Ethical and Legal

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The Ethical and Legal Complexity of Medical Tourism:Questions of International Justice, Economic Redistribution and Health Care Reform

Professor Sarah McBride

Toro LongeApril 18, 2010

M.J. Thesis in Health Law


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AbstractThis is an essay on medical tourism in the United States of America (U.S.). It includes a

brief history of the U.S. health care system, examines the social, cultural, ethical, andlegal issues that have affected health care changes in America. With the number ofAmericans going overseas to seek medical care steadily rising, the American insuranceindustry expanding benefits, and the Joint Commission accrediting facilities forglobalization of the health care marketplace, medical tourism should become increasinglyimportant in the health care industry. While there are many reasons for patients seekinghealth care outside of their own country, one that is particularly easy to overlook is theoutsourcing of health care and its effect in U.S. and around the world. The purpose ofthis paper is to examine the concept of medical tourism, noting the specific medicaltourism destinations, presenting reasons for the recent increase in medical tourism, andexamining the risks and benefits, as well as wrestling with the challenging ethical and

legal issues inherent in medical tourism. The paper will conclude with consideration ofthe role of the law in medical tourism.

IntroductionOver the past 100 years, the United States of America (U.S.) has changed greatly in itseconomic structure, population composition, culture, technological achievements, andhealth care. 26 However, the U.S. health care delivery system has not changedsignificantly compared to other areas. 26 Americans life expectancies have almostdoubled since 190. Americans have also seen significantly decreased mortality rates,which were almost cut in half since 1950. 26 These facts demonstrate the aging ofAmericas population. 26 In addition, with decreased fertility rates in the U.S., the aging

of American population should increase over the next century. 26 These demographictrends connect correspond with to the changing epidemiology trends in the U.S. over thepast 100 years. 26 When people live longer lives, this means that they have survivedthrough previous epidemics, acute diseases, and other similar sudden causes of death,leaving their bodies to deal with long-term illness. 26 Chronic diseases / illness aredefined by their long-term character, beginning early in life without visible symptoms,and are typically un-curable; however, their symptoms may be treatable and are anexpensive burden on the financing of the health care system. 26

Health insurance is typically obtained as a benefit of employment for most Americans. 26In the 1940s and early 1950s, the federal government developed many incentives for

employers to purchase group health insurance benefits for their employees. 26 This led tomillions of Americans becoming insured. 26 Having your employer as your source ofhealth insurance to this day is the most common and likely method of paying for healthrelated expenses.26

The U.S. has the most expensive health care system in the world, yet is the onlydeveloped country besides South Africa, that does not provide health care for every oneof its citizens. 1 Exorbitant administrative costs, defensive medicine, and weak preventivecare tactics are just a few of several reasons why U.S. heath care costs are skyrocketingand health care has become inaccessible to many Americans. 1 The Kaiser FamilyFoundation estimated that American family health coverage currently costs about


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$11,500 a year, and with health insurance premiums increasing over 87 percent since2000.1.2. Therefore, it is no surprise that there are over 45 million Americans eitheruninsured or underinsured. 2 Increasing unemployment has likely contributed to thegrowing number of uninsured in the U.S. 1 Concurrently, the cost of medical care has notdeclined in proportion to decrease in consumers incomes, saving, and investments.1Patients must either decrease the amount of care they receive or look for more costeffective alternatives. 1.21 Accordingly, there is currently several proposed fixes for thecostliness of Americas health care system.1.22 However, these proposals lack a forwardlooking strategy. 1.22 As a result, many Americans are reconsidering their health careoptions, or lack thereof, and are going beyond U.S. borders to get the medical care theyneed and want.1 In addition, transportation costs have risen significantly compared to ayear ago; this may be contributing to the decline in U.S. patients traveling for care andthe rate at which foreigners are traveling to U.S. for medical services. 1.3 American healthcare system is in need of a thorough and effective overhaul 1.3 Although medical tourism

will not be the only solution to health care access, since insurance coverage for medicaltourism has not yet been widely adopted and most medical tourism is limited to electiveprocedures, not acute illness that requires immediate attention, due to increased employerand insurer awareness, it will likely sustain growth in 2010 and beyond.1.2.7.12

The health care reform legislation enacted on March 23, 2010 (subsequently amended onMarch 30, 2010) expands health care coverage to all citizens, reduces the cost of healthcare, improves access to health care, and arguably allows economic growth.7 The factthat American companies pay twice as much as other countries for health care for theiremployees distorts business decisions and lower wages.7 There will be people who willlose money because of the health care reform; there will be business that will fail.

However, there will other business that blossom as result of legislation.7 One solution forthis distortion would be to equalize the tax treatment of health insurance purchases;currently, business can deduct the premiums, while individuals cannot.7 Another solutionis more regulation of insurance companies to make sure they deliver the promisedcoverage and cannot cancel a policy when an insured person becomes ill 20. Health carereform legislation should be viewed as important step toward fairness and equity in theU.S. health care system 24.

Evolution of Medical TourismThe concept of medical tourism as a global medical market is not new phenomenon.Even in ancient times, people traveled to other countries for health related purposes. 2The ancient Greeks and Egyptians travelled to health resorts in the Mediterranean forpurification and spiritual healing. 2 The first recorded case of medical tourism describedGreek pilgrims who traveled from the Mediterranean Sea to Epidaurus, a small territoryin the Sardonic Gulf, known as sanctuary of Asclepius, the healing god. 2 Since the 1500sIndia has enjoyed a rich history of providing yoga instruction as well as Ayurvedahealing to patients from around the world. 2 Roman British patients traveled to a reservoiraround hot springs at Bath for healing and rejuvenation. 2 At the end of 18th century.Europeans traveled to spas in Germany and the Nile in Africa, in hope that they wouldobtain relief from their disabling conditions, such as tuberculosis, gouts, bronchitis, orliver diseases; especially in Europe, well-to-do people, over the years, have traveled to


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spas to take the waters for various cures 2. In 20th century, patients began traveling insearch of alternative forms of treatment, e.g. Hoxsey Clinic, Tijuana, Mexico. 2Bumrungrad International Hospital and Bangkok International Hospital, Asia. 2. In 21st

century, the U.S. internationally promoted centers of excellence: world-renownedCleveland Clinic, Mayo Clinic, University of Pittsburgh Transplant Center, and M.D.Anderson Cancer Center; thereby attracting cash paying patients from around theglobe. 12

Medical Tourism: DefinedThere is no universally accepted definition for medical tourism, but the phrasegenerally refers to traveling abroad for health care services. Another approach of medicaltourism defined as health care distance from home that is affordable, accessible,available, and acceptable. 12 Medical tourism is not emergent or critical care while out of

the country, or expatriate care. 12 Articles and broadcasts on medical tourism areappearing in the press and on the airways with increasing frequency and several guidebooks were recently published by facilitators and coordinators of medical travel andtourist services on behalf of the medical tourist. 12 A Google internet search on May 6,2007 using the term medical tourism returned 777,000 results (Table 1) 12,approximately using the term medical tourism on March 31, 2010 returned 26,400,000results. With the ease, affordability of international travel, and improvement intechnology and standard of care, medical tourism is an opportunity for patient to travelfor medical care, and take advantage of reduced costs and wait times. 2 The typicalmedical tourist is described as someone aged 50 years or more and in need of an electivesurgical or medical procedure. 21 Elective procedures commonly offered include

rhinoplasty, dental care, fertility treatment, and breast enlargement2

. The concept ofvalue in health care is not new; medical tourism represents another mechanism forvalue purchaser of health care services. 16. These patients are unwilling or unable to payfor the necessary care at home, or endure long hospital waiting times that are typical ofsome countries. 16 Another feature of medical tourism medical procedure, such as genderchanges, have become small but significantly important parts of medical tourism, whererecuperation and consolidation of new identity may be better experience at a distancefrom standard daily life style. 2. The world population of medical tourists may beinitially broken down into three groups:

Outbound: U.S. patients traveling to other countries for medical careInbound: Foreign patients traveling to the U.S. for medical careIntrabound: U.S. patients traveling domestically for medical care 16

For all three potential groups of patients, access, rather than cost has been major factorfor these medical tourists 1 Medical tourism is market-driven; it is shaped by thecomplex interactions of myriad medical, social, economical, and political forces 8 Forexample, Americans might travel due to real or perceived lack of access to unprovenmedical therapies such as stem cells or cytoplasmic transfer therapy. 12 Foreigners mighttravel to another country because the technology is not available, is illegal, the wait is toolong in the home country, or the procedure relatively unavailable locally due to ashortage of trained personnel 1.8. A summary of reasons medical tourists embark onworldwide journeys for health care are shown in Table 2.


