Medical tourism represents a $2.1 billion business, study shows

By Steve Twedt, Pittsburgh Post-Gazette

The same economics that outsourced call centers and manufacturing jobs overseas may soon hit health care in a big way.

A recent Deloitte study forecasts that the number of people turning to "medical tourism" -- traveling internationally for medical care -- will increase from 750,000 to 6 million by 2010, an eightfold increase.

If the actual increase is even half that, one thing is clear: It will be insurers and employers driving the change, not individual workers.

Blue Cross and Blue Shield of South Carolina has already started down the medical tourism road, and employers in other parts of the country are showing growing curiosity, if not interest.

At the annual Pittsburgh Business Group on Health symposium earlier this month, local benefits managers heard how the Maine-based Hannaford Brothers grocery store chain this year began offering its workers the option to fly to Singapore for their knee replacements, while pocketing an extra $10,000. Because the surgery would be so much cheaper, the company also will pay for a spouse or loved one to accompany them.
Medical tourism

Map of popular destinations for medical care, along with the average cost savings and common treatments offered.

The change "was designed to initiate a dialogue about quality and cost," said Chris Washburn, employee benefits supervisor for Hannaford, which is self-insured but uses Aetna as its vendor.

It's certainly started a conversation -- once the Hannaford program was publicized, the company started hearing from hospitals and health systems in the United States that said they could match or beat the Singapore prices. So far, no one from Hannaford has traveled to Singapore for an operation.

All this is not to say the Pittsburgh region is verging on a medical tourism boom.

While Mr. Washburn's presentation last week generated interest among local benefits managers, PBGH Executive Director Christine Whipple said she knew of no local company actively and seriously considering adding medical tourism to employee health benefits plans.

In line with Pittsburgh's historically conservative approach, she said, "They don't want to be leading edge, nor do they want to be far behind."

But as medical tourism becomes a global trend, the world may come to Pittsburgh. If the quality really is comparable, why not fly somewhere that will perform the same surgery for one-tenth the cost?

"The borders of health care have blurred. It is a very different world today than it was five years ago," said Dr. David Jaimovich, chief medical officer of Joint Commission International, which accredits international health systems and hospitals in similar fashion as its sister company, the Joint Commission on Healthcare Organizations, does in the United States.

JCI has given its stamp of approval to more than 250 hospitals in more than 30 countries, he said, and those institutions meet standards that "are very comparable to the U.S. domestic standards. There are many hospitals around the world that would put some of our [U.S.] hospitals to shame."

He expects that number of JCI-accredited hospitals to double by 2012.

At the same time, even accredited hospitals aren't worry free. As the Deloitte report points out, questions remain about follow-up care once a patient returns from overseas, and about who bears responsibility if something goes wrong. In most cases, the regulations and laws of the host country prevail.

"What a lot of folks would say is that the quality of care is highly variable," said Paul Keckley, executive director for Deloitte's Center for Health Solutions, which invested 1,900 hours analyzing the trend.

That does not mean that simple procedures, such as an uncomplicated shoulder surgery, could not be done safely at many centers in many countries, Dr. Keckley said. But he questions the wisdom of traveling overseas for, say, a hip replacement that carries a significant risk of infection or a deep vein thrombosis, when the patient faces a long flight home a few days later.

The Deloitte report estimates that medical tourism by Americans represents a $2.1 billion business. Part of that is a new industry of companies such as BridgeHealth International, which helps insurers, employers and individuals arrange medical travel plans. BridgeHealth advertises that it has "the most extensive provider network in the industry," with 25 hospitals in 10 countries.

The draw is easy to spot: A heart bypass procedure that costs $130,000 in the United States can be done for $18,500 in Singapore or $10,000 in India. A $40,000 knee replacement here is offered at one-fourth that cost in Thailand, all at accredited hospitals.

With health-care costs rising 8 percent to 9 percent domestically, it's the kind of savings that can make medical tourism sound very appealing.