NCPA - National Center for Policy Analysis

Wal-Mart Turns to Medical Tourism to Lower Employee Health Costs

October 19, 2012

Medical tourism is becoming a popular avenue for employers to lower employee health costs. Wal-Mart, the nation's largest employer, will offer insured employees no-cost heart and spine surgeries at Scott & White Memorial in Temple, Texas, and seven other hospitals around the country, says BusinessWeek.

  • To reduce health costs, many companies have narrowed the number of physicians and hospitals covered by their insurance policy.
  • Wal-Mart, for example, has urged employees to use Mayo Clinic's three hospitals for organ transplants.
  • Furthermore, Wal-Mart encourages people to use one of their preferred hospitals by offering to cover out-of-town expenses.

This new policy will save thousands of dollars for employees that are plagued with high deductibles and out-of-pocket requirements. Employees can save as much as $5,000 or more.

Other companies have jumped to capitalize on the reduced costs that medical tourism has to offer. Energy Future Holdings, for example, hired consultants ACAP Health to help its employees find local doctors and hospitals that are low cost and high quality.

The costs of medical tourism are relatively low, considering that cost of a care episode is bundled. This means that everyone in the system pays a lump-sum rather than getting billed separately for tests, procedures, etc.

The benefit to this design is that employers become choosy about which health providers they do business with. Health care providers will increase the quality of patient outcomes while simultaneously reduce the cost of procedures as a way of attracting more companies.

Source: "Wal-Mart Turning to Medical Tourism to Lower Employee Health Costs," BusinessWeek, October 12, 2012.


Browse more articles on Health Issues