Foreign travel for health caremight be a tough sell for brokers, but it does hold the promise ofconsiderable savings for plan sponsors and employees.(Illustration: Ivan Canu)

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Medical tourism, or medical travel,historically appealed to either wealthy travelers or those unableto access experimental treatment in the U.S. Now, more brokers withself-funded clients are exploring medicaltravel as a benefits package option. It isn’t for everyone, but inthe instances where it does fit, employers and employees can bothrealize consideration savings without settling for lower qualitycare.

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Medical travel for plan sponsors falls into three basic buckets:domestic, foreign and pharmaceutical. All represent opportunitiesfor substantial cost savings. If a broker is aligned with a plansponsor seeking innovative answers to plan design, all threeoptions could be exercised, depending upon the risk profile ofsponsor and plan members.

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(Jump ahead: Foreign medicaltravelDomestic medicaltravel | Pharmaceuticaltravel)

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“The very first item to be discussed with health care travel isall about employer culture and the level of risk tolerance,” saysMargaret Hare, vice president of strategic business services andbenefit technology officer at Holmes Murphy. “We have very fewemployers who have chosen to implement this type of program. We tryto take any other approach first, as we know that domestic andinternational tourism can be disruptive. But if they are ready todo innovative solutions, it’s something that we look at.”

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Related: Startups giving a boost to medical tourismindustry

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Domestic travel offers the most immediate opportunity, and withthe emergence of centers of excellence (COEs), it is attractingthe attention of more employers. Unpredictable pharmaceuticalprices are also propelling services that offer cheaperforeign-sourced drugs. Although foreign travel for surgery andtreatment are still seldom used by plan members, morebrokers want to know how they work and are educating themselvesabout the details of foreign medical travel.

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And well they should, as foreign medical travel—or medicaltourism—is clearly on rise. A recent article in the AmericanJournal of Medicine, “Medical Tourists: Incoming and Outgoing,” bytwo doctors with the University of Arizona predicted a 25 percentannual increase in foreign medical tourism by U.S. citizens.

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According to the authors: “Of course, U.S. hospitals andphysicians have also long cared for medical tourists from othercountries. Now, many medical tourists are going the other way—fromthe United States to other countries to receive health care.”

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For example, they cite the dramatic increase in Americanstraveling to other countries for health care between 2007, when anestimated 750,000 Americans did so, and 2017, when more than 1.4million Americans sought health care abroad.

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This article appeared in theJan/Feb 2019 issue of BenefitsPRO magazine. Browse the rest of theissue.

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“The reason more Americans have become medical tourists issimply that they are seeking less expensive health care,” thedoctors write. “Because we have the most expensive health caresystem in the world, it is not difficult to find countries thatoffer various procedures at 30 percent to 65 percent of the cost ofcare in the United States. Other countries can charge less becauseof lower pay to physicians and other health care workers, much less overhead because patients pay cash,and subtraction of the substantial cost of malpracticeinsurance.”

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Employers, too, are seeking less-expensive health care. And asthe opportunities for safe, effective medical travel continue togrow, it is only a matter of time before more plan sponsorsintegrate it, where appropriate, into their benefits offerings.Medical travel represents yet another way for creative brokers tobetter serve their clients—and improve the health care experienceof plan members.

Before you book…

Brokers who want to include medical travel in their toolkitshould know they will encounter several major objections fromsponsors and plan members. Studies have reported that few patientswill willingly travel more than 25 or 30 miles for treatment, whilesponsors may be wary of the risks of foreign travel in particular.In addition, including medical travel in a benefits packagerequires a willingness to innovate and take risks, something mostemployers are not known for.

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Before embarking on a benefits strategy that includes medicaltravel, brokers should consider the following checklist that canlead to successful matchmaking with a client:

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1. Self-funded clients. The financialincentives are greatest for self-funded sponsors and plan members,and these plan sponsors tend to be more open to creativesolutions.

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2. Targeted situations. The service as abenefit should be available but not heavily promoted, since itsapplication will be case by case. The ideal candidate would besomeone with a definite medical diagnosis for a procedure that willclearly be less expensive in a foreign or distant domesticfacility. The candidate must be willing to travel for healthcare—something studies have shown most patients will not do.

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3. Strong educational component. Do not rely onthe plan sponsor to explain or promote medical travel to members.Jim Blachek of the Benefits Group recommends using a medicalmanagement team to explain the process to the plan sponsor and toany plan members willing to travel for medical care.

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4. Clear cost savings. The difference in costshould have a true impact on plan sponsor and plan memberspending.

Foreign medical travel

Foreign travel for health care will be the toughest sell for thebroker, but it does hold the promise of considerable savings forplan sponsors and employees. As a broker, Jim Blachek says he hasan obligation to understand where foreign medical travel fits intohis benefits toolkit. To that end, he and colleague Eric Silvermanof Voluntary Disruption flew to El Salvador in 2018 to test themedical travel services offered by SkyMedicus, a Roswell, Georgia,company that specializes in managing health care journeys forclients.

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SkyMedicus began promoting its service to self-funded plans ayear ago. The company provides a complete service for patients,from booking flights and surgical time to managing patient travelto and from the airport, hotel and medical facility. El Salvador isjust one of its medical travel destinations.

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Medical Tourism in El SalvadorTom Garner and colleague Eric Silverman of Voluntary Disruptionflew to El Salvador in 2018 to test the medical travel servicesoffered by SkyMedicus, a Georgia-based company that specializes inmanaging health care journeys.

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“It’s an option for employees,” says Tom Garner, vice presidentof operations. “We don’t want to over-incentivize somebody or steerpeople to it. But for the right case, the employer will be saving asignificant amount of money.”

