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Saturday, February 04, 2012
Special Report: July 2007
Outsourcing Surgery
Growing number of “medical refugees” seeking treatment abroad
Story by Judith Horstman
Cesar Contreras was heading for a medical crisis: At 5 feet 7 inches and 315 pounds, he had high blood pressure, sleep apnea and diabetes. His doctor suggested stomach-reduction surgery to treat his weight problem, but he couldn’t get his insurer to cover the procedure.
“For five years I tried to get my medical plan to pay for an operation, and nothing was getting done,” Contreras says. “The insurer never refused, they just kept giving me a test, and then another test, and then another test.”
Meanwhile, his health issues increased along with his weight, and Contreras decided to pay for the procedure himself. In the U.S., he says, the price tag was about $15,000. Then he began shopping around on the Internet. After mulling over a hospital in India and another in Mexico, he drove from his Roseville home to a new hospital near Tijuana and had the procedure done in January for $8,000.
Contreras described the experience as excellent. “No doubt about it,” he says. “The average person who goes to Tijuana sees tourism and poverty, but the hospital I went to is brand-new, as good as any in the U.S. Two of the doctors are involved with Stanford.”
Contreras is among a growing number of Americans who are taking their medical dollars to facilities and doctors in low-income countries such as India, Thailand and Mexico.
The concept of medical tourism is not new, but until recently, it’s been the purview of well-to-do travelers combining a vacation abroad with elective cosmetic surgery. Americans along the borders have often skipped over to Canada or Mexico for such procedures.
But as out-of-pocket medical costs have gone up, so has competitive pricing of medically necessary procedures. A new global market for outsourcing medical treatment has sprung up, serving a group called “medical refugees,” who are the not-so-rich patients with often-serious health issues.
The term, which appeared in a New England Journal of Medicine article last fall, refers to the uninsured, the underinsured and those who can’t get insurers to cover their medical treatment. Because they have to pay out of pocket, medical refugees are traveling to developing countries where the cost of treatment is 20 to 80 percent less than it is in the U.S.
Medical refugees are finding options via the Internet, support groups, foreign hospital websites, chat rooms and specialized travel agencies that make arrangements for treatment abroad.
A glance at the comparative costs is startling: A cardiac bypass in a top-notch hospital in India costs $7,500; in Bangkok, it costs $20,000 to $28,000; and in the U.S., it costs $60,000, according to Aruna Thurairajan-Hollingshead, owner of Overseas Medical Services, an international medical-referral service.
The trend has made U.S. insurers and the employers who buy coverage sit up and take notice, especially those employers who are self-insured or pay directly for employees’ medical care.
Although most Americans blanch at the idea of heart surgery in a developing country, experts say the quality of treatment is very good and the accommodations are often posh.
Many of the doctors are trained in the U.S., U.K. or Australia and have returned home to practice in spanking-new hospitals built to accommodate an international trade in patients. Joint Commission International certifies many of these facilities. The commission is a global institution affiliated with the commission that accredits most U.S. hospitals, or the International Organization for Standardization.
Some U.S. doctors use offshore medicine themselves. “We go to Singapore all the time for medical treatment — it’s cheap compared to the U.S.,” says Dr. Enoch Choi, a Palo Alto family practitioner who is considering knee surgery in Singapore.
“If my deductible or co-pay here is high, I would definitely go abroad,” he says. “Knee arthroscopy is so routine now, it’s low-risk.”
Choi, who was born and educated in the U.S., is of Chinese ancestry and more familiar with Asian medical care than most U.S. doctors. Foreign quality of care shouldn’t be an issue, he says. “People are going overseas for even more complex procedures, like cardiac bypass for people with stable angina who are not critical,” he says. “I am hearing of HMOs sending people over there for treatment.”
For Melanie Greco of Sacramento, the cost of her offshore surgery was a hardship, but a worthwhile one. In excruciating pain from osteoarthritis, her U.S. doctors agreed she needed surgery, but wanted to do a total hip replacement. But Greco discovered a newer FDA-approved procedure called hip resurfacing that is less drastic and preserves mobility.
A total hip replacement cuts off and replaces the top of the femur head with an artificial joint, limiting many activities and compromising future revision of the joint replacement. Hip resurfacing smoothes the damaged femur head and covers it with a metal cap, preserving bone. Since total-joint replacements often wear out or fail over 20 years, resurfacing is considered a better option for younger patients like Greco, who is 51. The U.S. cost of resurfacing would be about the same as the cost of a total hip replacement: between $25,000 and $60,000.
“We’re sending about five patients a day from the U.S. — 18 from the Sacramento area in the past six months.”
—Rudy Rupak, president and founder, Planethospital.com
But, Greco says, no one in her insurer’s group does the procedure, and her insurer refused to cover it outside the group, or even to cover a consultation with a U.S. surgeon. By May, she could no longer live with the pain. She considered either India or Belgium, choosing the latter because it is closer to the U.S. and because the Belgium surgeon Greco had her eye on has done thousands of these procedures.
