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.
Milstein says that employers are pursuing surgical offshoring for three reasons. First, they can benefit from lower costs; facility and physician charges per surgery are generally 60 percent to 85 percent lower than insured-negotiated charges in U.S. hospitals.
Second, they trust the quality-of-care accreditation of offshore hospitals, many of which have obtained ISO (International Standards Organization) certification and/or Joint Commission International (JCI) accreditation from the Joint Commission on Accreditation of Healthcare Organizations. For example, half of the cardiac surgeons at Bumrungrad Hospital in Bangkok are U.S. board-certified. Apollo Hospital in Chennai, India, has a mortality rate of less than 1 percent for elective coronary artery bypass graft surgery.
Third, companies feel that they have a fiduciary responsibility to consider solutions that are beneficial to their employees. That's especially true for businesses with large numbers of low-wage workers who can ill afford to pay for health care or health insurance.
These programs may also benefit employers. IndUShealth, the vendor with which Blue Ridge is working to develop its program, says that companies can reduce hospital-related health-care benefits by 15 percent to 20 percent per year or more.
At the same time, the unknowns in global health care, including those related to the Employee Retirement Income Security Act (ERISA), are many. And is it realistic to think that enough employees would consider forgoing access to the U.S. malpractice system and taking lengthy overseas flights to make these programs viable?
"Although the concept of getting on a plane to get medical treatment may, at first blush, seem radical, hospitals like the Veterans and Kaiser have been doing this for decades," says Rudy Rupak, president and CEO of Calabassas, Calif.-based PlanetHospital, a medical tourism agency that's currently developing an insurance product. Rupak notes that people who need certain surgical procedures routinely travel long distances within the United States. For example, a Veterans Hospital patient living in Phoenix who needed gamma knife surgery -- a noninvasive treatment for brain tumors and brain dysfunctions -- "would have to fly to the Oklahoma VA for this treatment," he reports.
"It's cheaper for the hospitals to fly clients to these cities for tertiary care and fly them back home as soon as possible, often at great discomfort to the patients," Rupak points out. "If patients are already enduring a two- to four-hour flight for surgeries, then why not go to hospitals across the border or across the ocean for significant savings?"
Although global health care as a benefit option is still in the incubation stage, it's receiving increasing attention from employers. The topic will be on the agenda at the International Foundation of Employee Benefit Plans' annual meeting in Las Vegas next month.