients from the US, Canada and Mexico. It still also offers treatment overseas. Uninsured Americans have traditionally been charged much more than what insurance companies are charged for the same service by US hospitals. By negotiating for lower price for medical care, Healthbase's customers will pay even less than what insurance companies pay in specific cases for medical services. This means, a heart bypass tagged at over US$100,000 can now be had for under US$15,000, which closely matches the price of the operations overseas.
Medical tourism management expert Health Travel Guides has reached an agreement with The Krongrad Institute of Miami, Florida to develop affordable medical tourism options for prostate cancer patients in the US. Health Travel Guides CEO Herb Stephens said: “It is important for consumers to understand that they have healthcare options that do not necessarily mean travelling abroad.”
Many leading US academic medical centres are seizing the opportunity to attract national patients. These hospitals foresee growth will come as consumers and health insurers use cost and performance comparison data to take advantage of regional differences in pricing, quality, customer satisfaction and waiting times. Some focus on price while others focus on their niche expertise. Several have set up agencies to promote groups of hospitals in an area.
Domestic US medical tourism is growing as medical travel agencies continue to hunt for the best deals for patients willing to look beyond their hometowns for care they think is better and less expensive. Hospitals are looking for ways to attract new patients from within the US. American hospitals, clinics, tourist boards and cities are all starting to actively market their service to patients from overseas or other states at a much faster pace than last year. By the end of 2009, inbound and internal medical tourism in American could together outnumber outbound. Consumers increasingly are trying alternatives to their local hospitals and doctors, which is why internal medical tourism is on the rise.
Ian Youngman is a writer and researcher specialising in insurance and health. He writes regularly for a variety of magazines, newsletters, and on-line services. He also publishes a range of insurance reports and undertakes research for companies. An ACII, with an honours degree in Economics from the University of Liverpool, Ian was a co-founder of The General Insurance Market Research Association. He also has widespread experience within the insurance industry at management level, working for brokers, a bank and an insurance company.
