|Medical Tourism A $2.1 Billion Business And Growing
More than 750,000 Americans left the country last year
for less expensive medical treatments, with the number expected to grow
to six million by 2010, according to a new report by the Deloitte
Center for Health Solutions.
The growing trend of medical tourism represents $2.1
billion spent by Americans overseas for care, and $15.9 billion in lose
revenue for U.S. healthcare providers.
The Executive Report on Managed Care and the Managed Care Information Center
spoke with representatives from different aspects of the health tourism
industry, including a spokesman from the Joint Commission International
(JCI), experts on the health tourism industry and a health insurer now
offering international treatment to ascertain the depth of the
"Medical tourism has been with us for awhile," said Ken
Powers, spokesman for JCI, an international healthcare accrediting
body. "Historically, the traffic pattern has been in our direction, but
because of the high cost of U.S. healthcare, we are also seeing
Americans seeking care in other countries where healthcare costs are
Deloitte reported that by 2017, the number of outbound
medical tourists is expected to rise to 15.75 million, representing a
potential $30.3 to $79.5 billion spent abroad by Americans. Many times,
uninsured or underinsured patients opt for less-expensive surgeries
abroad. However, elective surgeries such as cosmetic or dental, often
not covered under insurance plans, are also popular reasons to travel
"The cost spiral in the U.S. system has caused large
numbers of consumers to go abroad just based on the cost differential,"
said Paul Keckley, executive director of the Deloitte Center for Health
As the trend continues to grow, however,
employers’ and insurers’ acceptance of global healthcare
will help expand the options of millions of American workers.
"Now," said Keckley, "there are two drivers of medical
tourism. As receptivity among employers and insurers increases, they
will offer more international options. And as Western standards of
medicine are implemented, now at over 10 major sites throughout the
world, receptivity among patients will increase."
Keckley insists this is not a fad, but rather a trend that will continue to grow as acceptance of the practices grow.
According to John F.P. Bridges, assistant professor of
health and policy management at Johns Hopkins University, alternative
treatments unique to other cultures are also driving the trend.
"Health tourism, as opposed to medical tourism, is
broader to include not just procedures. There’s a much bigger
market for holistic care. Some people like to go home for cultural
reasons, language reasons, etc. Because of internationalization, we all
come from different places and that’s an ingredient in this
trend," said Bridges.
An important marker in the beginning of the global
healthcare trend came in 1998 with the creation of the JCI. It was
created as a separate body of the Joint Commission on Accreditation,
which has acted as an independent accrediting body in the U.S. for
nearly a century. Between then and now, the JCI has accredited 176
healthcare organizations in 34 countries. They also provide information
for patients looking outside the U.S. for surgeries and procedures.
"The mission of JCI is to improve the quality and safety
of healthcare around the globe," said Powers. "Many of our hospitals
tell us that they seek JCI accreditation because it helps them learn a
common language, like that used by air traffic controllers, which
ensures safety and consistency in the delivery of healthcare."
JCI has approximately 300 standards which hospitals must
meet, Powers explained. By seeking accreditation, hospitals demonstrate
a commitment to safety and quality by undergoing an independent review
of their practices.
To help facilitate interaction between JCI-accredited
hospitals and patients, BlueCross BlueShield of South Carolina created
a wholly-owned subsidiary, Companion Global Healthcare, to cater to
health tourists. Its mission was to set up a network of overseas
hospitals accredited by JCI and provide networking and concierge
services for BlueCross BlueShield members wishing to go abroad.
"We know that increasing numbers of our members, and
Americans in general. are going outside of their standard benefit plans
for various things that are health and wellness related. Creating a
global surgery option for our members seemed like a logical next step,"
said Billy Quarles, representative for Companion.
Most experts agree that the recent growth in healthcare
tourism has been driven by cost. The increasingly astronomical cost of
domestic surgeries has led many uninsured to go abroad.
According to a study from the National Center for Policy
Analysis, a heart bypass surgery that would cost between $95,000 and
$200,000 in the US would typically cost just $10,000 in accredited
hospitals in India, one of the most popular destinations for American
Though there is agreement that cost is one of the most
crucial factors, authorities disagree about the reasons costs are so
high in the U.S. and so low in other countries for comparable
"In other countries," said Bridges, "the governments are
paying for the hospital, there are wage differences, etc. Healthcare is
an island economy. In the past, we haven’t allowed people to
travel so there has been no change in prices at home."
Many sources, including Companion Global Healthcare,
attribute the lowered cost to labor and malpractice expenses. In many
other countries, doctors have lower fees and salaries and do not have
to pay the same high rates for malpractice insurance. Bridges, who has
traveled around the world studying healthcare trends, credits the cost
discrepancy to the uneven relationship of list price and actual charge
that exists between hospitals and insurers.
"What are insurers actually paying? We don’t know.
We just see what they tell us the charge is, we don’t know what
they actually pay. And that is definitely going on, we just don’t
know to what degree," said Bridges.
Despite less expensive surgeries, there are challenges
and concerns for those interested in partaking in the global healthcare
trend, regardless of whether they are consumer, provider, or regulator.
"Be careful of middle men," recommended Bridges. "If a
good is selling for $1,000 here and $100 somewhere else, it creates
arbitrage opportunities to make money. People acting as middle-men are
not to be trusted because of this arbitrage opportunity. There is too
much money out there to be made. Deal with hospitals directly."
The JCI agreed that people must be vigilant when planing
overseas surgeries. Finding accredited and respected doctors and
hospitals should be a top priority, they said.
"Medical tourists can receive safe, quality care, but
first they must research the physician and organization they are
considering using," said Powers.
The implications for the future of healthcare are still
unclear. Most sources agree that at this point, the health tourism
market is too small to affect American healthcare significantly.
However, the growth trend is clear and projected to continue for the
next several years.
"At this time, it appears medical tourism is a growth
industry," said Powers. "As U.S. healthcare costs soar, many Americans,
particularly the uninsured and underinsured, are in search of
institutions around the world providing quality, safe care for less
"As healthcare costs continue to rise for American companies," agreed Quarles.
"We expect to work with more and more who want to offer
a global option to their workers," said Quarles. "We think that over
the next three to 10 years, a significant number of Americans will be
traveling abroad for major operations."
For more information on the Deloitte Center for Health
Solutions, call (888) 233-6169 and for more information on Companion
Global Healthcare, visit www.companionglobalhealthcare.com.
Addresses: Joint Commission International, 1515 West 22nd Street, Suite 1300W, Oak Brook, IL 60523; www.jointcommissioninternational.org.
John Hopkins University, Bloomberg School of Public Health, Health
Policy and Management Department, 624 N. Broadway, Rm 689, Baltimore,
MD 21205; (410) 614-9851.