Medical Tourism: The Big Picture

You’ve probably heard about “medical tourism,” the traveling of patients to foreign countries in order to receive care. But what you may not know is just how popular medical tourism has become: according to Deloitte LLP, an international consulting firm, an estimated 750,000 Americans traveled abroad for medical care in 2007. Aggressive projections put this number somewhere around 6 million by 2010.

As interest in medical tourism increases it’s important to understand the nuts and bolts behind its allure, and the risks that it poses—both for patients and health care systems at home and abroad.

Saving Money

Over the past few years insurers and employers have warmed up to medical tourism as a way to save money: its cheaper for insurance plans to help fund patients’ trips to foreign doctors who charge much less for procedures than their U.S. counterparts.

The price differentials  are stunning. According to a recent Deloitte report, Thailand, the world’s leading medical tourism hub, saw 1.2 million medical tourists from around the world in 2006. On average, medical procedures in Thailand cost a mere 30 percent of American prices. India, another destination that sees more than 400,000 medical tourists each year, charges just an average of just 20 percent as much as the U.S. Thousands of Americans also flock to Mexico and South America every year for cosmetic and dental surgery, where procedures cost anywhere from 75 to 50 percent less than they do in the U.S.

Data from the University of Delaware offers more specific numbers: “A heart-valve replacement that would cost $200,000 or more in the U.S., for example, goes for $10,000 in India—and that includes round-trip airfare and a brief vacation package. Similarly, a metal-free dental bridge worth $5,500 in the U.S. costs $500 in India, a knee replacement in Thailand with six days of physical therapy costs about one-fifth of what it would in the States, and Lasik eye surgery worth $3,700 in the U.S. is available in many other countries for only $730. Cosmetic surgery savings are even greater: A full facelift that would cost $20,000 in the U.S. runs about $1,250 in South Africa.”

Sine insurance doesn’t cover cosmetic procedures insurers and employers don’t care too much about cheaper facelifts (though patients do, of course). But medical tourism isn’t all about vanity. According to the National Business Group on Health, some of the most popular procedures pursued by medical tourists include heart procedures (e.g. coronary artery bypass graft, heart valve replacement, pacemakers, etc), orthopedic procedures (e.g. hip and knee replacement), laparoscopic surgery for gall bladder and hysterectomy, and many kinds of transplants. Given this, the consulting firm McKinsey and Co. aggressively estimates that increased medical tourism over the next few years can save health care purchasers as much as $20 billion in benefit pay-outs.

Catching On

Insurers and employers are quickly catching on to the savings opportunity represented by medical tourism. In June, MSNBC reported that  “CIGNA, Aetna and Blue Cross/Blue Shield…have begun or are considering pilot programs that provide limited coverage for foreign care.” Last month CNN reported on an Albuquerque construction firm that has included a medical tourism component in its health coverage that encourages employees to seek care in countries like Costa Rica, Singapore, and India. In South Carolina, BlueCross BlueShield and BlueChoice recently formed an alliance with one of Thailand’s premier hospitals to promote medical tourism to its 1.3 million members. United Group Programs, a smaller insurer in Florida, also has begun to offer a plan that sends patients to Thailand for expensive procedures. Insurers Blue Shield and Health Net of California also both offer low-cost policies that allow members to receive medical treatments in Mexico.

It would be wrong to say that providing coverage for medical tourism is common practice amongst employers. A January survey by the International Foundation of Employee Benefit Plans found that just 11 percent of employers cover medical tourism under their plans. Nevertheless, according to the National Business Group on Health, another 9 percent of large U.S. employers are interested or very interested in sending employees off shore for major surgeries over the next five years.

Still, these proportions are noteworthy given that (a) medical tourism was a non-issue a few years ago and (b) these employers are willing to pay to send their employees halfway around the world for medical care. All things considered, this is a pretty drastic measure—the fact that it’s gaining traction, however slowly, means something.

Patients also are warming to the idea of going abroad for medical care: Deloitte’s 2008 Survey of Health Care Consumers found that almost 40 percent of the 3,000 Americans aged 18-75 that the company interviewed said they would go abroad for medical care, provided the procedure was half the cost and of comparable to quality to what they’d get in the U.S.

Personal Risks

Yet for all the appeal that medical tourism holds, it’s not without its downsides, which are in fact considerable. The first big problem is that medical tourists have little legal recourse if things go wrong. In 2007, one patient wrote the U.S. embassy in Bangkok, describing her horror story after undergoing botched plastic surgery.

“…I have been scared, mutilated, and disfigured by offshore plastic surgery in Thailand,” she began. After surgery, the patient removed her facial bandages and was appalled at what she saw, but could do little about it: “After the doctor refused to refund my money, or pay to have the damage he had done to my face fixed by another doctor, or do the surgery over again himself, I attempted to report the doctor to government and professional medical associations to no avail. I was completely ignored by the Thailand Medical Council, the Thailand College of Surgeons, and the Medical Association of Thailand. I wrote a formal complaint to the hospital where the surgery was performed…and it was ignored.

“Even the attorney I attempted to hire just gave me a run around for several weeks promising to take action against the doctor and never doing so. He initially was very eager to take my case, but shortly after doing so, he not only lost interest in the case, but became an apologist for the doctor. This appeared to have everything to do with me being a foreigner, attempting to take legal action against a wealthy and influential Thai plastic surgeon.

“I later discovered that there are extremely few successful medical malpractice cases against medical doctors in Thailand that result in a cash award. Currently, there are only about 60 outstanding medical malpractice cases on file with the Medical Council of Thailand for the entire country, and this number of cases is being pointed to by Thai Medical Council authorities as being unacceptably large.”

