As Medical Tourism Grows, Hold On We're In For a Wild Ride

By Bob Wachter

Until now, medical tourism has been a curiosity, iconic “Wow, Look How Flat the World Is Becoming,” fodder for stories on 60 Minutes. But as health insurers and employers get into the act, get ready for some Battles Royale.

Of course, it was only a matter of time. With surgeries costing tens of thousands of dollars less in India and Thailand than in Indiana and Tucson, and with companies ranging from GM to Citigroup desperately trying to shave health care costs to fend off bankruptcy, you knew it wouldn’t be long before insurers or employers began offering incentives – or forcing – patients to have their surgery overseas.

Starting this month, some employers working with WellPoint, the nation's largest health insurer, will begin offering their employees substantial discounts if they choose to have their surgery in India. The Indian hospitals are accredited by Joint Commission International (JCI), the arm of the Joint Commission that's in the business of blessing foreign hospitals. If they are like most of the foreign hospitals catering to international tourists, chances are that the quality of care is more-than-acceptable and the quality of service would make the concierge at the Ritz jealous.

The press release trumpeting WellPoint’s arrangement oozes with PC spin:


Members will now have more choices regarding where to receive care and a greater involvement in the care they receive.

Well, what could possibly be controversial about that?!

I’ve written two articles for the New England Journal of Medicine about international teleradiology and other digitally-facilitated outsourcing (here and here), another burgeoning piece of our newly flattened world. That phenomenon is far from fantasy: thousands of patients in American ERs will have their x-rays read tonight by physicians sitting in India, Zurich, Tel Aviv, and Sydney. But because this happens behind our professional curtain, the debate over tele-whatever has largely been Inside Baseball (Is the quality adequate?

Do the non-U.S. docs need American malpractice coverage? Can the foreign docs bill Medicare? [Answers to date: 1) Seems reasonable, a few anecdotal glitches, but no good studies; 2) At this point, yes; 3) Presently, no – the local docs bill Medicare for their “final read” in the morning and they or their hospitals compensate the foreign docs]). It's all been back office and arcane enough that it hasn't been terribly controversial.

While medical tourism seems poised to be more controversial, its limited niche thus far has attenuated the arguments. To date, most participants have been un- or under-insured people trying to control their out-of-pocket costs for elective surgeries that require large cash payments, such as plastic surgeries and elective hip replacements. So most surgeries have involved private arrangements between patients and international providers, sometimes facilitated by intermediaries that have sprouted up like weeds. (Since nobody needs a travel agent anymore to book a vacation to Paris, up pops a new tourism niche. Capitalism's resiliency never ceases to amaze.)

As I said, as long as these were private choices, the potential reach of medical tourism was muted, as was the controversy. But every healthcare insurer and large employer is now actively scrutinizing the concept, and many find it quite appealing. Of course, sensitive to the politics, it is unlikely that any of them will flat-out force their customers/employees to travel to Thailand or Singapore. The pressure will be more subtle: with savings of tens-of-thousands of dollars per case at stake, there is enough money around to waive patient co-pays, give insurance discounts to employers, and cover travel expenses – including in-flight drinks and headphones – and still come out way ahead. As Brian Lindsay wrote in a terrific piece in Fast Company last March,

"They [patients] don't – and we don't – want to be in a situation where an insurer says, 'You have to go,' " says Victor Lazzaro, CEO of the [medical tourism] packager BridgeHealth International and a former executive at Prudential… One solution is to be up front with patients about the true cost of their treatment and offer to share the savings with them. In light of what it costs for a fresh set of knees in the States – $45,000 and up for the uninsured – and the huge discounts overseas, it's conceivable that patients might come out ahead if they let a Thai doctor install them. Of course, just because insurers won't use a stick doesn't necessarily mean the dangling carrot couldn't be considered coercion in its own right.

The wars will be fascinating and the battles lines will be fluid and a bit unpredictable. Consider unions, for example. On the one hand, the cost savings for companies that insure their workers may help preserve union jobs or allow for cost savings to be passed on in the form of higher salaries or richer benefits. On the other hand, as local hospitals are hurt, unionized service and nursing jobs may take a hit. So should unions be for medical tourism or against it? Who knows?

But one set of losers seems clearer: domestic providers, particularly cardiac, plastic, and orthopedic surgeons. Again, from the Fast Company article,

In one fell swoop, [the surgeons] devolve from the rock stars of the OR to glorified mechanics, and they'd really only have themselves to blame. Overseas patients routinely return home raving about the personal attention shown by their Thai or Indian surgeons. Even before arriving, patients can trade phone calls and emails with doctors. (Nothing punctures the myth of American medical invincibility quite like the experience of having a doctor who actually speaks to you.)

I participated in a panel on medical tourism at last October’s American College of Surgeons meeting, and many of the docs in the audience were pissed. Using those computerized audience response gizmos, the surgeons in attendance were asked: If a patient returned from surgery abroad with a complication and came to see you, would you agree to care for the patient? A clear majority answered “No.” (Had there been a choice called “Hell, No!” I’d wager that it would have been the winner). Surely Hippocrates would be turning over in his grave, but I’m guessing that Hippocrates didn’t have to pay $100K/year in malpractice premiums or watch his 8 years of residency training become devalued by foreign competition.

How will all of this play out? It seems likely that medical tourism will continue to grow, as will the number of concerned responses from domestic providers (mostly guild behavior and protectionism clothed in the garb of patient safety and quality). I’m sympathetic to my colleagues’ reactions, but look, the status quo isn’t acceptable: We’re spending $2 trillion dollars per year on healthcare and still have nearly 50 million uninsured people, 100,000 yearly deaths from medical mistakes, huge and clinically indefensible variations in care, and outcome and performance measures that are as likely to be sources of shame as pride. If flattening our world improves value (quality divided by cost), either through the new internationalized care or by goosing our own system into action (the now-familiar disruptive innovation), that’s got to be a good thing.

But for domestic providers, it might not feel so good. Yes, foreign competition led the Big Three automakers to build better and more efficient cars – but they answered their wake-up call too late to save their hides. The risks to domestic healthcare are not as monumental as those playing out in Detroit (it is one heck of a lot easier to buy a Camry at San Francisco Toyota than to get a CABG in Bangkok, and every now and then a Bangkok airport shutdown or a Mumbai terrorist attack will make some Americans hesitate before getting on that plane). And there are hundreds of issues still to be worked out: can patients sue for medical malpractice, how do you ensure continuity of care for patients receiving care both domestically and internationally, will medical tourism compromise local care for Thais and Indians, will middlemen start siphoning off too much of the savings or acting unethically, and much more.

But in the end, the Flattening of Healthcare is inevitable. And, while it will be controversial, it may also represent the kind of shakeup our system requires if it is ever to deliver the value Americans need and deserve.

So hold on tight. We’re in for a wild ride.