Patients Beyond Borders

The Growing Trend Of Americans Who Go Elsewhere For Health Care

Mark Williams
The Bulletin Staff Writer

The price of health care for Americans has finally become sublimely ludicrous.

Those who defend organized medicine are fond of saying that the United States has the best health care in the world -- but, in actuality, we only have the most expensive; in terms of results for dollars spent, the United States ranks very near the bottom of the list of all industrialized nations. We get less actual health than anyone else for each dollar that we spend. This realization is finally hitting the general public -- who are increasingly leaving their homeland to find offshore locations and assess quality medical care and surgical procedures elsewhere. This phenomenon is known as "medical tourism." 

In medical tourism, patients who might normally undergo some sort of medical procedure in the United States, usually a costly surgical procedure, instead fly to the Philippines, Thailand or other countries to have the procedures done there. Growing legions of American patients -- by one estimate, 150,000 in 2006 -- are traveling to countries such as India, Thailand, Brazil and Mexico for medical care; and while earlier waves of medical tourists sought mostly cosmetic procedures, more and more Americans are going abroad to get their hearts fixed, joints replaced and stomachs stapled.

Most consumers who take the medical tourism plunge do it to save money: the cost difference between medical procedures in the United States and foreign countries can be huge. According to information presented at a hearing last year before the U.S. Senate Special Committee on Aging, the typical cost of a coronary bypass in the United States ranged from $55,000 to $86,000, compared with $7,000 to $7,500 in India and $15,000 to $16,000 in Thailand.

Experts attribute those whopping price differentials to lower earnings by most health care personnel in developing countries. Also, malpractice insurance premiums are non-existent in most foreign countries and global health care product suppliers sell to developing countries at cheaper prices. American patients also are drawn to medical tourism by the high-quality reputations of many overseas health providers.

Foreign hospitals that treat large numbers of English speaking patients recruit U.S. surgeons. American doctors who make the trek typically are paid the same fees they earn in the United States, but enjoy the lower cost of living and lack of malpractice insurance premiums in the countries to which they move. Conversely, many wealthy foreigners still come to the United States for medical treatments; but those numbers have declined significantly in recent years because of tighter regulation of people wanting to visit this country.
Hardly anyone goes to Canada for medical treatments -- since our neighbor to the north has very few private hospitals and that thousands of Canadians go to the U.S. and other countries for treatments, mostly because of long waiting times in Canada. But Canadians who jump the medical tourism train get reimbursed by their provincial governments.

Some medical tourists combine their treatments with an exotic vacation -- but an overseas medical trip shouldn’t be taken on a whim. Experts recommend that you only go to hospitals that have certification from a recognized health care accrediting agency. You also have to think about how you would handle outcomes that fall short of expectations. If there are complications after you come home, who will take care of you? And if you think your overseas health provider committed medical malpractice, how would you seek compensation?

A good number of Americans flinch at the idea of going overseas for health care -- and Senator Gordon Smith of Oregon, former chairman of the Senate Special Committee on Aging, expressed concerns at a June 2006 hearing on the topic. "Americans should not have to travel overseas to obtain affordable health care," Smith said. "Does lower cost equal lower quality? Could lower-priced medical care provided in developing countries drive down health care costs in the U.S.?"

But the idea of medical tourism isn’t just catching on with individual Americans: a rising proportion of those traveling overseas for medical procedures are getting insurers or employers to pay part of the cost. While global medical tourism has yet to make major inroads with U.S. employers, some small employers and benefit providers such as Blue Cross Blue Shield of Texas are starting to take the idea seriously. Experts predict that the medical tourism industry will grow to $40 billion by 2010. 

There is, of course, a huge stumbling block to growth: convincing workers to fly 12 hours or more to have surgery. That's where Global Choice Health Care comes in: based in New Mexico, Global Choice is a firm that helps connect U.S. employers and patients with foreign physicians. Currently courting business owners to sign on for their services, Global Choice finds hospitals, sends records, schedules surgeries and acts as a concierge -- arranging air travel, hotel reservations and even sightseeing excursions; but, perhaps most importantly, it aims to reassure patients that they will receive quality care. 

Global Choice uses providers in India, Mexico and Singapore, and screens doctors to make sure they speak English and were trained in Europe or the U.S. It works only with hospitals that have received accreditation from the Joint Commission International, a subsidiary of the group that screens U.S. clinics and hospitals. Global Choice serves small and mid-sized companies in two ways: self-insured firms deal directly with Global Choice to arrange employees' travel and treatments; other employers use Global Choice through their health insurers. Either way, Global Choice charges a per-employee, per-month fee, much like a health insurance premium. Employees might be responsible for a co-pay or deductible, depending on their health plan. Global Choice then covers all medical and travel expenses for an overseas surgical procedure. 

