For example, with active baby boomers in the market for new hips and knees, the high demand for orthopedics figures to continue. There's no shortage of hospitals overseas that can deliver high-quality hip resurfacing, spine fusions, and total joint replacements. But successful outcomes in orthopedics often require both postoperative rehab and physical therapy. Keckley expects that in the next few years international providers will cut into the orthopedics service line, but at the same time sponsors of the programs will work contracts with U.S. providers for follow-up care. He says advancements in electronic medical records and other technology to support distance medicine will help with care coordination.
Bali points out that joining with international providers could be an attractive option for some independent medical groups and community hospitals if it's considered a tactic to expand the patient population rather than exporting existing patients.
"If the insurance and employers start participating in it, then these community hospitals will decide that it makes sense to participate in this trend," says Bali. "The community hospitals would be in a better competitive position to offer low-cost structures in the larger international networks."
Foreign owned and operated private hospitals are hardly the only group anticipating a spike in outbound medical travel from the United States. Christus Health, a nonprofit system of more than 50 hospitals and long-term care facilities headquartered in Irving, TX, has added seven hospitals in Mexico to its brand as part of the Christus Muguerza system. Luke B. Johnson, director of international business development, says that in 2001 Christus didn't enter into the 51% ownership relationship with medical travel in mind, but since Muguerza's flagship hospital, Alta Especialidad, received JCI accreditation three years ago, attracting international patients has become more of an emphasis.
While the names of private hospitals abroad are unfamiliar to most Americans, many residents in southern states likely know about Christus Health. Johnson expects that being affiliated with Christus Health will be a big differentiator for Muguerza as more consumers from the U.S. market shift to international providers.
"Insurers and institutional players in the market also recognize the name and are familiar with how we work," says Johnson. "So there is certainly a level of trust that goes along with that and a nice level of familiarity in term of contracting to setting up and determining fees and everything else that goes along with an established relationship." The system has begun promoting medical travel only recently and has cared for a modest but growing number of international patients. Julio Cesar Lopez, general manager of Medical Travel for Christus Muguerza, says the system started counting medical travelers in 2006, when it received 80 international patients. Last year, that number increased to 2,045 from just 140 in 2007.
Given its close proximity to the United States, Johnson says Christus Muguerza matches up well in terms of value and convenience against hospitals in India or Asia that require patients to travel up to 30 hours each way. "It's a tremendous source of competitive advantage that we are so much closer," says Johnson. "The United States is expected to be the largest source of medical travel growth for the next five to10 years."
COMPETITION IN A FLAT WORLD.
Typically when an industry globalizes, consumers win. With a broad choice of providers, patients can make purchase decisions based on value scales of customer service, quality, and price. It stands to reason that with an influx of global options, prices for these elective procedures would drop in the United States. Johnson, however, doesn't think the U.S. healthcare system is in the best position to compete on cost of care. "Many hospitals are going out of business because they are not the most profitable businesses in the world," he says.
But others think there's room for American healthcare providers to become more consumer-centric, and that competition from abroad will force this change quickly. A research brief based on Thomson Reuters' 2008 PULSE survey of 23,000 Americans challenges the traditional assumption that all healthcare is local. Thomson found that consumers are becoming more conscious of medical travel options; in fact, 71.2% of Americans are well aware of overseas treatment as an option, according to the study.
"The idea that you have a geographic franchise is less and less guaranteed," says Kaveh Safavi, MD, JD, chief medical officer at Thomson Reuters' Center for Healthcare Improvement. "You really have to earn your business because geography matters less and less."
A few community hospitals are starting to react to the threat of global competition, says Michael Taylor, a principal at Towers Perrin in Boston. These nimble hospitals are putting together packages with upfront pricing that doesn't match international hospitals on price or quality, but comes close enough to be appealing to those deterred by medical tourism's barriers of extended travel, passports, and medical liability issues.