Deloitte Report key findings
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8 percent of respondents sought health care services outside their immediate community. |
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More than 40 percent said they would travel outside their immediate area for care if their physician recommended it or for a 50 percent savings. |
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The Joint Commission International (JCI) increased the number of foreign medical sites from 76 in 2005 to more than 220 in 2008. |
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Several health insurers have launched medical tourism pilots as part of health benefit plans. |
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Health care reform could increase growth in the elective outpatient market, especially if expenditures are limited to $2,000 or less. |
“Medical Tourism: Update and Implications – 2009 Report,” Deloitte Center for Health Solutions
Employer focus
Employers look offshore - and at home - to save on health care costs
U.S. health care costs are projected to climb six percent a year through 2019. Having run out of options for reducing health care costs, some employers are exploring medical tourism as a practical, albeit exotic, alternative.
The figures are persuasive. According to a 2009 report by the Deloitte Center for Health Solutions, employers with self-insured medical plans can potentially save 70 percent on doctor and hospital bills (after travel expenses) when enrollees go abroad for treatment.
While a few years ago patient safety concerns appeared to be the largest obstacle to acceptance, today it appears liability issues are the issue. Fortunately, liability insurance is now being made available through joint agreements between medical providers and liability insurers.
A good fit
Bill Ford, director of risk management for IDMI Systems, a software developer in Warner Robins, Georgia, is a proponent. Last fall he introduced a voluntary overseas medical tourism benefit to the company’s High Deductible Health Plan (HDHP), which offers a health savings account. Through Companion Global Healthcare, a medical travel facilitator, IDMI employees have access to 29 hospitals accredited by the Joint Commission International (JCI) and four dental clinics around the world.
Companion Global handles the patient’s round-trip arrangements, transfer of medical records, case management, claims filing and so on. IDMI chose Companion because they include rigid standards strictly enforced and inspected at all approved facilities. Such oversight provides IDMI an extra measure of security in offering the benefit.
The benefit is a good fit for IDMI’s independent-minded employees who like having control and flexibility, says Ford. “They can use their HSA accounts to go offshore for elective surgery not covered under the plan or for dental work such as implants for a fraction of the cost here. The difference pays for the trip, accommodations . . . and a vacation.”
Two employees plan to use the overseas option later this year – one for back surgery and another for cosmetic dentistry. Ford believes the demand for medical tourism at his company will grow as employees age and their HSA account balances increase in value, along with their need for medical care.
No takers?
IDMI’s experience is not universal, however. Of the 4000 U.S. adults who responded to Deloitte’s 2009 Survey of Health Care Consumers, just one percent reported using an offshore health care provider and a mere nine percent said they’d be likely to do so.
Serigraph, Inc., a specialty graphics company in West Bend, Wisconsin, has found overseas medical tourism to be a tough sell despite offering significant bells and whistles. Since January 2008, the company has encouraged its 500 U.S. employees and their dependents to voluntarily seek treatment for a select group of elective procedures at the Apollo Hospital in India. As an incentive, the medical plan waives its customary co-pays and deductibles, covers the procedure at 100 percent and pays the airfare and hotel expenses for the patient and a companion. If necessary, Human Resources will also grant an additional week of short-term disability leave to an employee obtaining overseas medical care. Furthermore, if a portion of the companion’s travel expenses are taxable, the company adjusts reimbursements to make them cost neutral.
“We knew we had a limited audience,” says Linda Buntrock, Serigraph’s senior vice president of human resources. “Our workforce is cautious about going outside their local area for medical care.” The company introduced the benefit anyway. Medical costs in its part of the state are extremely high, even after factoring in network discounts on its PPO plan with a consumer-driven component.
“We thought we could save $20,000 to $30,000 even if just one person used it,” Buntrock explains.
Hannaford Bros., a supermarket chain in Maine, has had a similar experience with its international medical tourism program at a Center of Excellence facility in Singapore. After more than two years, not one of the 9,000 employees enrolled in the company’s medical plan has used the benefit, says Christopher Washburn, Hannaford’s supervisor of employee benefits.
Consider domestic providers
Undeterred, Serigraph and Hannaford have shifted to plan B. Only this time, they have brought medical tourism closer to home. Their experience in the overseas arena has taught them that domestic providers outside their geographic area are also willing to reduce costs without sacrificing the quality of patient care.
“Working with our third party administrator, we’ve found the partners we needed to bring about changes,” says Joanne Abate, Hannaford’s director of health and wellness strategy. Since last year, Hannaford has had an agreement with two U.S. Centers of Excellence that offer non-emergency knee and hip replacements at significant savings and with improved patient outcomes. The response by enrollees has been very positive. In 2010, fifty percent of employees and dependents who were candidates for the program took advantage of it, says Abate.
One key to success has been capitalizing on a high-touch opportunity when patients call to pre-certify their surgery, a plan requirement. At that time, a registered nurse dedicated to their account explains the advantages of going to a Center of Excellence in New England. “With the proper communication, our associates have been very open-minded to change,” says Abate. Later this year, Hannaford plans to expand its domestic medical tourism benefit to heart and back surgery.
Americans are ready for alternatives
Despite the uneven experience of employers adopting medical travel, the average U.S. consumer appears to be ready for medical travel. A recent Gallup poll found that a sizable proportion of Americans would “consider traveling outside the United States for treatment in a foreign country” for a variety of procedures and medical treatments. Twenty nine percent of respondents would consider traveling out of the United States for alternative medical treatments for a major medical problem, and 24 percent would seek cancer diagnosis and treatment abroad.
According to the 2010 outlook by CDHC magazine, the medical travel option is beginning to penetrate the mainstream discussion and, inevitably, will become a de facto option for all Americans.
Resources
American Medical Association. New Guidelines on Medical Tourism.
CDHC Solutions, Annual Solutions Outlook 2010, [Medical Travel] Savings Draw Consumers In, but Provider Buy-in Lacking.
Deloitte Center for Health Solutions. Medical Tourism: Update and Implications – 2009 Report.
Keith Mendoza, Sartori World Medical, Benefits Selling, June 2009. Medical Tourism.
For a list of foreign hospitals accredited by Joint Commission International, visit www.jointcommissioninternational.org/JCI-Accredited-Organizations
