SPOTLIGHT
The Future of Medical Tourism and TPAs

Linda Ludwick, president of the Health Care Administrators Association (HCAA) and Executive Director of Mountain States Administrative Services, Tucson, AZ

The enormous amount of recent press dedicated to the subject of medical tourism has caught the attention of consumers and Third Party Administrators (TPAs) alike.

In a recent conversation with Linda Ludwick, president of the Health Care Administrators Association (HCAA) and executive director of Mountain States Administrative Services, Medical Travel Today learned that more and more TPAs are looking seriously at how medical tourism may shape their future offerings.

“Without a doubt, brokers and TPAs are looking hard at medical tourism as an opportunity. In the last year alone, our top five clients have begun looking earnestly at how they might incorporate medical tourism into their offerings,” says Ludwick.

Among the questions being asked are:

• Should we offer it?
• What type of cost savings could we see?
• What’s the associated liability?
• What’s the quality of the site and the provider?
• How do we implement a medical tourism offering?
• Should we implement this ourselves or partner with others?

According to Ludwick, TPAs aren’t the only ones asking questions.

“At a recent employee meeting with a client of Mountain States, an employee stood up and asked how soon the company would begin offering a medical tourism benefit. That was a first for me, but I expect we’ll see more and more of it in the near future.”

In order to help TPAs better understand exactly what medical tourism is all about, the HCAAs annual TPA University to be held July 16-18 in San Francisco will feature panel discussions on the subject of medical tourism.

“We feel that medical tourism is one of the key issues for TPAs today. We’re all engaged in a constant struggle to compete with the BUCAs (the Blues, United, Cigna, and Aetna) – all of whom are currently offering or about to offer medical tourism benefits,” says Ludwick. “If we as TPAs don’t offer it, we’ll lose our competitive edge.”

For more information on the HCAA and TPA University, visit http://hcaa.org/tpauniversity.html.

ISSUES AND ANSWERS
Editor’s Note: In a recent issue of Medical Travel Today we featured a piece by Edward Watson, M.D., CEO of Medtral New Zealand regarding the risks of having surgery overseas. Another company that’s taking steps to protect consumers while they are overseas is AOS Assurance Company. AOS’s newest offering serves as the only insurance product available globally to resolve the risks taken by medical tourists. While we anticipate similar products emerging in the future, here’s how this initial offering works:

AOS Assurance Company Limited Releases a New Medical Malpractice Insurance Product for the Medical Tourism Industry

AOS Assurance Company Limited recently announced the launch of a new and unique issuance of insurance to cover people who travel outside their country for medical procedures, either elective or non-elective. Patient Medical Malpractice Insurance (PMMI) addresses the financial and personal risks related to out of domicile medical travel. PMMI is the only product available globally to resolve the medical tourist's financial risk.,Much like traditional travel insurance, PMMI is "first person" insurance ,purchased by the patient before traveling for the medical or surgical procedure. Should a medical malpractice occur abroad, the claim is handled in accordance with the patient’s own home country standards and claims are paid in U.S. currency. There are no lawyers or lawsuits involved, and claims are estimated to be settled 80 percent faster than the traditional litigation environment.

Last year, over 500,000 U.S. citizens and thousands of international residents traveled abroad to get healthcare. People choose to pay out-of-pocket for medical procedures in foreign countries to avoid both the high cost of health care in their own countries and the often long waiting lists for treatment. Patients are willing to travel for medical procedures that may cost one-fifth to one-eighth less than in their home country. Procedures can be arranged very quickly abroad, avoiding domestic waiting lists.

JCI, the international accreditation arm of the U.S. Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has provided numerous foreign facilities with U.S. accreditation, and in many cases, the care is superior. Practitioners are experienced and are board certified in either Europe or North America., Nurse-to-patient ratios in these geographics are often at one-to-one.