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Growth of Foreign Medical SitesMany countries are working to successfully compete in the medical tourism marketplace

by advertising variety of medical, surgical and dental services in comfortable modernfacilities (See Table 3) Cost and quality are typically the most important factors patientsconsider in choosing specific destinations for treatment. 2 However, many patients alsoconsider amenities commonly found in resorts and hotels.2.8 Medical tourists travel fourcorners of the world for executive health evaluations, ophthalmologic care, cosmeticdentistry, and surgery 2 These countries have large, modern medical facilities that arestaffed by well-trained physicians who perform complex procedures such as minimallyinvasive / off-pump heart surgery, correction of congenital cardiac abnormalities inchildren, thoracic organ transplantation, and implantation of mechanical cardiac devices2.8

India. Despite the long travel time involved, India is a popular destination for medical

tourists. It arguably has the lowest cost and highest quality of all medical tourismdestinations and English is widely spoken. Several hospitals are accredited by the JointCommission International (JCI) 14 and staffed by highly trained physicians. Prices can beobtained in advance and many hospitals bundle services into a package deal that includesthe medical procedure and the cost of treating any complications. Hotelaccommodations are extra, but hospitals often have hotel rooms or can offer discounts forhotels nearby.2

Thailand. This popular destination for medical tourists rivals India in price and quality.Thailands large tourist industry is one reason it has a better infrastructure and less

noticeable poverty than India. Prices are typically not as low as in India, and Thai hospi-tals do not offer fixed pricing. However, food and lodging during recuperation will likelybe less expensive than in India due to Thailands competitive recreational industry.Bangkoks Bumrungrad International Hospital is a world-class private health care facilitybuilt for wealthy Thais, but foreigners comprise more than one-third of its patients.2

Singapore. English is also widely spoken in this former British colony, located ap-proximately 1,000 miles south of Bangkok. Singapore has modern, high-quality hospitalsand is home to three hospitals accredited by the JCI. Prices are higher than in Thailandor India but are much lower than in the United States.2

Central and South America. Mexico has been popular for some time with Americanpatients seeking primary and dental care. But to attract cash-paying American patients forsurgical services, health care systems are building hospitals and clinics with the highlevel of service and amenities that American patients have come to expect. For instance,Americans expect professional medical staff and upscale private rooms in clean, modernfacilities. They also expect high-tech equipment that American hospitals would possess. 2

Other Latin American countries provide services as well. For example, Costa Rica isbest known for quality dental work, with prices one-third to one-half of those in theUnited States. Colombia is a favorite destination for cosmetic surgery. Argentina and


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Brazil have long been known for cut-rate plastic surgery, and more advanced treatmentsare becoming available. Plenitas is a Buenos Aires-based boutique clinic that arrangesmedical travel. Although most of the services provided are cosmetic surgeries, it alsooffers in vitro fertilization and bariatric (weight loss) surgery. Nine Brazilianorganizations have established a health care consortium to market Brazil as a medicaltourism destination in various countries. 2

Europe. Northern and Western Europeans have numerous opportunities to get lower-costmedical and dental care. Germans favor Szczecin, Poland, less than 100 miles fromBerlin, for low-cost, high-quality dental work. Sopron, Hungary, less than an hoursdrive from Vienna, Austria, caters to medical tourists. Sopron has more than 200 dentistsand 200 optometrists, 10 times as many as would be expected in a town of 20,000people.2

South Africa has been very successful selling medical services combined with tourismactivities such as Safaris 9.

For some countries, the rationale for engaging in medical tourism is to improve theirGross Domestic Product (GDP) as overseas patients bring needed cash for procedures. 12GDP is the primary indicator used to gauge the health of countrys economy. Itrepresents the total dollar value of all goods and services produced over a specific timeperiod. 12 Another commonly cited reason for growth of foreign medical sites is a beliefthat overseas patients expect an even higher standard of care than had been typical theirhome country, thus promoting hospitals to upgrade their institutions as to remain

competitive in a thriving market 12. India has a reputation for high quality care in anumber of major hospitals; has the important advantage of lower cost than most otherdestinations, at approximately 10 percent Gross Domestic Product ( GDP) of the cost ofU.S. (See Figure 1.) 12 The cost savings associated with growth of foreign medical sitescannot be overstated. While the costs vary geographically, the average surgicalprocedure performed in Asia will cost only 20% to 25% as much as the comparableAmerican procedure. A brief list surgical procedure and a comparison of the costsbetween the U.S., India, Thailand, and Singapore is provided in Table 4. 1.12.

Health care might seem the most, local rooted form of practices, medical interventionsand are moving to offshore regions where treatment is more affordable that the U.S. for

many reason: 12Labor costs. In the United States, labor costs equal more than half of hospital operatingrevenue, on the average.11.22 Wage rates and other labor costs are lower overseas;specifics were not available, but as one example, at Fortis hospitals in India

Doctors earn about 40 percent less than comparable physicians in the United

States.22

Median nurses salaries are one-fifth to one-twentieth of those in the United

States. 22


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The wages of unskilled and semiskilled labor, such as janitors and orderlies, are

also much less. 22

These lower labor costs make it much less expensive to build and operatehospitals in other countries. 22

Less (or No) Third-Party Payment. Markets tend to be bureaucratic and stifling wheninsurers or governments pay most medical bills. In the United States, third parties(insurers, employers and government) pay for about 87 percent of health care. Sopatients spend only 13 cents out of pocket for every dollar they spend on their healthcare. As a result, they do not shop like consumers do when they are spending their ownmoney, and the providers who serve them rarely compete for their business based onprice.22

Price Transparency and Package Pricing. One criticism of American hospitals andclinics is that prices are difficult to obtain and often meaningless when they are disclosed.Patients who ask potential providers to quote a price are likely to be disappointed. Infact, many people have little idea of the cost of medical treatments. A recent Harris Pollfound:22

Consumers can guess the price of a new Honda Accord within $1,000, but

when asked to estimate the cost of a four-day hospital stay; those same consumerswere off by $12,000 22

Furthermore, 68 percent of those who had received recent medical care did not

know the cost until the bill arrived, and 11 percent said they never learned the cost

at all. 22

In the international health care marketplace, the situation is quite different. Packageprices are common, and medical travel intermediaries help patients compare prices. [Forexamples, see Table 4.] Even providers who do not offer fixed pricing will providereasonably accurate price quotes. As a result, medical centers and clinics that treat largenumbers of medical tourists routinely quote prices in advance and look for ways toreduce patients costs.22

Few Cross-Subsidies. In American full-service nonprofit general hospitals, revenuesfrom treatments for some patients are used to cover the costs of providing treatments toother patients. 11 This cross-subsidization is possible because some medical procedures

produce more revenue than it costs to provide them. For example, the revenue fromroutine heart catheterization procedures or diagnostic imaging systems in a communityhospital might be used to subsidize indigent health care or the cost of operating theemergency room. 11This means that a hospitals charges for the heart procedure morethan cover its costs, but its charges for emergency room care do not cover those costs. Ifthere is no competition for the business of heart patients in the hospitals service area, itcan cross-subsidize without losing revenue. However, a provider who does not cross-subsidize could offer the cardiac treatment for a lower price or could make a profitcharging the same price. In the United States, such providers have emerged in the form ofhighly efficient specialty hospitals. Nonprofit community hospitals complain that


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specialty hospitals skim off lucrative surgeries but do not provide the services thatcommunity hospitals do, such as emergency departments and charity care for theuninsured. This has led to a moratorium on new specialty hospitals in the Medicareprogram. 11

Streamlined Services. Some foreign medical providers operate highly efficient focusedfactories. These are specialty clinics and hospitals where tasks and procedures have beenstreamlined for the highest efficiency, similar to the way an automotive plant operates.For example, Fortis Healthcares Rajan Dhall Hospital in New Delhi uses a businessmodel that combines the personalized service of the hotel industry with the industrialprocesses of an automaker; both industries in which its senior executives haveexperience. 22 Jasbir Grewal, Rajan Dhalls vice president for operations, spent yearsworking for a well-known hotel chain. He describes their hospital as a hotel providing

clinical medical excellence. Fortis chairman Harpal Singh, who came from theautomotive industry, emphasizes the need to streamline processes in such a way thatprocedures can be performed quickly and efficiently.22

Limited Malpractice Liability. Malpractice litigation costs are also lower in othercountries than in the United States. 22 In addition, one of the most significantdifferences in health care cost between the U.S. and global competitors stem frommalpractice insurance premiums. 22 In Thailand, for example, the average doctor will payapproximately $5,000 in medical malpractice insurance for one years coverage. 22Contrast this with malpractice premiums in the U.S., which can cost up to $100,000 ayear for specialist, and a major source of Thailands savings become clear. 1.22 Thailand

does not compensate victims of negligence for noneconomic damages, and malpracticeawards are far lower than in the United States.1.22 As the data indicates, the difference incost to the consumer is even greater than the savings experienced by insurancecompanies, assuming the medical cost in the U.S. continue to trend upward. 1.22

