14:33'Medical Tourism' to Grow as Thrift Prevails
BOSTON (TheStreet) -- Post-recession thrift, health care reform and the aging baby boom generation will likely lead to a surge in overseas "medical tourism."
The weak economy has reigned in the number of U.S. citizens travelling abroad for everything from facelifts to heart bypasses. About 540,000 Americans sought medical care outside the U.S. in 2008, a 28% decrease from the previous year, according to a report released last month by the Deloitte Center for Health Solutions. That number is expected to rise 20% this year to a projected 648,000, and grow by 35% annually starting in 2010.
"Outbound medical tourism could reach upwards of 1.6 million patients by 2012," says Paul Keckley, executive director of the Washington, D.C.-based Deloitte Center for Health Solutions. "Pent-up consumer demand for elective procedures, especially outpatient dental and cosmetic procedures, will help fuel increased demand for medical tourism again."
The driving force behind overseas medical care is -- and has always been -- cost. According to the Medical Tourism Association, heart bypasses in the U.S. cost $144,000, on average, compared to $8,500 in India. Heart valve replacements at domestic hospitals can run upwards of $170,000, dwarfing Colombia's average bill of $10,450. A $15,000 facelift by a U.S.-based plastic surgeon more than triples the $4,000 a Singapore hospital would charge. Breast implants, a $10,000 luxury in the U.S., can be had for the bargain price of $3,000 in Jordan.
Surgery Around the World
Source: Medical Tourism Association
Rising health care costs, insurance premiums and out-of-pocket expenses will likely keep the offerings of foreign hospitals competitive for years to come. Some insurers, including Blue Cross and Blue Shield, are subsidizing out-of-country procedures under some plans.
The impact of pending health care reform could prompt more Americans to seek treatment abroad, particularly if flexible spending accounts are limited to $2,000 and elective cosmetic and dental procedures aren't classified as "basic benefits." The estimated 47 million people who lack insurance may see medical tourism as the only affordable way to get the care they need.
Foreign hospitals are bracing for an increase in patients. Medical tourism in India is expected to grow 30% annually, according to Deloitte. The Tourism Authority of Thailand says foreign patients brought in $6 billion last year. The agency expects 2 million patients to visit Thailand for treatments in 2010.
Josef Woodman, author of the medical tourism guide Patients Beyond Borders (Healthy Travel Media, 2008), has visited 140 medical facilities in 22 countries. The value of travelling abroad for care is summed up well by a patient quoted in the book: "I took out my credit card instead of a second mortgage on my home."
Woodman says U.S. attitudes about seeking medical treatment overseas are still evolving. Many Americans still view the U.S. as the only country that offers high-quality care.
"Americans still tend to not carry passports and have a tendency to be xenophobic," he says.
Hospitals that attract foreign patients typically offer state-of-the-art technology. There are more than 240 hospitals in more than 30 countries that are certified by the Joint Commission International, an affiliate of the Joint Commission, a group that accredits U.S. hospitals. To receive JCI certification, foreign hospitals must adhere to the same standards as their counterparts in the U.S.
Woodman says dental care is a fast-growing part of medical tourism, fueled by demand from the 130 million Americans who lack insurance that covers major procedures. Mexico is among the South American destinations attracting dental patients. Some dentists in the Southwest now operate offices on both sides of the border.
Woodman says U.S. hospitals should think of themselves as hotels. Many of America's largest hospitals are already "brand names" overseas, making foreign partnerships and international branches a natural outgrowth, he says.
At least one major hospital is thinking the same way. Ohio's Cleveland Clinic began construction last year on a 360-bed facility in the United Arab Emirates. It's scheduled to open in early 2011.
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