US reforms may boost medical tourism
By Muhammad Cohen
HONG KONG - The long-awaited United States healthcare reform package became law
last week. Asian hospitals treating American medical travelers will have to
wait longer to see whether the bill will have a significant impact on their
businesses, but US insurers will feel the reforms' impact more quickly, and
that could lead them to look more closely at international options.
"Greater coverage for more Americans presumably would mean fewer Americans
would need to travel abroad for care," Bangkok Hospital international marketing
manager, Judy Mitchell, said.
However, Mitchell's colleague at Thailand's largest hospital group, Bangkok
Hospital international medical care coordinator, Dr Michael Moreton, said,
"Hardly anybody knows exactly what is in
the bill, then what is doable, how the states will react, and so forth - it is
a crap shoot."
Josef Woodman, author of a medical travel guidebook, Patients Beyond Borders,
said, "Near-term, I believe perception will impact consumers far more than
reality. Initially, rather naive consumers will expect all illness to be
covered by the new healthcare reform bill, and patients will likely take a wait
and-see stance. Within six months, however, when it's clear healthcare reform
implementation is in for a longer haul, patients requiring care will be forced
to act. Many will pursue better access to care and lower costs abroad."
Uninsured and underinsured Americans are at present the primary market for
medical travel. "For example, the 55-year-old, self-employed American who needs
heart surgery that would cost US$100,000 in the US," Bumrungrad Hospital senior
director of marketing and business development, Kenneth Mays, said. "He comes
to Thailand and gets it done at Bumrungrad for $25,000 so he can preserve his
retirement savings. We see many such patients."
Last year, Bumrungrad in Bangkok treated 420,000 overseas patients, making it
the world's most popular medical travel destination, according to the hospital.
"Today this man may not buy insurance because, as an individual, with a
pre-existing condition, the insurance is very, very expensive," Mays said. "In
2014, that changes. He will be forced to buy insurance or pay a penalty. But he
will also have access to new insurance exchanges set up to offer affordable
plans to individuals, including those with pre-existing conditions.
"He may decide that paying the penalty is cheaper than buying a policy. Or the
coverage he buys may require so many deductibles and co-pays that it still
saves him money to go abroad for treatment. Some observers think that the
burden of additional patients on the US system will increase waiting times and
reduce service, so there will be new incentives to travel for better care.
Whatever happens, the calculus of medical travel decisions, starting in 2014,
will be different," Mays said.
The reform package doesn't explicitly address Americans seeking medical care
overseas. "That is a good thing," said Rudy Rupak, chief executive officer and
president of Planet Hospital, a leading US medical travel agency. "If a foreign
option was included, it would have given the opposition party something else to
attack."
Rupak cited the 2003 Medicare Modernization Act, which barred the senior
citizens' healthcare program from paying for radiology readings conducted
overseas, as an example of congressional disdain toward overseas options - even
when they offer a simple way to cut medical costs.
Sending patients rather than x-rays overseas would be an even more difficult
sell, especially in the present US economic and political climate. "When jobs
are being lost to overseas companies, anyone who suggests going abroad for
medical care would be looked upon with derision," Rupak, who founded Planet
Hospital in 2002, said. "We are better off letting the private sector push this
agenda."
Cosmetic changes
Individual economic decisions already govern medical travel for uninsured or
elective procedures, such as dentistry or
cosmetic surgery. "Under the reforms, elective procedures remain
unchanged and as always Asia would present a considerable cost saving," said
Dave Amdal, co-founder of wellness website SenseTrak.com. "The challenge for
Asia is to inspire trust and confidence with elective procedures that can
increasingly be performed in other closer countries like Panama and Costa Rica
- or Brazil for breast implants."
Amdal said that US reforms not specifically aimed at medical travel, such as a
proposed 5% tax on cosmetic surgery, which died in the senate, can produce
unintended, albeit marginal, effects. An extra $500 on a $10,000 breast
enhancement or facelift would be a minor factor compared with having the
surgery at less than half the overall cost in Asia or Latin America.
Similarly, the 2.9% tax on medical devices - many patients overseas travel for
joint replacements - that is in the final bill adds just $58 to the cost of a
$2,000 artificial knee, $261 to the cost of a $9,000 artificial hip, or $35 to
a pair of breast implants. Again, these are marginal considerations in
procedures that cost thousands of dollars; the US average total cost for hip
replacement surgery is around $50,000 - while the cost overseas is up to 80%
lower.
Author Woodman said the reforms appear to expand coverage for orthopedics,
including joint replacements. "If that's true, medical travel destinations
known for orthopedics, for example India and Singapore, may see a decrease in
US patients traveling for those treatments."
Medical travel insurance
Experts agree that the new reforms will drive up overall US health insurance
rates. Higher costs plus longer waits could steer consumers and insurance
companies to look more seriously at overseas options. "We'd love to see
insurers fold high quality medical tourism options into their plans, especially
for their self-funded employer clients," Bangkok Hospital's Mitchell said. A
handful of small and medium-sized US businesses that self-insure employee
coverage already offer international treatment options.
Overseas hospitals and US insurance companies have been talking for years about
expanding medical travel options for American patients. More than 300 overseas
hospitals have accreditation from the US-based Joint Commission International,
assuring care at or above US standards.
A pioneering 2007 deal between BlueCross BlueShield of South Carolina and
Bumrungrad Hospital was expected to usher in a new era of so-called medical
outsourcing by big US insurers to foreign providers. Very few policyholders
have so far taken advantage of the international option.
"There needs to be more employee education of the medical tourism program being
offered," Medical Tourism Association chief executive officer Jonathan Edelheit
said. "Currently they are not doing a very good job educating the insured on
the quality of care and outcomes overseas which would encourage more insured to
engage in medical tourism."
Woodman said more information is the key. "Transparency in this sector is long
overdue, and with our healthcare system steadily deteriorating, consumers need
ready access to basic provider data." He suggested rules similar to those in
Singapore to require hospitals to publish costs, outcomes and other
information.
Woodman, who writes editions of Patients Beyond Borders for a half-dozen
countries, said, "Greater transparencies in quality assurance, cost-comparison
and patient satisfaction data will lead consumers to an impressive array of
informed, cost-effective choices for medical care, often international in
scope."
Diaspora united
Planet Hospital's Rupak said insurers should narrow their focus to help medical
travel options take root. "Populations that are ethnic in nature might be the
first adopters." Planet Hospital plans to launch in May an insurance plan
called Diaspora. The pilot project will aim at Latinos living in the US and is
associated with two hospitals in Mexicali, Mexico, just over the border from
California.
"My feeling is that anyone with a pre-existing medical situation will be a
Diaspora consumer until healthcare reform kicks in and possibly afterwards if
the [post-reform insurance] rates are too high. For example, if someone has
diabetes, they cannot even get accident coverage now - since when is an
accident associated with diabetes?" Rupak said "We developed Diaspora in
anticipation of healthcare reform."
There's also the matter of US citizens abroad. "Six million Americans live
overseas," Bumrungrad's May said. "Many are deciding to retire in countries
like Thailand or Costa Rica. If they are over 65 and want to get their
healthcare at an internationally accredited hospital costing 50% to 80% less
than in the US, Medicare should support it. The patient is happy, the
government saves money, and we help reduce the burden on the US system.
Everybody wins."
Former broadcast news producer Muhammad Cohen told America’s story to the
world as a US diplomat and is author of
Hong Kong On Air,
a novel set during the 1997 handover about television news, love, betrayal,
financial crisis, and cheap lingerie. Follow
Muhammad Cohen’s blog for more on the media and Asia, his adopted home.
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