Healing Your Health Insurance Budget - Destination HealthCare
Destination healthcare is a centuries-old consumer medical practice, with definitive records dating back to the early Greeks. The asclepieion at Epidaurus was the most celebrated healing center of the Classical world, the place where ill people went in hope of being cured. Roman records from around 75BC describe the healing centers in Bath, England. The Pool of Bethesda, recorded in the Gospel of John, was surrounded by an asclepieion where the ill and infirmed traveled for healing. The earliest references, however, seem to date to about 2650 BC, when people traveled to see the Egyptian physician Imhotep who was renowned for medicines for wound care and for relief of intestinal, muscular and skin disorders.
In the United States, destination healthcare began to take root in the late 19th and early 20th centuries when Americans suffering from tuberculosis traveled to sanitoria in places like Colorado Springs; Battle Creek, Michigan; Louisville, Kentucky; and Saranac Lake, New York, among others. In the second half of the 19th century, destination healthcare developed further as patients traveled cross-country to leading specialty and teaching hospitals including the Mayo Clinic, the Cleveland Clinic, Johns Hopkins, the MD Anderson Cancer Center, and St. Jude Children's Research Hospital among many others.
Today, advances in medical techniques and technology, international partnerships between hospitals and medical universities, and internationally trained doctors combine to deliver medical outcomes and standards of service equaling or surpassing those in the US. Patients take advantage of the ease of global travel to access world renowned international hospitals in China, India, Thailand, and other countries that provide premier medical care with costs far less than those in the US. The number of Americans receiving medical care internationally, including vacationers and expatriates, was estimated at one million for 2008.
Medical associations have also recognized the value of destination healthcare. In 2009, both the American Medical Association and the American College of Surgeons issued new position statements recognizing the important role destination healthcare can play when properly structured and delivered. The American College of Surgeons recommends that patients "seek care of the highest quality" and encourages its member physicians to "assist all patients in reaching informed decisions concerning medical care, whether at home or abroad."
Healthcare Issues
Medical patients look outside their home community for medical care for three basic reasons: access to care, affordability, and outstanding care. The American College of Surgeons described it this way:
"Residents of the US may choose to pursue medical care abroad for a variety of reasons, including a real or perceived lack of services available at home; limits imposed by payors or regulatory agencies on access to certain specialists, treatment protocols, equipment or services; prolonged waiting periods, lower costs of care; and personal reasons."
The American College of Surgeons effectively identifies the primary access concerns for patients today: wait times to receive needed care and limited or denied access locally to the care they need. The reasons are often a combination of location, medical specialty, expense to the payor, or, in the case of regulatory issues, that nation's domestic process for approval of medical procedures.
In some locales, access concerns arise because wait times to see a physician can easily reach four to six months. The Fraser Institute reported the average wait in Canada between a primary doctor referral to a specialist and the appointment is 4.5 months. The American Medical Journal reported that wait times in 2009 had risen to an average of six weeks across the United States. In Massachusetts, wait times for certain specialist appointments were stretching to 25 weeks. Merritt Hawkins & Associates' 2009 Survey of Physician Appointment Wait Times reported 2009 waiting times to schedule an appointment in Minneapolis with a cardiologist averaged seven weeks.
Patients are frustrated with limitations on available benefits and services. Health insurance policies frequently define the number of visits allowed for particular services, the number of inpatient care days, or financial caps. Kathy Pfeifer, a speech therapist from Louisville, Kentucky describes the frustration in the documentary 9000 Needles: ""As soon as you get your patient in the door, the first thing you're looking at is their insurance approval. You need to make your goals according to what time restrictions they give us." Dr. Kelly Vincent adds, "We have to get a stroke rehabbed in less than 100 days, or benefits are cut back to the point that people cannot often proceed with the therapy they need." In other cases, health insurance policy conditions impose a greater co-insurance responsibility for care that is outside a network hospital, even though that same service is not available in-network where the patient lives.
Worries about affordability worsen almost daily. In February 2010, Anthem announced price increases of 39% for many California policyholders. PriceWaterhouseCoopers reports almost 80% of companies expect to shift costs to their employees again in 2010 by increasing deductibles and employee share of the premium. During the last few years, annual out-of-pocket expenses have risen from just over $1,500 to almost $4,800 in 2008, the last year for which complete statistics have been reported. According to a recent study, 94% of Americans are afraid that a major medical incident will result in a personal financial crisis, even with their health insurance, and over 50% are afraid an incident could bankrupt them.
Even in this environment, premier medical quality remains the dominant factor, especially for destination healthcare. As much as any person may be willing to travel to get the medical attention they need, none are willing to do so for lesser, or even suspect, quality of delivery or outcome. Even in the United States, destination healthcare decisions are based on quality considerations. In some cases, it results from worries about quality in that patient's home hospital. A 2009 study conducted by the Robert Wood Johnson Foundation found that 60% of Americans give the US medical care system a letter grade of C or lower. In other instances, the decision is based on access to specialists that don't exist in a patient's home community. Patients have each shown a willingness to travel across the country to top specialty medical centers. Increasingly, that willingness includes international destinations.