Despite the numerous accounts of excellent service and prices, there are many individuals who do not choose foreign medical travel, because they fear something will go wrong. If a medical malpractice occurs abroad, there is presently little recourse available to the patient in a foreign country. Patients who have the PMMI product can focus their attention on getting well; they can rest knowing that, however remote the possibility, a medical malpractice could occur, and they have the ability – with PMMI - to mitigate that risk and know that they will be looked after.

This is an important development that will provide necessary insurance, not presently available anywhere else in the world, for medical tourists. This development will also help to mitigate the liability risk assumed by medical tourism companies (portals) arranging for the foreign practitioner and hospital on behalf of the patient, should the patient purchase the product beforehand.

AOS has also developed a group version of the PMMI product called GMMI (Group Medical Malpractice Insurance) to be used in the growing group insurance market. This product will provide a much-needed level of security that before now was missing for the medical tourist.

For patients who need more information, please visit our website www.aosassurance.bb or e-mail us at info@aosassurance.bb

BridgeHealth International Receives Seven-Figure Funding

Earlier this month, BridgeHealth International, Inc. (BHI) announced that its worldwide health care network model received a seven-figure seed round investment led by the NY-based private equity firm, Jovian Holdings. Additional participation comes from Denver-based Tivis Capital, a private equity firm specializing in healthcare services and medical device companies, which will also provide a senior management team to lead BHI’s medical tourism operations. 

“With strong financial backing and a seasoned executive team that has extensive experience in health care operations, BHI emerges as the industry leader in the burgeoning market niche known as medical tourism,” said Victor Lazzaro, Jr., CEO of BridgeHealth International and managing director of Tivis Capital.

Lazzaro has 20 years of senior management experience in the health and managed care fields and formed International Health Technology Company (IHT), a consulting firm, which has developed and managed medical clinics and hospitals in China. He serves as president and CEO of Signum US Healthcare, developing CyberKnife®-focused surgery clinics in China. Previously, Lazzaro was president and CEO of United Healthcare Corporation - Mountain States (UHC) and was regional vice president of Health Plan Operations, Gulf South for Prudential Insurance Company of America.

“We are assembling a wide selection of dentists, physicians and accredited hospitals, and are actively expanding the network to serve the needs of employers, insurers, benefit plan payers, third party administrators and consumers,” continued Lazzaro. 

“Our model includes highly competitive pricing models that offer clients flexibility, along with outcomes-based measurement systems to evaluate patient experiences.  Drawing upon our diverse backgrounds in health care, we will focus on the delivery of outstanding customer service -- a hallmark of our product offering.”

BridgeHealth International arranges cost effective care, easy access, and travel to key destinations where the dentists, physicians and hospitals are well-known and respected for their dental and medical care.  As a premier international health care service provider, BHI carefully selects centers of excellence that are accredited by the Joint Commission International (JCI) or equivalents, and are often largely staffed by Western-trained, board-certified physicians. In many cases, data is available for customers to perform health care comparison shopping and self-evaluate hospital services.

“BHI delivers value to companies and individuals seeking significant savings on health care, with no hidden costs,” added Lazzaro.  “Employers and payers can look forward to seamless integration with their existing health benefits products and can rely upon our ongoing dedication to upholding the standards of care that Americans have come to expect from their domestic healthcare system.”

For more information on BridgeHealth International, visit their website at http://www.bridgehealthintl.com

Opportunities in Thailand Explored at a Two-Day Conference

The Tourism Authority of Thailand (TAT) and MEDS Global Healthcare Inc. teamed up November 29-30 in Las Vegas to host a unique forum examining the growth of overseas medical care options in Thailand and their potential impact on U.S. patients and providers.

More than 150 healthcare professionals and patients attended the two-day Thailand Medical Tourism and Healthcare Trade Fair at the Mandalay Bay Hotel and Casino. The event was arranged through a first-of-its-kind partnership between MEDS GHC and the TAT, as the government agency adds major medical care to a lengthy list of features that attract visitors to the popular Southeast Asia destination.

“We promote the natural beauty, the seaside, the festivals, and the culture. Spas, health and wellness are simply among the attractions we promote,” said Juthaporn Rerngronasa, deputy governor for international marketing with the TAT. “With this conference we are involved in an expansion of our promotion in terms of medicine.”

