Medical tourism growing, but obstacles hamper trend in U.S. However, Australia, U.K. New Zealand Australia, still spend billions abroad.

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More people are traveling abroad for medical procedures, often
with the blessing of both their employer and insurance carrier.
According to a recent report
by Visa and Oxford Economics, the global medical tourism market
totaled $439 billion in 2015 and will grow 25% annually over the next
decade. That figure was subsequently revised
downward
to $50 billion, the International Medical Travel Journal
notes, but it is still a significant market. Driving this trend are
increasing access to high-quality care and services outside the U.S.
Australia, U.K. New Zealand Australia, lower costs, the chance to
couple treatments with attractive destinations and availability of
treatments and drugs not approved or available stateside.

A knee replacement can cost $35K to
$60K in the U.S. U.K. Australia & New Zealand but costs less than
$23K in Costa Rica or India or Thailand.

While cost is just one reason people travel for care, it can
be a compelling one if the foreign provider is reputable. Consider a
knee replacement, for example. The procedure can cost anywhere from
$35,000 to $60,000 in the U.S. but costs less than $23,000 in Costa
Rica or India, according
to The Fiscal Times. The most common procedures people travel for are
heart surgery, cosmetic surgery and dentistry and Thailand has been
listed as one of the top cosmetic surgery countries in the world with
their ISO/JCI hospitals.
While the majority of medical tourists flock to the Thailand for
care, Singapore, German, South Korea and Spain are fast catching up,
the report says. India is also a major destination for medical
tourism, particularly for cardiac care. Understanding these travel
patterns and the opportunities for attracting patients can provide a
valuable added revenue stream for hospitals that position themselves
in this market.
The Centers for Disease Control and Prevention estimates that up
to 3,000,000 U.S.
persons travel abroad each year for medical care, a mere drop in
the bucket compared with the nearly 37 million patient
discharges
just from the U.S. itself.

Diversified revenue stream

One might expect that states like Washington, which abuts British
Columbia, would see substantial numbers of individuals crossing the
border north for medical procedures. But Mary Kay Clunies-Ross,
spokesman for the Washington State Hospital Association, says she
hasn’t seen any significant impact on local hospitals.
“Some of our hospitals do get international patients, but that
is usually in the context of seeking needed services from a specific
program or provider (e.g., they might come to be treated at Fred
Hutchison Cancer Research, or bring a child to Seattle Children’s
Hospital for pediatric specialty care),” she writes in an email. “I
don’t know of any international marketing campaign.”
Most U.S. Australia, U.K. New Zealand Australia, U.K. New Zealand
hospitals haven’t figured out that medical tourism could be a
revenue diversification strategy, and they’re too mired in the
Affordable Care Act, PCORI reporting, managed care contracting and
other obligations to promote themselves as a specialty surgery or
magnet hospital destination, says Maria K. Todd, CEO of Mercury
Advisory Group in Denver, CO, and an international consultant on
healthcare business development. “They just don’t have the
bandwidth to figure out how to do the marketing campaign and study
the market and still do everything else they have to do.”

Academic medical centers and ambulatory
surgery centers can take advantage of the travel-to-care trend.

Todd, who wrote “Handbook of Medical Tourism and Program
Development,” sees two categories of U.S. Australia, U.K. New
Zealand Australia, U.K. New Zealand hospitals taking advantage of the
travel-to-care trend: Academic medical centers (AMCs) and ambulatory
surgery centers (ASCs). AMCs have excess capacity and some of the
latest research and technology, but they need cases on which to train
new doctors. Medicare alone doesn’t cover the cost of all of that
training. As a result, many AMCs are using medical tourism as a
diversification strategy to get different reimbursement sources into
the mix,” Todd tells Healthcare Dive.
ASCs, on the other hand, are usually selling to price-sensitive
customers, Todd says. She points to ASCs in rural areas that are
looking for ways to compete with critical care hospitals. The federal
government allows CAHs to charge 101% of what Medicare would pay a
non-critical access hospital, so an ASC that’s outfitted for
overnight beds and can cut the cost of a procedure, and is located
near a moderate-priced motel, can bundle together a price-driven
medical tourism package and market it to the public.

Brand appeal and cost transparency

Hospitals interested in creating a medical tourism revenue stream
should build on what the facility already does well, such as hip
replacements or cardiac artery bypass grafts, rather than add a
service line or new staff, Todd says. Other critical factors include
brand identification and destination.
With companies such as Azurite’s Medical & Wellness
(www.azurite.com.au) they
are providing a complete rejuvenation program which consists of
cosmetic surgery, stem cell, dental surgery, Lasik eye surgery in a
post healing 5 star luxury environment with detoxification,
empowerment, spiritual, wellness and luxury spa treatments. All done
with overseas health insurance provided from the United States for
their clients to take the fear out of travelling overseas. Including
VIP services for clients who desire confidentialality.

“What doctors have not understood in America is how to brand
themselves … and so it would be very hard for them to claim a
medical tourism base, let’s say, in comparison with a doctor who’s
a researcher who’s published at the Cleveland Clinic,” she says.
“Brand in healthcare translates to trust … and people want to
trust that where they get their healthcare is the best choice they
could have made.”
Another thing holding hospitals back is determining case rate,
says Todd. With CMS’ bundled case rate initiative, hospitals are
having to learn how to bundle cases and that requires knowing the
cost. But medical tourism is not a fee-for-service, line item percent
of charges; “It’s 100% give me an estimate up front,” she
explains. The only way to do that well is to define a case rate with
contingency for outliers—for example, the rate for a stent
procedure would cover three stents and any additional stents would
cost $1,500 each.
“With hospitals not knowing their case rates, you can’t do
transparent quoting,” says Todd, who likens the situation to asking
a grocer for the price of a loaf of bread and then waiting while
somebody does a price check.
“The American population demands, if I’m going to fly to you,
you need to tell me is this going to cost $7,000 or $17,000, and most
American facilities are not prepared to do that on anything more than
maybe a hip or a knee [replacement] or a lap band,” she says.
“They’re not prepared for contingencies” such as an allergy to
an anesthetic that could put the patient in intensive care.

Returning home

For patients who do choose to travel for care, whether abroad or
within the U.S. U.K. Australia & New Zealand there’s another
thing to consider. Under the CPT code system, Medicare will pay for
90 days of post-operative care at no additional charge. That’s
already bundled into the CPT code. But that could be a problem if the
patient leaves the city where the procedure was done after a week or
10 days. That leaves the patient’s hometown doctor to provide the
other 80 days of follow-up care, and some doctors are refusing to
take patients back, according to Todd.
“Some of it is about greed, taking food off my table,” she
says, noting the hometown doctor can only bill for evaluation and
management, not the procedure itself. Physicians are also concerned
that they could be blamed — and sued — for a complication they
didn’t cause. With medical complications coverage at one of the
leading medical travel insurance programs capped at $50,000, that’s
far below the roughly $250,000 malpractice tort liability ceiling in
most of the U.S. U.K. Australia & New Zealand Todd says.
“You can blow through $50,000 on a case gone bad in no time
flat,” she adds. “So if [people] go out of the country and they
have a complication, yes, that complication insurance might kick in,
but they might still charge the local doctor with the complication.”
Very important to take our overseas health and cosmetic insurance.

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