Changing Environment for Destination Healthcare
In America, we want to believe that our medical care is the best in the world, and who can fault that desire. Great medical care is not, however, exclusively an American product. Nations from around the world have made and continue to make important contributions to medicine. "Medicine has always evolved globally. Innovations in health care occur around the world as doctors and scientists working at universities, health care device companies and other organizations grapple with major healthcare issues. What is new is that with globalization, unique health care options are available worldwide to those who can access them," writes Dr. David Hogberg of the National Center for Public Policy Research.
The growth of patient directed care is also having a marked influence on the growth of international destination healthcare. The Deloitte Center for Health Solutions writes, "Consumerism is a formidable force in health care, a defining characteristic between its past and its future that will impact every stakeholder's value proposition and business models. Consumerism is not a fad; it is a trend of enormous significance."
The Internet has made more of that information available to them than at any time in history, and these informed patients are more comfortable with both quality of care and medical outcomes around the globe. The Deloitte Center for Health Solutions noted that 60% of the respondents to its 2009 survey reported seeking information about treatment options online during the previous year. Patients and their family members are able to gather information about treatments, medications, and new advances and discuss them with their doctors. Support groups for family members have sprung up across the Internet, including many that have become outstanding information resources regarding difficult to treat diseases. The parents of children with Batten's Disease routinely share information that is leading to strides in treatment and to destination healthcare decisions accessing specialized programs in Germany and China. International destinations offering positivie medical outcomes become very attractive when the needed treatment is not available close to home.
Businesses and insurance companies are paying attention to destination healthcare as a means to control costs and realize positive medical outcomes. A survey conducted by China Connection Global Healthcare found that savings on 13 leading destination healthcare candidate procedures can exceed $1.4 million per 100 cases. For companies sponsoring self-funded health insurance plans, those savings can contribute to direct savings as well as the ability to stabilize benefit costs for their employees. Destination healthcare can also remove volatility from corporate health plans by reducing the costs of high dollar claims that can be effectively managed with an integrated destination healthcare benefit.
Businesses and insurance companies have tried to mitigate some of the cost-shifting burden through high deductible health plans (HDHP), Health Savings Accounts, Health Reimbursement Accounts and Section 125 flex benefit plans. This approach can be very effective if properly designed and implemented. With HDHP's, destination healthcare can reduce the cost of medical procedures, resulting in direct savings to both the individual and the health plan. For example, a procedure that would cost $25,000 in the US and use all of a $7,500 deductible may only cost $5,000 internationally, even after including airfare, a savings to the insured of $2,500. Used with a medical expense reimbursement plan, like an HSA or a flex plan, a properly designed destination healthcare benefit can reduce the direct out-of-pocket expense to the individual even further, in same cases to zero.
Finally, a new group of destination healthcare facilitators has emerged to assist patients and organizations access first-world medical destinations. Rather than emphasizing leisure travel and low cost medical procedures, the better firms are healthcare companies whose focus is on quality medical care, access and affordability issues. The importance of this difference cannot be underestimated. Among the factors that distinguish these top companies are:
- Transportation assistance, including travel arrangements and document assistance, arrival assistance from the airport to the hospital;
- Direct admission and discharge support, including bill resolution and payment guarantee;
- Company staff on-site at the destination, rather than reliance on hospital staff or independent contractors;
- Internal assessment criteria for hospital selection, rather than sole reliance on an international credential; and
- Service programs that preserve and directly coordinate with payors of medical benefits.
The emergence of destination healthcare facilitators and other factors open new opportunities for individual patients and corporate administrators to realize the benefits available via destination healthcare. In the United States, the outcome of ongoing health insurance reform debates stands to further change the environment.
Issues in Destination Healthcare
Destination healthcare, like medical procedures in general, is accompanied by both benefits of favorable outcome and concerns about associated risks. For the person considering destination healthcare, it is important to understand these concerns and the ways in which each of the service providers manages the risks involved. There are five commonly cited concerns.