The procedure cost $11,000. Greco’s total out-of-pocket costs, including airfare and recuperation, are closer to $21,000. Two weeks after the surgery, she has no more joint pain and says the overseas surgery was “fabulous and first-class.”
Her insurer forced her to go out of the country to get the best procedure, she says. “It’s really disappointing,” she says. “You pay premiums for years, and then they do this game of push-pull. They make you apply and deny you, and make you appeal and deny you — constant rejection, getting your hopes up that they may cover it.”
Because the information isn’t tracked, it’s impossible to know how many Americans seek treatment abroad. Bumrungrad International Hospital in Bangkok has courted an international patient base and says it treats more than 400,000 patients a year from some 190 countries. The hospital, often called “the queen of Asian hospitals” for its marble floors and international dining services, says 55,000 of those patients come from the U.S.
Some think that number is inflated, but there is no doubt that American patients are big business at some Asian hospitals. Business is so good it has spawned a new type of service in the past few years: packaging healthcare abroad for a fee. There are about two-dozen agencies in the U.S. and Canada offering international medical-referral service, says Thurairajan-Hollingshead of Overseas Medical Services.
These agencies — new, largely unregulated and growing in numbers — refer patients to doctors and hospitals as well as make travel arrangements for a 10 percent fee, sometimes more. Optional concierge services can include a travel companion, translators, apartment rentals and vacations built around treatment. Some, such as Overseas Medical Services, are official representatives of hospitals like Bumrungrad.
A World Health Tourism Congress had its second annual meeting in March for packagers of international healthcare programs, tourism companies and agencies, corporate buyers of healthcare and ministers of health from various countries.
“We’re sending about five patients a day from the U.S. alone — 18 from the Sacramento area in the past six months,” says Rudy Rupak, president and founder of Planethospital.com, based in Calabasas, Calif.
Rupak arranged a package for someone from Chico to get a lumpectomy and radiation in Singapore with an apartment for six weeks and a trip to Bali between treatments.
While some have scoffed at this trend, economists wonder if it will do to medicine what Japanese cars did to Detroit.
The biggest benefit to this medical trend is for the developing countries that provide it, according to the authors of the New England Journal of Medicine article. The influx of foreign money bolsters the economy and provides more opportunities for native-born physicians trained in the U.S. to come home to work. The impact on U.S. medicine is mostly symbolic, with only about 2 percent of Americans able to benefit from medical outsourcing.
The authors also say medical refugees are a symptom, not a solution. For one thing, the majority of people with healthcare woes can’t afford to go anywhere; they are the poor and the working poor who can’t afford a monthly premium, let alone a $15,000 procedure.
There are plenty of concerns associated with seeking care abroad, too. The patient has to be able to travel by commercial conveyance, and travel times are long; the treatment has to be non-emergency and of short duration; and there may not be much recourse for malpractice or medical mistakes. Patients may find U.S. doctors reluctant to pickup treatment after overseas treatment: Greco says her primary-care office refused to change her bandage after she returned from overseas surgery.
So far, U.S. insurers aren’t leaping at outsourcing. Several major U.S. insurers have said they are watching the trend, but have concerns about quality of care and legal liability. Blue Cross has expressed interest, according to Thurairajan-Hollingshead. Cigna HealthCare, which covers more than 9 million people, is exploring the issue, says Lindsay Shearer, director of public relations.
“Savings can be considerable, depending on the procedure and country,” she says. “We are researching potential issues such as clinical quality and safety standards, post-operative complications, litigation rights and tax implications.”
There’s no doubt some amount of healthcare is outsourced, says Dr. Anmol Mahal, president of the California Medical Association. The vast majority can’t and won’t be going thousands of miles from home for surgery, he adds.
“People are not going abroad for any reason other than economics,” Mahal says, adding that it’s not the uninsured poor who are going abroad, but people with assets who can afford to pay out of pocket. They are comparison-shopping and choosing how to reduce their out-of-pocket costs and preserve their assets.
“Otherwise, clearly the best place for anyone to get healthcare is close to home, close to your loved ones, in the community in which you live, with doctors you know and trust,” he says.
The system, however, needs reform, Mahal says. “We have a half-million Californians without any healthcare coverage,” he says, adding the solution is basic to the U.S. healthcare cost crisis.
There is an epidemic of inactivity, obesity and diabetes among the young in California, Mahal says. Neither health system reform nor outsourcing alone will solve the problems these conditions foreshadow. Reforms have to include ways to help people stay healthy, not just cure the sick.
“Clearly, a healthy lifestyle and preventive medicine has to be the cornerstone,” he says, “or health cost will be an ever-increasing burden.”