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For example, a coronary bypass for which Blue Cross quoted aprice of $127,000 would cost $23,000 in El Salvador.

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“It’s a win-win,” Garner says. “The employer realizes asubstantial savings and it’s a value-add for the employee.”

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Silverman and Blachek found the experience eye-opening. Medicalfacilities were clean and modern, security was first rate, thestaff spoke English, and the cost of a variety of basic surgicalprocedures was far lower than a patient (or plan sponsor) would payin the states.

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“If you had asked me a year ago would I go to El Salvador formedical care, it would not have been on my list,” Silverman says.“SkyMedicus works just through brokers and advisors—that’s the key.It’s an extremely well-run operation with medical care at afraction of the cost in the states.” Blachek and Silverman visiteda dentist there and were told the cost of a tooth implant was $900,compared to up to $4,000 in the U.S. “It’sgoing to fit into any plan with employees who are willing to take arisk,” Blachek says. “It is one of the arrows in the quiver. In thefuture, you will have to have it in the toolbox.”

Domestic medical travel

Blachek realizes selling employers and plan members on foreignmedical travel will likely be just a sliver of his business. Butdomestic travel is another matter.

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As brokers and employers become privy to, and begin tounderstand, the waves of medical outcomes data now available,centers of excellence around the nation are emerging. Employers cannow compare outcomes by location. With a few exceptions, plansponsors are not requiring employees to take their business to adesignated COE. But if they have crunched the numbers of potentialsavings, they are increasing the incentives for employees to chooseto travel for certain medical care.

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A survey of major employers by the National Business Group onHealth reported a 6 percent increase from 2018 (14 percent) to 2019(20 percent projected) in including COE care availability in plandesign. It’s a trade-off for employees: Those who opt for COEmedical care instead of a surgical procedure at a local facilityare rewarded with lower copays and reduced premiums.

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As the COE concept catches on, large employers in particular areincluding distant facilities in their plans. Benefits Group’sBlachek says there’s a $50,000 difference between what hospitals inhis area (Scranton, Pennsylvania) charge for a knee replacement,and what facilities in Bethesda, Maryland charge.

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“We can provide the employee with a hotel room for several dayswith their spouse, and a $3,000 cash bonus. Why would you not dothat?” he asks.

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Centers of excellence represent a truly robust option foremployers with the vision and resources to take advantage of them,says Dave Chase, co-founder of Health Rosetta.

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“If employers can’t obtain high value in their own community,smart benefit plans will encourage travel that may range fromdriving an hour to another town to hopping on a plane to a domesticcenter of excellence,” he says. “In a given year, it’s common for 5percent to 8 percent of employees to consume 50 percent to 80percent of the overall costs of an employer health plan. Withshocking levels of misdiagnosis and overtreatment in the U.S., it’snot hard for an employer to cut their health care spending by 10percent to 20 percent by guidingemployees to high value health care organizations.” And thatincludes foreign health care providers, he adds.

Pharmaceutical travel

The major savings here lie in foreign sourcing of the mostexpensive drugs— ones that treat diabetes, hepatitis, certain typesof cancer and other drug regimen treatments. While prices varylocally and regionally by pharmacy, plan sponsors who are willingto pay for plan members to travel to purchase high-cost drugs cansave thousands of dollars on a single employee’s drugs.

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Gary Becker, founder of ScriptSourcing, manages pharmaceuticaltravel for an increasing number of self-funded plans. Becker hasfound it cost-effective to fly an employee prescribed an expensivedrug to San Diego, put the employee and spouse up in a hotel,transport them across the border to Tijuana, Mexico, supervise thepurchase of the drug, and fly them back home. He says his clientsroutinely save 70 cents on the dollar, a considerable sum in thecase of an employee whose medication costs $100,000 a year ormore.

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David Henka, CEO of ActiveRADAR, which specializes inreference-based pricing consulting, understands why employers arewilling to fly employees around the globe to purchase costly drugs.But he cautions that prescription travel is not without itsrisks.

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“The foreign manufacturers say they monitor production anddistribution. They say the drugs are from the same manufacturer.But how do we know? You are in a foreign country with differentlicensures. Both you and plan sponsor are taking a risk.”

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But that risk must be weighed against the potential reward: asavings of potentially hundreds of thousands of dollars on behalfof a seriously ill person who might not otherwise get the propertreatment anyway.

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“The trouble with medical tourism for pharmaceuticals is that itdoes not address the real problem: Why is there such a wide costvariance for the same drug, even within the U.S.?” Henka says.“That is the issue we need to be addressing.”

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Clearly, medical tourism, both foreign and domestic, will beembraced by more self-funded plan employers as they battle the mostobvious demons of runaway medical costs. Sadly, medical tourism isnot driven primarily by the desire to visit an exotic land for freeor by the lure of far superior medical facilities to those in theU.S. Instead, as Dave Chase points out, the rise of medical travelis yet another symptom of the sorry state of the U.S. health caresystem.

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“While most of the attention for medical tourism is focused oninternational medical tourism, the majority is happeningdomestically,” he says. “The benefits are clear. Higher-value caredue to dramatically lower rates of misdiagnosis and overtreatmentwhen the medical tourism plan is well structured. The downsidesreally only come into the picture if the plan isn’t welldesigned.”

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And, absent true health care reform in the U.S., medical travelwill continue to grow in popularity among plan sponsors and theirmembers.

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“Every traditional health care system should take the rise ofmedical tourism as a wake-up call,” Chase notes. “Old, ineffectivesolutions that are wildly overpriced have forced employers to lookoutside of their own communities for high-value healthsystems.”

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.