After outsourcing everything from manufacturing to customer service, U.S. businesses – pressed by rising health-care costs – are looking overseas for medical benefits as well.
A growing number of employers who fund their own health-insurance plans have begun looking into sending their ailing employees around the world for surgeries that in the U.S. would cost tens of thousands of dollars more.
Carl Garrett of Leicester, N.C., will fly to a state-of-the-art hospital in New Delhi, India, in September for surgeries to remove gallstones and to fix a worn rotator cuff. His employer, Canton, N.C.-based Blue Ridge Paper Products Inc., will pay for it all, including airfare for Garrett and his fiancée. The company also will give Garrett a share of the expected savings when he returns.
“I think it is a great thing,” the 60-year-old technician said. “Maybe it will drive down prices here in the U.S.”
Blue Ridge, which employs 2,000 and funds its own health plan, began studying the idea out of frustration with rising rates at local hospitals, company officials said. Blue Ridge’s health-care costs have doubled in the last five years, to about $9,500 a year per employee.
“The hospitals have a monopoly. They don’t care because where else are patients going to go?” said Bonnie Blackley, benefits director. “Well, we are going to go to India.”
Every year, tens of thousands of Americans travel abroad in search of cheaper tummy tucks and angioplasties. This “medical tourism” has been typically reserved for uninsured procedures or uninsured patients. But as health benefits cut into U.S. companies’ bottom lines, insured medical tourists such as Garrett may grow from a trickle to a flood, industry observers say.
IndUSHealth, a Raleigh, N.C.- based medical-tourism agency hired by Blue Ridge, said it is in negotiations with several other interested companies.
Earlier this year, United Group Programs Inc., a Boca Raton, Fla., health-plan manager, began offering a Thai hospital in its network of preferred providers. A handful of its plan members already have traveled for treatment in recent months.
Arnold Milstein, chief physician at human-resources consulting giant Mercer Health & Benefits, said he has been hired by three Fortune 500 companies interested in contracting with offshore hospitals.
“This could really open up the health-care market to foreign medical travel,” said Milstein, based in San Francisco. “It won’t just be people without insurance anymore. It could be available to just about everybody.”
Hospital operators say that doesn’t bode well for them.
Hospitals rely on paying, well-insured patients to keep them afloat in the face of costly government regulations and low-paying programs such as Medicare and Medicaid, said Jan Emerson, spokeswoman for the California Hospital Association.
Exporting the best-paying patients abroad, she said, “will only add to the woes of the entire health-care system.”
But, as in other industries, rising costs are leading to the globalization of health care. High drug prices have pushed many Americans to get prescriptions from Canada and other countries. U.S. hospitals outsource radiology analysis to cheaper doctors in Australia and Europe.
Expanding health plans’ provider networks to include foreign hospitals is an economic necessity and a natural progression, industry observers say.
There are risks. Patients have little or no legal recourse in cases of medical malpractice because of relatively weak patient- protection laws in countries such as India and Thailand, popular destinations among Americans seeking surgeries. And U.S. medical organizations and government agencies have no oversight of foreign facilities.
Traveling to a strange country to undergo a serious surgery far from home also may not appeal to everybody. Said Blackley, Blue Ridge’s benefits director: “Some of our employees have never even been on a plane.”