Thai government statistics show that the number of international patients seeking care in Thailand—both visitors and ex-patriates—has grown from “a couple of hundred thousand” in 2000 to 1.44 million in 2006, Rerngronasa said.

Dr. Rome Jutabha, medical director of the Los Angeles-based MEDS Global Healthcare, said the numbers reflect incremental leaps in the availability of quality, cost-effective care in the country and in the growth of patient confidence.

“ Thailand boasts some of the most modern hospitals in the world, featuring state-of-the-art medical equipment and facilities, outstanding nursing and ancillary services, and US trained/board certified physicians,” Dr. Jutabha said.

“Our goal at MEDS Global Healthcare,” he added, “is to ensure that patients receive the latest treatments and procedures from the most qualified and credentialed doctors, and to facilitate seamless care and communication between patients’ doctors in the United States and Thailand.”

Dr. Richard Corlin, a Santa Monica gastroenterologist and former president of the American Medical Association (2001-2002), was one of more than a dozen doctors, patients, healthcare experts, and tourism officials who spoke at the symposium. He noted several factors he believes must be addressed to win support for overseas care models among U.S. providers.

“If we can get assurance that the level of care is comparable to the level of care in this country; if we can be assured that medical record transfers will be appropriate; if we can be assured that transfer agreements are in place; and if we can be assured that legal and liability issues have been resolved, then I think (overseas care options) will be good because they will increase access to care,” Dr. Corlin said.

“I think I heard a very realistic attitude toward a willingness to do what’s necessary to meet these standards,” added Corlin. as the symposium drew to a close. “What I heard today that impressed me the most was … information about the facilities and the standards at some of the major institutions in Bangkok. I didn’t realize that, and I was very impressed.”

Corlin encouraged American physicians and healthcare administrators to educate themselves about the opportunities and challenges related to overseas medical care.

“I think most of us doctors are not very aware of the options that are available and the level of competency that exists in many areas in Thailand,” he said. “As with most other things, a greater knowledge of what goes on elsewhere can be very helpful, especially in avoiding misperceptions.”

More information about the symposium and MEDS Global Healthcare is available online at medsglobalhealthcare.com

National Center for Policy Analysis: Global Competition in Health Care

Early in November the National Center for Policy Analysis (NCPA) issued its first-ever report on the topic of Medical Tourism. An internationally known nonprofit, nonpartisan research institute with offices in Dallas and Washington, D. C., the NCPA cited medical tourism as “one of the most promising solutions for our nation's soaring health care costs.”

In the 37-page report, 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.

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

In this issue of Medical Travel Today, we feature an excerpt from the report that focuses on how globalization is changing the delivery of health care, specifically in the U.S., as well as how some companies are responding.

In our next issue, we’ll feature the report’s findings on the obstacles to health care globalization.

A complete copy of the report can be found at: http://www.ncpa.org/pub/st/st304

How Globalization Is Changing the US Health Care System

For the United States, globalization of health care encompasses both exporting patients (medical tourism) and importing medical services (outsourcing). This medical trade has the potential to increase competition and efficiency in the U.S.. Princeton University health economist Uwe Reinhardt says the effect of global competition on American health care could rival the impact of Japanese automakers on the U.S. auto industry — forcing domestic producers to improve quality and to offer consumers more choices.

Apart from patient travel, many medical tasks can be outsourced to skilled professionals abroad, especially when the physical presence of a physician is unnecessary. This can include long-distance collaboration — incorporating the services of foreign medical staff into the practices of American medical providers. Finally, global competitors can build facilities closer to the U.S. and selectively contract with America’s health insurers.

Outsourcing Medical Services. Information technology makes it possible to provide many medical services remotely, including outsourcing them to other countries. Telemedicine — the use of information technology to treat or monitor patients remotely by telephone, Web cam or video feed — is becoming common in areas where physicians are scarce. Telemedicine gives rural residents access to specialists and will probably become the preferred way to monitor patients with chronic conditions.