Fewer Regulations. Excessive health care regulations in the United States preventAmerican hospitals from making the sort of collaborative arrangements manyinternational hospitals use. 11 For instance, facilities abroad can structure physicianscompensation to create financial incentives for the doctors to provide efficient care,whereas American hospitals usually cannot. The reason is physician compensationarrangements in American hospitals cannot violate the Stark (anti-kickback) laws. 11Foreign hospitals can also employ physicians directly; a practice prohibited by manystates. For instance, physicians in India contract with hospitals to provide a certainnumber of hours per month in return for a guaranteed fixed fee. 11 Patients select thehospital based on reputation and then choose an appropriate doctor who works with thehospital. In this regard, physicians depend on hospitals for business rather than the otherway around.11

The significant cost savings available oversea means little, however, unless it motivatespersons to go through the hassle and risk of travel before and after surgery and recoveringin foreign environment. 1 A study by Deloitte in 2009, suggests that eight percentindicated that they sought health care services outside their immediate community; overforty percent say they would travel outside their immediate area if their physician


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recommended it or for a fifty percent cost savings. 16 In 2008, fewer consumers reportedgoing to a distant hospital; one percent reported using an offshore health care provider. 16The larger number of person willing to travel to abroad for discount surgical procedureshighlights the importance of financial incentives in the growth of foreign medical sitesand the potential impact of outsourcing of health care could have upon the U.S. healthcare system in the future.16

As Deloitte Center for Health Solutions estimates that constraint in the supply of foreignmedical centers could prevent growth in medical tourism industry, but recent reportshows that Indias medical tourism sector is expected to grow 30 percent annually from2009 to 2015. 16 Also is estimated that over 18,000 patients visited Indias medicalcenters during the first eight months of the 2008 fiscal year. 16 India is preparing for thisexpected growth and thus far has not encountered any supply-side constraints. 16 TheDeloitte survey in 2009, indicates a growing demand for medical tourism; estimates

750,000 Americans traveled abroad for medical care in 2007, growing to 9,000,000 by2012.16

Quality and Patient Safety in Medical TourismThe critical challenge for potential medical tourists is to select the best possibledestination for the specific services needed. Although medical tourism offers benefit formany patients, quality of care issues abound. 2 Many hospitals that advertise heavily tomedical tourists are located in low-cost, developing countries that may experiencingsocial, political, and cultural problems. These issues may detract from quality of carereceived, thus resulting in a less than optimal environment for the medical tourist seeking

quality health care.2

There are also concerns regarding lengthy airplane trips needed totravel to distant countries. These long trips have been associated with known healthrisks, such as lung disease and thrombosis. 2 The lower oxygen levels on airplanes inflight could become problematic for patients with lung disease taking a flight to adeveloping country, sometimes in excess of 14 hours. Long flights can also contribute todevelopment of deep vein thrombosis (DVT). Both of these conditions are of seriousconcern for surgical patients 2. Other quality issues include complications that mightresult from vacation activities and travel in the postoperative periods and follow-up care,as well as adequate communication between provider and patients. Provisions to assurethe quality of long-term, follow-up care, and provide for the cost of the care need to beconsidered to before undergoing procedures in another country.2

Additionally, cultural barriers and language, including medical jargon, may beproblematic, even with the assistance of interpreters. 2 Serious misunderstanding mayoccur on both the part of the patient and the provider. 2 Both the patient and providerneed to share with each other all necessary information before initiating the proceduredesigned to promote quality outcomes 2.

Another issue is the quality of the foreign hospital environment. Patient should carefullyassess the quality and standard that they expect and have been promised. Thisassessment should include the environment outside the hospital. 2 In some countries thequality of the water, as well as hygienic standard, may vary from patients expectations


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and may compromise their convalescence. For instance, the World Health Organization(2008) reported that data collected in 2006 from 132 countries demonstrated that 31countries (or 23.5%) have less 100 percent screening for at least four common infectionmarkers: HIV, HBV, HCV, and syphilis. WHO noted that many countries cannot providecomplete information related to the screening process, even when testing of bloodproducts; the testing may often be incomplete or lack of a quality assurance mechanism.Thus, patients risk becoming sicker through their travel to another country, rather thangaining an improved state of health 2. While the number of foreign medical sitescontinues to increase, issues remain about how to best monitor quality and patient safety.2

Measuring Quality. 1 Despite claims of high U.S. standards, results vary widely byhospital. Consider one of the most commonly performed procedures in the United Statestoday, coronary artery bypass graft (CABG) surgery:

Hospitals in California that perform CABG surgery have an average mortalityrate of nearly 3 percent (2.91). 11

The California average is nearly four times higher than the Cleveland Clinic,

considered the best hospital in the nation by U.S. News & World Report. 11

Closer inspection of California hospitals shows wide variations in quality:

The University of California Davis Medical Center experienced no deaths amongthe 136 patients receiving CABG surgery in 2003.11

Fountain Valleys mortality rate of 2.14 percent was below the state average of2.91 percent. 11

Desert Regional Medical Center, which performed a similar volume of surgeries,had a mortality rate of more than 6 percent, twice the California average and 10times Cleveland Clinics average. 11

Beverly Hospital performs few CABG procedures, which may explain its highmortality rate of 13.79 percent. 11

How does the quality of facilities overseas compare to those in the United States? Someof the more prestigious providers, such as Apollo Hospital Group and WockhardtHospitals (which is affiliated with Harvard Medical School) in India, and BumrungradInternational Hospital in Thailand, offer a better level of care than the averagecommunity hospital in the U.S. 10.11

In comparison, Bumrungrad International Hospital in Bangkok, Thailand, is a modernmultispecialty hospital with 554 beds, accredited by the Joint CommissionInternational.14 Its main 12-story building was constructed in 1997 to comply with U.S.hospital building and safety standards. 11 The medical staff of more than 900 includesabout 200 U.S. board-certified physicians. 11 Many others hold licenses in Australia,Europe and Japan. 11 A team of 800 nurses assists with patient care. 11

Bumrungrad tracks more than 500 measures of quality and patient safety. 11 It treatsabout 430,000 medical tourists a year from 190 different countries. 11 This numberincluded nearly 60,000 American patients in 2005. 11


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Bumrungrad is equipped with all the latest diagnostic equipment. 11 It has 150 clinicalexam suites, two cardiac catheterization labs and 19 operating theaters, two of which arespecifically designed for cardiac surgeries. 11

The hospital uses Global Care Solutions Hospital 2000, a sophisticated healthinformation technology system. 11 This software is designed to recognize and preventdangerous drug interactions, store patient records electronically and fully integrate allareas of patient management and hospital operations. 11

The hospital staff assists patients with travel arrangements, airport pickup, interpretersand lodging if needed. 11 Seventy-five percent of Bumrungrads patients pay cash forservices. 11

As in the U.S., many hospitals abroad do not disclose recognized quality indicators.11 Butmost hospitals that compete on the international level generally do, such as:

Dartmouth Hitchcock Medical Center in New Hampshire and Ohios ClevelandClinic have quality indicators on their Web sites. 11

National University Hospital Singapore also discloses information

demonstrating that its quality compares very favorably internationally. 11

Indias Apollo Hospital Group has devised a clinical excellence model to ensure

its quality meets international health care standards across all its hospital. 11

Other Indian hospitals are working to create standards for reporting performancemeasures. 11

Electronic Medical Records. Because potential medical tourists must first be evaluatedremotely, most large health care providers and medical intermediaries for patients useelectronic medical records (EMRs) to store and access patient files. 11 Patients can thendiscuss the procedures with potential physicians via conference call. 11 Modern hospitalsabroad also use information technology to identify potential drug interactions, managepatient caseloads and store radiology and laboratory test results. 11

By contrast, only about one out of four U.S. hospitals store medical recordselectronically. 11 Third parties pay 87 percent of medical bills in the U.S. health caresystem, and most of the third parties do not reimburse physicians or hospitals for the useof EMRs. 11 Since others pay the bills, patients usually do not choose hospitals orphysicians based on their use of EMRs.11

Hospital Accreditation. How does the quality of facilities overseas compare to those inthe U.S? The Joint Commission International (JCI), 14 a subsidiary of the U.S. JointCommission is the health care industrys official accreditation institution, in addition toproviding educational and consulting services to hospitals around the world.14 It hasincreased the number of approved foreign medical sites from 76 in 2005 to over 220 in2008 12. Both JCI 14 and the International Organization of Standardization (ISO) are ableto provide useful and reassuring benchmarks for patients in selecting offshore medicalfacilities 11. In lieu of the JCI, some countries are adopting their own accreditation stan-dards. 11 For instance, the Indian Healthcare Federation is developing accreditationstandards for its members in an attempt to reassure potential patients about Indias highquality health care.11


