Health Insurance City

Low Cost Operations:

Low cost operations have become an oxymoron in the U.S. over the past 20 years or so. While the rate of inflation has remained in check for most of the U.S. economy, it has been increasing at double-digit numbers for health-related goods and services. While some progress has been made recently, it still outpaces the general inflation figures by 200% to 300%. As a result, employers, both large and small, have struggled to maintain cost-effective health coverage. The sad reality is that America now has over 45 million uninsured people.

One option for health care cost control that is beginning to gain attention is known as “medical tourism.” In essence, medical tourism involves U.S. citizens going abroad for some medical procedures. Initially, they would go on vacation and undergo some form of elective procedure such as cosmetic or dental surgery, thus combining surgery with a more traditional vacation. However, as the concept has matured, there is less emphasis on the tourism part and much more on the medical aspects. Over time, more complex procedures have been performed.

The early adopters of the medical tourism concept were typically Americans who had family or friends in the area where the procedures were being performed. Procedures were usually confined to minor surgeries that were excluded from a traditional health insurance program. However, the medical tourism concept has advanced rapidly over the past few years. It is estimated that 500,000 Americans traveled abroad to get medical treatment in 2006. Currently, it is estimated that medical tourism represents $20 billion worldwide and is expected to double to over $40 billion by 2010.

Why would a person consider going abroad for medical procedures? First and foremost, it’s the cost. According to Renee-Marie Stephano, legal counsel for the newly formed Medical Tourism Association (MTA), “Cost savings average about 60% to 80% of comparable procedures in the U.S.” In rare cases the savings may even be 90%. Certainly this is meaningful by any measure. And, as Jonathan Edelheit, president of MTA, points out, “Medical tourism is the only thing in health care that has hard dollar savings. If people actually start to use it, health care costs will start to go down.”

Admittedly, this option is not for everyone. Stephano, who also serves as the editor in chief of MTA’s monthly magazine, points out that it, would have the most appeal for the uninsured/underinsured, and to date this has been the primary group to use the medical tourism option. But other groups will be interested as well, according to Edelheit. He believes that medical tourism can become a major influence on self-insured employers. “While there are only a handful of self-insured employers who are currently taking advantage of the medical tourism option,” he believes this is where the best utilization will come from. For example, with a $100,000 self-insured retention, “two or three catastrophic losses during the year could bankrupt a small employer.”

This entry was posted on Saturday, May 24th, 2008 at 10:20 pm and is filed under american health insurance, arizona health insurance, basic health insurance, california health insurance, california health insurance quote, catastrophic health insurance, celtic health insurance, cheap health insurance, child health insurance, health care insurance, health insurance agent, health insurance agents, health insurance benefits, health insurance broker, health insurance brokers, health insurance ca, ma health insurance, maryland health insurance, mass health insurance, massachusetts health insurance, medical health insurance, medicare health insurance. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.