Lots of interesting stuff at The Economist article mentioned in the previous post. What stood out the most for me having already been immersed in medical tourism trends these past couple of years was this idea of “importing competition”:
He is right that health care abroad is not a substitute for difficult reforms at home. But medical travel could serve as a catalyst for those reforms. Rajesh Rao of IndUSHealth, a middleman that helps insurers and employers co-ordinate medical care in India, reckons medical travel “is not really about exporting patients, it is importing competition.”
A bit of rivalry from top foreign facilities may introduce transparency and price competition into an inefficient system riddled with oligopolies and perverse incentives. For example, American and European hospitals may cut prices once they realise how much potential business they stand to lose. By Deloitte’s reckoning, medical travel will represent $162 billion in lost spending on health care in America by 2012.
I’m a big believer in the potential benefits of medical tourism. At it’s best, it gives uninsured patients facing a major illness requiring surgery expanded options. If they do their homework they can find world class doctors and hospitals who can do the surgery at a fraction of the cost. Without these options the uninsure patient faces two devastating scenarios: financial ruin or deteriorating health.
And if enough patients go abroad for medical care the ones who stay behind will benefit too. Healtchare spending in the United States accounts for roughly 1/7 of the economy. And it’s grossly inefficient. If ten people walk into an ER for medical care they will walk out paying 10 different prices. There’s no transparency and very little competition.
It’s Econ 101: the more competitors there are, the more prices will fall and consumers stand to gain. And I bet that as patients and employers pressure insurance companies and lobby politicans to make it easier to travel abroad for medical care it will also open up greater medical travel inside the US as well. The patient in Chicago looking for hip replacement will one day not only consider traveling to Bangkok for the procedure but also Phoenix, AZ.