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Hospital Affiliation. Some foreign hospitals are owned, managed or affiliated withprestigious American universities or health care systems:

The Cleveland Clinic owns facilities in Canada and Vienna, Austria; and in

Abu Dhabi, the clinic already manages an existing facility and is building a newhospital.11

Wockhardt (India) is affiliated with Harvard Medical School.11

Hospital Punta Pacifica in Panama City, Panama, is an affiliate of U.S.-based

Johns Hopkins International.11

JCI-accredited International Medical Centre in Singapore is also affiliated with

Johns Hopkins International.11

Dallas-based International Hospital Corp. is building and operating hospitals inMexico that meet American standards.11Bumrungrad International Hospital in Thailand has an American managementteam to provide American-style care.11

Physician Credentials. Foreign health care providers and medical travel intermediariesalso compete on quality by touting the credentials of the medical staff. 11 Thesephysicians are often U.S. board-certified, while others have internationally respectedcredentials. 11 Many of the physicians working with medical tourists were trained in theUnited States, Australia, Canada or Europe. 11 Nearly two-thirds of the physicians whowork with Planet Hospital have either fellowship with medical societies in the UnitedStates or the United Kingdom, or are certified for a particular specialty by a medical

board. 11

Online Communities. Potential patients can get some idea of the safety and quality ofmedical providers by searching online for testimonies of patients who have had surgeryabroad. 11 These Internet communities facilitate the exchange of information aboutproviders, including facility cleanliness, convenience, price, satisfaction with medicalservices and the availability of lodging while recuperating.11 Professional websites arealso helpful in identifying quality care. 11 The International Society of Plastic surgerycertifies approximately 1,500 surgeons in 73 countries who meet U.S. standards of care.11The American Dental Association website includes information addressing travel, dentalcare, and dental tourism. 11 This site provided a link to A Travelers Guide to Dental

Care, which is available through Global Dental Safety and Asepsis Procedures 11 TheAmerican Medical Association (AMA) has developed guiding principles for employers,insurance companies, and other bodies that facilitate or offer incentives for care outsidethe U.S. 2 These principles were adopted at the June 17, 2008, annual session of theAMA.2 The principles stipulate the following:

international care must be voluntary and provided by accredited institutions

financial incentives should not limit or restrict patient options inappropriately

continuity of care, including coverage of costs upon return, should be provided

patients should be informed of their rights and legal recourse before travel


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patients should have access to licensing, outcome, and accrediting information

when seeking care

medical record transfers should comply with the Health Insurance Portability andAccountability Act guidelines

patients should be informed of the potential risks of combining surgical procedures

with long flights and vacation activities. 2

Other medical tourism operators recommend that potential patients apply a checklistcalled The Four Ds, when investigating a hospital outside their country. These FourDs include: Domain, Doctors, Data, and Disaster. A summary of these and other criteriahave been discussed above and presented in (Table 4.) 2. Patients Beyond Borders,located in Chapel Hill, North Carolina, conducted a three-part assessment that identified42 foreign medical sites which it believes provide value and quality for U.S. patients

traveling abroad for care. [Table 5.] 16

PlasticSurgeryJourneys.com 31 has built such a community. Members, including bothformer and prospective patients, can exchange information in online discussion forumson such topics as destinations, specific physicians and types of surgery. Members answerquestions about side effects, complications and occasionally even discuss patients whohave died from surgery. A few members who had cosmetic surgery have even postedbefore-and-after photos. If a facility performed low-quality work on a member, others inthe community know to avoid the provider. 11 For example, patients who weredisfigured by Mexican cosmetic surgeons created a Web site (http://www.ciru-

janosplasticos.info) to warn would-be patients. HealthMedicalTourism.org is another

website with a forum where members can interact.11

When Things Go Wrong. All surgical procedures carry an accessory amount of risk;even with the most skilled physicians, patients may have adverse outcomes. When amedical tourist experiences injury or even death, it is natural to wonder whether a poorlytrained physician or substandard hospital played a part.2 Of course, sometimes adverseevents are due to the patients pre-existing health conditions or other factors not the faultof the physician; but, as with any service providers, doctors arent perfect. 2 Case inpoint, was a story about Betsy Meisel, a 30 year old wanted plastic surgery for breastimplant and a tummy tuck at Bumrungrad International Hospital in Bangkok. 4http://www.washingtonpost.com/wpdyn/content/article/2008/07/03/AR2008070303533.html.

Actor Steve McQueen is one of the most recognizable "medical tourists" to travelabroad for treatment with laetrile.1 Laetrile is a compound that contains a chemicalcalled amygdalin, is found in the pits of many fruits, raw nuts, and plants. It is believedthat the active anticancer ingredient in laetrile is cyanide. Laetrile is given by mouth asa pill or by intravenous injection. Laetrile has shown little anticancer effect inlaboratory studies, animal studies, or human studies. The side effects are like thesymptoms of cyanide poisoning. Laetrile is not approved by the US Food and DrugAdministration (FDA). McQueen suffered from mesothelioma, an incurable cancer of


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the lungs related to asbestos exposure, and in 1980 he traveled to Mexico for laetriletreatment. 1 McQueen initially reported success from the treatment, but he eventuallydied in November of 1980 after surgery to remove a cancerous mass from his body.1Although McQueen did not survive and the effectiveness of laetrile is widely criticizedby the medical community, because of lack of opportunity to try the lateral treatment inthe U.S. and which may spur cancer patients and others to travel abroad for medicaltreatment. 1

In addition, Joshua Goldbergs death at Bumrungrad International provides a soberingaccount of the risks of medical tourism. 1.22 Bumrungrad International Hospital admittedJosh Goldberg on February 12, 2006 after he complained of an abrasion on his left legthat resulted in pain, swelling, and loss of feeling and motion. Allegedly, Mr. Goldbergdied twelve days later on February 24 after being administered a cocktail of twenty drugs,

six of which were contraindicated. 1.22 Mr. Goldberg's family contends that the hospitalmade no resuscitation attempt after discovering Mr. Goldberg's body, and a report of anindependent medical examiner hired by the deceased's family supports their allegation.1.22Mr. Goldberg's death remains the subject of litigation both domestically and abroad. 1.22His alleged experience casts a dark pall over medical standards abroad.1.22

Little evidence exists to indicate that botched operations 21 are a widespread problem inthe medical tourism industry. Anecdotal evidence tends to involve cosmetic surgerypatients who went to facilities that were not screened by a respected intermediary orwhose physicians credentials were not checked. 21 Sometimes complications from

cosmetic surgery are due to a patients having too many procedures performed too soon.21 Most American physicians advise against multiple or consecutive cosmetic surgeries ina short period of time. But patients often have limited time off from work and considertravel and recuperative time as part of the cost of surgery. Thus they are tempted toeconomize by having more work done than is medically recommended.21

Some foreign physicians entice patients with package deals that combine multiplesurgeries for one low price.2.21 It is not uncommon for South American doctors to offerpackage prices that include full body liposuction, a breast lift or augmentation (withimplant) and a tummy tuck. The package price can be as low as $6,500 (plus travel andlodging) in Colombia, Costa Rica or Mexico. The comparable surgery costs $12,000 to$15,000 and sometimes as much as $30,000 in the U.S. 2.21 Women who receive that

much cosmetic surgery at one time often find recuperation slow and extremely painful.They may also need postoperative monitoring in a clinic for several days withintravenous antibiotics and blood transfusions, all of which can add several thousanddollars to their overall cost.2.21

The Web-based intermediaries mentioned elsewhere in this study could help potentialpatients more carefully choose a destination and physician through a rating systemsimilar to those found for travel and hotels on eBay, Orbitz, Travelocity or Expedia. 11 Arating system would help steer patients to facilities that have more satisfied customers.Health care providers that fail to supply the quality and level of service American patients


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expect would be blackballed, or at the very least learn valuable lessons about whatpatients want. 11

Foreign laws governing medical liability are not as strict as those in the U.S., nor aremalpractice compensation awards as generous. 1.22 Foreign physicians typically do notcarry the same level of malpractice insurance as physicians practicing in the U.S.1.22 Thethreshold for malpractice is higher outside the United States, and there is limited recoursethrough the court system in some countries.22 Injured patients may not even have theright to sue at all.22

Moreover, a medical tourist would have no recourse through the American courtsystem.22 It is doubtful an American court would hold an intermediary liable sincemedical tourism matchmakers are not health care providers, and, thus cannot commitmalpractice.22 Reputable facilities abroad will work hard to prevent and correct problems.Although it rarely happens, patients may have to travel back for follow-up care if they do

not have a U.S. physician willing to provide it. 22 A patient may travel overseas againbecause the cost of treating unexpected complications is lower abroad. Additionally,some providers include treatment for complications in their package price. 1.22

