Health Beat / By Niko Karvounis

Medical Tourism Is Great -- for Those Who Can Afford It

Americans going abroad to deal with their medical problems would only cut health costs 1-2 percent -- not enough to solve our greater crisis.

August 21, 2008 |

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This article originally appeared on Health Beat.

You've probably heard about "medical tourism," the traveling of patients to foreign countries in order to receive care. But what you may not know is just how popular medical tourism has become: according to Deloitte LLP, an international consulting firm, an estimated 750,000 Americans traveled abroad for medical care in 2007. Aggressive projections put this number somewhere around 6 million by 2010.

As interest in medical tourism increases it's important to understand the nuts and bolts behind its allure, and the risks that it poses -- both for patients and health care systems at home and abroad.

Saving Money

Over the past few years insurers and employers have warmed up to medical tourism as a way to save money: its cheaper for insurance plans to help fund patients' trips to foreign doctors who charge much less for procedures than their U.S. counterparts.

The price differentials are stunning. According to a recent Deloitte report, Thailand, the world's leading medical tourism hub, saw 1.2 million medical tourists from around the world in 2006. On average, medical procedures in Thailand cost a mere 30 percent of American prices. India, another destination that sees more than 400,000 medical tourists each year, charges just an average of just 20 percent as much as the U.S. Thousands of Americans also flock to Mexico and South America every year for cosmetic and dental surgery, where procedures cost anywhere from 75 to 50 percent less than they do in the U.S.

Data from the University of Delaware offers more specific numbers: "A heart-valve replacement that would cost $200,000 or more in the U.S., for example, goes for $10,000 in India -- and that includes round-trip airfare and a brief vacation package. Similarly, a metal-free dental bridge worth $5,500 in the U.S. costs $500 in India, a knee replacement in Thailand with six days of physical therapy costs about one-fifth of what it would in the States, and Lasik eye surgery worth $3,700 in the U.S. is available in many other countries for only $730. Cosmetic surgery savings are even greater: A full facelift that would cost $20,000 in the U.S. runs about $1,250 in South Africa."

Sine insurance doesn't cover cosmetic procedures insurers and employers don't care too much about cheaper facelifts (though patients do, of course). But medical tourism isn't all about vanity. According to the National Business Group on Health, some of the most popular procedures pursued by medical tourists include heart procedures (e.g. coronary artery bypass graft, heart valve replacement, pacemakers, etc), orthopedic procedures (e.g. hip and knee replacement), laparoscopic surgery for gall bladder and hysterectomy, and many kinds of transplants. Given this, the consulting firm McKinsey and Co. aggressively estimates that increased medical tourism over the next few years can save health care purchasers as much as $20 billion in benefit pay-outs.

Catching On

Insurers and employers are quickly catching on to the savings opportunity represented by medical tourism. In June, MSNBC reported that "CIGNA, Aetna and Blue Cross/Blue Shieldhave begun or are considering pilot programs that provide limited coverage for foreign care." Last month CNN reported on an Albuquerque construction firm that has included a medical tourism component in its health coverage that encourages employees to seek care in countries like Costa Rica, Singapore, and India. In South Carolina, BlueCross BlueShield and BlueChoice recently formed an alliance with one of Thailand's premier hospitals to promote medical tourism to its 1.3 million members. United Group Programs, a smaller insurer in Florida, also has begun to offer a plan that sends patients to Thailand for expensive procedures. Insurers Blue Shield and Health Net of California also both offer low-cost policies that allow members to receive medical treatments in Mexico.

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