CEO Ken Erickson launched the company in 2005, catering to early retirees for whom Medicare coverage had not kicked in as of yet. To expand, he is also targeting self-insured companies that can barely afford benefits for workers. "Seeking treatment overseas may mean the difference between offering health insurance or offering no benefits at all," says Erickson, adding that a handful of other U.S. firms arrange medical trips, but Global Choice is the first to target businesses. "Once a few daring souls try it and everything turns out all right, other employees will embrace the idea," says Erickson. 

As a result, those companies who sign up with firms like Global Choice will save an enormous amount of money. So where do the cost savings come from? How come these hospitals offshore can offer these services at much lower prices? The answer lies in the economics of health care in the United States and the amount of fraud and waste that is present in the U.S. healthcare system. Many doctors insist that as much as 80 percent of all health care dollars that go through their office cover nothing but paperwork. 

Many workers in the health care industry are basically getting paid to shuffle paper around. The health insurance companies are paid to deny health claims and the government workers at Medicare and Medicaid offices are paid to find new ways to deny payments to doctors and hospitals for services rendered. Thus, doctors' offices and hospitals have to employ entire armies of people to sit around and reclassify procedures in ways that can get paid by insurance companies, Medicare and Medicaid. It's a massive waste of time, money and effort. 

In the U.S. health care system, it's a paperwork nightmare -- and there is a paperwork war taking place. All of this is a result of health insurance, both taxpayer-funded health insurance and private health insurance. In other words, things would be a lot simpler if people just shopped around for some of these procedures and paid out of their own pocket, rather than having to go through a monstrous bureaucratic system of paper shufflers. 

As a medical tourist in another country, you eliminate these paperwork shufflers. Right there, you can save as much as 80 percent right off the bat. Because now, your dollars are actually going to the surgeons, anesthesiologists and other hospital workers who are attending to you during your surgical procedure. Whereas in the United States, your money is going to the insurance company and then the insurance company money is being used to pay paper shufflers. 

Another reason these surgical procedures are so much more affordable in Asia or the Philippines is because of the liability issue. In the United States, doctors and hospitals must carry extremely expensive medical malpractice insurance policies -- after all, we are nothing if not a litigious nation. In contrast, when you undergo a surgical procedure as a medical tourist in an offshore hospital, you sign paperwork that says you agree not to sue under certain conditions; thus, you save a fortune by essentially not funding the legal fees, settlements and malpractice insurance costs normally found in a U.S.-based health care practice. When you combine these two savings -- the paperwork shuffling reduction and the medical malpractice lawsuits -- and you get an incredible deal for your dollar. 

Medical tourism hospitals in the Philippines and other countries actually have to meet a higher standard -- mainly because they know there is more on the line; they have to give you such a high-quality experience with such outstanding results that you go back home to the United States and tell 20 people. Because when you do that, they know they're going to get more customers, and this is great word of mouth marketing for that hospital. 

They are going to do their absolute best to make sure that you have a wonderful experience -- whereas in the United States, that incentive is not in place. Many hospitals realize they won't be paid much for your procedure because of all the paperwork shuffling and the late payments by insurance companies and Medicare. So they have no incentive to have more patients come in with low-quality insurance. Besides, they have probably got patients coming in through the door every single day anyway -- so there's really no incentive to give you an outstanding, positive experience. At least it's not the same incentive offered by these outsourced, offshore medical facilities that base their very existence on reputation and word of mouth. 

All this doesn't mean something can't go wrong, because we are, of course, talking about Western medicine and surgical procedures. Things can go wrong, but they can go wrong anywhere. Something like one percent of all people undergoing gastric bypass surgery die on the operating table. That's going to happen in any country, anywhere you are; and whether or not there's medical insurance and malpractice insurance in effect at the time of your surgery doesn't affect your outcome. All it does is it gives people a chance to sue when they don't get the outcome they want. So, believe it or not, more and more people are seriously considering the option of medical tourism: they're booking tickets, going online to learn more about these hospitals, and opting to have these surgical procedures done overseas. 