Outsourcing often results in lower costs, higher quality and greater convenience. Some clerical tasks, such as medical transcription — entering physician notes and dictation into a patient’s electronic medical record — are already outsourced. American hospitals increasingly use radiologists in India and other countries to read X-rays. For instance, NightHawk Radiology Services contracts with U.S. board-certified physicians living in Australia for overnight interpretations of X-rays and scans. Other medical tasks that don’t require the physical presence of a physician could also be outsourced to lower-cost doctors abroad. The British National Health Service (NHS) is considering using doctors in India to read some lab tests and MRI scans.

PlanetHospital has offered to work with US hospitals to set up local imaging centers that would use physicians in India to read imaging scans. An MRI scan could be performed profitably for as little as $400 to $500 — far less than typical U.S. prices.

Opportunities for American and Foreign Health Care Providers to Collaborate. Helping patients to manage a chronic condition is often complex and time consuming. Outcomes could be improved if teams of medical providers worked together to enhance all aspects of medical treatment through aggressive management. 100 What’s missing?

When multiple physicians are treating a patient, a case manager could ensure that all physicians are coordinating their efforts. However, such close monitoring and interaction is labor-intensive and costly. Often these tasks are not reimbursed or are reimbursed at rates lower than the cost of providing them. A potential solution is for American health care providers to collaborate with low-cost providers who are in developing countries. They can perform the labor-intensive tasks that don’t require the physical presence of a physician.

Telemedicine, which involves remote consultation, monitoring and treatment of patients, is increasingly being used in disease management programs. Past research has already shown that telemedicine can improve adherence to protocols and increase convenience for patients with chronic ailments. Thus, it is a logical to outsource some of disease management or remote health coaching to places where labor costs are lower.

Creating New Heath Insurance Plans that Cover Medical Travel. Currently, most insurers do not include foreign providers in their networks, but they may in the future. Mercer Health, an employee benefits consulting firm, is working with several Fortune 500 employers to take advantage of medical travel. Several health insurers are also experimenting with international coverage. Milica Bookman, a professor at St. Joseph University, predicts that by 2009, it will become increasingly common for mainstream health insurers to include foreign providers in their networks. The following are some examples of insurance products that already use foreign providers.

Access Baja . BlueShield of California has a health network designed for people who choose to get their medical care in Mexico. Access Baja was implemented a year after California passed legislation in 1999 allowing the state’s insurers to reimburse providers in Mexico. Although many of the enrollees are Mexican nationals who cross the U.S. border each day to work, employers on both sides of the border can offer this plan to their workers. However, the plan requires enrollees to live within 50 miles of the border to easily access the Mexican primary care physicians in the BlueShield network. By 2005, nearly 40,000 people had signed up for coverage offered by Mexican health care providers.

Because Mexican medical care costs less, Access Baja premiums are less than two-thirds the cost of the alternative BlueShield of California plans. Hispanic enrollees can have a doctor who is fluent in Spanish and understands their culture. An added convenience is that Mexican physicians are often available for same-day appointments, as well as evenings and weekends.

Networks with Foreign Hospitals. Some health plans take advantage of the potential savings by allowing enrollees to travel abroad for lower-cost treatments. In February 2007, BlueCross BlueShield of South Carolina added Bumrungrad International Hospital in Thailand to its network. South Carolina BlueCross BlueShield does not plan to require patients to go abroad for lower-cost care, nor is it actively considering using financial incentives to encourage patients to travel abroad. Rather it is a value-added service available to members who request it. While no patients have thus far taken advantage of this service, it may benefit underinsured patients facing steep out-of-pocket payments.

Other Options . As the medical tourism trend grows, other U.S.-based companies in the health industry are looking at ways to offer medical travel that is at least partially covered by health insurance.