Discerning medical quality
Evaluating hospitals and doctors can be challenging; however, it is not impossible. In one's own community, a patient will often have either direct experience with or knowledge of a hospital or doctor. He may also know others who have experience with that provider. For destination healthcare, information regarding the experiences of previous patients, international accrediting authorities, and medical outcome statistics, including negative outcomes like post-surgical complications, is important for both prospective patients and health insurance administrators. Many medical tourism companies tout the fact that each hospital they recommend has JCI accreditation. This can be one element of evaluating the quality of a hospital; however, it should not be the only one. Ori Karev, CEO of United Health International, speaking on the subject of accreditation suggested that while JCI may be good, he is not sure if it is the solution. As one example of the gap left by using JCI alone is the absence of JCI-accredited hospitals in Canada, the United Kingdom, Australia, Finland, or France, countries where few patients would have concerns about being treated in the best hospitals. Currently, United Health International does its own credentialing of doctors and hospitals. The best destination healthcare companies do so as well. Evaluations include the ratio of English-speaking doctors and nurses, the hospital's complication and infection rates, successful medical outcomes, familiarity and experience with treating international patients, and medical specialties and their ranking by other medical authorities. As a prospective patient or health plan sponsor, it is imperative to inquire how the facilitator offering a recommendation has evaluated the provider.
Liability Concerns
This is the most commonly cited concern, and, somewhat interestingly, a patient's home physician most often raises it. Medical errors resulting from malpractice can occur internationally just as in America. The best destination healthcare firms have insurance options available that can aid with the direct costs of medical complications for their clients as another element of helping manage these concerns. In addition, these firms have working relationships with the hospital and will work with it on their clients' behalf.
Travel Concerns
This concern consists of two elements for many patients. People occasionally express concerns about flying to their medical destination prior to care and about comfort and safety on their return. It is critical that the selected destination healthcare company be knowledgeable in travel medicine to ensure that patients who are not fit to fly because of their medical condition are properly advised of the risks. In fact, the best destination healthcare companies have protocols to assure that only patients who are fit to travel do so. Individuals should ask how their provider would address a situation of this type, including inquiring about specific examples to determine how the company assesses these risks. A destination healthcare company working alongside physicians at home and at the destination can also ensure that the patient is ready for travel before leaving for home.
Patients may express concerns about family members being able to accompany and/or visit them while hospitalized. Many medical studies demonstrate the importance of support from family and friends during major surgical care and recuperation. Destination healthcare hospitals understand this, encourage patients to bring a family member or other companion and provide an environment in which family and companions are comfortable. Unlike the US where family or companions are asked to leave at the end of the day, destination healthcare hospitals have rooms in which the companion can stay throughout the admission. Many provide Internet connections, so patients can remain in touch with family and friends at home through email or voice over internet phone services.
Continuity of Care
Continuity of care, particularly post-operative treatment, is essential in patient care. When someone visits a distant specialty hospital, she leaves the direct care of her home physician for treatment and requires appropriate medical and therapeutic follow up care after returning. Domestically, she returns to her general physician who oversees that care. Some doctors and commentators have expressed concerns about the challenges of doing this effectively relative to destination healthcare. Some go as far as expressing reluctance to treat a patient returning from a destination healthcare experience. This argument overlooks the fact that this situation exists regardless of whether the destination hospital is domestic or international. Dr. Kevin Huffman, Chief Medical Officer for Ohio-based iBariHealth, recognizes the real issue is different from the argument being raised, "It isn't the potential for any complication occurring. It is not a matter of where a surgery was performed that worries a doctor. It is whether the surgery was performed properly. We don't want to clean up another doctor's lack of knowledge, poor technique or lack of skill."
The best destination healthcare providers understand the demands of continuously connected care and have established procedures to connect home physician(s), destination physician(s), therapists, insurance company case managers, and other aftercare providers.
Sample Destination Healthcare Costs
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If it's this good, why isn't everyone doing it?
It's a good question. Before getting at the answer, it's important to understand that many people are taking advantage of destination healthcare's benefits. Hundreds of thousands of Americans are making domestic destination healthcare decisions every day. Deloitte estimated the number of Americans using international destinations at approximately 750,000 in 2008. Deloitte and Forbes both forecast that number will quadruple by 2012. There are some reasons people have not yet taken advantage of what international destination healthcare offers.
Second, people are only now beginning to understand the range of medical services for which destination healthcare is a serious alternative. Using hospital admission statistics from the American Hospital Association, there are about 59 million hospital admissions annually in the United States alone based on medical procedures that are good candidates for destination healthcare.
Third, some corporate and insurance company pilot programs have not yielded the results plan sponsors desired. Close assessment of this finds quickly that the plans were either too narrowly designed, e.g., a single medical procedure or a single destination; based on ineffective benefit design; or poorly delivered, e.g., focused on use of a hospital in a third world environment.
Finally, it is still relatively new as a corporate benefit. Companies are coming to realize that they can offer employees and their families an alternative to the high costs of American healthcare. In combination with other corporate benefits, like health savings or medical reimbursement plans and higher deductible health plans, destination healthcare offers a highly effective means of managing employer costs and maintaining robust benefits for employees. The best destination healthcare companies have already evaluated issues, including ERISA compliance considerations and potential plan liabilities, and are working with employers and insurers to implement solutions.
