Workers Put on Planes to Cut Healthcare Costs
Companies have discovered in recent years that they can save
significant healthcare dollars by putting workers on planes and sending them
off to have surgical procedures far from home.
Many businesses going this route have looked overseas to get
good care for employees at much lower costs. Last year, for example, Hannaford
Bros. announced it would begin sending employees to Singapore to get knee
and hip replacements. Interestingly, according to a report by Business
Insurance, the grocery chain then received bids from
hospitals in Boston offering to match Singapore’s price.
Medical tourism, as the practice of sending workers long distances
for healthcare is known, continues to grow as companies seek ways to try
and get hold of the rampant increases that seem endemic to the American
healthcare system.
Employers usually offer workers incentives to help them get
over the normal anxiety of going far away from home to deal with a medical
issue. Berner
Food & Beverage Co. in Illinois has waived individual deductibles and
offered up to $1,000 in wellness credits to those who that take part in the
company’s program with Healthplace America, a company that specializes in
medical tourism.
"Surgery is
our greatest expense," Anita Boska, human resources manager at Berner,
told Business Insurance. To date, three of Berner’s workers have
used the program saving it an estimated $1,000 per month per employee.
Discussion
Questions: Is the growth of medical tourism indicative of a failure
of the current employer-sponsored healthcare system in the U.S.? Will
an aging workforce requiring more surgeries put employers in
the position of having to insist employees go the medical tourism route
to keep healthcare costs down? As an employee, how would you react to such
a directive?
Good old Capitalism. Medical tourism forces local providers to lower prices. Our health care system isn’t broken. With global competition, medical tourism is simply making health care more competitive. Without medical tourism, local providers could get away with charging any price they wanted. Interesting that when a local hospital is losing market share to Singapore, they can suddenly lower prices.
The simple truth is that the healthcare system in the U.S. is broken and that–given a choice–few people want to fly halfway around the world to get any kind of surgery. The fix behind that simple truth is highly complex.
Without turning this into a debate about health care reform, the Hannaford example underlines one of the biggest needs: To encourage interstate commerce in the cost of insuring and providing care. As long as an oligopoly exists within each individual state, there is no market incentive for costs of premiums to drop. There is also little incentive for insurers to negotiate better rates on a national scale with providers. It’s hard to imagine that the incremental costs of a trip to Singapore–in money and time–can’t be offset in our own country through a market-based approach to this problem.
The U.S. healthcare system is an abomination and the Hannaford example confirms it.
Can healthcare companies be made competitive? Not to cut costs! Healthcare companies’ objectives are the same as any other company. They want to increase revenues and increase profits. That can not be done by cutting the cost of healthcare. Health insurance companies are perhaps the most aggressive. Cutting the cost of healthcare means one thing to these companies…a cut in revenue, profit and stock price.
Healthcare represents 18% of the GDP. 50% more than the next closest country. There are many industries that have an interest in making sure health care spending rises to 20 percent of GDP, and then 22 and then 24. These companies do not fear medical tourism. Medical tourism is a drop in the bucket versus the unimaginably huge dollars that are generated in healthcare.
As part of the government or any insurance plan we should send people anywhere in the world to get the best medical care at the lowest possible price. Real competition in a global economy.
Where the quality and where the service is delivered is determined by the payer (the insurance company), then the treatment will be given where it costs less to provide it.
If we end up with government insurance, don’t you think the same standard will apply? When in the last 30 years have our government leaders shown to have better values than our private-sector leaders?
Healthcare debates are meaningless unless there is true reform at its core.
First, the idea that the system is broken is not true. It works, but not always well. The fact is that the majority of patients are subjected to tests which are not necessary. This is a result of out-of-control liability insurance rates.
Tort reform and limits must be a foundation to any healthcare reform and debates.
Secondly, the idea of covering all people regardless of their condition is fine, but will everyone else (aka the taxpayers) want to pay for their care? I happen to believe everyone should be able to obtain coverage regardless of pre-existing conditions.
The cost of coverage for those with pre-existing conditions is a huge obstacle to overcome. (but, maybe if we start with tort reform…)
Finally, the mere fact we are discussing flying/traveling around the world for surgeries to save money is not a function of our system being broken or dysfunctional. It is a simple rule of capitalism. I am not saying it is simple to fix, just to take caution in over-complicating or over-analyzing the situation.
As for me, I cannot picture myself taking this action for a surgery. But I am not faced with it right now, either.
Keep in mind, China recently was going through their own mini recession. As their economy grew, their workforce began demanding higher wages, albeit still small in comparison to our wages. Many companies began shuttering plants as they moved to India and Indonesia. Also, many closed due to their relentless pursuit to obtain and retain business through being a low-cost provider.
There is no simple solution, but this reform has to start at the core, the foundation of where the costs really are.
