This paper will address some of the challenges and opportunities in medical tourism. The medical tourism industry is still evolving and there is limited experience data with which to make truly informed choices. Several of the authors presented have developed decision matrices for consumers of medical tourism to assist with the decision process; however the decision for a medical provider to cater to medical tourist is a little less certain. A couple of local (Las Vegas) physicians who cater to medical tourism are used to illustrate micro models of a form of medical tourism that is feasible.
Globalization of Health Care – Threat or Opportunity
The globalization of healthcare is expanding at an ever-increasing rate. Chilingerian, McAuliffe, and Kimberly (2012) states “… that the world of healthcare is globalizing (or becoming flatter), but that we are really only at the beginning stages of this process, a process that is likely to accelerate with the passage of time.” (p. 433). This new and challenging healthcare landscape change represents several strategic options of the US healthcare system. One of the primary traits of this globalization is patients traveling not only regionally but across international borders to seek and receive healthcare. The ease of international travel and the ability of patients to search via the Internet for facilities and healthcare providers that are the best according to international healthcare rating indexes at what they do. If you require a relatively common surgery but particularly if you require a sensitive relatively rare surgery, you quite naturally within the limitations of your financial situation want to seek the best care possible at the best value. An industry that has sprung up in response to the demand is travel agencies and professional organizations that cater to the medical tourist. One example is the Medical Tourism Association that caters to companies that provide services to individuals seeking to travel for whatever reason for healthcare. (Stephano, 2012). Self-promoted as a vehicle to promote safe medical tourism they appear on their website to respond more to advertiser dollars than patient’s best interests. These travel intermediaries act as a broker between the consumer and provider of medical tourism options can provide travel and lodging at a reduced rate. (Altin, Singal, & Kara, n.d.).
For medical tourists from the US, value is a major factor second possibly only to quality. Chilingerian et al. (2012) cites one study that demonstrated a 90% cost savings for a procedure in the United States versus the same procedure at an international accredited destination. Joint Commission International (JCI) created in 1994 accredits healthcare facilities internationally and is a subsidiary of The Joint Commission for Accreditation of Healthcare Organizations (JCAHO) in the US, which is the premier organization in the US for accrediting healthcare organizations. (JCI, 2012). This presents the medical traveler with a high degree of reassurance as to quality and safety at a non-US facility. Since being established the JCI as accredited approximately 150 international hospitals to standards similar to those used to accredit US hospitals.(Chilingerian et al., 2012, p. 436). Dr. Dominic Ricciardi, an internal medicine physician and a personal friend, specializes in medical weight loss and provides follow-up care for patients who received lap band surgery in Mexico. He has contracts with several insurance companies in Southern Nevada to provide the follow-up care. Based on his eight years’ experience, the complication rate of lap band procedure performed in selected facilities in Mexico is approximately 10% which is comparable to the complication rate of lap band surgeries done in the US. (Ricciardi, 2012). One of the minor risks of travel outside your home country is exposure to new bacteria that your body has not developed antibodies to combat. Hill (2011) discusses the risk of spreading an antibiotic resistant bacteria from one country to another via a medical tourism. Dr. Hill notes that the United Kingdom has one of the highest methicillin-resistant staph aureus (MRSA) rates in Europe. Two factors that contribute to the spread of antibiotic resistant bacteria include under or over use of antibiotics and lack of appropriate follow-up after a surgical procedure. In many countries such as Mexico, antibiotics are available over-the-counter which could lead to their misuse. There are many physicians such as Dr. Ricciardi who provide postsurgical follow-up for patients who receive their lap band surgery across borders. None of the literature reviewed quantified failure to follow up. Unless the out of country facility as an agreement with a resident country provider for follow-up there is no effective means of tracking that variable until an individual presents with a postop infection or other complication. Hill (2011) cited a study regarding the spread of a new antibiotic resistant bacteria called NDM-1. It is considered particularly dangerous because even the antibiotics that are used as a last resort have no effect. The study noted that several of the British cases of NDM – 1 recently had surgical procedures in India, Pakistan or Bangladesh. (p. 287). Anecdotally, a well-respected plastic surgeon in Las Vegas Nevada operates, in addition to his large local practice, a large accredited plastic surgery facility in Mexico where he offers packaged cosmetic procedures at half the cost of the same procedure in the US including transportation, visas, room and board, etc. As part of the package price he then provides follow-up back in Las Vegas for his medical tourists. In addition, some third-party payers have determined that cost savings are worth a pilot program to send patients to India, Mexico, and Thailand for treatments. And they include in their packages a referral to a state side provider for followup and management on any complications. When third party payers start contracting with out of country providers, it has significant potential impact on stateside facilities and physicians who are not flexible when it comes to price negotiations with insurance companies.(Chilingerian et al., 2012).
