by Renee-Marie Stephano, Esquire

In today’s climate, it’s not always easy to find a good doctor or an appropriate and affordable medical procedure. The federal health insurance exchanges, which have reduced patient options even further, haven’t helped matters. A growing number of Americans and employers are seeking creative paths to inexpensive and first-rate healthcare. What they have found is not always available at their doorsteps, but many miles away. 

No matter how many healthcare consumers sign up for insurance on the Obamacare exchanges, patients are likely to find that a doctor or local hospital they want to visit is not in their network. Consumers and employers were looking for answers to their healthcare dilemmas even before the Department of Health and Human Services unleashed president Obama’s chief domestic policy initiative on a divided and wavering public at the beginning of the year. Some forward thinking consumers turned to overseas alternatives to buck a health care system that leaves them priced out of services in their own neighborhoods.

Certainly, Obamacare has enabled some Americans to afford health insurance for the first time. That’s what the Affordable Care Act was supposed to do, after all. But finding fair-priced healthcare remains out of reach for far too many. Fifty-nine percent of Americans reported a negative experience with the exchange websites, according to a Gallup poll. The good news is that those who have made medical tourism a reality are finding an innovative path to sound, inexpensive care.

Employer Savings

Joy Guion wasn’t dreaming when she boarded a flight to Costa Rica for weight-loss surgery. The North Carolina native wasn’t accustomed to traveling overseas, let alone for medical care and certainly not to a sun-soaked destination where she would stay at a four-star hotel with a personal concierge and a local driver. Her employer, HSM, even sent Gary Harwell, a retired manager and former colleague who needed knee replacement surgery, along with her. Here’s the kicker: both employees didn’t have to pay a dime for their surgeries – not even travel expenses or post-op recovery. Picking up the tab was HSM – a self-funded employer of 2,500 in the United States.

What’s more, as an incentive for medic al tourism, HSM waives copays and deductibles, and covers travel expenses for the employee and a companion.

The math makes perfect sense to employer members of the Medical Tourism Association like HSM. In Costa Rica, the procedure costs $23,531 compared to more than $59,000 in the United States.

Guion’s gastric sleeve surgery came to $17,386 in Costa Rica, but would have cost about $30,000 in the United States. When the bandages came off, Guion and Harwell received bonus checks for at least $2,500 from HSM, or up to 20% of the savings the company enjoyed in insurance costs – healthy and happy employees indeed.

What’s the catch? There isn’t one. HSM has saved about $10 million in healthcare costs in the past five years. Close to 250 of HSM’s employees have traveled abroad for medical tourism procedures, and more are scheduled to go.

Closer to Home

When it came to medical tourism, Phil Dominguez didn’t need much prodding. He wasn’t the least bit scared of travel. “I would have gone any place,” he said. He was unemployed, but had health insurance through his wife who works at Pacific Seafood. Dominguez only had to take a one and a half-hour trip by car from his home in San Antonio to Arise Austin Medical Center. It offered a preset price for a knee replacement with no out-of-pocket expenses. Arise Austin Medical Center is one of hundreds of hospitals that take advantage of bundled-payment arrangements with Pacific Seafood and large companies in the United States like Wal-Mart and Lowe’s. These companies have contracted with very narrow private networks across the country that offer treatment to their employees who need a pre-planned surgery. Total knee replacements can cost from $36,000 to $48,000. Dominguez saved Pacific Seafood 41% of what the company would have paid through his health plan including all bundled medical and travel costs as well as the EmployerDirect fee.

Thomas Johnston, CEO of EmployerDirect Healthcare, says that bundled case rates reduce the cost of care. This benefit to the employer’s bottom line can be passed down to employees – some of whom may not be able to travel great distances for a major procedure. EmployerDirect administers bundled case rates for planned medical procedures by negotiating and consolidating all costs including fees for surgeons, anesthesiologists, all medical care until a patient is discharged, and associated travel. Surgery costs can vary widely by provider and geographic location. So employers who self-fund their health insurance plans can get a better handle on their benefit offerings based on the number of employees they cover and the hospitals they have contracted with to bundle care costs.

Efficient Operations

Companies can expect to save 30% to 50% by steering employees and eligible dependents who need the most specialized and costly care to a health system that provides proven outcomes. They can also reduce total plan expenditures by 6% to 10%. Brian Cramer, CEO of Orthopaedic Hospital of Wisconsin, says that bundled payment contracts help keep his Milwaukee facility operating more efficiently while justifying appropriate staffing levels. “Because we’re a small specialty hospital, we can be like an aircraft carrier in the middle of the ocean. Without our patients, we don’t have anything. Bundled care arrangements are important to us. We get volume we wouldn’t ordinarily see; that’s why we can charge less.”

While many hospitals are struggling to fill beds and are cutting jobs, healthcare providers are looking to extend their market share. More and more employers are realizing that they can reduce costs by 20% to 40%, which is more than enough to cover travel expenses. They are persuading employees to consider traveling to locations that may be no more than a five-hour drive away. Lowe’s was one of the first large companies to send employees across state lines for domestic medical tourism procedures. Wal-Mart followed suit last year. Since then, more than a million employees and family members have opted for coverage under a plan that enables the retail giant to fly them to six providers including the Cleveland Clinic, Virginia Mason Medical Center in Seattle and Scott & White Memorial Hospital in Temple, Texas, for heart, spine and transplant surgery.

Roads Lead Overseas

Health care travel was not foreign to Kelly Jenkins, a medical tourism facilitator who matches patients in the United States with doctors and accommodations around the world. Jenkins, who had a successful surgery in Puerto Vallarta, Mexico said, “It sounds nuts; I wanted to experience what our clients experience when they go overseas for a medical procedure.” She got a taste of the cost-savings firsthand. Jenkins said the procedure to repair her knee cost only $5,000 in Mexico compared to the $12,000 to $14,000 it would have cost in the United States.

The healthcare landscape has never been harder for many Americans to navigate. Finding a doctor is not enough. Patients who call in advance to check if a provider is enrolled in their network may be surprised to learn their insurance coverage is not accepted when they arrive for an appointment. New policies are prone to hiccups. The path to treatment, once a funnel, now seems like a maze to millions of Americans. Healthcare has never been immune to confusion, but the idea to make medical tourism — both domestic and international — an integral part of employee coverage is making more sense to Americans, their employers, and insurance companies.


RenÈe-Marie Stephano, esquire is president of the Medical Tourism Association and editor-in-chief of Medical Tourism Magazine. She works closely with governments, hospitals, business leaders, and travel and tourism entities to develop sustainable medical tourism/international patient programs and strategies throughout the world. She has authored and co-authored several books, has been a keynote speaker at hundreds of international conferences, and has been a valuable resource for medical tourism initiatives in media outlets worldwide.