NCPA - National Center for Policy Analysis


June 19, 2009

Immigrants continue to show up in California, where many become part of our 18.5 percent uninsured population.  A more neglected story, says John R. Graham, Director of Health Care Studies at the Pacific Research Institute, is traffic the other way: California residents crossing the border for treatment in Mexico.

According to new research by Steven P. Wallace of the University of California, Los Angeles:

  • Almost a million Californian residents crossed the border into Mexico for treatment in 2004, of which half were Mexican immigrants -- both legal and illegal.
  • The rest were Americans shopping for cheap prescription drugs or who needed treatment when they were in Mexico for business or vacation.

Many Mexicans go home for treatment because of cost or cultural and linguistic issues, however, the striking trend is the growth in "binational plans," which cover U.S. businesses near the Mexican border.  These plans started in 2000, and now cover 150,000 workers.  Certainly, most of these are Mexican immigrants, but according to Graham, more employers will seek such benefits for their American employees in California, and investors will capitalize Mexican clinics and hospitals to serve their needs. 

The primary reason will be to escape California's expensive regulatory burden on health facilities, says Graham:

  • California hospitals shift the costs of treating Medicare and Medicaid patients (for whom government reimbursement does not cover costs) to private insurers.
  • Professor Daniel Kessler of Stanford University figures that premiums for private health insurance would be about 11 percent lower without this cost shift -- a hidden tax that private insurers can avoid by leaving the state.

California hospitals also suffer under laws that drive up their costs, says Graham:

  • For example, seismic retrofitting and nurse-patient ratios, which Mexican hospitals do not.
  • California hospitals also have to deal with a militant union, the California Nurses Association, whose members parade in front of the Capitol by the hundreds in support of more government interference in health care, in the quest for "universal" coverage.

The political momentum in California, and the nation, will make our hospitals more accountable to government but less accountable to all patients.  That will give Californians more reason to head south. In years to come, be prepared to have a margarita with your medical procedure, says Graham.

Source: John R. Graham, "Health Care's Future: Mexican Medical Tourism for Californians?" Pacific Research Institute, June 17, 2009.


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