A study by Ehrbeck, Guevara and Mango cited by Chilingerian et al. (2012) found five reasons for international travel for acute-care medical treatment. They include better quality; the most advanced technology; quick access; lower cost for medically necessary procedures; and lower costs for discretionary procedures. (p. 436). It is interesting to note that lower-cost was the least common reason for seeking international medical care and better quality was the most common reason. This may be presumed to be counter to our natural ethnocentrism however with the increasing multiculturalism in the US; it appears to be less and less of an issue. An analysis of patient flows from North America shows that approximately 45% of the outbound patients go to Asia for care. Another 26% go to Latin America for care and within North America, Canada and the US, 27% of patients make that trip. (Chilingerian et al., 2012, p. 437).
According to Chilingerian et al. (2012) there are five categories of medical tourists. The first group is wealthy patients from countries with a high GDP that lack comprehensive health service. Examples cited include Qater, Bahrain, and United Arab Emirates. One measure of the degree of local healthcare infrastructure is infant deaths per 1000 live births. All three of the above cited countries have a relatively high in for mortality rate. The second category is medical tourists from countries with a large disparity between rich and poor. This would include countries like Turkmenistan, Jordan, Malaysia, Vietnam, the Philippines, Pakistan, Indonesia, India and China. These countries do not have a significant middle class and as such they lack significant comprehensive health service and experience a relatively high infant mortality rate. Another category is patients from countries with a relatively high GDP and relatively expensive healthcare services. Japan and the United States are excellent examples of this category. One example provided is an American patient who can fly to India and have a coronary artery bypass graft for 10% of the cost of having it done in the US. This is a significant benefit to patients with no health insurance assuming equivalent quality. The fourth category of patients is those from countries with historically long waits. This occurs primarily in countries with government-sponsored national health systems, where funding is reduced or limited. These lengthy waits can be both physiologically and psychologically difficult for patients. One study cited indicated urgent cases can wait as long as 30 months and non-urgent cases can wait as much as 78 months. In Canada the weight may be as much as three years for a hip and/or knee replacement. Patients willing to travel rather than tolerate pain and discomfort for months and years indicated that not only do they save money but the value added is less time in pain. The fifth category is a select group of patients that not only are seeking better outcomes but five-star service from the facility. Although most destinations for medical tourist state that only about 10% of their clients come from abroad there are certain hospitals that specialize in medical tourists. One facility in Bangkok Thailand treats 400,000 international patients from 154 countries providing five-star hotel services which includes “…deluxe rooms, VIP and Royal suites, laptop computers, a swimming pool, and a fitness center, and is within walking distance of Bangkok’s most prestigious restaurants, shopping, and entertainment venues.” (p. 439). In Canada, where the health delivery system is a mixture of national health system and private enterprise, there are facilities that derive over half their income from Americans traveling across the borders to receive high-quality specialized care at a reduced rate.
Lunt et al. (2011) in their report categorized patients into subsets: temporary visitors abroad and long-term residents. Temporary visitors are those who travel specifically across borders to receive medical care or plan a holiday across borders and receive medical care as a result of an accident or sudden illness. Long-term residents are those who retire or choose to reside in a country other than their country of origin and receive health services in their country of residence. Arguably, the long-term residents may not be considered a category of medical tourists. (p. 8).
Keckley and Underwood (2008) utilized a much less specific way of categorizing medical tourists. They grouped them into outbound, inbound and intra-bound or domestic medical tourists. The data for the domestic medical tourists was insufficient to accurately assess potential in the market, so the report focuses on outbound and inbound international medical tourists. They state that in 2007 an estimated 750,000 Americans traveled abroad for medical care. They projected that the number seeking care outside of the US will increase to 6 million by 2010 tempered by factors such as ability of foreign countries to supply the healthcare, US health plans denying coverage for care provided outside the US borders, US providers increase competition for these patients, and government policies that may restrict demand.(p. 3). In 2009 Keckley and Underwood (2009) updated their previous report maintaining the same three categories while addressing some of the previous factors that might affect the expansion of medical tourism. They cited three large insurers that have established a medical tourism pilot program and to state programs to incentivize medical tourism. All of these in the name of reducing cost to the consumer.(pp. 3-4).
International inbound medical tourists represent a source of revenue, often cash, to facilities who have both the reputation as a center of excellence in a specific product line and who make the effort to market to those groups of patients. As stated by Chilingerian et al. (2012) however, facilities who develop the infrastructure to cater to this rather select group of patients faces the risks and uncertainties generated by a potentially unstable environment. As other countries see patients leaving to go overseas and adapt their health services to better serve the needs of their citizens the demand for services in the US may drop. A hospital that has invested significant capital in facilities and equipment to specifically handle a significant number of medical tourists may have to realign their strategic plan if their volume of patients does not meet expectations. As stated by Lunt et al. (2011), “The demand for services may also be volatile with travel determined by both wider economic and external factors, as well as shifting consumer preferences and exchange rate.” (p. 13). Certain questions remain about the effects of supply and demand on the movement of patients across borders. Some could argue that as economic conditions deteriorate a patient who planned an elective procedure in their country of residence may make the trip across borders to receive the procedure at an overall reduced cost as opposed to forgoing the procedure altogether. According to Baran (2011), health care prices in the US has fueled the growth of international medical tourism. Heart bypass surgery that cost $100,000 in the US compared to 10 to 20,000 in countries such as India, Thailand and Singapore. The downturn in the economy beginning in 2008 negatively impacted medical tourism with the estimated number of tourists falling from 750,000 in 2007 two 540,000 in 2008 outbound from the US. However, due to the significant savings and increasing reassurance of equivalent quality the professional medical tourism groups project a 35% annual growth in medical tourism. Josef Woodman, author of “Patients Beyond Borders”, believes that the numbers cited are inflated and are more likely to be in the 400,000 patient range. (p. 2).
