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Price Check on Medical Travel

Rick Johnson, for HealthLeaders Media, December 9, 2008

The whole premise behind promoting medical travel to U.S. consumers and employers is founded on the potential for significant cost savings. Sure, quality, convenience, and service are all factors, but if consumers didn't stand to realize huge cost savings, few would consider it, and reporters, like me, wouldn't cover it.

Yesterday, I facilitated a wide-ranging discussion on the medical travel experience at the Health Care Globalization Summit here in Arlington, VA. One of the difficult issues for those in the medical travel industry is how to get across the real cost savings that they provide.

"For American patients, the vast majority travel outside of the U.S. for one reason and one reason only, and that is to save money," says Michael Horowitz, MD, MBA, president of Medical Insights International.

The problem, when comparing charges for procedures in the U.S. with those provided by global destination hospitals, is that U.S. hospitals typically accept far less than they charge.

The reality is that even providers in the U.S. don't understand what their services truly cost the consumer, so this creates a confounding challenge for global destination hospitals. They could rightly compare charges with U.S. counterparts, but that's somewhat disingenuous considering that no one really pays full price for healthcare in the U.S.

U.S. providers are willing accept lower payment compared to their charges from Medicare, Medicaid, and private payers, and Horowitz points out that U.S. providers will even set conditions to accept lower than charged payment for self-paying patients. He says this price is likely lower than the quoted charge but higher than that paid by third-party payers.

It might not be possible for the global provider or a medical travel facilitator to come up with the real price that a self-paying patient would pay here in the U.S., but Horowitz cautioned against some of the broad cost comparisons he has seen online. The challenge for the medical travel provider is coming up with some realistic estimate and then trying to explain it to the consumer in a way that is honest and shows the potential for cost savings.


Rick Johnson is senior online editor of HealthLeaders Media. He may be reached at rjohnson@healthleadersmedia.com.
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