This is Part 3 of a multi-part series on legal barriers to implementing international providers into Medical Provider Networks for workers’ compensation. Previous articles in the series can be found here: Part 1 and Part 2. Subsequent articles in the series will be forthcoming soon.
Heather T. Williams agrees with critics, that medical tourism is a trade-off for consumers, allowing them to opt-out of increased regulation in favor of fewer restrictions and greater cost savings. Factors unique to the medical tourism industry will help preserve the quality of patient care and insulate patients from the regulatory pitfalls critics fear. Williams points to the benefits of medical tourism as providing patients with substantial cost savings, due in part to lower labor costs overseas.43
The cost savings in the context of inflated health care costs in the U.S. indicates why patients are driven abroad to seek medical care. How much of a cost savings medical tourism offers patients can be seen in how much hospitals charge for major surgical procedures such as cardiac surgery, partial hip replacement, knee replacement, and rhinoplasty. A hospital in India charges $4,000 for cardiac surgery, compared to $30,000 in the U.S. Hospitals in Argentina, Singapore or Thailand charge $8,000 to $12,000 for a partial hip replacement that would otherwise cost twice that much here. Singapore and Indian hospitals charge $18,000 and $12,000 respectively for knee replacement that normally cost $30,000 in the U.S. Finally rhinoplasty that costs $4,500 in the U.S. costs only $850 in India.44
Though all patients can benefit, medical tourism’s cost savings are more likely to benefit those with inadequate health insurance coverage.45 Lower-middle-class individuals, who typically have sufficient means to pay for reduced-price care out-of pocket, will benefit most from medical tourism.46 This is a point to bear in mind with regard to workers’ compensation, as many claimants are generally lower-middle-class.47
Medical tourism disproportionately benefits uninsured or underinsured individuals,48 but they are not the only ones benefitting from cost savings from medical tourism.49 Self-insured employers and private insurance companies have begun integrating medical tourism into their policies. It is attractive to small businesses as well.50 Medical tourism is expanding as self-insured employers and insurance companies have integrated medical tourism into their policies.51 For instance, Blue Ridge Paper Products of Canton, North Carolina sought to send an employee overseas for gallbladder and shoulder surgery.52 They offered him 25% of the savings, but the United Steelworkers prevented them from doing so and union workers were removed from the pilot program.53 54
State governments, looking to save money anyway they can may accept medical tourism for their state employees. A bill introduced into the state legislature in West Virginia in 2006, (H.B. 4359), would have encouraged state employees covered by the Public Employees Insurance Agency (PEIA) to utilize Joint Commission International accredited foreign hospitals, receive travel reimbursements for themselves and a companion, and participate in the savings with a cash rebate.55 56 The bill is still pending in the House Banking and Insurance committee.57
Large HMOs and health insurance companies have established plans to allow patients to obtain low-cost services overseas.58 BlueShield and Health Net of California, United Group Programs of Boca Raton, and BlueCross and BlueShield of South Carolina have offered such plans for travel to Mexico and Thailand for treatment.59 The effect of financial incentives on American’s willingness to travel for medical care is evident in a 2007 nationwide telephone survey of a representative sample of 1,003 Americans in which 38% of uninsured and one-quarter of those with insurance would travel abroad for care if the savings exceeded $10,000. One-quarter of uninsured, but only 10% of those with insurance would travel if savings were between $1,000 and $2,400. Fewer than 10% would travel to save $500 to $1,000, and no one would do so to save $200 or less. This represented a potential market share of 20-40 percent for non-urgent major surgery.60 61
Medical tourism is fast becoming a feature of American health care. In the next few years, more and more Americans will be going overseas for medical care. It is only a matter of time before medical tourism’s mark is felt on another arena of American health care — workers’ compensation.
43 Williams, 611.
44 Herrick, 8.
45 Williams, 614.
46 Ibid, 614.
47 Juan Du and J. Paul Leigh, “Incidence of Workers Compensation Indemnity Claims Across Socio-Demographic and Job Characteristics,” American Journal of Industrial Medicine, 54 (2011): 758-770. The study suggests that low socioeconomic status was a predictor of reporting workers compensation claims, but did not include income levels; although it is possible to extrapolate from the data presented that the subjects were generally lower middle class or working class.
48 Williams, 614.
49 Ibid, 615.
50 Ibid, 615.
51 Ibid, 615.
52 Boyle, 43.
53 Ibid, 43.
54 Williams, 616.
55 Ibid, 44.
56 Nicolas P. Terry, “Under-Regulated Health Care Phenomena in a Flat World: Medical Tourism and Outsourcing,” Western New England Law Review, 29, no. 29 (2007) 427.
57 West Virginia Legislature website, (2006).
58 Williams, 616.
59 Boyle, 44.
60 Herrick, 2.
61 Arnold Milstein and Mark Smith, “Will the Surgical World Become Flat?,” Health Affairs, 26, no. 1 (2007): 138.