Obviously less expensive is a motivating factor for individuals who cannot or will not pay for elective procedures based on price alone. As reassurance is provided regarding the equivalent quality through accreditation organizations, the medical tourist will have to overcome the natural tendency to think that cheaper implies a lower quality. For example, Bangkok Thailand has six medical facilities that have hospital accreditation from the US. (Hutchinson, 2005). Accreditation by a subsidiary of the same organization that accredits all of the United States acute-care facilities is a significant endorsement of quality care. Smith and Forgione (2007) attributes the cost differences to lower labor costs, little to no malpractice costs, and lower pharmaceutical costs. She cites a report of the Centers for Medicare and Medicaid Services that 70% of healthcare costs are labor related. (p. 25). Altin et al. (n.d.) states, “This demand – supply gap has resulted in a lucrative business development opportunity for several countries like India, Thailand, Singapore, Turkey, Dubai and others where labor, both skilled and unskilled, and infrastructural facilities costs are considerably lower.” (p. 2). Smith and Forgione (2007) cites cost as the number one reason for Americans traveling overseas for healthcare. However, Runnels and Carrera (2012) state, “… the direction of movement is not one way and that wide price differentials alone, while instrumental in the calculus for seeking care abroad, do not drive medical tourism.”(p. 2). They conclude that the primary drive of growth in the medical tourism trade is unmet individual needs for healthcare. One of the causes of the unmet need may be cost; however unlike shopping for clothes, we probably will not purchase health care just because it is on sale.
As stated earlier labor costs are significant driver of overall health costs. A central point of the current election process and our economic problems is the transfer of jobs overseas where there are significantly lower labor costs which reduced costs to the consumer. This applies to health service delivery also. Chilingerian et al. (2012) discusses the flow of healthcare workers across borders. The ability of high income countries to offer increased wages and benefit packages to skilled workers has created a maldistribution in some of the poorer countries. Graduates in one country are not necessarily going to stay in that country to practice. This creates a worker flow of the pay scale which often means moving to a more developed country. Africa appears to be at the bottom of the barrel so to speak. According to Chilingerian et al. (2012), “Africa carries 25% of the world’s disease burden, yet has only 1.3% of the world’s health workers.” It is also estimated that about 1/5 of the African born physicians and 1/10 of the African born professional nurses are working overseas in higher income countries. (pp. 441-442). Often the healthcare professionals that tend to immigrate are experienced and/or highly skilled. This also creates diminished healthcare services quality in that the new healthcare workers lack senior supervision to further their education and increase their skills. There are also significant financial implications to this brain drain. For example one organization estimates that the United States has saved $3.86 billion as a consequence of importing 21,000 doctors just from Nigeria. (p. 443). However this brain drain also costs the country that trained the physician in not only loss of their services but cost of their education. Some of this loss is offset by what is referred to as migrant remittances. Migrant professionals are in a position to send significant amount of financial support to their family in the country of origin. The report cited gave three factors to explain this trend:
- Remittance flows are now the second largest source of external funding for development countries (foreign direct investment being the largest)
- Remittances are one of the least volatile sources of foreign exchange for developing countries
- Remittances are expected to rise significantly in the long-term
- (Chilingerian et al., 2012, p. 444)
This phenomenon does not apply to just healthcare professionals. Migrant farm workers in the US who receive what most would Americans would consider very low pay are able to send part of their pay to family in Mexico, which provides the majority of support for those family members.(Anonymous, 2012).
The scale of health worker migration has created a movement towards manage migration which would link state and federal health policy goals in such a way as to control health workers immigrating. This would benefit both source and destination country. The ethical issues of rich countries poaching healthcare workers from developing countries and countries with a medically underserved population have yet to be agreed upon.(Chilingerian et al., 2012, pp. 444-445).
The overall implication is that the global supply of healthcare workers is insufficient to meet the healthcare needs of the world population. There does not appear to be effective ways of dealing with the maldistribution until an adequate supply of skilled healthcare workers are available.
The implications for the grassroots healthcare manager are significant, however the solutions might be considered above the pay grade of even the CEO of any given facility. A large facility might as part of their planning strategy put into motion a plan to become a center of excellence and market that capability overseas, either directly or through one of the many medical tourism organizations. It is much more likely that the myriad of problems and challenges associated with this undertaking should be handled by large healthcare conglomerate that includes acute-care facilities, long-term care facilities, an associated medical practice group, and a memorandum of understanding with one or more health insurer that will support this type of endeavor.
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