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In fact, Hayes says Hannaford's has started fielding counteroffers from providers and has asked Aetna to work on vetting them. It's worth noting that Hannaford's has yet to send a single employee to Singapore for medical care, but with the option in place, Hayes says the reaction from U.S. healthcare executives is starkly different from just a year ago. "Our wildest expectation and hope would be to create a different dialog with U.S. providers," Hayes says. "First, we did this to give our members options and choices, but we hoped to change the response from our U.S. healthcare system to really look beyond their hospital service area."
Healthplace America is trying to address self-insured employers' need for lower-cost healthcare options. As a facilitator of domestic medical travel, Lisle, IL-based Healthplace America is developing a network of U.S. providers as an alternative to outbound medical travel, says Darren Tomey, executive vice president of sales and marketing. He says employers and employees can save 30% to 50% on select elective procedures without sending workers across international borders.
TIME TO WAIT.
For sure, not everyone is convinced that droves of insured patients will flee to private hospitals abroad. But considering the financial outlook of the healthcare system and the fact that global competitors are focusing on traditionally high-dollar elective procedures, it may not take millions of patients to hurt U.S. healthcare's bottom line. At the end of last year, Moody's Investor Services downgraded the healthcare industry's 12- to 18-month outlook to negative from stable. Moody's predicts that in a tough economy, fewer paying patients will seek care, particularly in costly elective surgeries. In fact, the American Hospital Association released data supporting this outlook.
The AHA says admissions and elective procedures are both down across the nation. With the average profit margin for community hospitals hovering around 2%, Taylor expects community hospital administrators would get nervous if global competitors were someday able to siphon 10% of select elective surgeries. "Those are the procedures that make the difference as to whether the hospital is in the red or in the black," he says.
Moreover, Keckley sees the sheer number of electives that international hospitals could provide increasing over time. "The amount of opportunity is exponential. Behind orthopedics and minimal cardiac, you have a substantial amount of ophthalmic, dental, and reconstructive work that's done," he says. "Anytime you have something like a bariatric procedure done, you have one to two body sculpting procedures done. The number of procedures is astronomical, and the technology that's letting us do that is making it increasingly cost effective to do it in an outpatient setting."
If Deloitte's projections about the impact of American outbound medical travel prove incorrect, it might only be a problem of the timeline. Many of the private health systems abroad are eager, but not in a rush, to make a footprint in the United States. Many of these systems are diverse and international in reach, well funded, and prepared to wait for the additional revenue stream from the United States, whether it comes in two or 20 years.
Bangkok-based Bumrungrad International is perhaps the extreme example. With 85 facilities in eight countries reaching from Bangkok to the United Arab Emirates, Bumrungrad doesn't need to make inroads into the United States to remain a profitable system. "We're the largest provider of care to the Middle East outside the Middle East itself," says CEO Curtis J. Schroeder.
Still, Schroeder estimates that about 30,000 American residents traveled to his Bangkok hospital last year and predicts many more will make the trip given the signs he sees in the industry. "We are moving beyond the grassroots phase," he says. "We do now have at least some level of attention from third-party payers and employers in North America. What's new is that they're looking at products to put on the line to prospectively send Americans abroad rather than just handle them when they happen to be abroad."
Rick Johnson is senior online editor for HealthLeaders Media, and editor of HealthLeaders Media Global, a free weekly e-newsletter that provides strategic information on the business of healthcare management from around the world. He can be reached at email@example.com.
PHYSICIAN BRAIN DRAIN
For many years, the United States has counted on foreign-trained physicians to fill the nation's healthcare talent gap. The American Medical Association estimates that up to a quarter of all practicing physicians in the country received their medical training abroad.
Traditionally, many international medical school grads have sought visas in order to earn a more lucrative living in the States. But more recently, leaders at private healthcare systems abroad say, foreign-born doctors are returning to their native countries to practice in the up-and-coming private health systems.
"We're seeing countries and companies within those countries dedicate resources to train people to supply labor for the world shortage," says Luke B. Johnson, director of international business development for Christus Health.
India has long been a source for the world's medical talent. With the rise of private hospitals there, even physicians who have received education and training in the United States and Europe are deciding to practice in their home country.
"Over the past two years, we now have almost 28 very senior clinicians who have come back from the U.S. and the U.K. after spending many years over there and almost reaching consultant status in both the U.S. and the U.K. with an average work experience of about 15 to 17 years," says Vishal Bali, CEO of Wockhardt Hospitals Group.
The strong urge to come home isn't just because of the allure of the nation's growth story. Some physicians there say practicing in India actually affords them a better lifestyle as well. These physicians say they can make a good living and practice patient-centered medicine without the burdens of onerous regulations and the high cost of operating a practice in the United States.
When he was a medical student some 20 years ago, Aniruddha Malpani, MD, admired the U.S. medical system. Today, Malpani is an in vitro fertilization specialist who owns a private clinic in Mumbai. "But as time has gone by things have changed," he says, "and the reason I feel sorry for U.S. physicians is I feel they got squashed between patients, lawyers, third-party payers, HMOs, and the government; they seem to be on the receiving end for everything."
As opportunities in the private health sector become increasingly available in emerging countries, critics now complain about the growing threat of brain drain from public health settings to private hospitals and clinics. The thinking by some goes that physicians in Thailand, India, Singapore, and other developing countries are enticed to take on more patients in budding private hospital settings where they can get paid at a higher rate.
"I have 200 physicians who wouldn't even be here if Bumrungrad didn't exist," says Bumrungrad International Group Chief Executive Officer Curtis J. Schroeder. "They wouldn't be in Thailand; they wouldn't be servicing Thais at all."
As the largest private hospital in Southeast Asia, with 554 beds and more than 30 specialty centers, Bumrungrad clearly has a lot to gain by partnering with the best physicians in Thailand. It is, after all, the physician-patient relationship that is at the center of the system's care model that has earned Bumrungrad's international reputation for service excellence.
The Bangkok hospital reports that it cares for about 400,000 international patients annually—nearly half its patient population—but Schroeder holds firm that Bumrungrad isn't profiting at the expense of the Thai people. He points out that across Thailand only 0.3% of the healthcare delivered goes to non-Thais. Without the private sector to support Thailand's physician work force, it's likely that many would try to find opportunities in the West.
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