Health Insurers Jump On The Costa Rica
Medical Tourism Bandwagon
(Associated Press) Elizabeth Kunz left her
dentist's office this spring with a mouth
full of problems and no way to pay for them.
The South Carolina resident went out of her
way, literally, to find a solution, which
turned out to be in Central America. Her
trip to the tropics is part of a health
insurance experiment for trimming medical
costs: overseas care.
As Washington searches for ways to tame the
country's escalating health care costs, more
insurers are offering networks of surgeons
and dentists in places like India and Costa
Rica, where costs can be as much as 80
percent less than in America.
Until recently, most Americans traveling
abroad for cheaper nonemergency medical care
were either uninsured or wealthy. But the
profile of medical tourists is changing.
Now, they are more likely to be people
covered by private insurers, which are
looking to keep costs from spiraling out of
control.
The four largest commercial U.S. health
insurers - with enrollments totaling nearly
100 million people - have either launched
pilot programs offering overseas travel or
explored it. Several smaller insurers and
brokers also have introduced travel options
for hundreds of employers around the
country.
Growth has been slow in part because some
patients and employers have concerns about
care quality and legal responsibility if
something goes wrong. Plus, patients who
have traditional plans with low deductibles
may have little incentive to take a trip.
But a growing number of consumers with
high-deductible plans, which make patients
pay more out of pocket, could make these
trips more inviting.
In the meantime, the insurance industry's
embrace of overseas care has had a pleasant
side effect at home: some U.S. care
providers are offering price breaks to
counter the foreign competition.
This domestic competition and the slumping
economy have led to slower growth for
medical tourism over the past year, as
patients put off elective procedures that
involve big out of pocket costs, said Paul
Keckley, executive director of the Deloitte
Center for Health Solutions.
Last year, the center estimated that 6
million Americans would make medical tourism
trips in 2010. But Keckley has since shaved
that projection to about 1.6 million people.
Still, that more than doubles the roughly
750,000 Americans who traveled abroad in
2007, the last year for which Deloitte had
actual numbers.
Keckley expects the medical tourism industry
to recover, as more health insurers offer
the option and as more people wind up with
high-deductible plans.
Health care costs for employers who offer
insurance to their workers were projected to
rise 9.2 percent this year and another 9
percent in 2010, according to the consulting
firm PricewaterhouseCoopers. That could mean
double-digit percentage increases for
employees through higher premiums,
deductibles or copays.
Overseas care can lead to price breaks of
more than $40,000, not counting travel
costs, for procedures like knee replacement
surgery or heart bypasses. Insurers, or
employers who provide their own insurance,
can save between 50 percent and 90 percent
on major medical claims, said Jonathan
Edelheit, president of the Florida-based
Medical Tourism Association. A lower cost of
living and lower prices for medical supplies
and drugs help drive down care costs
overseas compared to American providers.
While employers or insurers reap much of the
savings, these lower costs can be the
difference between a manageable expense and
a bank-breaker for patients with
high-deductible plans. These increasingly
popular plans can lead to out-of-pocket
expenses surpassing $5,000 for individual
coverage and $10,000 for family plans.
High out-of-pocket costs also are common
with dental coverage, which is one reason
dental care trips have proven popular.
Kunz, 47, initially doubted the potential
savings she might see from visiting a Costa
Rican dentist though a program offered by
her insurer, BlueCross BlueShield of South
Carolina. But a little comparison shopping -
with help from the insurer - persuaded her
to get on a plane.
She had eight crowns replaced, a tooth
filled and a root canal. The work would have
cost her $10,000 out of pocket back home,
but she paid just $2,800 after insurance.
Ben Schreiner of Camden, S.C., would have
paid the entire $10,000 deductible on his
insurance policy if he had his hernia
surgery done last year near home. For that
reason, Schreiner, 63, had planned to wait
until he turned 65 and qualified for
Medicare before fixing it.
After reading about medical tourism in his
insurer's annual report, the retired bank
executive flew to Costa Rica and paid about
$4,400, including travel expenses. Frequent
flier miles covered his flight.
Schreiner said he was initially skeptical
about the quality of care he might receive
but reading about the doctors who could
perform the surgery put him at ease.
"When you read the bios and the backgrounds
of the doctors, you kind of lose your
skepticism," he said.
However, apprehension about medical travel
remains a high hurdle.
"People still do not understand that there
could be a hospital in Thailand that can be
as good as any hospital anywhere in the
world or in the United States," said John
Ferguson, chief marketing officer for
Georgia-based BasicPlus Insurance Services.
BasicPlus, which underwrites and provides
group health insurance plans to employers,
started offering medical tourism as part of
a benefits package last year. About 200
employers it contracts with around the
country now offer that option, but no
patients have used it.
Quality can be a legitimate worry, said
Harvard Medical School professor Sharon
Kleefield, who has worked overseas with
several health care systems to establish
quality measurements.
The average patient has no way of comparing
hospitals worldwide on quality, which can
vary widely. But, Kleefield said, insurers
are helping to raise standards through
careful inspections of hospitals before
including them in an overseas network.
Concerns about liability also may be keeping
some employers from adding overseas care
options to their plans.
U.S. employers who encourage an overseas
medical trip could become litigation
targets. It can be difficult to sue an
overseas provider in U.S. courts, said
Nathan Cortez, a Southern Methodist
University law school professor who studies
medical tourism. And the average malpractice
recovery in Thailand is about $3,000,
roughly 1 percent of the U.S. average.
To ease this fear, medical tourism companies
have started offering insurance that
protects employers who send employees
overseas from liability.
Some employers also have learned they don't
have to send people overseas to save money.
Shortly after Hartford, Conn.-based Aetna
Inc. and the Maine-based grocery chain
Hannaford Bros. Co. launched a program to
send patients to Singapore for hip and knee
replacements, some New England hospitals
countered with their own deals.
So far, three patients have benefited from
the competitive pricing; Hannaford has sent
no one overseas, even though the program
pays travel and lodging costs.
"People travel all the time a couple hours
on the interstate," said Dr. Brian Kelly,
Aetna's national medical director. "That's
no big deal."
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Elizabeth Kunz, 47, with the help of
BlueCross Blue Shield of South Carolina,
traveled to Costa Rica this spring to have
dental work done for a fraction of the cost
of the same work done at home -- $2,800 vs.
$10,000 out of pocket back home. |
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