Furthermore, there are offshore insurance companies offering medical malpracticeinsurance by contract. 23 Medical tourists who have little recourse in foreign courts whenmalpractice occurs have another option: they can purchase a medical malpractice policythat pays in the event a procedure is botched from AOS Assurance Company Limited, aninsurer based in Barbados. 23 One of the ways AOS ensures quality (and reduces its risk)is by covering only procedures performed in accredited hospitals by credentialedphysicians. 23 For instance, an American patient needing angioplasty can obtain

$250,000 of coverage for a fee of $1,124.55. A patient wanting $100,000 in financialprotection against a botched facelift would pay $225. 23 In the event of medicalmalpractice, AOS Assurance Company Limited will compensate insured patients or theirbeneficiaries for lost wages, repair costs, out-of-pocket expenses, rehabilitation, severedisfigurement, loss of reproductive capacity and death.23 Claims are administered by anindependent, Canadian-based firm, Crawford & Company. 23

Apart from patient safety, but another safety concern, is how medical waste is handled atforeign medical sites. 3 Simply defined, medical waste includes used needles, soileddressings, blood, body parts, chemical, pharmaceuticals, expired medicines, scalpels,medical devices, and radioactive materials. 3 According to World Health Organization(WHO), approximately twenty percent of the wasted generated from health care facilities

is hazardous. 3 Hazardous materials could be infectious, toxic, or radioactive (WHO2007). 3 Medical waste is a serious concern in the third world especially, in countrieswith little or no enforcement on medical hazardous materials. 3 According to the author;in Costa Rica, hospitals in San Jose produce 17 tons of waste a day and about twenty fivepercent of it is classified as biohazardous. 3 These materials are disposed of in bright redplastic bags. 3 The contents pose a health and safety risk to scavengers who comblandfills to gather items for recycling or financial rewards.3 One might argue that themedical accreditation process may help with medical waste concerns.3 The challenge islarge, since medical accreditation considers the patient and foremost, much akin the waytraditional tourism caters to tourist. 3 The question is how the two industries (traditionaltourism and medical tourism) both have quite dissimilar motivations, yet can reap the


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benefit of collaborations and cater to interest of local people, since the extra servicescomes at a cost? 3

Ethical and Legal Considerations of Medical TourismIt appears that medical tourism in our global economy is here to stay. 2 One obviousconcern is the ethical and legal uncertainty regarding medical tourism. What rights dopatients have? There is no current international legal regulation of medical tourism.1.22However, there are many agencies that provide services to potential patients who wantforeign medical and surgical health care. 22 These agencies help patients select a country,facility, and provider. They determine prices and collect payments, assemble and transitmedical records, and arrange travel and accommodations. Additionally, they mayarrange for postoperative follow-up in the patients own community after they return.22For example is MedRetreat, a U.S. based medical tourism service agent facilitating health

care needs and travel for desire of Americans. 22 MedRetreat created a network of pre-qualified hospitals from which a client can choose. 22 For medical tourists who may wantto file malpractice claims in the U.S., medical tourism firms make attractive defendantsbecause they are not encumbered with personal jurisdiction problems that might protectnegligent foreign physicians. 22 A firm that is incorporated in or has its principal place ofbusiness in a particular state is always subject to that states jurisdiction. 1.22Consequently, medical-tourism plaintiffs might try to hold the medical-tourism firmsthey used liable for including foreign providers who were negligent on their network.22Plaintiffs could invoke a number of theories to hold medical-tourism firms liable,including corporate negligence, the informed consent doctrine, and vicarious liability. 22However, none of these theories fit perfectly in the medical tourism context.

What rights do plans administrators have to outsource medical, surgical, or hospital carebenefits overseas? 1 Given the broad scope of the Employee Retirement Income SecurityAct of 1974 (ERISA).1 The act provides, in relevant part as follows: (a) A healthinsurance carrier, health maintenance organization, or other managed care entity for ahealth care plan has duty to exercise ordinary care when making health care treatmentdecisions and is liable for damages for harm to an insured or enrollee proximate causedby its failure to exercise such ordinary care.1 (b) A health insurance carrier, healthmaintenance organization, or other managed care entity for a health care plan is alsoliable for damages for harm to an insured or enrollee proximately caused by the healthcare decisions made by (1) employees, (2) agents, (3) ostensible agents, or (4)representative who are acting on its behalf and over whom it has the right to exerciseinfluence or control or has actually exercised influence or control which result in thefailure to exercise ordinary care. 1 ERISA reflects the governments belief that employeebenefit and welfare plans play such an important role in interstate commerce that theseplans represent a national public interest. 1 Therefore, ERISA seeks to ensure the soundmanagement and application of employee benefit and welfare plans in the U.S.1 Whatroles do World Trade Organization (WTO) and World Health Organization (WHO) playin globalization of health care? WTO helps member nations attain fair trade ofoutsourcing of medical services and WHO helps member nations attain highest possiblelevels of health. 5 Every country has different standards, rules and regulations that haverestrained a wider use of cross border delivery and seeking of medical care. 5 The WTO


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played a pivotal role in mediating internally agreed upon rules and settling disputesamong country as far as trade in health good and services is concerned. 5 The WTOplayed in the arena of public health to make pharmaceutical products more accessible tolow and middle income countries and provides a description of possible consequences forone such policy that was meant to provide flexibility for trade in drugs. 5 Althoughprohibitively high drug prices is the primary barrier to affordable medicines fordeveloping nations, even the developed nations have started facing their own problemswith respect to access to affordable care, more in the form of services. 5 U.S. has seenrising numbers of individuals who either do not have health insurance or have insuranceor are routinely denied catastrophically expensive care. 5.15 Rising costs of medical carehas fostered cross-border outsource of health care services and international medicaltourism has become a viable alternative for health care providers and potential patients.5.10

With the North American Free Trade Agreement (NAFTA), the health care sectors of theUnited States, Canada, and Mexico are becoming more economically integrated.17NAFTA poses major challenges to the realization of the international human rights. 17These include: (1) Cross Border Trade in Medical Products, (2) Cross Border Trade inMedical Services, and the attendant investment protections, (3) Portability andComparability of Health Insurance Coverage, and (4) Protection of Public HealthInsurance Programs. 17

The United States, Mexico, and Canada all provide public health insurance programseither to the entire population as in Canada or to vulnerable groups as in the UnitedStates. 5.17 None of these countries have private, for-profit providers and insurers able to

provide universal and affordable health coverage and care in a truly free market. 17Private insurers and for-profit providers should not profit from the care of the healthy andwealthy in ways that compromise the public programs that serve the poor and seriouslyill. 17 Nor should they be allowed to use NAFTA processes to compromise publicprograms. 17

For the United States, globalization of health care encompasses both exporting patients(medical tourism) and importing medical services (outsourcing). 5.21 This medical tradehas the potential to increase competition and efficiency in the United States. 21 PrincetonUniversity health economist Uwe Reinhardt says the effect of global competition onAmerican health care could rival the impact of Japanese automakers on the U.S. auto

industry forcing domestic producers to improve quality and to offer consumers morechoices. 19.21

Apart from patient travel, many medical tasks can be outsourced to skilled professionalsabroad when the physical presence of a physician is unnecessary. 19 This can include longdistance collaboration incorporating the services of foreign medical staff into thepractices of American medical providers. Global competitors can build facilities closer tothe United States and selectively contract with U.S. health insurers.11.19

Outsourcing Medical Services. Information technology makes it possible to providemany medical services remotely, including outsourcing them to other countries. 1.11.18Telemedicine 11 the use of information technology to treat or monitor patients remotely


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by telephone, Webcam or video feed is becoming common in areas where physicians arescarce. It gives rural residents access to specialists and will probably become thepreferred way to monitor patients with chronic conditions. Outsourcing 18 often results inlower costs, higher quality and greater convenience. Some clerical tasks, such as medicaltranscription entering physician notes and dictation into a patients electronic medicalrecord are already outsourced. American hospitals increasingly use radiologists in Indiaand other countries to read X-rays.11 For instance, Night Hawk Radiology Servicescontracts with American board-certified physicians living in Australia for overnightinterpretations of X-rays and scans. 11 Other medical tasks that dont require the physicalpresence of a physician could also be outsourced to lower-cost doctors abroad. 11 TheBritish National Health Service (NHS) is considering using doctors in India to read somelab tests and MRI scans.11 Planet Hospital has offered to work with U.S. hospitals to setup local imaging centers that would use physicians in India to read imaging scans. 11 AnMRI scan could be performed profitably for as little as $400 to $500, far less than typical

U.S. prices. 11

Opportunities for American and Foreign Health Care Providers to Collaborate.Helping patients properly manage a chronic condition is often complex and timeconsuming. 2.11 Outcomes could be improved if teams of medical providers workedtogether to improve all aspects of medical treatment through aggressive casemanagement. When multiple physicians are treating a patient, a case manager couldensure that all physicians are coordinating their efforts. 11 However, such closemonitoring and interaction is labor-intensive and costly. Often these tasks are notreimbursed or are reimbursed at rates lower than the cost of providing them. 11 Apotential solution is for American health care providers to collaborate with low-cost

providers in developing countries by having them perform these labor-intensive tasks thatdont require the physical presence of a physician.11

