Medical travel promotes healthy competition

Business Insurance | 2009-08-24

We are encouraged, as we report on page 1, that more employers are adding a medical tourism feature to their health care plans.


Employers provide financial incentives, such as waiving copayments and offering travel allowances to employees who are willing to travel within the United States, to undergo procedures at hospitals far from their homes where intermediaries have negotiated lower rates.

We can well understand the appeal to and interest by employers in medical tourism. The approach addresses, at least partly, a driver of high health care costs. As hospitals have merged in many parts of the country, employers, insurers and third-party claims administrators have lost leverage negotiating with health care systems facing little competition.

By hammering out deals with hospitals in parts of the United States that have lower costs, employers may increase their clout with hospitals in areas where most of their employees live. Hospitals, concerned about losing business, may be more flexible at the negotiating table.

For that reason, medical tourism is a promising approach that may help to cool medical care inflation, and employers would be wise to explore whether it makes sense to offer the benefit.

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