Why Smart Health Planners in California Are Turning to Medical Tourism
California Broker Magazine Article
By Edward Watson, M.D.
25 September 2008
Health plans, PPOs, and third party administrators (TPAs) are beginning to see the wisdom of offering medical travel as an employee-paid healthcare option. Medical travel emerges as another viable solution to improve quality, cut costs, and make healthcare more affordable for the employer and employee. Brokers can differentiate their product portfolios and take advantage of the upswing in consumer interest in medical travel benefits. In a 2008 survey of 3,000 consumers, Deloitte found that outbound medical tourism is expected to experience explosive growth over the next three to five years. By 2017, there could be as many as 15.75 million Americans traveling overseas for medical care through medical tourism.
The opportunity to save a significant amount of money on quality healthcare is particularly appealing to those who don’t have sufficient coverage or face high co-pays. More than 20% of California employees are uninsured, according to a 2007 study by the California Healthcare Foundation. While this crisis is national, a smaller percentage of Californians have employer-sponsored coverage and a higher percentage is uninsured. Because of California’s large population, the number of people without insurance is the highest of any state at 6.6 million.
One half of the insured and uninsured who were surveyed in California expressed a great deal of concern about being unable to get care due to excessive cost, according to the California HealthCare Foundation study. Fifty-eight percent of those in poor health neglected care due to cost in 2007, up from 43% in 2004. Clearly, this leads to higher, more expensive rates of hospitalization and emergency room visits.
Medical travel is one solution to this -crisis since healthcare in many countries is a fraction of the cost of care in the United States. For example, one leading healthcare organization based in New Zealand offers a heart by-pass surgery package that costs $38,000 including the procedure, round-trip air-fare, and accommo-dations. That com-pares to a cost of $110,000 to $125,000 in the United States for the procedure alone.
As a medical destination, New Zealand has taken center stage for many California health plans. It offers a 12-hour flight from the West Coast for high quality and affordable acute procedures. Many patients are more comfortable having procedures in New Zealand than they are in other countries. It is a first world, English speaking, and culturally familiar country that maintains strict hygiene control standards in all hospitals. It also has rigorous standards of enforcement over the use of antibiotics. As a result, the rates of hospital-acquired infections are low. New Zealand also has a low incidence of HIV infection and the country offers a clean, green environment, which is ideal for recuperation.
New Zealand’s government regulations and policy allow the country to offer extremely cost competitive medical treatment. But the quality of care is just as important. Many of the hospitals used in medical travel in New Zealand undergo independent accreditation by Quality Health New Zealand (QHNZ), which is accredited by the international umbrella organization ISQua. A report issued by the New York-based Commonwealth Fund reveals that New Zealand has one of the world’s best healthcare systems. The country’s private hospitals rival the best in the world with the latest medical facilities and excellent accommodations. All facilities are staffed by experienced English-speaking doctors and nurses – many of whom have had training and experience in the United States, Canada, or Great Britain.
Medical travel appeals to a wide variety of employees including the following:
- Those with insufficient coverage and those who face high out-of-pocket expenses.
- Those who are looking for elective surgery, such as cosmetic, corrective eye surgery, or dental work.
- Those looking for procedures that are not available in the United States, such as stem cell transplants.
- Retirees who are looking for doctors who accept Medicare.
In addition, New Zealand offers stunning scenery, winery tours, golf, and fly-fishing.
Forging An Optimal Partnership
When looking for a medical travel partner, it is important to find an organization with world-class surgical and medical treatment from highly trained, experienced medical specialists in internationally accredited hospitals. They should provide alternatives that enable clients to cut costs without compromising on quality for non-acute surgical and medical services.
Such a partnership depends on affordable health premiums that allow access to the rapidly growing medical travel and self-insured market. This gives health planners the competitive advantage of offering world-class quality surgical and medical services without high deductibles or co-payments.
For example, an increasing number of forward-thinking self-funded employers are looking abroad and choosing New Zealand as the ideal medical travel destination. Recently, Pinnacle Health, a PPO providing network and administrative services to self-funded employers – with more than 3,000 providers throughout America’s Northeast – formed a partnership with a New Zealand-based medical travel service provider due to the overwhelming potential for saving its member employers significant costs while ensuring quality of care.
A Checklist Of Excellence
Before health planners forge a medical travel partnership, they must look for the highest standards of medical travel service, which includes the following:
- World-class medical facilities.
- Highly experienced English-speaking surgeons.
- Access to specialists trained and/or board-certified in North America.
- Hospitals that are internationally accredited under the International Society for Quality in Healthcare (ISQua) – the membership of which includes Joint Commission International (JCI).
In addition, the medical travel provider has a comprehensive package that includes the following:
- The expected medical costs.
- Hospital (theater, accommodation – single room, nursing).
- Surgical and anesthetic.
- Allied health (physiotherapy, dietetic).
- Aftercare (nurse and physiotherapy in hotels).
- The pre- and post-projected hotel accommodation.
- Concierge services by patient coordinators.
- Air flights from North American and airport pickups
- Contingency insurance to help cover the small risk of a serious adverse event
While there are multiple advantages of medical travel to New Zealand, partnering with a medical travel service provider is a significant step for a health plan, PPO, or TPA. But such a partnership holds significant potential for change in the face of burdensome healthcare costs. It’s important to keep up with the growing trend in medical travel and anticipate the increased consumer demand by exploring and committing to this option.
About Edward Watson, M.D.
Edward Watson, M.D. is the founder of Medtral New Zealand and a medically qualified physician. He spent the past 10 years in pharmaceutical and biotechnology clinical research in Australia and New Zealand. For more information, contact Dr. Watson:
Edward.watson@medtral.com
Phone toll free USA/Canada: 1866 206 3582
Phone: +64 9 623 6589