Medical Travel Today is a publication of CPR Strategic Marketing Communications, a public relations firm based near New York City that specializes in medical companies, with an international clientele. CPR, its partners and clients are at the nexus of where medical travel is today, and where it will be tomorrow.

Publisher: Laura Carabello

From the Editor: This week in Medical Travel Today, by Jeff Schult, editor and author of Beauty from Afar...
BREAKING NEWS The National Center for Policy Analysis releases a groundbreaking, far reaching report on medical travel....
News in Review: News and briefs and new links from around the web and around the world...
Spotlight: The Numbers Game by Jeff Schult.
Medical Tourism Association: Advisory Board announced
Issues and Answers: Dr. Michael Horowitz on why costs of care abroad can be so low, relatively. Conclusion of three-part series.
Press Releases
Privacy Policy

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PRESS RELEASES

DALLAS (Nov. 1, 2007) – One of the most promising solutions for our nation’s soaring health care costs may be found in sending our patients outside the country for care, according to a new study released by the National Center for Policy Analysis (NCPA).  The NCPA notes that health care spending per capita is growing at twice the rate of growth of national income, an unsustainable path that is on course to crowd out all other consumption.  The NCPA study can be accessed online at http://www.ncpa.org/pub/st/st304.

“Wealthy patients from developing countries have long traveled to the U.S. for high quality medical care,” said NCPA Senior Fellow Devon Herrick, author of the report.  “Now a growing number of less affluent Americans are traveling outside the U.S. for quality health care at affordable prices.”

According to the study, an estimated 500,000 Americans crossed the border for treatment in 2005.  A majority traveled to Mexico and other Latin American countries.  Americans were also among the estimated 250,000 foreign patients who sought care in Singapore, the 500,000 in India and as many as 1 million in Thailand.  The cost savings for patients seeking medical care in other countries can be significant.  For example:

• Apollo Hospital in India charges $4,000 for cardiac surgery, compared to about $30,000 in the U.S.
• Hospitals in Argentina, Singapore or Thailand charge $8,000 to $12,000 for a partial hip replacement — one-half the price charged in Europe or the U.S.
• Hospitals in Singapore charge $18,000 and hospitals in India charge only $12,000 for a knee replacement that runs $30,000 in the U.S.
• A rhinoplasty (nose reconstruction) procedure that costs only $850 in India would cost $4,500 in the U.S.

 “Foreign hospitals are posing a challenge to domestic hospitals similar to the challenge Japanese automakers posed for Detroit,” said NCPA President John Goodman.  “There is nothing that is being done in Mexico, Thailand or India that can’t be done just as inexpensively in this country.  But to do so, U.S. hospitals need to be freed from unwise public policy constraints.”

Prices for treatment are lower in foreign hospitals for a number of reasons.  Labor costs are lower, third parties (insurance and government) are less involved or not at all involved, package pricing with price transparency is normal, there are fewer attempts to shift the cost of charity care to paying patients, there are fewer regulations limiting collaborative arrangements between health care facilities and physicians, and malpractice litigation costs are lower.

Despite the lower cost, health care abroad can also be of high quality.  For example: 

• Foreign health care providers often have physicians with internationally respected credentials, many of them with training in the United States, Australia, Canada or Europe.
• More than 120 hospitals abroad are accredited by the Joint Commission International (JCI), an arm of the organization that accredits American hospitals participating in Medicare; another 20 are accredited through the International Standards Organization; and some countries are adopting their own accrediting standards.
• Some foreign hospitals are owned, managed or affiliated with prestigious American universities or health care systems such as the Cleveland Clinic and Johns Hopkins International.
• Several companies are building and operating hospitals that meet American standards in Mexico largely for American (and wealthy Mexican) patients.

Patients who are not familiar with specific medical facilities abroad can coordinate their treatment through medical travel intermediaries.  These services work like specialized travel agents.  They investigate health care providers to ensure quality and screen customers to assess those who are physically well enough to travel.  They often have doctors and nurses on staff to assess the medical efficacy of procedures and help patients select physicians and hospitals.  In addition, patients can also use online communities to get information on the safety and quality of medical providers by reading the testimonies of other patients who have had surgery abroad.

“Most insurers do not currently cover foreign providers, and we are unlikely to see large swaths of patients going overseas,” said Herrick.  “But the future of medical tourism is likely to be insurers taking advantage of global competition by adding nearby lower cost foreign facilities to their network.”  For example, BlueShield of California’s Access Baja plan is for people living near the border that want to receive physician care in Mexico.

Models of Medical Tourism

1. Least Aggressive: Patient Pays
2. Aggressive: Insurer Pays, Patient Pays Deductibles
3. More Aggressive: Insurer Pays and Waives Cost Sharing
4. Most Aggressive: Insurer Pays Patient to Go Abroad

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The NCPA is an internationally known nonprofit, nonpartisan research institute with offices in Dallas and Washington, D. C. that advocates private solutions to public policy problems.  We depend on the contributions of individuals, corporations and foundations that share our mission.  The NCPA accepts no government grants.

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One of the questions I am invariably asked when other journalists talk to me about medical tourism is: “How many Americans are going overseas for surgery and medical care?” Perhaps because I’m a journalist, I usually answer the question with a question: “Who do you want to count as a medical tourist?”

The definitive, short and tidy answer to the first question these days seems to be … 5,000, or 150,000, or 500,000 or 15,000,000 … and, of course, it all depends on who you count and how you count; because in medical travel, no one is actually in a position to keep score. Reporters generally understand the longer answer I try to give them, but it’s not the one they (or, more likely, their editors!) want.

