Clovis News

Medical travel business slows in U.S.

Reluctance by health consumers to spend discretionary money and jitters about impending health reforms have stalled the medical travel business in the United States.

While hundreds of thousands of Americans continue to travel outside the country for health care, fewer are packing their bags for hip replacements and restorative dental procedures.

Just five years ago, about 750,000 Americans sought medical care in other countries, many getting breaks of 30% to 70% for nonemergency procedures. But there were just 540,000 medical travelers in 2008, according to a 2009 report by Deloitte Center for Health Solutions, a Washington, D.C.-based research center that studies health-care trends.

One medical tourism company says business has been down 30% since the end of 2008.

"The people we would normally service are the people who are struggling right now financially, who are trying to figure out a way to pay their mortgage and to pay for food," said Patrick Marsek, managing director of MedRetreat, an Illinois-based medical travel company that was one of the first when it started in 2003. It had a booming business in 2007.

Medical tourism experts thought the drop in health travel during the recession would be temporary, and that a substantial recovery would soon follow. Instead, the anticipated rebound didn't occur.

The country's slow economic recovery is one reason, the experts say. But health reform -- and all the uncertainties surrounding it -- also plays a role in people delaying care, they say.

Beaten by the economy

Researchers at the Deloitte center predicted medical tourism would rebound in 2009 from a pent-up demand for elective procedures, and with more health plans covering out-of-country surgeries. The experts said a 20% growth rate was possible.

That didn't happen.

"The economy has beaten down the anticipated 20% growth," said Paul Keckley, the center's executive director and chief author of the medical tourism report.

The savings are still possible. In the United States a hip-replacement operation can cost $40,000 to $65,000, Marsek said. The same surgery done overseas costs as little as $12,000, including transportation, he said.

But those savings are not enough to drive business in 2010, Marsek said.

"The problem is many people don't even have that $12,000 to $13,000 right now," he said.

The economy isn't the only challenge, Keckley said. While more employers are looking at medical travel as a cost-savings, they're hesitant to make changes to health plans until more is known about health reform, he said.

Making changes to health plans could threaten protections for those plans under a grandfather clause of the health-reform package, Keckley said.

The clause exempts health plans from implementing the full array of new requirements in the health-reform law. But employers who make major changes -- such as significantly raising employees' annual deductibles -- may no longer be grandfathered in. They could be stuck providing new consumer protections, including full coverage of preventive health services.

That can be a disincentive to modify coverage for medical travel.

New approaches

With fewer people traveling outside the United States for elective procedures, medical tourism companies have had to make changes in their businesses to survive.

MedToGo of Tempe, Ariz., is taking medical tourism beyond hip replacements and dental work to bone marrow and kidney transplants, life-saving procedures.

MedToGo is negotiating with two hospitals for the transplants to be done in Mexico, a company spokesman said.

Kidney transplants can be done for one-sixth the price in Mexico, the spokesman said. Instead of $250,000 in the United States, the transplant can be done for $45,000 to $50,000 in Mexico, he said.

Keckley said it's doubtful transplants will become a major focus of medical tourism. "There's just so many post-acute complications and coordination issues," he said.

Some medical tourism companies are moving away from international medical travel to the domestic market to boost their business.

BridgeHealth International, a Colorado medical travel company, added a domestic service in January 2009. Now called BridgeHealth Medical, the company concentrates more on pairing patients with surgeons at U.S. hospitals than it does making surgery accommodations for patients in Mexico.

Health plans sometimes can save 20% to 40% when their enrollees travel to another city or state for surgery, said Will Garin, vice president of marketing and account management at BridgeHealth.

BridgeHealth achieves the savings by contracting with health providers on a case rate to provide services, Garin said. It allows a hip replacement to be done for $20,000 to $25,000, for example, he said.

Health plans sometimes give financial incentives -- the waiving of co-payments or deductibles -- if patients travel for surgery, Garin said.

Garin, a Clovis native and San Joaquin Memorial High School graduate, said employers from the Valley have yet to sign up for the domestic travel option. But he expects some to consider it when they look for ways to save on insurance costs.

Demand still there

When the economy gains steam, medical tourism operators believe their business will, too.

The need for inexpensive health care has not gone away, Marsek said. People are just postponing procedures.

Amanda Johnson tried putting off going to the dentist earlier this year -- she didn't have insurance or money to pay for the work she needed.

Johnson, 32, moved back to Fresno in January to live with her parents after finishing graduate school at Duquesne University in Pittsburgh. When she began getting infections and abscesses in her teeth, a dental examination showed she needed six root canals and other expensive reconstructive work.

Doctors in March told her it would cost $20,000 to $30,000.

But a friend in San Diego suggested she go to Washington Dental Clinics in Tijuana, Mexico, Johnson said. She paid about $3,000 to have the work done there, she said.

Johnson, who now lives in San Diego, said going to Mexico was her only viable option. And she would go back again. "It was just like going to a dentist in California," she said.