Medical Tourism

Employers, Payors and Brokers Are Embracing Medical Tourism Programs
by Keith Mendoza

Employers are using medical tourism to help reduce plan sponsor cost without increasing employees’ out-of- pocket expenses or restricting access to quality providers. With medical tourism, patients travel outside the U.S. to receive quality medical care at a fraction of the cost.
With the cost of healthcare higher in the U.S. than in any other nation in the world, it’s the right time to embrace innovative, cost saving alternatives like medical tourism. Year after year, employers in the United States face double-digit rate increases in health insurance premiums. Since 2000, the majority of employers have seen costs increase 100% or more in order to offer their employees a comprehensive medical plan. Their increases are not linked to new coverage or benefits, just renewals.

Due to today’s economic realities most employers are being forced to pass along a greater portion of these costs to employees, which places a great financial strain on many employees and their families. Employees now pay more out-of-pocket expenses to use their health plan with higher co-pays, deductibles, or coinsurance responsibility. They are also paying more out of each paycheck to participate in the medical plan. However, employers still continue to pay for the majority of the cost of the plan and face medical benefit costs that far outpace the Consumer Price Index.

Employers and plan sponsors are continually looking to their benefit vendors for ways to lower their costs while offering benefits their employees will value. Benefit advisors can use a host of traditional strategies to help address costs for their clients, such as higher co-pays, deductibles, or co-insurance and concentric or limited network access.

But, even after implementing these strategies, the employer is still spending more for the benefit plan than in previous years. Some strategies that provide immediate cost relief can mean more out-of-pocket cost to the employer or even give the employee less choice of medical providers.
Other strategies, such as disease management and wellness programs, can have a positive effect on improving employee health and lowering healthcare cost over the long term, but they often require the employer to make an upfront investment to get a longer term reduction to their healthcare costs. With the difficult state of the economy, how many employers are eager to invest more money upfront with the hopes of receiving a return-on-investment in their medical benefit plan?

Medical Tourism Programs Break Into U.S. Health Insurance Industry

With consumer-directed plans, there has been a movement toward giving consumers a greater financial stake in the cost of care. Employers can achieve lower claim costs on a medical plan, provide additional choice of providers, and reward consumerism.

The key word is “choice.” Plan sponsors now offer a choice of domestic network providers. Networks give plan sponsors discounts of 20% to 40% off of providers’ retail prices. The benefit plan provides incentives to use lower cost participating network medical providers. The precedent is there. We have all seen 80/50 coinsurance plans or plans with a $500 deductible in-network and $1,500 deductible out of network.

A medical tourism option can give employees an additional choice of providers while saving the employer 40% to 80% over domestic networks. If the choice were 100% at the employee’s discretion, the employee would have an additional financial gain for choosing an even more cost effective medical care option. The additional savings on a surgical procedure can range from $30,000 to $75,000. The savings allow the employer to provide a financially rewarding benefit and still see significant savings.

Of course, employees will only travel abroad if the medical care is comparable or better than care in the U.S. The global economy has grown and competition to provide the best possible healthcare services has also grown.

A number of high quality hospitals and physicians and medical services are now available globally. For instance, there are a number of private hospitals that have U.S. or U.K. or equivalently trained and board certified physicians practicing in hospitals, which compete for international patients. Their outcomes rival U.S. hospitals. Additionally, more than 200 public and private healthcare organizations, in 33 countries around the world, are accredited by Joint Commission International (JCI), the international arm of the U.S. accreditor of hospitals.
Companies that specialize in medical tourism make it easier for employers and payors to embrace global healthcare programs because they have already built the infrastructure, performed the due diligence, and provided contracts that can be supported by U.S. third -party payors. A high quality global healthcare network should include the following:

• No monthly network access fee or per-eligible-per-month cost to the plan sponsor or TPA.
• Contracted rates for procedures with a network of high quality JCI accredited facilities
• Claims savings of 40% to 80% compared to U.S. average cost, including all medical and travel costs for the patient and a companion
• A single in U.S. currency that the TPA or ASO can easily adjudicate.
• A financial incentive for the employee to participate. For example, the employee could receive a 100% medical benefit and be eligible to share in network savings with a HRA contribution to fund their future medical expenses
• Easy integration with an existing medical benefit plan design as an additional network option
As the industry emerges, interest in global healthcare among American companies will continue to grow significantly.
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Keith Mendoza is the director of sales for Satori World Medical, a payor-supported, employer-sponsored, consumer choice global healthcare network. Mendoza has more than 17 years experience of healthcare industry experience primarily focused in the sales and service of medical and health and welfare benefits. During the last eight years, he held a key position as an Aetna Senior Sales Director for large commercial groups. In addition, Mendoza has served in a similar capacity with other large U.S. health plans and insurers in Southern California. He has a Bachelor of Science in Business Administration with an emphasis in financial services from San Diego State University. For more information about Satori World Medical, call 619-704-2000 or visit www.satoriworldmedical.com.