More medical tourists may also contribute to further globalization of lab testing
Medical tourism continues to be a force with the potential to exert significant influence on healthcare in the United States. For that reason, experts have weighed in recently on how efforts to reform healthcare may either inhibit or encourage growth in the number of Americans opting to become medical tourists.
Just as medical tourism has the potential to be transformative to certain aspects of healthcare here in this country, Dark Daily believes that medical tourism may also encourage greater globalization of pathology services and clinical laboratory testing. For both reasons, pathologists and clinical laboratory managers will find recent commentary to be enlightening.
One expert on medical tourism is Paul Mango, who heads up the healthcare consultancy at McKinsey & Co. He argues that, whatever form that healthcare reform takes in the United States, the resulting model of universal healthcare will not be detrimental to medical tourism. In his view, it is a simple case of supply and demand. Even if, post-reform, the cost of care came under control or actually declined, Mango notes that the addition of large numbers of newly-insured patients into the U.S. healthcare system would increase demand in a healthcare system that currently has little excess capacity.
With only so many hospital beds to fill, waiting lists in this country would grow. That would force some patients to look overseas for healthcare even as hospitals here scrambled to accommodate an overwhelming workload and potentially decreased profits.
For this reason, some Americans will opt for medical tourism. “One of the biggest myths about healthcare reform is that because you’ll have access to health insurance, you’ll have access to care,” Mango stated publicly. “They [these patients] can say, ‘I’m tired of waiting. I’m just going to pay out of pocket and go to Thailand.”
In recent years, estimates of the number of Americans who traveled overseas as medical tourists have ranged as high as 500,000 people annually. But Mango and his colleagues at McKinsey believe the actual number is much lower. In a May 2008 study conducted by consultants at McKinsey & Co between 5,000 and 10,000 Americans seek healthcare outside the country each year. The statistics are based on five years of researching patient admission records from healthcare providers at the top 20 medical tourism destinations worldwide.
By studying this data, Mango was able to make an interesting observation about what motivates Americans to travel abroad for healthcare. “Many of the patients were uninsured, and if you’re paying out-of pocket, you can pay almost four to six times less for surgeries in certain markets,” said Mango during an interview with Modern Healthcare.
One example McKinsey supplied is that of an aortic valve replacement. In the United States, that procedure would cost $100,000. By contrast, it would cost about $12,000 at an equally credentialed and high quality hospital in Asia.
During the past 24 months, several hospitals in the United States have begun to compete for this medical tourism business. By offering to do surgeries and other procedures during times of the week when facilities are underutilized (like on Fridays and weekends), they have managed to create competitively-priced packages that they offer to those U.S. employers that incorporate a medical tourism option in their health benefits packages.
Dark Daily observes that this activity demonstrates how the threat of competition from overseas hospitals can motivate healthcare providers in the United States to be more innovative in how to provide high quality services at prices comparable to those offered by the hospitals serving the medical tourist trade. There is always some unused capacity that can be offered, based on marginal cost pricing, at attractive rates.
As the number of medical tourists increases, it should be expected that lab testing may travel with them. Using overnight delivery services, it is simple to get a lab specimen from where it was collected to almost any location in the world. Thus, it shouldn’t surprise anyone if the laboratory in the overseas hospital that performs the service has the patient ship specimens pre-admittance and post-discharge. That would ensure all the lab testing was performed by the same lab. At the same time, that would be a one step forward in the globalization of laboratory testing services.
Editor’s Note: If the name of Paul Mango seems familiar, that’s because he was prominent in the laboratory testing industry during the 1990s. Mango served as Executive Vice President and Chief Operating Officer at the Institute for Transfusion Medicine in Pittsburgh, Pennsylvania between 1991 and 1996. During this time, he conceptualized and had a major role in implementing the Reference Laboratory Alliance (RLA), one of the nation’s first functioning regional laboratory networks.
Still packing their bags
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The Dark Report: An Interview with Paul Mango on Consumer-Directed Health Plans
One big hole in the argument:
“With only so many hospital beds to fill, waiting lists in this country would grow. That would force some patients to look overseas for healthcare even as hospitals here scrambled to accommodate an overwhelming workload and potentially decreased profits.”
We have plenty of empty hospital beds in this country, and lots of capacity to provide procedures that people go overseas for. There won’t be waiting lists for that kind of care unless we go to explicit rationing. The primary driver for medical tourists going overseas is cost savings if they are paying out of pocket. If these people are suddenly given insurance under Obamacare, they will be LESS likely to go overseas because they won’t be paying out of pocket any more.
The real shortage that will crop up if Obamacare is passed will be in primary care – lots of formerly-uninsured people will suddenly be able to pay for a family doctor’s services but won’t be able to get an appointment. Medial tourism won’t be able to solve that problem.
Cost and timely treatment are not the only reasons patients seek global alternatives. Others include confidentiality, treatments not available in the US,and desire for travel experience. Regardless of the outcome of US healthcare reform, globalization will be inevitable.
I have also recently come across several U.S. companies that are offering lab work and a few other medical services. It is going to take some time, but I am sure some medical services can be easily farmed out to foreign doctors and medical facilities. Unlike the situation with overseas call centers, lab work results and a few other services don’t require much of a telephone interaction, which some times irritates American consumers. In fact, having doctors abroad may actually improve the speed of delivering timely medical information.
The biggest thing that will rise the medical tourism is the cost of services!
Great Article! I have a lot of medical professionals that I will pass this onto. You definitely brought up some interesting points on medical tourism.
Nice article, congratulations!!