Tag Archives: healthcare plan

Implementing international medical providers into the U.S. workers' compensation system, Part 1

This is Part 1 of a multi-part series on legal barriers to implementing international providers into Medical Provider Networks for workers' compensation. Part 2 of the series can be found here, and Part 3 can be found here. Subsequent articles in the series will be forthcoming soon.

Throughout the debate leading to the enactment of the 2010 Affordable Care Act (ACA), one area of health care has been relegated to the sidelines — the rising cost of workers' compensation claims. One major factor for the increase of workers' compensation claims costs is the rise of medical costs associated with those claims. The average medical cost per loss time claim in workers' compensation in 2008 was $26,000, and medical losses in that year represented 58% of all total losses.1 2 Since 2008, the average medical cost has risen steadily, increasing at a moderate rate3, as shown in Figure 1.

Figure 1 — WC Medical Claim Cost

WC Medical Claim Cost

20011p — Preliminary figure based on data valued 12/31/2011

In the past twenty years, from 1991 to 2010, the average medical cost per lost-time claim has gone from $8,100 to $26,900. In 2001 it increased to $15,900, and by 2005 it had gone up to $21,300. Given this trajectory, medical costs for workers' compensation will continue to rise, perhaps even reaching $50,000, if medical costs cannot be controlled. With all the workers' compensation system calls for reform, one possible solution has yet to catch on; implementing international medical providers into workers' compensation.

Implementing international medical providers into the U.S. workers' compensation system sounds far-fetched; however, globalization is rapidly changing many industries around the world, and health care and workers' compensation should not be an exception to that change. A rapidly emerging segment of the global healthcare industry is medical tourism.4 Medical tourism refers to patients going abroad to seek low-cost treatment. As international travel becomes more affordable and less complicated, and the technology and standards of care have improved, medical tourism has become very popular.5

This development has led to the creation of commercial ventures that facilitate the process of providing medical services to their clients. The facilitators’ role is to choose the best location, the best hospital and the best physicians to perform the treatment or procedures the patient requires. It began primarily as an individual practice.6 However, more group health plans are adding medical tourism into existing plans, or offering health plans that include medical tourism and implementing international provider networks into their plans.7

The desire to seek care abroad is motivated by a desire to seek health care that is lower cost, avoids long wait times, or provides services that are not available in one’s own country.8 The skyrocketing cost of U.S. health care due largely in part to exorbitant administrative costs, the practice of defensive medicine, and weak preventative care, is a potent argument for seeking medical tourism.9 10 Countries that serve as locations for medical tourism also have lower labor costs,11 and that translates into considerable savings for the patient.12

Just as many legal barriers exist to doing business overseas, the implementation of international medical providers into U.S. workers’ compensation medical provider networks also presents many barriers. This series will attempt to examine a few legal and regulatory barriers currently preventing foreign medical providers from treating patients abroad for injuries resulting from work-related accidents. It is not intended to be a definitive discussion of the subject, but rather a starting point for further discussion. Currently there is no literature available on the subject of medical tourism and workers’ compensation, but it is hoped that such literature will be forthcoming. At the conclusion, support for the hypothesis that the globalization of health care and the move towards medical tourism should include workers’ compensation will be offered.

1 Barry Llewellyn, (2009, September). Workers’ Compensation Medical Cost Issues. Casualty Loss Reserve Seminar (presented at the meeting of the Casualty Actuary Society (CAS), Chicago, Illinois, September 14, 2009).

2 Dennis C. Mealy, (2009, May). State of the Workers’ Compensation Line. (Presented at the meeting of the Annual Issues Symposium at the National Council on Compensation Insurance, Boca Raton, Florida, May 7, 2009). Figures shown in the 2009 report for 2008 were adjusted in later years, so that in the latest report, the average medical claim cost per lost-time claims in 2008 was $255,000, as shown in Figure 1.

3 Dennis C. Mealy, (2012, May), State of the Workers’ Compensation Line, (presented at the meeting of the Annual Issues Symposium at the National Council on Compensation Insurance, Boca Raton, Florida, May 10, 2012).

4 Laura Hopkins, Ronald Labonte, Vivien Runnels and Corinne Packer, “Medical tourism today: What is the state of existing knowledge?,” Journal of Public Health Policy, 31, no. 12 (2010): 185.

5 Kristen Boyle, “A Permanent Vacation: Evaluating Medical Tourism’s Place in the United States Healthcare System,” The Health Lawyer, 20, no. 5 (2008): 42.

6 Heather T. Williams, “Fighting Fire with Fire: Reforming the Health Care System Through a Market-Based Approach to Medical Tourism,” North Carolina Law Review, 29 (2011): 615.

7 Ibid, 616.

8 Hopkins, et al., 185.

9 Boyle, 42.

10 Williams, 613.

11 Ibid, 613.

12 Ibid, 613.

Note: This series would not have been possible without the inspiration, enthusiasm, encouragement, and guidance of Kristen E.B. Montez, Esq., the Director of Legal and Regulatory Services of Satori World Medical in San Diego, CA. It was Kristen who answered my call on LinkedIn.com for assistance with a topic to write for my Health Law class. Her knowledge and experience in the area of medical tourism as a published writer on the subject was not only very valuable, but also very much appreciated. Her desire to assist me in writing it, and in getting it published, is something that I did not expect, nor imagined when I placed the online posting. She is a remarkable individual, and it is my pleasure to have connected and collaborated with her on this project.