Five million Americans live outside the United States. About a fourth (25%) of those reside in Mexico, Panama or Costa Rica and most are retired Americans who receive social security and pension payments in those countries. In many ways, these expats may be the front lines of a more general shift to receiving a high-quality standard of living including very high-quality healthcare at bargain rates.
As medical tourism enters the mainstream of health care, Mexico could well emerge as America’s healthcare safety valve with both patients AND physicians taking their business across the border.
Mexico, where tens of millions of Americans either have family or have visited as tourists, is waking up to the fact that it may well be the perfect location for medical tourism.
Already, Mexican hospitals are adopting the “luxurious hotel concept” in contrast to the U.S.’s general ward ethos. One hospital in Tijuana even offers limousine service from the patient’s hotel to the hospital.
Several new polls (most recently a Gallup Poll from this past April) show that significant percentages of patients are ready to go outside the U.S. to obtain medical treatment.
Anecdotally, we hear from surgeons that THEY are ready to go outside the U.S. to deliver treatment.
Last year, worldwide medical tourism spending, according to consulting firm Deloitte, reached $20 billion in annual expenditures. By 2012, worldwide spending could be as much as $60 billion for the countries that host it.
A Gallup Poll conducted in April found that up to 29% of Americans would consider traveling abroad for medical procedures such as heart bypass surgery, hip or knee replacement, plastic surgery, cancer diagnosis and treatment, or alternative medical care, even though all are routinely done in the United States.
In the 1920s, medical tourism was typically thought of as trips to the healing hot springs of Arkansas or Georgia. The better heeled among us would luxuriate at the spas of Europe. Today, several powerful factors are driving patients and surgeons to leave the United States. High medical care costs and large numbers of uninsured (at least 48 million people, according to the Kaiser Commission on Medicaid and the Uninsured) combined with steadily decreasing compensation for surgeons is making the shiny new hospitals and more patient-centric approach to health care in Mexico, Panama, Brazil and other Latin American countries compelling alternatives to the strapped hospital wards in America.
In the April Gallup Poll, researchers asked a sample of 5, 050 U.S. adults either the direct question, “Would you consider treatment abroad?” or the qualified question, “Would you consider treatment abroad, assuming the quality was the same and the costs significantly cheaper?” When the additional phrasing was used, the percentage of respondents who said they would leave the United States for treatment increased by 12 percentage points, on average.
A recent Deloitte survey reports that 150, 000 U.S. citizens traveled outside the country for medical treatment in 2006—the majority going to Latin America or Asia. Deloitte estimates that that number soared in 2007 to about 750, 000 and that the rate of growth (which no one thinks will slow) will likely push the numbers of Americans going outside the U.S. for medical treatment to as many as six million by 2010. Mexico is ideally suited to serve this rising tide of tourist and émigré patients and their surgeons.
In the U.S., 46 million people do not have health insurance. When Gallup’s researchers began to parse through the respondents in their April poll, they found a distinct trend among uninsured patients to leave the country for treatment. For example, the percentage of uninsured respondents who said they would venture abroad for large joint reconstructive surgery was double the rate for respondents with insurance.
Again, if the care offered outside the U.S. was of equal quality or significantly cheaper, then the percentages rose further. In the case of hip/knee replacement, the percentages rose to 4 out of 10.
According to the Deloitte report, total charges for such surgeries as hip or knee reconstruction can be 50%–75% less outside the U.S. But cost is only one factor. The rising quality of treatment outside the U.S. is the other. Portability of healthcare coverage is another. Medicare is still not portable (unlike social security, which is), but private insurers are openly analyzing programs that will allow their members to obtain treatment outside the U.S.
Then there is the growing dissatisfaction among U.S. surgeons with the trends in their practices in the U.S. Why not follow their patients across the border?
Last year, the American Medical Association (AMA) issued recommendations for insurance companies who send patients overseas, and it acknowledged that the quality of health care in some countries outside the U.S. was comparable to in-country care.
Four factors appear to be driving medical tourism:
- Technology Development: The Internet is educating patients about high-end medical centers outside the U.S. that rival and in many cases exceed U.S. institutions in terms of capabilities. New medical technologies are often available outside the U.S. before they receive FDA approval, and even when FDA approval is granted to a new technology (e.g., disc arthroplasty) it may be more readily available to patients outside the U.S.
- Cost Shift: Under the current insurance system in the United States, the overall cost of the patient care (including the cost of patients without insurance) is shifted to those patients with health insurance. This “cost shifting” encourages healthcare consumers to search for cost savings.
- Demographic Changes: Demographic change is one of the vital drivers of the industry. Baby boomers are driving the growth—they comprise one of the biggest market segments for medical tourism. Almost 75 million baby boomers are heading towards retirement in the U.S. and the cost of private nursing care is too expensive for many of them here.
- New Definition of Patient Care: Imagine a surgery where a limousine picks the patient up at the hotel, where there are NO long lines or reams of forms to fill out, and where the latest medical treatments and equipment—even products that are not available in the United States—are employed. To top it off, the surgeon is one of the top surgeons in the world and he is from Philadelphia.
One country, South Korea, has even introduced a new category of visa in a bid to promote the country’s medical tourism industry. With $60 billion in medical tourism dollars becoming available in these next few years, Korea is logically making a play for those patients. According to Korea’s Ministry for Health, Welfare and Family Affairs, the new visa will be issued in two forms: a 90-day visa for those seeking short-term treatment such as plastic surgery, and a one-year visa for those seeking long-term care or rehabilitation.
Wooridul Healthcare, for example, operates one of the largest private specialty hospital groups in the world—rivaling in size and sophistication such institutions as the Mayo Clinic. Under the direction of Dr. Sang-Ho Lee, a world-renowned neurosurgeon and pioneer in advancing techniques and materials for minimally invasive and complex spine care, Wooridul Healthcare moved into the pinnacle of spine care in the world. Its physicians, for example, have presented the results of their clinical studies 459 times in Korea and 442 times in international conferences, and they have authored more than 200 articles for peer-reviewed journals.
In the early 1900s the Mayo brothers established a major medical center in Rochester, Minnesota. For the past 100 years, patients from around the world have come to Rochester to receive world-class care. Dr. Sang-Ho Lee is doing the same thing in Korea. Mexico may soon follow suit.
In addition to the hospital in South Korea, Dr. Lee has a hospital in Shanghai, is developing hospitals in Abu Dhabi, and is in the planning stages for a hospital in Japan.
While Dr. Lee is pulling patients and physicians from around Asia, his model (indeed the Mayo brothers’ model) is under serious consideration in Mexico. One rumor we heard is that the Mexican government is considering a $1 billion investment in new, world-class luxury hospitals to attract the U.S. medical tourist and physician.
Ultimately, Mexico may prove to be the American Healthcare System’s safety valve by providing world-class care at affordable prices and also providing U.S. physicians with more user-friendly operating environments.