If medical tourism is proof that the system is broken, then the UK is also broken. Read “The Fortune at The Bottom of the Pyramid.” One of the case studies therein talks about a company in India, Aravind Eye Care System, that specializes in cataract surgery. The UK health ministry sends people to India to get surgery from these folks.
This phenomenon is way bigger than the health care issue. What it is waking us all up to is the brutal reality that the world is rapidly moving from dependency on the US for all things marvelous. For way too long we’ve assumed the world revolves around us and with Galilean insight we’re discovering that our universe is all one energetic living system. And we don’t run it. We need to learn to be part of it.
The other thought that hits hard is that no living system escapes the lifecycle. Birth, Growth, Maturity, Death. Not even the mightiest nation on the planet is exempt. The only way to avoid death and/or decline is transformation of the highest order. But as we’re seeing in the effort to transform healthcare we’re all for transformation as long as everything stays the same.
Flying to Singapore for your surgery requires a big change in mind set. But soon we’ll hit the tipping point where we’ll all know people who “did it” with brilliant results–and they spent a week being pampered in a five-star resort while they recovered. Think I’ll get some suits made while I’m there!
Whatever the definition of “broken” means to you regarding any country’s health care system, AND capitalism notwithstanding…Does anyone truly feel that sending people overseas for medical care is the best solution we can provide in the industrialized world? Sure, I can see whey a citizen of Kenya might want to go to the Mayo Clinic, but c’mon, this is getting crazy.
A large part of our issue with health care is that we refuse to view it as an economic commodity. No one would ever express “surprise” at a company outsourcing manufacturing to China. And even Ian Percy seemingly has a yen for hand-tailored suits from Singapore (I used to like them too, when I wore suits.)
Why do we view health care any differently? Perhaps because it is intractably tied to our greatest mortal fear–death. We are conditioned to do anything to avoid death, and often do outrageous things (including suicidal acts) to try and guarantee some better state in the afterlife we so hope exists. That isn’t exactly an encouraging environment for making objective business judgments, now is it?
The U.S. health insurance system is all about making unlimited care available at an “affordable” cost. But what medical tourism points out is that our providers are not encouraged to be competitive. In fact, competition is discouraged in several ways in order to preserve existing institutions ability to “deliver high quality care profitably.” Unfortunately “profitably” is calculated on a cost plus basis in this industry–and no one is watching the “cost” line.
Medical tourism is one of the best examples of how the U.S. health care consumer is being “fleeced” (apologies to Dick Morris).
I agree with Ryan and Ralph–flying people halfway around the world to get surgery done is nuts. To me, it is proof positive that health care in this and many other countries is broken. It is a rare individual with a serious medical condition who would want to fly 10,000 miles to get it treated. And when you factor in the transportation costs involved, if it makes sense economically it is only because of the screwed up system.
It’s pretty pitiful that this is the best solution that some employers can come up with.
This is one small example of hundreds, if not thousands, of crazy things people and corporations will do in this country to get less expensive health care or to get health care at all. The fact that health care is provided primarily by employers is an accident that we perpetuate even in an era where more and more people are independent contractors, if they are employed at all. Why in the world should a corporation be involved in flying employees anywhere for care? This makes no sense if you stand back and think about it.
Anyone who says the system isn’t broken, isn’t paying attention. The simple fact that half our health care dollars go to corporations and people who are not health care providers nor health care institutions such as lawyers, insurance companies, ad agencies, clerks, etc, etc. Does this make any sense to anyone except the ones that profit from it?
I think the point is that businesses are using medical tourism, or the threat of medical tourism, to force health care providers to lower their costs. And its working. It doesn’t sound like anyone is being forced to go overseas, it’s only an option. The health care system in this country isn’t broken for the good people who choose to purchase health insurance. Those who can’t buy health insurance through the private sector have many options with state sponsored plans. It appears the true cost of a family health plan is about $12,000 to $15,000 a year. It’s a small price to pay for having access to the best care in the world. What’s it worth to you to have your life saved? Everything you got, right? So let,s make a deal and settle on $15,000 a year. Sounds like a bargain to me. I remember my mom having to drive 12 hours to the Mayo Clinic. Big deal, so you fly 12 hours some place if you want good treatment. I’m grateful mom was given the choice to go to the Mayo Clinic.
Health Care “tourism” has limited impact on the larger “Health Care proposals” that are being floated by the politicos in Washington. Companies, particularly ones with a multi-national bent, like HANNAFORD, will uncover and provide a variety of alternatives in procedures–“Tourism” might be one of them.
A significant pool of consumers is NOT likely to take on this step. And, if local health care providers see a loss in revenues, they will make a sound free market decision to adjust their pricing, should it be meaningful.
The market works–in health care and in retail–if we keep it unfettered from excess regulation.