Medical
Travel:
Key Drivers of This Emerging
Health Benefit Option in 2010
By Victor Lazzaro
he global recession has changed
T
the playing field for many
industries worldwide, but as
health care reform heats up and as
market pressures bear down on
employers, the medical travel benefit
option promises to take a bold new Despite, or because of, an unpre- U.S.-domestic Medical Travel: With the
direction in 2010. With analysts pre- dictable health care landscape, the expanded definition of medical travel
dicting initial stages of economic average U.S. consumer is ready for to include options within the United
recovery, expect increased adoption medical travel. A recent Gallup poll States, it is expected that the medical
among employers, payers, and insur- found that a sizable proportion of travel industry will thrive regardless of
ers throughout the United States, Americans would “consider traveling specific nuances imposed under health
especially in light of the latest report outside the United States for treat- care reform packages.
by the Deloitte Center for Health ment in a foreign country” for a vari-
Solutions predicting a sustainable 35 ety of procedures and medical treat- When Maine-based supermarket
percent annual growth rate for the ments.
3
Twenty-nine percent of chain Hannaford Bros. Co.
medical tourism industry.
1
respondents would consider traveling announced two years ago that it
out of the United States for alterna- would begin sending its employees to
“With health care costs increasing at tive medical treatments for a major Singapore for knee and hip replace-
six percent per year for the next decade, medical problem, and 24 percent ments to help control health care
and medical tourism offering savings of would seek cancer diagnosis and costs, several Boston hospitals offered
up to 70 percent after travel expenses, treatment abroad.
4
to match the price.
5
the Deloitte Center for Health
Solutions estimates that the medical Several key drivers point to a more “One of the primary reasons some U.S.
tourism industry will recover from the widespread adoption of medical travel: medical facilities are willing to be paid
current economic downturn and attain less is that they are generally compen-
35 percent annual growth in coming Health Care Reform: Medical travel sated upfront, before the procedures
years. This growth holds important offers an ideal health benefit option are conducted, which enables them to
implications for U.S. health care that serves the best interests of employ- avoid the arduous task of seeking reim-
providers, health plans, consumers and ers, individuals, and the U.S. health bursement afterward from insurers and
the government.”
2
care system, particularly in response to third-party administrators. The facili-
the growing demand for improving ties also receive a single package price
Medical travel is poised to become a quality, aligning costs with outcomes, that is negotiated beforehand.”
6
de facto option for elective care and creating incentives for consumers
because it achieves positive health – such as the ability to compare Many believe that U.S. Centers of
improvement and return-on-invest- provider cost and quality. Medical trav- Excellence (COEs) across the country
ment, particularly if coordinated el offers a compelling opportunity to generate better outcomes at lower
through reputable health plans and provide greater access to high quality costs. The institutions earn the COE
providers. Additionally, emergent care at lower cost, particularly for self- distinction by performing a high
technologies of distance medicine insured companies that want to provide quantity of a given procedure while
combined with insurance coverage for the best surgical options for their producing measurably superior clini-
certain low-risk procedures will pro- employees. Additionally, it creates pres- cal results. Better outcomes mitigate
vide greater impetus for growth in the sures across the board for quality and liability claims, which in turn stem
medical travel sector. cost transparency. the tendency toward defensive medi-
(see page 6)
The Self-Insurer
©
/ January 2010 • 5
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