Upfront: In the Corporate Incubator: Offshoring Health Care

Uninsured individuals facing costly medical procedures are embracing a novel health-care strategy: medical tourism. They are traveling to countries like India, Thailand and Malaysia to seek more affordable medical care than they could receive in the United States.

Now some U.S. employers in the public and private sectors, eager to contain health insurance costs while providing employees with access to quality care, are investigating the viability of offering workers the option of obtaining non-urgent surgeries overseas and sharing in the cost savings. Certain large organizations have retained consultant Dr. Arnold Milstein, chief physician for Mercer Health & Benefits in San Francisco, to evaluate this strategy for their self-insured health-benefit plans that serve U.S. residents. Overseas hospitals would be added as an alternative to an organization's domestic hospital network, and employees and dependents would be offered financial incentives to use them.

Dr. Milstein has testified on the topic of surgical offshoring and its implications for the U.S. health-care system before the U.S. Senate Special Committee on Aging. Although he does not believe that surgical offshoring is the solution to the growing health-care spending problem in this country, he supports the concept of shopping globally. "Unless and until American providers greatly improve their efficiency, more uninsured or underinsured and insured non-wealthy Americans will board international flights to obtain lower cost surgery at levels of quality that cannot be distinguished from American hospitals," he said.

Some companies are already moving ahead. Canton, N.C.-based Blue Ridge Paper Products is planning to amend its self-insured health plan next year to offer its U.S. employees and their covered dependents the option of obtaining health care offshore.