I may be at least partly responsible for the 500,000 number, though it has been blamed on others as well. (See above article, the National Center for Policy Analysis is now using it.) Who did I count and how did I count them? When researching Beauty from Afar, I looked at the major destinations for cosmetic surgery travel; talked to experts, officials and doctors from each country; and came up with a guesstimate that at least 100,000 United States residents were having cosmetic surgery outside of the U.S. annually, as of 2005-06. I surmised, further, that twice that many, or more, were getting dental work outside of the country – most of them in the border cities in Mexico. Then I added the 150,000-plus folks reported to have cross-border insurance in California, and threw in another 50,000 or so, conservatively, to cover everything else – from heart and hip procedures in India to sexual reassignments in Thailand to, well, anything else, anywhere.

That was about as scientific as I was able to get. I tried everything I could think of as far as methodology, and asked everyone I met what the “real” numbers might be, locally or globally. There were no real numbers and there still are not. But 500,000 “feels” like a sound number, at least to me, the way I count.

The 15,000,000 number, the one that sounds the craziest to most people to whom I’ve mentioned it? It comes from a reputable source – researchers at the University of Texas at El Paso Medical Center, 2005 -- and, moreover, it comes from an estimate of just the number of U.S. residents who go to Mexico annually!

“ … Patient movement: 5% of the border crossings are to purchase health services (20 million annually), including pharmaceuticals (75% of those services are rendered in Mexico). This is due partly to the high uninsured rates on US-side of the border (in TX about 38%), low and decreasing numbers of providers, and the increasing costs of health care that has driven people out of the US market in search for cheaper services and pharmaceuticals in Mexico …”

So – 75 percent of the total of 20,000,000 cross-border visits to purchase health services is 15,000,000 U.S. residents heading south of the border annually. Yes, it sounds like an enormous number, but I suspect that researchers in Texas know more than I can tell from up here in the Northeast U.S. Still, I have questions. What percentage of those 15,000,000 people were buying prescription drugs? Probably a lot, and I (arbitrarily) don’t count them as medical tourists. Does buying, say, toothpaste and vitamins count as a “purchase of health services?” I don’t know and will have to ask. As I said – it depends on who you count and how you count.

A lot of people would say the 5,000 number sounds as crazy as 15,000,000-plus … and might guess it came from an American who simply doesn’t believe that people would go out of the country for healthcare. But 5,000 was actually the estimate I got from the CEO of a medical tourism company, a fellow I met on Cyprus this past spring. However – and this is a big qualifier – he was choosing to count only a very small percentage of what most people consider as the whole.

His definition of “medical tourist” excluded cosmetic surgery and dental patients; it excludes also all the border traffic; and further excludes anyone who chooses to travel abroad for medical treatment without the services of a medical tourism company. One of the more disconcerting facts in the medical tourism business is that, so far, the vast majority of patients – however many there are -- shop for care with medical tourism companies but end up making their own arrangements for treatment or surgery with doctors, clinics and hospitals.

Finally, the 150,000 number I lay mostly at the door of Patients Beyond Borders author Josef Woodman, a contributor to this newsletter (See Issue 2.) And I know Joe arrived at his figure in much the way I arrive at mine – though he doesn’t count everyone I count, calls his own number conservative and says it will (or has) doubled in 2007.

Whatever the “real” number of American medical tourists is, it is of more than just journalistic or academic interest. These numbers are making their way into projections, analyses and business plans in boardrooms around the world, and are of significant interest to venture capitalists in the U.S. and abroad. How big is the market for medical travel? How much market share, how big of a niche, can a surgeon, a clinic, a hospital, a corporation, have?

As I said – for now, I like the 500,000 number. But I find the smaller numbers that make up the whole sometimes tell a more compelling story. There is a doctor – one surgeon – near Tijuana, Mexico, who, in an average month, does 90 bariatric procedures on U.S. residents. At a price of about $8,000 per surgery, that’s $8,640,000 a year. He probably doesn’t even have a business plan, but I’d bet his credit is pretty good.

Jeff Schult's home page is www.beautyfromafar.com . He can be reached at: editor@medicaltraveltoday.com.

Medical Tourism Association:

Report from Goa

Editor's Note: Jonathon Edelheit, president of the Medical Tourism Association, filed this report before heading back to the United States from Goa, India, where he and Renee Stephano, General Counsel for the association, were presenters at a medical tourism conference.

By Jonathan Edelheit
President, Medical Tourism Association
©2007 Medical Travel Today

The conference in Goa -- known to some as the Miami Beach of India -- was a big success, with more than 150 attendees from countries around the world, including India, Dubai (Arab Emirates), Singapore, Taiwan, Philippines and the U.S.  The Medical Tourism Association got strong positive feedback on it’s presentations on "How to Attract Americans Overseas" and also on “Medical Tourism and the Law.”

Several large hospital systems expressed interest in working with the association to help focus the industry on quality of care and to help the industry shape itself in a very positive way. The attendees were very excited to hear the topic "Medical Tourism and the Law" presented by Renee Stephano, general counsel for the association, and felt for the first time that someone had been open and honest and informed them of what liability hospitals and medical tourism companies may have when dealing with individuals.

Attendees at the conference felt a real need for those people involved in the industry to get together and to focus on working together towards a common goal and on providing the highest quality of outcomes for hospitals.  

After the conference, Renee and I traveled to several hospitals in India to see firsthand the world-class health care being performed overseas.   Some of the hospitals the association visited were Wockhardt, Apollo, Fortis, Escorts, Hiranandani, and the Asian Heart Institute.  Besides developing new relationships, the most positive outcome of the trip was the tremendous positive feedback international hospitals from around the world showed for it, and their commitment to work with the association to provide transparency in the industry.

Jonathan Edelheit can be reached at: info@medicaltravelauthority.com.

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