• Over the next few years, at least 40 company-sponsored health plans will offer overseas options through United Group Programs, a health insurer in Boca Raton, Florida.
• In 2006, West Virginia's legislature held hearings on the possibility of including foreign hospitals in its state employees’ health plan network.
• And the medical tourism firms IndUSHealth and PlanetHospital are in the process of creating health insurance products that combine American-based primary care with foreign travel for expensive procedures.

PlanetHospital . PlanetHospital is working with a major insurer to design a low-cost health plan. Initially, PlanetHospital plans to roll out a limited benefit plan, sometimes referred to as a “mini-med” plan, based on the casualty insurance model where the benefit is a specific sum of money. These types of plans generally provide coverage for a limited number of physician visits each year and a limited amount of inpatient care; they sometimes offer coverage for prescription drugs. Mini-med policies typically cap benefits at a maximum of about $25,000 annually. Since the amounts these policies will pay are relatively low, patients can expect significant cost-sharing for medical care. But this provides an incentive for patients to shop carefully to avoid high out-of-pocket costs.

The unique part of PlanetHospital’s plan is that it will reimburse patients the same amount for each particular service, regardless of where it is performed. Thus a patient could significantly lower out-of-pocket costs by going abroad for treatment. For instance, an enrollee who needs a heart procedure could easily spend more than $50,000 at a hospital in the United States. A mini-med policy may pay only $10,000 toward the cost. But abroad, the same surgery could cost less than $10,000, including travel, thus making the mini-med a sensible and affordable alternative. Because coverage is limited, this policy will cost about $50 to $100 a month, only a fraction of a traditional health plan .

PlanetHosptial’s first step will be a health plan aimed at El Salvadorans living in the United States. Enrollees would receive a limited number of primary care visits locally under the plan and could travel to El Salvador for covered major medical needs. If the plan proves successful, additional ones will follow for countries such as Mexico and India. Coverage under one of these “mini-med” plans might cost a family as little as $200 per month.

Effects of Increased Competition on U.S. Health Care Markets. Global competition could lower the cost of some medical procedures. At the same time, increased international competition for qualified medical personnel could raise labor costs in the United States. If foreign medical students, physicians and nurses currently in America choose to work overseas, there may be shortages of workers in some medical specialties in the U.S. and wages for these workers will rise. This is especially likely in areas of medicine not easily outsourced. For example, radiology is relatively easy to outsource, since it does not require the radiologist to be physically present. Although radiology has been one of the highest-paid specialties in medicine, that is likely to change in the future, since reading X-rays and other scans can easily be outsourced. On the other hand, outsourcing would have little effect on the inherently local practice of emergency room medicine.

Global medical competition could also exacerbate the shortage of primary care physicians in the U.S. Today nearly one-quarter of practicing physicians in the U.S. attended a foreign medical school. Indeed, each year nearly one-quarter of slots in U.S. medical residency programs are filled by foreigners. Greater opportunities in their native countries and in other countries could reduce the number of foreign physicians (and nurses) practicing in the U.S..and encourage more of them to return home after they receive training. Many foreign medical graduates currently work in underserved rural areas in the U.S., so these communities would be especially hard hit.

Also, due to an ongoing nursing shortage, American hospitals recruit foreign nurses to fill vacancies. A smaller supply of foreign physicians and nurses willing to work in the U.S. could strain the nation’s health care system by raising labor costs.

Effects of Globalization on Health Care in Other Countries. Today many African countries are experiencing shortages of physicians and nurses. Drawn by the opportunity to earn more in Europe and the U.S., many physicians trained in Africa emigrate. Offering more jobs, higher pay and entrepreneurial opportunities in developing countries could reduce this brain drain. This would benefit the local populations by increasing their access to care.

Some critics of medical tourism in developing countries claim that health care facilities and providers that serve medical tourists will treat only foreign patients to the exclusion of native-born poor residents. This is unlikely, since most hospitals in developing countries cannot survive on cash-paying medical tourists alone. But even if specific hospitals in developing countries are open only to foreigners and local elites, the health care systems of these countries will be enriched by the influx of revenue, enabling them to offer local populations increased access to medical care.