NCPA - National Center for Policy Analysis


July 27, 2009

When stories of outbound medical travel -- also known as medical tourism -- began making news roughly a decade ago, most of the coverage focused on wealthy patients who sought cosmetic procedures and experimental treatments outside of the United States.  But as health care costs and the number of Americans without medical insurance have skyrocketed, much of the medical travel industry's growth has been attributed to patients seeking more affordable high-quality care outside of the country, says

Now, rapidly moving efforts to pass health care reform legislation that would reduce costs and expand medical coverage could force the medical travel industry to undergo another shift even before it establishes a solid foothold in the U.S. market.  Whether that shift would redefine the medical travel industry's American clientele or render the option obsolete within the United States is unclear, experts say.

By all accounts, outbound medical travel is still a fledgling phenomenon in this country:

  • While some reports have estimated that 500,000 Americans leave the country for care each year, more definitive research conducted by consultancy McKinsey & Co. that was published in May 2008 estimates that only about 5,000 to 10,000 Americans are currently seeking care outside the country each year.
  • The estimates are based on reviews of five years' worth of patient admission records from providers at the 20 top medical travel destinations.
  • Many of the patients were uninsured and paid out-of-pocket, says Paul Mango, head of McKinsey's health care practice; they paid almost four to six times less for surgeries in certain markets.
  • In fact, the McKinsey report found that an aortic valve replacement that costs $100,000 at a U.S. hospital would run about $12,000 at an equally qualified and credentialed hospital in Asia.

Devon Herrick, a health care economist and senior fellow at the National Center for Policy Analysis, says, however, that most reformers don't see medical travel as a solution to the affordability problem, but as a symptom of the U.S. health care system's uncontrolled costs.  No one would go abroad for care without financial savings, and to the extent that reform could provide greater coverage without affecting people's pockets, then there's not much of an incentive to travel for care, he says.

But Herrick and other health care policy experts questioned whether the current health care reform bills making their way through Congress can simultaneously broaden coverage and cut costs for payers and patients alike.

Herrick adds that he doesn't see much in the health care reform bills introduced by House and Senate lawmakers that would help control costs.  There are a lot of good ideas that may improve quality, but not necessarily lower spending.

Source: Shawn Rhea, "Still Packing Their Bags,", July 27, 2009.


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