Telemedicine, which involves remote consultation, monitoring and treatment of patients,is increasingly being used in disease management programs.11 Past research has alreadyshown that telemedicine can improve adherence to protocols and increase conveniencefor patients with chronic ailments. Thus, it is a logical to outsource some of diseasemanagement or remote health coaching to places where labor costs are lower. 2.11

Creating New Heath Insurance Plans that Cover Medical Travel. Currently, mostinsurers do not include foreign providers in their networks, but they may in the future. 16Mercer Health, an employee benefits consulting firm, is working with several Fortune

500 employers to take advantage of medical travel.16 Several health insurers are alsoexperimenting with international coverage. Milica Bookman, a professor at St. JosephUniversity, predicts that by 2009, it will become increasingly common for mainstreamhealth insurers to include foreign providers in their networks. The simple answer is thatno one knows how the global competition will affect medical tourism in 2009 andbeyond.24 The following are some examples of insurance products that already useforeign providers.11

Access Baja. BlueShield of California has a health network designed for people whochoose to get their medical care in Mexico.11 Access Baja was implemented a year afterCalifornia passed legislation in 1999 allowing the states insurers to reimburse providers


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in Mexico.11.19 Although many of the enrollees are Mexican nationals who cross the U.S.border each day to work, employers on both sides of the border can offer this plan to theirworkers. However, the plan requires enrollees to live within 50 miles of the border toeasily access the Mexican primary care physicians in the BlueShield network. By 2005,nearly 40,000 people had signed up for coverage offered by Mexican health careproviders.113.19

Because Mexican medical care costs less, Access Baja premiums are less than two-thirdsthe cost of the alternative BlueShield of California plans.11 Hispanic enrollees can have adoctor who is fluent in Spanish and understands their culture.11 An added convenience isthat Mexican physicians are often available for same-day appointments, as well asevenings and on weekends.11

Networks with Foreign Hospitals. Some health plans take advantage of the potential inallowing enrollees to travel abroad for lower-cost treatments. 11.16 In February 2007,

BlueCross BlueShield of South Carolina added Bumrungrad International Hospital inThailand to its network.11.23 South Carolina BlueCross BlueShield does not plan torequire patients to go abroad for lower-cost care, nor is it actively considering usingfinancial incentives to encourage patients to travel abroad. Rather it is a value-addedservice available to members who request it. 11.23 While no patients have thus far takenadvantage of this service, it may benefit underinsured patients facing steep out-of-pocketpayments.11.21.23

Other Options. Insurers are hopeful that medical tourism will help to reduce treatmentcosts and improve margins, while employers are seeking reduced health care costs.11.23 Itis yet to be determined whether these pilot plans will be adopted on a broad scale and

whether employers or patients will receive the benefit of cost savings via reducedpremiums, co-payments or deductibles. 8 As the medical tourism trend grows, other U.S.-based companies in the health industry are looking at ways to offer medical travel that isat least partially covered by health insurance. 3.9.11.23Medical Site Program Summary

Anthem Blue Cross and Blue Shield (WellPoint) located in Wisconsin. Promoting to

clients for certain elective procedures. The program will start with Delhi and Bangalorefacilities and later expand to all JCI,14 accredited Apollo Hospitals. Pilot project willcover about 700 group members. All financial details, including travel and medicalarrangements, will be managed by Anthem WellPoint United Group Program. 16

United Group Program, a third party administrator located in Florida. Promoting

medical tourism for elective surgical care to more than 200,000 individuals coveredthrough self-funded health plans and fully insured, mini-med plans in BumrungradThailand.16

Blue Shield and Health Net sell discounted health insurance policies that encourage

potential patient to get most of their care in Mexico. This plan covers about 20,000patients, and focused on employers that hire a large number of Mexican immigrants. 16

Blue Cross Blue Shield South Carolina is focusing efforts in Thailand through its

subsidiary, Companion Global Health, Inc., that streamlines access to care for membersand uninsured at Bumrungrad International Hospital in Bangkok. 16


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Over the next few years, at least 40 company-sponsored health plans will offer overseasoptions through United Group Programs, a health insurer in Boca Raton, Florida.16

In 2006, West Virginia's legislature held hearings on the possibility of including foreignhospitals in its state employees health plan network.16 West Virginia 12 HB 2841 Billintroduced Feb 7, 2007 Program to establish incentives for covered employees who electto obtain medical care or medical procedures in foreign health care facilities accreditedby the Joint Commission International (JCI)14 Incentives included:

Waiver of all co-payments and deductibles payments Payment of round-trip airfare for covered employee and one companion Lodging expenses in the foreign country for the covered employee and companion Payment to the covered employees hiring agency for seven days of paid sick leave Rebate to covered employee of not more than 20 percent of cost savingsThe West Virginia 12 HB 2841 Bill died in committee.16

The West Virginia Legislature, HB 2841, available athttp://www.legis.state.wv.us/Bill_Text_HTML/2007_SESSIONS/RS/BILLS/hb2841%20intr.htm. Accessed April 12, 2009.32Colorado14 07-1143 Bill introduced in 2007.16 Program to establish incentives for stateemployees covered under state group benefit plans who elect to obtain medical care in aforeign health care facility where the cost of such care is lower. The Colorado 14 07 -1143 Bill was postponed indefinitely in the House Committee on Business Affairs andLabor.16 These bills were attempted to provide services for potential patient who wantsoffshore medical and surgical care.16

The medical tourism firms U.S. Health and Planet Hospital are in the process of creatinghealth insurance products that combine American-based primary care with foreign travelfor expensive procedures.9.11.18

Planet Hospital is working with a major insurer to design a low-cost health plan. Initially,Planet Hospital plans to roll out a limited benefit plan, sometimes referred to as a mini-med plan, based on the casualty insurance model where the benefit is a specific sum ofmoney. These types of plans generally provide coverage for a limited number ofphysician visits each year, a limited amount of inpatient care and sometimes coverage forprescription drugs.16 Mini-med policies typically cap benefits at a maximum of about$25,000 annually.16 Since the amounts these policies will pay are relatively low, patientscan expect significant cost-sharing for medical care. But this provides an incentive for

patients to carefully shop to avoid high out-of-pocket costs.16

The uniquepart of Planet Hospitals plan is that it will reimburse patients the sameamount for each particular service, regardless of where it is performed.11.16.23 Thus apatient could significantly lower out-of-pocket costs by going abroad for treatment. Forinstance, an enrollee who needs a heart procedure could easily spend more than $50,000at a hospital in the United States. A mini-med policy may pay only $10,000 toward thecost. But abroad, the same surgery could cost less than $10,000, including travel, thusmaking the mini-med a sensible and affordable alternative. Because coverage is limited,this policy will cost about $50 to $100 a month, only a fraction of a traditional healthplan.11


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Planet Hospitals first step will be a health plan aimed at El Salvadorans living in theUnited States.11 Enrollees would receive a limited number of primary care visits locallyunder the plan and could travel to El Salvador for covered major medical needs. If theplan proves successful, additional ones will follow for countries such as Mexico 6.11 andIndia.11.16 Coverage under one of these mini-med plans might cost a family as little as$200 per month.11

Effects of Increased Competition on U.S. Health Care Markets

Global competition could lower the cost of some medical procedures. At the same time,increased international competition for qualified medical personnel could raise laborcosts in the United States. 2.11.13 If foreign medical students, physicians and nursescurrently in America choose to work overseas, there may be shortages of workers insome medical specialties in the United States, and wages for these workers will rise.11.12This is especially likely in areas of medicine not easily outsourced.11.15 For example,

radiology is relatively easy to outsource since it does not require the radiologist to bephysically present. Although radiology has been one of the highest-paid specialties inmedicine, that is likely to change in the future since reading X-rays and other scans caneasily be outsourced.9.11 On the other hand, outsourcing would have little effect on theinherently local practice of emergency room medicine.11.12

Global medical competition could also exacerbate the shortage of primary carephysicians in the United States.16.20 Today nearly one-quarter of practicing physicians inthe United States attended a foreign medical school.27 Indeed, each year nearly one-quarter of slots in U.S. medical residency programs are filled by foreigners.11.27 Greateropportunities in their native countries and in other countries could reduce the number of

foreign physicians and nurses practicing in the United States.11

It could also encouragemore of them to return home after they receive training.11 Many foreign medicalgraduates work in underserved rural areas, would be especially hard hit. Also, due to anongoing nursing shortage, American hospitals recruit foreign nurses to fill vacancies.2.11A smaller supply of foreign physicians and nurses willing to work in the United Statescould strain the U.S. health care system by raising labor costs.8.11

