NCPA - National Center for Policy Analysis


August 12, 2008

Global competition in health care is allowing more patients from developed countries to travel for medical reasons to regions once characterized as "third world."  Many of these "medical tourists" are not wealthy, but are seeking high quality medical care at affordable prices.  To meet the growing demand, entrepreneurs are building technologically advanced facilities in India, Thailand, Latin America and elsewhere, and are hiring physicians, technicians and nurses trained to American and European standards to run them, says Devon Herrick, a senior fellow at the National Center for Policy Analysis.

Fees for treatments abroad range from one-half to as little as one-fifth the price in the United States, depending upon the destination country and type of procedure performed. 

For example:

  • Apollo Hospital in New Delhi, India, charges $4,000 for cardiac surgery, compared to about $30,000 in the United States.
  • A rhinoplasty (nose reconstruction) procedure that costs only $850 in India would cost $4,500 in the United States.  [See the figure.]
  • An MRI in Brazil, Costa Rica, India, Mexico, Singapore or Thailand costs from $200 to $300, compared to more than $1,000 in the United States.

One reason why medical costs are lower abroad is that labor costs are cheaper, says Herrick:

  • In the United States, labor costs equal more than half of hospital operating revenue, on the average.
  • Yet, Indian physicians often earn only 40 percent as much, and many Indian nurses earn only one-tenth as much, as their American counterparts.

As more insured patients begin to travel abroad for low-cost medical procedures, medical tourism will result in sorely needed competition in the American health care industry, says Herrick.

Source: Devon Herrick, "Medical Tourism: Health Care Free Trade," National Center for Policy Analysis, Brief Analysis #623, August 12, 2008.

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