Healthcare reform to impact medical tourism

 

Most Americans seeking medical services abroad are either uninsured or under-insured, so pay for treatment out of their own pocket. Most estimates of future demand by analysts, agencies and hospitals, assume that private and state healthcare insurance systems will follow the tiny handful now, where the insurers pay for medical tourism.

Healthcare reform has been promised for the last two decades, but President Obama has pledged to cure Americans from "the crushing cost of health costs," saying the country cannot afford to put healthcare reform on hold. 

“This is a cost that now causes a bankruptcy in America every 30 seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes," Obama said in his speech to Congress.

Obama’s plans include root-and–branch reform of healthcare. Hospitals, doctors and insurers have all done well in recent years, and have managed to prevent any serious healthcare reform. Now they are all seriously worried that Obama may actually succeed.

His reforms would include lower prices from hospitals, salary cuts for doctors, payment to hospitals by government insurance schemes linked to quality of care not quantity of care, giving Americans a choice of a public health insurance plan to compete with private insurance, and forcing insurers and health plans to guarantee coverage with no exclusions for pre-existing conditions, accepting all comers and not price sections of the community out of the insurance market.

Which of these are realistic and which are being used to scare hospitals, doctors and insurers into backing reform is unknown. Compulsory government health insurance for everyone with the government dictating the price that hospitals charge for healthcare is still a possibility. The medical and insurance establishment used lobbying and political allies to stop earlier attempts at reform. But Obama is in a much stronger political position than his predecessors. 45.7 million Americans are uninsured, and for those with insurance coverage health-care costs have been rising four times faster than wages. There is general agreement that healthcare has to be drastically reformed now.

Anyone targeting American medical tourists could be affected by reform as it could change everything. The state cannot stop Americans going overseas for treatment, but by compulsory insurance and price-controls it could remove many of the reasons people go abroad.

Health insurers that offer a private alternative to traditional Medicare will be affected by plans to make sharp cuts in their payments and open the programme to competitive bidding. The new administration plans to expand healthcare coverage for the uninsured. The expected cuts in budgets for programmes such as Medicare and Medicaid will reduce the amount doctors and hospitals get for treating patients whose care is paid for by the government; threats to stop accepting such patients could rebound harshly on hospitals.

Central to the reform debate is whether healthcare providers should be able to set their own rates or whether the government should tell them who to treat and how much they will be paid. Hospitals and doctors are resigned to the fact that they will have to accept change. Insurers are threatening to fight the reforms, but with recent figures showing dramatic price increases for the ever-decreasing number of Americans who can afford private health insurance, they have no alternative solution to offer. 

Obama wants the main features of healthcare reform to be in place by the end of 2009, which considering other changes he has pushed through in a few weeks, may not be as impossible as it sounds.

Whatever the outcome, three things are clear. Americans have less money to spend on healthcare; major insurers will not rush into medical tourism deals until they know how drastically they may have to reform what they offer to patients and at what price; and the price-differential between US and other countries will fall. In these uncertain times, many American employers will wait to see how they are affected by healthcare reform, before changing their employee benefit packages to embrace employer-paid medical tourism.

If Americans are a target market, you need to keep a very close eye on US healthcare reform as it could quickly impact your business. You may even have to change from marketing on price to marketing on quality alone.

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