Effects of Globalization on Health Care in Other Countries

Today many developing countries, including African and Asia countries are experiencingshortages of physicians and nurses.2.11 Because of the opportunity to earn more in Europeand the United States, many physicians trained in developing countries emigrate for moreopportunities to work for higher pay and entrepreneurial opportunities in developedcountries.11 Critics in developing countries claim that health care facilities and providersthat serve medical tourists will treat only foreign patients to the exclusion of native-bornpoor residents.11 This is unlikely, since most hospitals in developing countries cannotsurvive on cash-paying medical tourists alone.11.12 But even if specific hospitals indeveloping countries are open only to foreigners and local elites, the health care systemsof these countries will be enriched by the influx of revenue, thus would benefit the localpopulation by increasing their access to medical care.3.11.12


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Policy ObstaclesHealth care globalization, including medical tourism and medical outsourcing, has the

potential to lower costs and increase competition in the American health careindustry.1.6.10.11 However, there are numerous obstacles to incorporating foreign healthcare providers into the U.S. health care system.11 Some of these barriers are the result ofentrenched interest groups that do not want to compete with low-cost providers.1.23.Federal and state laws also create a number of obstacles to Americans seeking treatmentabroad, including outdated laws supposedly intended to protect consumers that nowmerely increase costs and reduce convenience,7.11.22 for example ERISA1 may limitincentive, state insurance commissioner, and state licensure laws. Finally, state andfederal regulations currently restrict public providers from outsourcing expensive medicalprocedures, for example Federal STARK laws may inhibit collaboration.11.18

In addition, federal regulations make it difficult for private plans to offer financial

rewards to enrollees willing to seek care abroad.11 This is significant because insurancepays the bills for most U.S. patients and surveys find that patients are unwilling to travellong distances for health care of the same quality they could receive at home unless theyhave a financial incentive to do so.11.16

State Licensing Laws. Recent advances in information technology allow a radiologist toread X-rays from India just as easily as an American radiologist could read them from ahome office.6.10.11.15 However, the practice of medicine is regulated by state medicalboards, which generally require a physician to be licensed in the state where the patientreceives treatment.11.27 Thus, state licensing laws prevent medical tasks from beingperformed by providers living in other states or countries. Foreign physicians also lackthe authority to order certain tests, initiate therapies and prescribe drugs that Americanpharmacies can legally dispense.11.27

States license and regulate physicians with the ostensible goal of maintaining the qualityof medical care.11.27 However, state medical boards are dominated by physicians and,like the boards governing other regulated professions, they tend to benefit thepractitioners.11.29 Besides stringent licensing requirements, these organizations suppresscompetition among physicians by declaring certain practices to be unethical.11 Medicalsocieties have long opposed innovations that pose a threat to their autonomy or income.And threats to hospital revenue or the ability of hospital systems to cross-subsidizeuncompensated care generate considerable opposition.11

Some restrictions on the practice of medicine have been removed in recent years, but

many still exist. For example:

It is illegal for a physician to consult with a patient online without an initial

face-to-face meeting.11

It is illegal in most states for a physician outside the state who has examined a

patient in person to continue treating the patient via the Internet after the patientreturns home.11


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It is illegal in most states for a physician outside the state to consult by phone

with patients residing in the state if the physician is not licensed to practice

medicine there.11

These laws make it difficult for American patients to seek care from doctors abroad viatelephone and the Internet.11

Restrictions on Collaboration among Health Care Providers. A physician practice inthe United States could easily provide doctor visits in a traditional office, coupled withchronic disease management services from a foreign doctor and tests done at aconvenient retail clinic when needed. Yet this scenario might run afoul of the so-calledStark Laws - 42 U.S.C. 1395nn (b) (Medicare), 1396 n(b) (Medicaid) (1982)11.16. Thefederal Stark laws make it illegal for a physician to refer a patient for treatment to a clinicin which the doctor has a financial interest.11. It is also illegal for a physician to rewardproviders who refer patients to him, or to a hospital in which he has a financial interest.Unfortunately, laws meant to prevent self-dealing and kickbacks also inhibit beneficialcollaboration between doctors and hospitals. 7.10.18.19. For instance, the Stark laws couldprevent a physician practice from referring a patient with a chronic condition to anaffiliated disease management program (employing a foreign doctor) or prevent thepractice from referring a patient needing minor treatment to an affiliated walk-in clinic. 11

By limiting compensation arrangements for referrals and collaboration, the Stark lawstend to result in rigid physician group practices that are not particularly convenient oreconomical for patients.7.11

Lack of Follow-Up Care. Some procedures require follow-up care to monitor the healingprocess or remove stitches, for example, case of Betty Meiselcosmetic surgery gone

wrongBumrungrad International Hospital Bangkok (2008.)4 In some cases, patientswho have traveled abroad for medical procedures have problems finding a local physicianwilling to provide postoperative follow-up care. "Aftercare is one of the most importantissues and problems in medical tourism," said Jonathan Edelheit, president of the MedicalTourism Association.11.20.24. This is especially worrisome if the patient has complications.Liability for another providers work is a perceived risk to doctors providing aftercareone reason some American physicians are loath to provide follow-up care to patientstreated abroad.4.11

Another reason for physicians reluctance to provide follow-up care is that patientstreated abroad often lack insurance.4.9.11.12 Over the years, many doctors have assumed

that health insurance is the only way for patients to finance medical care.10.11.16

Physicians may prefer not to treat uninsured patients (unless payment is made inadvance) for fear they will not get paid.7.11.24 Although lack of follow-up care is definitelya concern, many patients who have surgery abroad arranged in advance, perhaps reporttheir regular doctor continued to treat them throughout recovery.2.4.11 Patients with aregular physician will likely fare better than those who are only seeking physician carefor a short-term (postoperative) need.11

Legal Obstacles. Employers and insurers could lower health costs by sending employeesabroad for treatment.1.8.9.11.15 However, there are important legal considerations. Plansponsors must meet Employee Retirement Income Security Act (ERISA) fiduciary


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obligations in designing and managing employee benefit plans.1.22 According to somelegal scholars, an employer that sponsors a health plan offering workers a financialincentive to travel abroad for treatment could have greater liability risks. 11 The concernis that financial incentives might induce enrollees to accept substandard care when theyotherwise would select the local hospital of their choice although many health plans do

just that by offering financial incentives for patients to choose hospitals in theirnetworks.1.2.11 If health plans cannot offer enrollees financial incentives, patients areunlikely to consider medical travel.1.11.16

Federal and State Government Plan Obstacles. Nearly half of all health careexpenditures in the United States are paid for by the government;2.23.26. this includesMedicare, Medicaid and health coverage for state and federal workers. It is hard toimagine significant cost savings occurring without involving the public sector.25

Medicaid consists of 50 different state programs. State Medicaid programs near the

border with Mexico could easily outsource some procedures abroad.11 Yet despite thepotential savings for state taxpayers, none have considered taking this step.11 Medicarebenefits are limited to the United States.11 This is a hardship on foreign-born workerswho accrue benefits in the United States but want to return to their homelands to retire.11This also forces the estimated 40,000 to 80,000 American retirees living in Mexico to payout of pocket or return to the United States to receive care26. Furthermore, Medicarerequires significant patient cost-sharing, generally twenty percent above thedeductible.11.26 Medicare could reduce costs and allow seniors to share in the savings bywaiving the cost sharing requirements.11

Policy SolutionThe first step is for state and federal policymakers to understand that global competitionin health care will benefit American consumers by reducing costs and improving qualitythrough competition.1.2.6.9.11.13 Just as global competition improved the quality ofautomobiles; it will also improve the quality of medical care. Local politicians andcommunity activists often fight to protect community hospitals from closure in the beliefthat communities cannot do without them. However, lawmakers must take advantage ofcost-saving techniques in health care. States that border Mexico could follow Californiaslead and allow insurers to offer policies that include providers in Mexico. States thatborder Canada could follow suit.1.11.15.25

Modernize State Licensing Laws. Medical licensing laws must conform to the

information age, where distance (or country) is irrelevant. Reforms should includerecognizing standards of other countries as an alternative to local licenses.7.11.18.22 Forinstance, many Indian and Thai physicians are board-certified or licensed in the UnitedSates, Australia, Britain or Canada. Foreign physicians who meet standard criteria shouldbe considered licensed if their skills have been evaluated and approved for inclusion in anetwork. It does not make sense in the information age for each state to approve andpolice physicians living thousands of miles away. The same holds true for physicianspracticing in the United States. Laws that prevent physicians in one state from consultingwith patients in other states by telephone or e-mail should also be eased.11


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Relax Laws Restricting Collaboration. The federal Stark laws prohibiting self-referralshould be modified to allow beneficial arrangements where care is coordinated andprovided in a more efficient manner.1.3.7.11 Without revised legislation, it would bedifficult to integrate the services of physicians living abroad into the practices of localproviders. Integrated medical services would also allow domestic providers to competeby creating more efficient operations. For example, a traditional physician practice couldoffer disease management for chronic conditions at a lower cost through an associated In-dian physician. And an American radiologist might have an Indian radiologist read X-rays at costs lower than competitors.11

Encourage Follow-Up Care. While physicians prefer an ongoing relationship with apatient, outsourcing patients to providers abroad is not much different than referring themto a specialist down the street.11 If safe harbor contracts were created for physiciansproviding follow-up care, more doctors would be willing to treat cash-paying patients.

