With the current economic downturn, more employers are considering the cost benefits of medical tourism, experts say. And it's not just international travel anymore. Some patients are traveling to under-used medical facilities in the United States for lower-cost procedures.

By Jared Shelly

Medical tourism has become a viable option for uninsured or under-insured individuals in need of medical procedures.

After all, why pay $250,000 for heart surgery in the United States when the cost might be only $15,000 in India -- including airfare, accommodations and the attention of a dutiful and experienced medical staff?

A 2008 study by the Deloitte Center for Health Solutions reports that roughly 750,000 Americans traveled abroad for medical care in 2007 and states the industry "is expected to experience explosive growth over the next three to five years."

The study predicts that 6 million will go abroad for care by 2010.

A recent study by New York-based McKinsey & Co. is much more conservative, estimating between 60,000 and 85,000 medical tourists globally.

Jonathan Edelheit, president of the Medical Tourism Association, a West Palm Beach, Fla.-based membership organization for the industry, says the Deloitte survey is more accurate.

But, not even included in the Deloitte study is information on the latest wrinkle in the medical tourism industry -- individuals traveling to lower-cost medical facilities in the United States.

"When the economy is great, employers don't care about their healthcare," says Edelheit. "When the economy is bad and employers are hurting, that's when they get creative."

With the current recession, more employers are considering the cost benefits of medical tourism, experts say. And it's not just international travel anymore. Some patients are traveling to medical facilities in the United States to take advantage of lower-cost procedures.

North American Surgery Inc. based in Vancouver, is one organization that helps patients bypass international medical tourism by finding inexpensive deals for them at North American hospitals.

Richard Baker, founder of North American Surgery, compares the hospital business to the hotel industry. If a $100-a-night hotel isn't booked all day and a potential customer at 11 p.m. offers to pay $25 for a room, management may just take the deal. That way, they can get some revenue, even if it is lower than projected.

The same concept, he says, is true for hospitals.

"We've got about 17 hospitals in our network and they all have one thing in common: They're not working to capacity and they have unused operating-room time," says Baker. "If a three-hour gap in an operating room comes and goes and nobody gets an operation, that time's gone forever."

Baker recently consulted with the family of a Texas boy who needed complicated jaw surgery. A local hospital offered to do the surgery for $52,000, forcing the family to consider traveling abroad for treatment. Baker, however, helped negotiate a price of $21,600 at a hospital in Oklahoma City.

While numbers aren't available on the number of patients choosing to travel within the United States for medical care, Baker and Edelheit agree that domestic medical tourism is growing.

On the international front, the forecast is mixed.

The "outlook across Asia's medical tourism industry is grim," according to a recent article in Business Week, which puts the blame on "the financial crisis turning into a global recession."

That forecast is backed up by the Singapore-based newspaper TheStraits Times, which notes that industry professionals in that country forecast a 10-percent drop in medical tourism, from the 517,000 medical tourists Singapore housed in 2007.

On the other hand, a report in the Malaysian newspaper Bernama, cites research by Hong Kong-based OSK Research, noting that medical tourism in Malaysia will remain robust despite the economy.

"We believe demand for medical tourism in Malaysia will remain resilient as patients with a medical condition will seek treatment regardless of whether there is a recession or not," states the report.

Edelheit says that despite of the economy -- and in some ways because of it -- medical tourism is experiencing a boom, with the MTA's 20 international member hospitals and 300 corporate members seeing growth.

A struggling economy means an increase in the implementation of medical tourism by employers, he says, and a growing number of companies are considering whether to add such a program to their health plans.

Thus far, medical tourism has been primarily used by individuals, not employers.

"I think [medical tourism] is really going to explode this year," says Edelheit. "With an economic recession, employers simply cannot ignore the savings."

February 10, 2009

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