This is very bad news for the U.S. health care industry: for a long time, healthcare was an industry that people thought could be protected here in the United States. As jobs were lost overseas in the information technology, accounting and technical support industries, people thought it was okay -- since no one will go overseas to have medical care; but it turns out they were wrong. People will go overseas to get better medical care or a better value on surgical procedures -- and the new century popularity of medical tourism is proving just that point. 

What it could mean long term is a further deterioration of the U.S. health care system? If health care becomes so expensive in this country that it is by far cheaper to buy an international plane ticket and get some medical procedure done overseas, then more and more people are going to take that option and go overseas. 

So in addition to exporting so many jobs from the IT industry, we will actually be exporting health care revenues to countries around the world; and these are substantial revenues -- we're talking about billions of dollars at stake. In fact, many of Asian countries are counting on this revenue as an increasingly important part of their Gross Domestic Product. Some of these countries are saying tourism is big and medical tourism is going to be big; and they're putting a lot of money into building state of the art infrastructure and engaging in marketing to attract more medical tourists. It's a very big deal to these countries: they see the opportunity and they see the U.S. health care system dropping the ball.

Meanwhile, Americans are getting more diseased than ever before, so there's an instant customer base for hospitals around the world who can offer quality care at a better price. The U.S., for its part, tends to be rather protectionist about all of this: we have seen, for example, the FDA seizing the importation of perfectly legal prescription drugs because it doesn't want drugs to come into this country; it wants to protect the U.S. pharmaceutical industry and make sure that customers have to buy prescription drugs here in the United States at monopoly prices. That's a protectionist philosophy that goes against every free market economic principle we have known to be true in this world. 

Similarly, the FDA wants to regulate and even outlaw most nutritional supplements and medicinal herbs -- another protectionist strategy to protect the profits of the pharmaceutical industry. That said, sooner or later, the organized medicine industry might just argue that outsourcing our offshore surgical procedures is hurting the U.S. economy and they might just try to pass a law that makes it illegal to go overseas to get surgery; there have already been many attempts to arrest people traveling to cancer clinics in Mexico or to seize their medicinal herbs as they come back across the border. 

As medical tourism becomes more popular, we might just see the American Medical Association, hospital associations and maybe even the FDA up in arms, complaining about the loss of revenue to U.S. companies, because, let's face it: big medicine is big business -- and, like any monopoly, organized medicine absolutely hates competition. 

Of course, you can't really stop the free market: when people find out about medical tourism, they're going to get information on the internet, make informed decisions, go overseas and get high quality care at a fraction of the price they'd be paying in the United States; and they're going to come back and tell lots of people. 

As a nation, you can outlaw that, but all you're going to do is criminalize citizens of our society who should never be criminalized. They're just seeking honest, affordable health care -- they just want a procedure that they can afford. Some families have had their insurance dropped when a loved one is facing, for example, a heart bypass surgery -- but they just can't shell out six figures here in the United States. Is it justified to outlaw the practice of medical tourism and force that family to skip that surgical procedure because they don't have the money to pay for it here in the United States? Maybe that family only has $10,000. Well, that means they could probably afford that procedure somewhere else. Shouldn't they have the right to make that choice and go where they want? 

These are some interesting arguments that will come up -- but it is very dangerous for any government to start telling its citizens where they can travel and for what reasons they can travel. When you have restrictions on travel, restrictions on nutritional supplements and restrictions on people buying drugs from Canada, you begin to see a sharp deterioration of freedom in this country, you lose freedom and you become more of a police state -- and that's what we're seeing in this country today. 

All of that stands at odds with the fact that we live in a global economy. We must be able to compete globally from this point on -- and if we cannot compete globally and have a more efficient health care system that eliminates the fraud waste and the paperwork waste, if we do not have a more efficient tax system such as the flat tax, we're going to pay the price in this country.

In terms of health care, people are going to go somewhere else to get it, people are going to go somewhere else to buy their prescription drugs; and in terms of the flat tax, investors with billions of dollars are going to put their money in other countries because the money flows where the tax code is simplified. If you want to attract billions of dollars of investments to the United States, simplify the tax code and convert to a flat tax. We will have prosperity like we've never witnessed before -- because billions of dollars around the world will come flowing into this country to create new jobs and invest in new businesses.

And if you want to have a health care system that works in this country, you need to make it efficient. You need to get rid of the paperwork, the fraud and the waste, and have a system that offers medical procedures at a fair, affordable price. People around the world should be coming to the United States to get their surgeries done -- if we had the best health care system in the world, but that is no longer the case.

The rise of medical tourism is simply yet another demonstration of the deterioration of the U.S. health care system and the failure of organized medicine.

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