In late July this year, Swiss Reinsurance company, one of the world’s largest reinsuring companies, tied up with World Medassist, a US-based medical tourism company to provide employers with the option to save on medical bills by sending employees abroad for treatment. Swiss Re is one of the nation’s largest corporate insurers, and services federal employees and large national companies.
It is the first time a major insurance company in the US has deigned to acknowledge a trend that the medical fraternity largely sniggers at. Ken Erickson, CEO of US-based Global Choice Healthcare says: "This medical tourism thing is nothing. It’s not happening. People who don’t have insurance are travelling abroad for treatment, but there is no large movement, no corporation is involved. It’s either recreation or desperation. It doesn’t count for anything."
Sniggers and jibes aside, the fact remains that over 50 million people in the US are without insurance, and the issue is emotional enough to form a large part of the electoral agenda for both parties as the US goes to the polls in November. The irony is, the poorest who are living on state welfare are taken care of by Medicaid. Of those remaining, the luckier ones work in companies that shoulder the cost of paying the insurance premium, an average of US$5,900 per annum for a family of four. Those whose employers do not provide this facility either choose to go without insurance because they believe they are healthy, or sometimes just cannot afford it. Also, older people over 55 do not receive insurance even if they have the money. It is these two groups that make up the target market for medical tourism operators.
Despite this cynicism, the trend for uninsured individuals to travel abroad for treatment is growing; at least 150,000 travelled abroad for treatment in 2007 and that number is expected to double by 2010, says Josef Woodman, author of Patients Beyond Borders: Everybody’s Guide to Affordable, World-class Medical Tourism. Nearly half had medically necessary surgeries, such as hip replacements or spinal work, heart surgeries, and even cancer treatment.
The Swiss Re tie-up will only make it easier for people to receive treatment overseas – and for insurance companies to pick up the tab. It is the first sign that the corporate world may get involved in a hitherto individual trend. Andrea Marie Baldrica of Baldrica & Company, a health insurance company, feels that the Swiss Re deal will pave the way for others to follow suit. It might also trigger improvements in hospitals which will now have to compete at a global level. "It is sad, but in the US 10 per cent of the total cost of hospitals is actually on ‘defensive medicine’, this may just help them step up on quality and recognise the fact that there are other hospitals offering similar care abroad."
At the World Medical Tourism and Global Health Congress held in San Francisco in mid-September, hundreds of professionals came together to swap notes, sign agreements and discuss legal issues. Jonathan Edelheit, president, Medical Tourism Association says: "This is the first time a conference of this sort has been held in the US, and we were fully booked, with 850 people attending and 53 exhibitors from 45 countries. I know for a fact that several agreements have been signed between corporate clients and insurance carriers, but I am not at liberty to discuss them yet." In both establishing a corporate trend and forcing
introspection and improvement, the announcement is a huge deal, yet it did not create the waves that it should have – for a very good reason.
The legal aspects of medical tourism still remain muddy, and nobody quite knows how things would be handled if an operation ever went wrong. "Everybody is asking the same questions, and there really are no clear answers at the moment," says Pramod Goel, president of Colorado-based Placidway, a global portal for medical services providers. Hospitals from any numbers of countries list themselves on Placidway, and queries are routed by the company to the provider.
To the extent that it allows patients to get directly in touch with hospitals, it is great – but what if a patient had a treatment that did not go well? What would be the implication for Placidway? "None," says Goel. "We are simply a marketing platform and are offering a global window of opportunity for hospitals to find high-value patients. Hospitals have one goal: to maximise ‘heads in beds’, but typically they are poor marketers and salespeople, so the portal provides them a channel of growth. We get paid per referral, and cannot be held responsible for the outcome of a doctor-patient interaction, just as a magazine cannot be brought to book for advertising a product that does not live up to its promise."
Next in the food chain are medical facilitators, or travel agents-turned medical tourism specialists, who take on the administrative task of dealing with online queries on behalf of hospitals. These facilitators receive queries, ask patients for their medical records, arrange for a doctor to speak to patients if required, then suggest suitable procedures and deliver a quote.
In theory, facilitators’ recommendations are supposed to be completely impartial, matching patient needs with the hospital best capable of providing the best solution. In reality, because facilitators receive 10 to 20 per cent of the medical bill from hospitals as commission, referrals could be coloured by personal gain, depending on which hospital pays how much.
