WE WERE PLEASANTLY SURPRISED to read recently of yet another emerging trend in the health care field: Employers are providing financial incentives, such as waiving copayments and offering travel allowances, to employees who are willing to travel within the United States to undergo surgery at hospitals far from their homes where employers have negotiated lower rates.
It is a domestic variation of foreign medical tourism in which employers give employees the option and financial incentives to have surgery done in countries, such as India, Mexico and Singapore, where the cost of medical services is a fraction of the cost in the United States.
Truth be told, we think foreign medical tourism, while appealing, will always be a niche market. Having surgery can be difficult enough, but having it outside the United States adds a complication that probably will make that option unappealing for most employees, especially those with families.
Still, these innovative approaches should be commended.
Indeed, they address, at least in part, one of the drivers of high health care costs. As health care systems have merged in some parts of the country, employers and insurers have lost much of their leverage in negotiating rates with providers operating with little competition. No wonder hospital bills are so high.
By working out deals with hospitals in parts of the country that have lower costs, employers may regain some leverage with hospitals in regions where most of their employees reside. Hospitals worried about losing business are more likely to negotiate their rates.
If health care inflation is ever to be more in line with the overall growth in the Consumer Price Index, employers and insurers are going to have to keep looking at new and perhaps unorthodox strategies, such as overseas and domestic medical tourism, to achieve that vital goal.