Moreover, if the number of medical tourists rises significantly, entrepreneurial physiciansand clinics will sense an opportunity to provide follow-up care. To facilitate providingfollow-up care for patients who return from treatment abroad, a committee of theAmerican Medical Association has recommended creating a current proceduralterminology (CPT) reimbursement code for patients who need postoperative follow-upcare.3.6.11

Facilitate Liability by Contract. Some American patients may be concerned about thepotential difficulty of holding providers accountable in foreign legal systems (malpracticeliability) and of receiving compensation for complications that will undoubtedly arisefrom medical treatment abroad.1.11.16 Federal law needs to recognize patient contractsthat provide for binding arbitration or that limit liability. For instance, patients could

purchase additional insurance from their health insurer in an amount they believe willprotect them in the event of predefined problems that might occur from foreign treatment.A policy could clearly identify financial remedies for specific problems similar to anaccidental death and dismemberment policy, for example, life insurance policies.11 (cites)

Allow Financial Incentives. Lately, some insurers have begun creating low-cost healthplans that rely on foreign-based providers to treat serious ailments. Unfortunately,lawyers could interpret ERISA and Health Insurance Portability and Accountability Actof 1996. (HIPAA - 42 U.S.C. 1320) regulations in ways that discourage employers(and health plans) from providing patients with financial incentives to travel abroad forlower-cost care.1.11.22 Insurers and self-insured employers should have the right toexperiment with a range of health benefits that inject global competition into health care.In addition, insurers, health plans and self-insured employers that have facilitated theoverseas treatment of willing patients should be protected from liability. 11

Lead by Example. The federal and state governments should lead by example byallowing Medicare and Medicaid programs to send willing patients abroad. Medicarewould particularly benefit from cost savings since it pays for a large volume oforthopedic and cardiac procedures.11


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Summary and Conclusion

A lot has been said about medical tourisms level of uncertainty for health care providers

and specific risks that U.S. health care providers will encounter as a result of theirinvolvement are not understood and have not been tested.23 Medical tourism is likely toincrease over the next decade as more patients are able to access the Internet and acquireinformation relevant to care offered overseas at an affordable price. While some patientswill benefit immensely from treatment as a medical tourist, many legal and ethical issueswill also arise. Health care professionals need to familiarize themselves with the benefitsof medical tourism while also acknowledging its inherent dangers. Potential medicaltourists will benefit from the services of a knowledgeable health professional in theirhome country who can discuss the many issues that relate to this medical tourism. It isexpected that medical tourism will provide a new role for health care professional as thishealth care trend expands around the world. 2 In addition, the trend of number of

uninsured and self-pay patients traveling abroad for health continue as medical carebecomes more expensive or difficult to obtain in countries such as the United Stateswhere third-party payment is the norm. It is unrealistic to assume that every Americanwill travel abroad for medical care.1 But it doesnt require huge numbers to inducechange. If only ten percent of the top fifty low risk treatments were performed abroad, theU.S. health care system would save about $1.4 billion annually.1 As more insuredpatients begin to travel abroad for low cost medical procedures, medical tourism willresult in competition that is truly needed in the American health care industry. 7 Policymakers must consider implications of ERISA, WHO, WTO5 and NAFTA17 whileassuring access to affordable health care for all people on the health care globalization.


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Tables and Figures:

Michael D. Horowitz, MD, MBA and Jeffrey A. Rosensweig, PhD

Table 1. Results of Internet Search for Terms Related to Medical

Tourism. (a)

Number of Internet

Search term sites identified

"medical tourism" 777,000

"medical tourism" + surgery 239,000

"medical tourism" + heart 169,000

"medical tourism" + heart + surgery 111,000

"medical tourism" + cardiac + surgery 121,000

"medical tourism" + transplantation 81,900

"medical tourism" + cancer 152,000

"medical tourism" + obesity 85,400

"medical tourism" + bariatric 24,600

"medical tourism" + joint 86,700

"medical tourism" + hip 79,200

"medical tourism" + prostate 62,400

"medical tourism" + cosmetic 123,000

"medical tourism" + plastic + surgery 136,000

"medical tourism" + dentistry 189,000

"medical tourism" + surgery + sex 51,300

"medical tourism" + savings 67,600

(a) Google[TM], May 6, 2007. 12

Table 2. Reasons medical tourist go abroad to seek care at medical tourism destinations. 12

1.Low cost- No insurance / inadequate insurance. Particularly patient from U.S.- Plastic and cosmetic surgery- Cosmetic dentistry /extensive dental reconstruction- Bariatric surgery / and subsequent body contouring- Gender reassignment procedure- Treatment of infertility

2. Avoid waiting lists- Countries with National Health Services. Particularly from Britain and Canada

3. Procedure not available in home country

- Newly developed procedures not approved by regulatory agencies- Stem cell therapy- Joint resurfacing- Artificial disc replacement (multi-level)

- Procedures unavailable or restricted by society and / or legal system- Organ transplantation- In-vitro fertilization with donor eggs

4. Tourism and vacations- Luxurious accommodations and excellent service- Exotic vacation destinations

5. Privacy and confidentiality-Personal reasons


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Table 3. Popular medical tourism destinations around the world. 2

Asia The Americas Europe Africa Oceania

China Argentina Belgium South Africa Australia

India Bolivia Germany

Israel

Jordan

Brazil

Columbia

Hungary

Lithuania

Malaysia

Philippines

Singapore

Thailand

Costa Rica

Jamaica

Mexico

United States

Poland

Table 4. Criteria for Assessing Quality of Care.2

Variable Question(s) to Ask

Accreditation Are the hospital accredited by Joint Commission International and/or theInternational Organization of Standardization (ISO)?

Background What various social, political, and cultural problems might exist?Contamination Are infectious and parasitic diseases rates available?

How do they compare with the rates at home?Complications Who will manage the postoperative complications and the consequent costs of this

care?Domain Are the facilities and infrastructure well maintained and up-to-date?Doctors and Nurses Are providers credentialed and board certified?

Are the nurses registered and fully trained?Data What kinds of statistics does the institution collect?

Do they make these statistics available to potential patients and certifyingagencies?

Disaster and Death Are morbidity and mortality data available?

How do they compare with the rates at home?Due diligence Who exactly are you dealing with?

Can you visit the hospital, tour its facilities, and meet the staff?

Source: Adapted from International Monetary Fund, World Economic Outlook Database, September 2006


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Table 5Cost Savings Compared to U.S.

Procedure U.S.insurers

cost $

U.S. retailcost $

India Thailand Singapore

Angioplasty 25,704 to37, 128

57,262 to82,711

11,000 13,000 13,000

Gastricbypass

27,717 to40,035

47,988 to69,316

11,000 15,000 15,000

Heart bypass 54,741 to79,071

122,424 to176,835

10,000 12,000 20,000

Heart bypass 54,741 to79,071

122,424 to176,835

10,000 12,000 20,000

Heart valvereplacement

71,401 to103,136

159,326 to230138

9,500 10,500 13,000

Hipreplacement

18,281 to26,407

43,780 to63,238

9,000 12,000 12,000

Hysterectomy 9,591 to13,854

20,416 to58,702

2,900 4,500 --------

Kneereplacement

17,627 to25,462

40,640 to58,702

8,500 10,000 13,000

Mastectomy 9,774 to

14,118

23,709 to

34,246

7,500 9,000 12,400

Spinal fusion 25,302 to36,547

62,778 to90,679

5,500 7,000 9,000

Source: Adapted from WebMD Health Services US rates, including at least one dayhospitalization; Planet HospitalInternational rates, 2007. Table appears in Unti. 27


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Table 6. Foreign Medical Sites Identified by Patients Beyond Borders 16Mexico Christus Muguerza Alta Especialidad Hospital, Monterrey

Costa Rica Clinica Biblica Hospital, San JoseBarbados Barbados Fertility Centre, Christ ChurchBrazil Hospital do Coracao, Sao Paulo

Hospital Israelita Albert Einstein, Sao Paulo Hospital Samaritano, Sao Paulo

India Asian Heart Institute, Bombay Apollo Hospitals, Chennai Indraprastha Apollo Hospital, Delhi Shroff Eye Hospital a

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