Not that a facilitator’s bias would affect the patient, only which hospital gets how much business. Most operators, aware of the potential pitfalls of a wrong recommendation, tie up with only the very best hospitals. In order to define the best, there are globally recognised quality standards like Joint Commission International (JCI) or others like Trent, CCHSR or ACHSI conducted by UK, Canada or Australia-based organisations respectively.
Since the accreditation process evaluates all aspects of the healthcare process – how patients access care, quality of the services provided at the hospital, hygiene and service levels, ambience, post-operative care and care after discharge – it is very reassuring for a patient who is going to travel half-way across the world for treatment. So in theory at least, dealing exclusively with accredited hospitals would ensure a high percentage of patients who return home healthy and happy. But what if there are complications and an irate patient decided he wanted to take the case to court?
"We cannot be held responsible, because we receive no payment from the patient for the medical procedure. We have a signed agreement with the hospital saying we are only providing a service to the patient, but are not liable for any damages," says Vishal Laroia, manager operations at Sahara Medical, a facilitator in India. Sahara collects payment only for the hotel and other ground arrangements like transfers; air tickets are often booked by patients on their own because costs can be cheaper in the West.
Since no middle man can be held accountable for facilitating a transaction between a hospital and its patient, we asked the Artemis hospital in Delhi about potential legal action.
Over 20 per cent of its total revenue already comes from overseas patients, with the United States, Nigeria, the Middle East and Afghanistan, accounting for 65 per cent of the overseas income. The hospital has an in-house travel division to facilitate the needs of patients visiting from abroad, and each room has space for one relative to live with the patient at the hospital itself. For those needing a longer recuperative stay, the hospital has tie-ups with nearby serviced apartments.
Abhik Moitra, controller international sales and marketing says: "Because India has a strong consumer law, lawsuits do happen. An overseas patient too would naturally have the right to take a hospital to court with a malpractice suit – but in order to take legal action he would have to stay in India, so it is a bit impractical in reality. We have a 99 per cent recovery rate for cardiac patients, so we feel confident taking those on. Sometimes when we feel our efforts will not help – as with stage four cancer patients – we ask them to go back home. Also all patients sign a consent form before any procedure, effectively saying they bear the responsibility for the outcome of the treatment and waive the right to take legal action."
It seems bizarre that a person can be so desperate that he/she will agree to be treated under any circumstances, no matter how unfair. How is it that Americans, who are so used to litigating every little lapse, agree to forego that right?
"You have to remember that these are very heart operation, which may be very expensive in the US if they do not have insurance. Others, like those over 55 do not have insurance cover anyway, so there is no option. Those who are coming for a procedure like a hip replacement may have been given a twoyear waiting period back home," says Laroia.
As many doctors know, post-operative care can sometimes be as critical as the main procedure as infections later on can be very dangerous. What if one of Swiss Re’s clients came back after a successful operation abroad, to develop complications? Since insurance-paid travel will involve the patient’s US doctor, shouldn’t both doctors and insurance companies be concerned?
Renee Marie Stephano, CEO and general counsel of the Medical Tourism Association says: "Liability issues are a reasonable concern, but it’s a little bit of a hype to be concerned with infection after a procedure. At the end of the day, doctors have taken an oath to take care of their patients and they should not let fear of litigation outweigh their patients’ need for care. Also, as medical tourism matures, affiliated doctors in the US are coming forward to offer post-procedural care."
AMF International Health Plans (AMFIHP) was founded earlier this year to address the high cost and continuing affordability of group health plans for employers. Targeted at self-funded employers, the company promises savings of as much as 50-75 per cent on most elective surgical procedures and provides air fares and hotel reservations as part of the plan for the convenience of patients.
It currently works with accredited hospitals in Costa Rica only, a smart move when targeting US patients because most sick people are overwhelmed at the thought of travelling to India or Thailand. "In my experience, when savings exceed US$10,000 people are motivated to travel farther to save money. In most cases, Latin America offers a very balanced option that provides cost savings with world-class care," says Goel of Placidway.
Goel believes that as with AMFIHP, the Swiss Re option will encourage smaller operators to develop new products for what may appear a high-risk area to more established hospitals. With time, more doctors, facilitators and insururs will come forward to offer a seamless service, with happy results for all. It is too early to say how this will impact the US healthcare market in the long term, but medical tourism has crossed a major milestone.