Medical Tourism: Chancy or a Chance to Learn?

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tourism_1334773641.jpg - Medical tourism
Coronary artery bypass graft (CABG) surgery cost on average $113,000 in the U.S. in 2011, according to an Organization for Economic Cooperation and Development (OECD) review. The same surgery in India carried a price tag of $10,000 in 2011. Heart valve replacements offered an even better deal, at $150,000 vs. $9,500. Researchers who track medical tourism warn that these bargains come with potential health and financial risks, while others say the U.S. should view such enterprises as an example of innovative, cost-effective care.

Markets and market drivers

Historically, wealthy people have traveled to other countries for healthcare for centuries. But what differs in recent decades is the destination, with medical tourists—many with limited means—choosing less developed as well as less expensive nations for procedures such as heart surgeries.

The U.S. consumer is the No. 1 target for overseas hospitals trying to attract patients for services as varied as cosmetic to CABG surgery, says Leigh Turner, PhD, at the Center for Bioethics at the University of Minnesota in Minneapolis and author of numerous papers on medical tourism. But exactly how many Americans elect to have medical procedures done abroad remains a question.

“Finding reliable data on patient flows is difficult,” Turners says. Underscoring that point, the “Medical Tourism: Treatments, Markets and Health System Implications” review for the OECD “narrowed” its worldwide estimate of medical tourists to between 60,000 and 50 million.

As many as one-quarter of 4,000 U.S. adults surveyed by the Deloitte Center for Health Solutions in 2011 responded that they would consider traveling abroad for a necessary hospital treatment, and the majority listed cost as an important factor. Some hospitals see opportunity in this patient population, using medical tourism brokerages to draw in health insurers, employers and consumers. For instance, Blue Cross and Blue Shield South Carolina, through Companion Global Healthcare, offers plans that allow members to undergo elective procedures overseas (International Journal of Health Services 2010; 40[3]:443-467).   

When it comes to cardiac surgery, though, India stands out, according to the OECD review. Research conducted by Krishna Udayakumar, MD, MBA, which explored cardiac surgery programs in two Indian hospitals, supports that conclusion.

“Many high-end hospitals in India specialize in cardiovascular procedures,” says Udayakumar, head of global innovation for Duke Medical in Durham, N.C. “Many of them have made medical tourism a core part of their strategy to be able to provide high-quality care at international standards at a very low price point, relative to what is available in countries like the U.S. or England.”

2011 Medical Tourism Prices in Selected Countries
Procedure U.S. India Thailand Singapore Malaysia
Heart bypass (CABG) $113,000 $10,000 $13,000 $20,000 $9,000
Heart valve replacement $150,000 $9,500 $11,000 $13,000 $9,000
Angioplasty $47,000 $11,000 $10,000 $13,000 $11,000
*Costs given in U.S. dollars. Price includes hospital and doctor charges. | Source: “Medical Tourism: Treatments, Markets and Health System Implications,” March 2011

Risky or rational?

Traveling abroad for medical care has its hazards, Turner warns, including patient safety, quality of care, post-operative follow-up and financial strain. “There are many procedures [abroad] where it is less expensive, but they still require financial resources,” says Turner.

U.S. medical tourists also lose the protection of the FDA, which has stringent standards for approving drugs and devices. They run the risk of receiving drugs that might be contraindicated, have boxed warnings or are not available once they return to the U.S. Once discharged, they may embark on a long flight without medications such as anticoagulants. The OECD cited deep vein thrombosis, pulmonary thromboembolism and MI as potential in-flight risks for medical tourists during their return trip.   

In-hospital and transfusion-related infections pose threats as well. Researchers report incidences of hepatitis B infection from cardiac surgery, for instance. They added that assessing quality of care, patient safety and outcomes is difficult because of lack of transparency and independent review.

Sensitive to such concerns, some hospitals use international accreditation organizations, such as the U.S.-based Joint Commission International, to show they meet standards. Many hospitals hire physicians trained in the U.S., and encourage their physicians to obtain U.S. board certification, according to Turner.  

Model of innovation

Medical tourism offers an opportunity to identify cost-efficient strategies that could be applied to U.S. hospitals, says Udayakumar. “In the last several years, we have seen healthcare expenses become a major driver of weakness in the long-term U.S. financial sustainability,” he says. “We focus on improvements in the way we provide and deliver healthcare by learning from global best practices.”

In a multidisciplinary collaboration, he and colleagues explored how hospitals in India could offer cardiac surgeries at a fraction of U.S. costs. They concluded, based on interviews and visits to CARE Hospital in Hyderabad and Fortis Hospitals in the New Delhi region, labor costs played a role, but innovation paved the path to success (Health Affairs 2008;27[5]:1260-1270).

Less than 20 percent of the Indian population is insured, and most pay for healthcare out of pocket. The growing middle class is price conscious but also expects quality care, Udayakumar says. Consequently, private hospitals must meet both demands—and still make a profit. How? Among other factors:   
  • Labor: While labor accounts for a large part of U.S. healthcare costs, it does not in India, where some tasks are delegated down to staff capable of performing the duties. The “de-skilling” approach allows higher wage staff to work more efficiently.
  • Pricing: Indian hospitals start with a targeted market price that allows them to assess cost drivers and innovate to provide quality and value.  
  • Accountability: Capitated pricing means the hospital picks up the cost of preventable complications, giving everyone an incentive to provide efficient and high-quality care.
“Places like the CARE Hospital fundamentally look at healthcare delivery differently by using system engineering approaches, by trying to reverse engineer quality into the delivery of care,” Udayakumar says. “That is one way for organizations and policymakers to improve the quality of U.S. care at an affordable price point.”   

Time to reassess

Continuity of care is also a challenge and a potential cost burden to the U.S. healthcare system, Turner says. If a patient who already has financial constraints develops complications once home, who picks up the tab? “Having to go to the emergency room [in the U.S.] may be far more expensive” than properly performing the initial procedure, Turner says. “This may be a medical debt inherited by the patient or the hospital providing follow-up care.”

While it is unclear how many patients actually travel abroad for procedures such as heart surgeries, the Deloitte survey showed that only 3 percent responded that they “definitely” would cross borders for care. A mere 1 percent reported that they had traveled abroad to either consult with a physician, undergo a medical test or procedure or receive treatment within the past year. And the brokerages may be struggling. In an analysis of medical tourism companies based in Canada, Turner found a high attrition rate, with half of the companies folding between 2006 and 2011 (Globalization and Health 2011;40:1-16).

In the U.S., some employers and cardiac programs have shifted to the equivalent of a “Made in America” campaign. For instance, in 2010, Lowe’s partnered with the Cleveland Clinic to provide full-time employees and covered dependents heart surgery procedures at the clinic. The program included travel expenses and lodging. “They say consider traveling, but stay in the U.S.,” Turner says.

The bigger picture is not market share but rather a chance to improve, Udayakumar emphasizes. “Medical tourism will always be a blip in terms of the overall U.S. population,” he says. “The broad strategic point is that this is a way for us all to learn and innovate.”