This is just one story, of course, but it illustrates an important fact, best summed up by Miami plastic surgeon James Stuzin in a 2006 Fox news segment: "The liability and the responsibility that physicians have to their patients in America is very high, and that doesn't necessarily exist in foreign countries if you have a problem."

Another barrier to patient satisfaction is culture. The same news story presented the case of Amie Goldberg, a patient who went to South America for surgery and almost bled out on the table. Her doctors tried to talk to her about performing another surgery to help her, but she couldn’t understand them. "When you don't know what someone is trying to tell you, and your life is at stake, it's really scary,” she said.

If a surgery is botched abroad, the options for getting a ‘fix’ here in the states are few: most surgeons aren’t thrilled at the prospect of trying to mess with a surgery that they themselves did not perform. And even if things go perfectly in Bangkok, patients don’t get much by way of follow-up—after all, their doctors are 9,000 miles away and speak another language.

Policy Concerns

But the problems with turning to medical tourism as an answer to health care problems goes beyond personal stories and into to the realm of hard policy. There are a lot of stakeholders that are eager to trump up medical tourism as a silver bullet for health care costs. Firms like GlobalChoice, IndUShealth, and PlanetHospital exist to connect employers and patients with medical tourism opportunities—and like any other business they want to convince consumers that their services are essential. The claim here is that, since insurers and employers can pay less to cover procedures, the U.S. health care system will benefit greatly from medical tourism. It will “help drive costs down in the U.S.,” the CEO of GlobalChoice said in an interview last year. Other advocates say its time for “the U.S. Marketplace to seriously step outside the box and look at medical tourism as a real solution to the rising costs of healthcare.”

This isn’t the case. According to a 2007 article in Health Affairs, medical tourism is unlikely to reduce total U.S. health spending by more than 1-2 percent. Why such a small impact? First, because most of our health care costs are related to supply-side factors, not to patients demanding care—so even if you reduce demand by shunting patients to Thailand you won’t make a huge dent in the system’s overall spending. Second, medical tourism carries with it its own extra costs. A 2006 piece in Health Affairs, authored by a lead economist from the World Bank, points out that if patients get bad care abroad and come back to the U.S. in bad health, insurers might have “to cover the costs of subsequent treatment,” resulting in little savings. Monitoring the quality of care received overseas—something that insurers will have to do if they want to institute medical tourism programs—can also become costly since it’s administratively cumbersome. 

Another important consideration is this: as more people get care from abroad, what happens to those who are left behind? As medical tourism catches on, people may grow more open to the prospect of cheaper care abroad; as more people hop to India for care when they need it, attachment to U.S. public health care systems would likely diminish.

Why does this this matter? Because, according to Deloitte’s consumer survey, the people most willing to consider going abroad for care are young and healthy—the very people who cross-subsidize care for the old and sick by paying into our health care system. And traveling to India is expensive, meaning medical tourists are also more likely to be relatively well-off. When our system loses contributions from those who can pay into the system but don’t need that much care, it “could again increase costs for those” who are too poor, frail, or scared to travel.

Inequality is also a problem for medical tourism hub countries. Slowly but surely, it’s becoming clear that an influx of wealthy foreign patients siphons the attention, resources, and medical labor force of developing countries. The result is a two-tiered system of posh, concierge care for foreigners and sub-par leftovers for citizens.  In Thailand, one newspaper recently opined that “most of the benefits of the $6.4 billion Medical Tourism Promotion in Thailand over the past five years have gone to private hospitals, while the public health system has shouldered much of the cost in terms of the ‘brain drain’ and deteriorating working conditions for government-employed doctors and nurses. The country’s public health system is still a long way from meeting its target of providing one doctor per 1,800 people…thousands of vacancies remain unfilled due to an exodus of government-employed doctors to the lucrative private healthcare industry.”

The WHO has expressed a similar concern with regards to India, where “medical tourism could worsen the internal brain drain and lure professionals from the public sector and rural areas to take jobs in urban centres.” Last year, Dr Manuel Dayrit, director of WHO’s Human Resources for Health department, noted that emerging data on medical tourism “does not augur well for the health care of patients who depend largely on the public sector for their services.” Dayrit pointed out that revenues from medical tourism are unlikely to be fed back into public health systems “unless national laws or regulations are set up so that these revenues are taxed explicitly and channeled to the public sector.”

In the end, medical tourism might reduce our national health care bill by 1 percent to 2 percent—not enough to solve our problem. For insurers, medical tourism means taking on extra duties that they may or may not be able to perform. Finally, the patients who need the most care—both in the U.S. and in destination countries—end up getting the short end of the stick.

Undoubtedly, medical tourism will become more popular as time goes on. To a certain extent, it’s a reality of globalization, and no doubt it’s here to stay. But that doesn’t mean it’s a viable solution to the United State’s health care crisis.

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This is a well-researched analysis, Niko. One thing worth addressing, however, is the success rates of some of these medical tourism destinations. You speak of overseas medical tourism as if it is more likely to cause complications and malpractice than domestic care - however, the statistics show that this is not necessarily the case. Taiwan, for example, has higher success rates and lower infection rates than the United States - and I'm sure many other countries have similar stories. To say that the increase in medical tourism will only force US healthcare to foot the bill for corrective procedures, therefore, is misleading. Indeed, perhaps the globalization of medical care would make it so fewer - rather than more - people will have to seek follow up care in the United States.

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