Medical Device Daily Washington Editor

WASHINGTON – Another array of negative opinions on the state of healthcare in the U.S. was a prominent feature of a Tuesday morning congressional hearing that focused on one of the fallouts from the U.S. system's many problems: medical tourism.

Considered as a type of outsourcing, medical tourism could present a cost-lowering competitive challenge to American providers, but the degree of this challenge, according to speakers at the hearing, is difficult to forecast.

Thus, the chair of the Senate Special Committee on Aging, Gordon Smith (R-Oregon), recommended the creation of a task force to look into this phenomenon, and he suggested that Uncle Sam could join the ranks of payers that do business with overseas providers.

In his opening remarks for the hearing, titled “The Globalization of Healthcare: Can Medical Tourism Reduce Healthcare Costs?” Smith reminded attendees that the state legislature of West Virginia is examining whether it would encourage state employees to “travel abroad for less-expensive medical care.”

He added: “American medicine is less and less competitive” on price, demonstrated by the fact that in many instances the cost of a flight to the subcontinent of India for a two-week stay and heart surgery is much below the cost of receiving the same care at home without the travel and lodging expenses associated with transcontinental travel.

Case in point: Maggie Ann Grace, whose advocacy on behalf of heart surgery patient and significant other Howard Staab led to a trip to Escorts Heart Institute and Research Center (New Delhi, India), where surgeons replaced Staab's mitral valve for $6,700. Grace said that Staab, with 31 years experience as a carpenter, “had chosen not to have health insurance.”

Since then, Grace has penned a book, due to hit the stands next year, based on her and Staab's experiences.

Bonnie Grissom Blackley, benefits director for Blue Ridge Paper Products (Canton, North Carolina), said that the self-insured, employee-owned company expects to fork over roughly $24 million for healthcare services for its 2,100 member/employees in 2006, an increase of around 75% over 2000 and a trend that is “unsustainable.” Blackley complained that “even with the promise of patient steerage, we were unable to negotiate discounts with a large medical practice across the street from our mill.”

Adding to this mix, Blackley described the case of two employees who joined the company in January and have needed major surgical intervention – a heart valve replacement and a kidney transplant – after indicating that “they had no major medical issues.”

“Fraud is rampant,” she said, “with employees desperate to cover themselves or ineligible dependents” due to the increases in medical care.

Rajesh Rao, CEO of IndUShealth (Raleigh, North Carolina), a firm that bills itself as “a global healthcare service that links uninsured and self-insured Americans to affordable, high-quality medical care in India,” told Sen. Smith that “more than 150,000 foreign patients have visited India for medical procedures last year” and that despite substantial cost differences between its contracting hospitals and hospitals in the U.S., “one-on-one nursing is made available to patients around the clock.”

He asserted that many hospitals in India offer care that is “comparable to the best institutions in the U.S.”

While bypass procedures can cost between $55,000 and $86,000 in the U.S., according to Rao the same procedure can be handled in India for as little as $6,000, the same price tag as would be fixed to an angioplasty and stent installation that would ring up a tab of as much as $49,000 at a typical American hospital.

IndUShealth targets companies that rely on self-insurance, with the rationale that “since a relatively small number of cases results in their biggest expenditures, employers are able to save up to 20% of their medical costs,” even with modest employee participation. However, Rao admitted that it can be difficult to overcome the “emotional barriers that many Americans face when first exposed to this concept.”

Bruce Cunningham, MD, president of the American Society of Plastic Surgeons (Arlington Heights, Illinois), urged caution, stating that “patients considering medical care outside the U.S. do so primarily through a price-driven lens” that may fail to take into account the standards for the institution provider. He argued that in the absence of such information, “a patient can be ill-informed and worse, at significant risk.”

Cunningham also said that “post-surgical complication . . . present particular challenges for the medical tourism patient,” and that under such circumstances, “their insurance company likely will not cover complications” stemming from an operation overseas.

“There also may be no legal recourse if surgical negligence by the physician or facility occurs,” he remarked.

Despite the incredible disparity in prices, medical tourism might not affect healthcare in the U.S. in meaningful ways.

“To the degree that medical tourism grows, it will never provide a level of competition that will have much impact on prices in the U.S.,” Rao said.

In his opening remarks, Smith said that he is considering a proposal to prompt federal agencies to form a task force to look into medical tourism.

He told Medical Device Daily that this task force would examine how the hospital industry in other nations are regulated and what sort of standards they hew to. The task force might also have to come up with recommendations as to whether overseas hospitals should offer “some government stamp of approval” to ensure that the quality of care is up to U.S. standards.

Asked whether the Centers for Medicare & Medi-caid Services (Baltimore) should consider covering medical tourism, he said, “I think this is the question we're going to have to come to eventually,” adding that the idea may be feasible so long as any such services are not compromised by sub-standard care.

Rao told MDD that salaries for providers at specialty hospitals are higher than nearby hospitals because this enables specialty hospitals to “be the best at what they do.” He insisted that while the implicit drain of top-flight talent is a source of controversy in the communities in which these hospitals are located, there is nonetheless a benefit.

“It allows,” he said, “the hospitals to invest in the [healthcare] infrastructure, which fundamentally raises the bar” for all healthcare in India's communities.

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