Kristin R. MoyerAs healthcare costs in the West continue to skyrocket, it is not unthinkable that insurance companies would provide corporate-sponsored plans (across industries — including financial services) that provide incentives for patients to utilize medical tourism. For example, an insurance company may provide 90% coverage for an open-heart surgery in India (leaving the patient to pay $870 out of pocket) or 80% coverage for an open heart surgery in the U.S. (leaving the patient to pay $6,000 out of pocket).
Medical tourism could generate $2 billion annually by 2012, according to a report that appeared on the Indian Web site Medindia.com. In 2006, almost 500,000 people from the U.S., the U.K., Canada, France, Germany, Australia and other countries came to India for medical procedures. To promote medical tourism, the Indian government introduced a new category of a medical visa for foreigners who visit the country for the purpose of medical treatment.
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4 responses so far ↓
1 Brian Prentice December 9, 2009 at 11:04 pm
Kristin – it’s not just India. Thailand also has a very healthy medical tourism industry. I was just there last week. I’ve been to a number of these facilities (for business meetings only – not as a patient). Places like Bumrungrad Hospital, Bangkok Hospital, Phyathai Hospital are all well regarded. Some of these look more like hotels than hospitals.
I can see a time where a large bulk of elective surgery will start moving to these places like India, Thailand, Costa Rica and other locations. Hospitals in high cost countries will become emergency procedure facilities or teaching schools (shipping out the next wave of low cost doctors back to their home countries. Additionally, hospitals maybe become dependent on high profile doctors who bring in patients based on their reputations.
The broader question I’m considering when looking at the growing movement of skilled labor to low cost geographies – particularly when coupled with the existing losses in manufacturing – is whether this ultimately leads to a wage deflation in western countries in order to sustain some type of competition.
2 Senthil December 10, 2009 at 1:26 am
Kristin,
It is a matter of economics and depends on the acceptance from the patients about the system and procedures. Medical systems and facilities in countries like India have caught up with quickly with the latest advancement in medicine. It makes sense for people to move towards an option which gives them the value for the money. Ultimately these might lead to wage deflation proportional to the health insurance costs paid by the organizations to thier employees. Though the anlytics are difficult to arrive at this point in time, this is ought to happen in the next decade. It is a matter of time that insurance, Pharma and hospital chains have to think innovatively in western countries and reap on the benefits resulting from medical tourism!
Rgds,
Senthil.
3 Kristin Moyer December 10, 2009 at 7:40 pm
Hi Brian,
Thanks for your comment. Interesting about Thailand – I have read about their push into medical tourism, but didn’t find any data as of yet.
I just had ACL surgery for a sports injury and could NOT believe the bill. We got a $20,000 bill, only about $2,000 of it being from the surgeon – the rest from the hospital. And it was outpatient – I was out of there about 90 min. after surgery after having some ginger ail (they gave me one of those little 1/2 cans) and a small bag of cookies (smaller than you get after you give blood to be honest).
Interesting thoughts about skilled labor moving to low cost geographies. Could it look something like this? Skilled labor moves to low cost geographies for better opportunities and potentially fewer insurance head aches (my physicians friend tells me this is the hardest side of the business). Then, higher cost geographies experience brain drain and innovate/change the system to lower costs and the skilled labor moves back. To some extent, this is happening in emerging markets now (skilled labor coming home).
Thanks again for your thoughts,
Kristin
4 Kristin Moyer December 10, 2009 at 7:43 pm
Hi Senthil,
Thanks for your comment, great points.
I just had ACL surgery, and I have to admit – I would have felt uncomfortable accessing lower cost care in a country I am not familiar with, despite its good reputation. Since the surgery I just had was outpatient, it would have also consumed a lot more time and meant more time away from work.
However! If my insurance company paid 90%+ of my costs to have surgery in India or Thailand or the like and only paid 20% of my costs if I had the surgery here – I might have felt more comfortable.
With all the struggles and debates over healthcare in the US, I agree with you – I can see this beginning to happen over the next decade. I’m a banking analyst not a healthcare analyst, but perhaps medical tourism is the “next thing” after consumer-driven health plans?
Thanks again Senthil,
Kristin