Medical Tourism Saves Government Money

Even when you include airfare and meals, having public employees travel abroad for health care -- which a growing number of public entities are offering as an option -- can be significantly cheaper.

Ashley Mitchell, a 34-year-old manager of administrative services for Carrollton, Texas, needed gastric bypass surgery. Her regular insurance would only cover half the operation, leaving her with an out-of-pocket charge of $5,000. The cost was beyond her budget, so she did the only she could: She fled the country.

Well, not fled. Instead, she took advantage of a new service in her benefits package that allowed her to travel overseas for the operation. She would be treated by a world-class surgeon in a Joint Commission-accredited hospital (a nonprofit that sets performance standards for health-care organizations). Travel and hotel expenses, plus per diem, were included for her and a companion. Her cost? Not one single dollar. (Or, since she had her operation in Montreal, Canada, not a single Loonie.)

Carrollton is one of a growing number of public entities that now offer so-called medical tourism packages. Because medical care is so much cheaper outside the U.S. -- between 40 and 80 percent cheaper, on average, depending on the procedure -- it’s cost-effective even when you include airfare, accommodations, local travel and meals. It also saves money for public-sector employers and municipalities.

The trips are arranged by a third-party vendor -- in this case, a company called Satori World Medical in California. The city pays nothing to Satori until an employee is approved for the trip. Then it pays the full bill plus Satori’s fee. “The city saves money, and the employee saves money,” says Leonard Martin, Carrollton’s city manager. He admits that the idea was “shocking” to a lot of people. “Some health-care options may be scary at times, but you have to explore them,” he says. “Everyone agrees we have to change our fee-for-service system. This option puts more competition in. This is the ultimate consumer-driven health care.”

Carrollton purchases benefits through a consortium called the Public Employee Benefits Alliance (PEBA). The medical tourism benefit, which is totally elective, came online in January. So far, Mitchell is only the second person to choose care abroad, says Susan Smith, a PEBA officer. PEBA learned about the possibility of medical travel from reinsurance companies. “Going international was always a negative historically, but a few years ago they mentioned there were viable overseas options now,” Smith says.

Satori’s president and CEO Steven Lash says that his public-sector business is booming. “We are getting inquiries from governments, school districts, all kinds of organizations that rely on public funding,” he says. Quoting a study from the consulting firm Deloitte that predicts medical travel will grow by 35 percent a year, he estimates that his public-sector client list will increase from about 10 percent to one-third or more in the coming years.

The money is one very important thing, to be sure. “But delivery of care is more important, that’s what I am really focused on,” says Smith. Mitchell was quite happy with her experience. “They took care of everything, and I had a great patient advocate who still calls me once a week,” she said in May.

Her doctor back home was perhaps even happier. “When I told him I was going to Montreal for the surgery, he thought I was going to some shady back-room hospital,” Mitchell says. “When he found out who my surgeon was, he said, ‘Do you know he’s probably the foremost bariatric surgeon in the world?’ He was really impressed.”

Caroline Cournoyer is GOVERNING's senior web editor.
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