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Saving Money on Health Care: Is Medical Tourism the Answer? Posted: March 16th, 2010

By Megg Mueller

Megg Mueller is a journalist with almost two decades of experience. She has worked as a reporter and editor for the Reno Gazette-Journal, as editor of health care and education manuals and was an assistant travel editor for USATODAY.com.

Medical tourism is a burgeoning field. According to the Deloitte Center for Health Solutions, which tracks the medical tourism industry, some 648,000 people traveled outside of the United States for a medical procedure in 2009. And that number is expected to grow by 35 percent annually over the next few years.

These figures begin to tell the story of how the rising cost of health care and lack of cheap health insurance in the United States is sending many people abroad for surgeries. How much of a savings can you expect to see? Depending on the procedure and the location you choose, the savings are between 25 percent and 80 percent over the cost of the same procedure in a U.S. hospital.

According to Jessica Johnson, Director of Operations for the Medical Tourism Association (MTA), an international non-profit association that encompasses international hospitals, health care providers, medical tourism facilitators, and insurance companies, notes that the organization used to see most U.S. citizens traveling for cosmetic surgeries and dental treatments. However, orthopedic surgeries, like hips replacements, knee replacements, and spinal surgeries are gaining popularity. But Johnson says the MTA is also seeing U.S. patients traveling for procedures that aren't as easy to come by in the U.S., like stem cell and cancer treatments, heart procedures, and increasingly, bariatric surgeries.

The Savings Are Real

Johnson explains that many insurance companies don't cover bariatric surgeries, and the cost for the weight-loss procedure can be as much as $30,000 in the U.S. However, patients traveling to Costa Rica pay about $8,500, while Thailand and Singapore travelers may spend about $12,000--all of which amounts to massive savings. The savings on many medical treatments offered abroad can be just as dramatic:

Heart Bypass

U.S. cost = $144,000
India = $8,500
Korea and Thailand = $24,000
Mexico = $20,000

Heart Valve Replacement

U.S. cost = $170,000
Colombia = $10,450
Thailand = $22,000
India = $1,200

Hip Replacement

U.S. cost = $50,000
Korea = $16,450
Singapore = $11,100
India = $8,000

Dental Implants

U.S. cost = $2,000 - $10,000
Costa Rica = $1,000
Jordan = $500
Mexico = $910

Hysterectomy

U.S. cost = $15,000
Thailand = $5,000
Mexico = $6,675
Korea = $9,000

But What about Quality?

The large discrepancy in pricing can often frighten potential patients, who may think they are getting less-qualified care. However, Johnson explains why the cost of the same surgery outside the United States is so much cheaper, "We see health care being more expensive (in the US) for a few reasons; overseas you find lower labor costs, plus less expensive insurance costs for physicians and hospitals."

In the U.S. malpractice insurance is a very large part of a doctor's practice; for example, a neurosurgeon in Miami probably pays about $2 million a year in malpractice insurance, Johnson says. In foreign countries malpractice isn't as common, so insurance rates are much lower and doctors can charge less to cover their cost of doing business.

"They're basically more cost effective, these hospitals. They do not have to pay as much for medical supplies and physicians' costs, or insurance," Johnson says.

Most overseas hospitals are also more familiar with covering an uninsured population, which makes them more familiar with cost-saving measures than their U.S. counterparts might be.

"The physicians are paid less but it's not a quality issue," Johnson says. "They're often trained in the United States. It's simply a cost of living issue."

Does Health Insurance Cover Medical Tourism?

While many who travel abroad for surgery do no have medical insurance, in 2009 the MTA released its first survey of medical tourism participants. The survey revealed that 42 percent of respondents had some sort of medical insurance coverage when they traveled overseas for treatment.

Insurance companies are still testing the waters of medical tourism insurance coverage, but a few group health plans, generally employer provided, are starting to cover some treatments. One such group plan is WellPoint, which launched a pilot program in 2009 for a Wisconsin company. The program allowed employees to travel to India for select procedures, such as joint replacement, or upper and lower spine fusion.

Another insurance company, Blue Cross and Blue Shield of South Carolina (BCBSSC), offers its members the chance to apply their health insurance benefits to procedures at any hospital, including international facilities, within its network. The company requires precertification and that pre-existing policies requirements are satisfied, but if those criteria are met and the procedure is allowed under the health plan in question, members are covered overseas.

Aetna also offered an opportunity for medical tourism with less success in 2008. The health insurer announced that some of the 27,000 employees of Hannaford, a New York and New England supermarket chain, would be offered the chance to travel to Singapore for knee and/or hip replacement surgeries--the company would make all travel, surgery and accommodation arrangements. However, there were no Hannaford employees that chose this option. It was noted in Managed Care Magazine that at the time, a few New England hospitals offered to match the price charged in Singapore, thus spurring the notion that medical tourism may create competition and U.S. hospitals could eventually be forced to lower prices.

The only way to be sure you are covered is to ask your health insurance provider for a quote on the procedure that interests you. By doing your homework, and presenting a significant savings to your employer, you might just open the conversation. There is a reasonable expectation that as the medical tourism industry grows, the notion of insuring medical tourism may become more mainstream. Until that day, if you don't have health insurance or your coverage does not pay for surgeries outside the U.S., the option to save a large amount of money is still on the table.

Megg Mueller