The Case for Medical Travel

What companies need to know to incorporate a global health care benefit into their employee plan design

By Steven Lash, Satori World Medical Apr 1, 2009

Faced with skyrocketing health care costs and rising insurance premiums, medical tourism—or traveling to international hospitals to receive medical care—is becoming an increasingly viable option within employer-provided health care coverage.

According to the 2008 Deloitte Survey of Health Care Consumers, the medical tourism industry is poised to grow substantially over the coming decade.The survey reports that medical tourism will be a $4.4 billion industry in 2009 and increase to $13.9 billion by 2011. Additionally, the report forecasts that by 2010, 6 million Americans will travel abroad for medical care, compared to the 750,000 Americans who received medical care outside of the United States in 2007.

Several factors have led to a substantial increase in the popularity of medical travel:

  • Favorable clinical outcome results in high-quality, accredited international hospitals.
  • The escalating cost of health care in the United States.
  • An increase in the dollars that a patient is responsible for in their health care expenses.
  • The ease and affordability of international travel.
  • Significant improvements in technology, hospitals and physician and nurse training.
  • Overall demonstrable improvements in the transparency, measurement and quantification of the standards of care available globally.

Despite this growing popularity, when it comes to incorporating a global health care benefit option into a company’s overall employee benefit plan design, many employers do not know where to start. Below are key recommendations on how to offer a global health care benefit option to employees.

Why Medical Travel?

For an employer, there are a number of compelling reasons to consider medical travel. Among the most significant are:

  • Dramatic cost savings. The costs of receiving medical care in other parts of the world are in excess of 50 percent lower than similar procedures in the United States. Therefore, employers can lower their health care expenses and pass a portion of the savings to their employees. For example, when an employee selects an approved provider for their medical procedure, a portion of the savings can be deposited into their employer-funded health reimbursement account (HRA). These funds can then be used to finance their future medical expenses. What’s more, the funds are 100 percent tax deductible for the employer while tax free to the employee. For the employee, this is a 100 percent medical benefit with no out-of-pocket expenses. The package includes all travel and accommodations for the patient and a companion.
  • Superior medical quality, safety and patient care: Many hospitals in other parts of the world offer quality care and favorable clinical outcomes that are equivalent or superior to U.S. hospitals. Hundreds of international hospitals are now accredited by the Joint Commission International (JCI), an arm of the U.S. hospital accrediting body, the Joint Commission on Accreditation of Health Care Organizations (JCAHO). These hospitals have leading-edge technology; nurse-to-patient ratios exceeding U.S. standards; U.S./U.K. or equivalently trained and Board Certified physicians; medical and nursing staff that is fluent in English; as well as affiliations with prestigious U.S. medical universities, such as Harvard Medical, Johns Hopkins, Cleveland Clinic and others.
  • U.S. companies can compete better globally: Global health care models result in major economic benefits for U.S. companies because the costs of their employees’ health care are greatly reduced.As a result, the company can be more profitable and competitive in today’s global marketplace.
  • Improves employee retention and satisfaction: Companies that offer a global health care benefit option to employees can strengthen the overall morale and productivity of their workforce. As a result, they are able to recruit more qualified and talented job candidates, as well as improve employee loyalty and retention.
  • Offers seamless integration with any existing medical plan: A global health care benefit program can be added to an employer’s existing employee benefit program with minimal startup costs for the employer. It does not replace an employer’s existing health benefit program but rather augments the current package to provide employees with an additional choice and new benefit.
  • Single bill for employee claims: One common concern among employers is that a global health care benefit option will require significant internal resources and staff to administer patient claims and billing. Use of a third-party medical travel service provider can meet this challenge by handling the entire billing process for the employer, which receives a single bill in U.S. dollars for all services rendered—reducing company claims processing costs and with no foreign currency exchange fluctuations.

Getting Started

The first step is to find the right program.

Many medical travel providers or companies cater to patients who are uninsured, so their model is focused primarily on providing medical care at the lowest possible cost to the patient. It is important to assure that the organization meets certain quality standards. One way to determine the quality of a particular international hospital is to look for the JCI accreditation or seal of approval. JCI sets over 350 standards of excellence for international hospitals to ensure the quality and safety of patient care.

In addition, when selecting a medical travel company, compare what services and fees are covered. Ask:

  • Are the patient’s costs of travel and transportation fully included in the benefit program, as well as the costs for a companion?
  • Are there any deductibles or direct out-of-pocket expenses required for the employee?
  • What about start-up costs and administration fees?

While a medical travel program is not a cure-all for health care expenses, it can help companies reduce their employees’ medical costs drastically while offering employees more choice and control over their health care and medical expenditures.

Steven Lash is president and CEO of Satori World Medical, an employer-sponsored, consumer choice global health care network. He has more than 25 years of health care experience, including 19 years at Sharp Healthcare, San Diego’s largest health care delivery system.

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