Medical Travel and Managed Care

The medical travel industry (previously referred to as "medical tourism") has not seen much growth within the United States. This is ironic, because the industry was founded about 20 years ago on the money spent by wealthy foreigners who wished to have their heart ailments addressed, hips replaced, and cancers treated by world-renowned institutions in the U.S. such as the Mayo Clinic, Sloan-Kettering, Johns Hopkins, and many others. Whereas U.S. employers or health plans have not encouraged citizens to be treated for covered conditions in other countries to take advantage of lower costs, there has been quite a bit of medical travel to other countries for treatment of non-covered conditions, like cosmetic surgery (e.g., Mexico), in vitro fertilization (e.g., Israel), or dental implants (several countries).

However, medical travel has had a significant effect on managed care plans—not incentivizing members to get a bypass operation in Thailand, but rather encouraging members to go to centers of excellence within the United States. This form of domestic medical travel has been a staple of U.S. healthcare. Members of health plans often seek care in highly rated, high-volume facilities for procedures such as cardiac bypass, knee replacements, and cancer care (e.g., in the latter case, sometimes opting for National Comprehensive Cancer Network facilities). A recent agreement between PepsiCo and Johns Hopkins Medicine [http://www.medicaltraveltoday.com/?p=778] highlights the appeal of domestic medical travel. Starting this year, PepsiCo’s 250,000 workers and dependents will have the option to come to Baltimore for treatment at Johns Hopkins Medical Center for cardiac care and joint replacements.

It is generally agreed that the implementation of health reform, providing coverage to millions of uninsured and underinsured Americans, would short circuit any growth potential for U.S. residents to seek inexpensive care overseas. At the same time, the growth and utilization of health savings accounts paired with high-deductible health plans may drive people to international medical facilities in Southeast Asia, Central America, and South America. People investigating medical travel options often use specialty travel agents who work with networks of international medical centers to offer patients choices of hospitals and locations. One facilitator, Global Health Voyager (www.globalhealthvoyager.com) has rolled out a product that it hopes will be made available to the 11.4 million U.S. residents enrolled in HSA plans (according to estimates from America’s Health Insurance Plans), to be used for qualified medical expenses. Thus, the possible uptick in the use of high-deductible health plans overall may help spur both the foreign and domestic medical travel industry.

Before this can happen, several mitigating factors must be addressed. International medical travel, unlike domestic medical travel, can be risky in terms of quality of care and quality of providers. Although the Joint Commission International accredits facilities outside of the United States, this is no guarantee of quality care. In addition, reporting of complication rates and outcomes in general has been spotty and unreliable (rarely is peer review involved). Furthermore, for many procedures, the continuity of care or the aftercare one receives may be spotty. This can result in employer liability if a corporation incentivizes its workers to use facilities abroad but with poor outcomes. Finally, the greatest attraction—lower costs of care—may not yield great savings, especially if poor care quality results in readmission to a U.S. facility or additional unplanned health service utilization.

This means that although domestic medical travel is quite active in the U.S. and is often embraced by patients and managed care plans alike, international medical travel faces many hurdles before it is generally accepted in the U.S. marketplace. This is unfortunate, because for those residents who have to pay mostly out-of-pocket for their initial healthcare costs, it may offer additional choices.