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Two Drivers for Medical Tourism: Public-Private Partnerships and Medical Insurance Participation

Posted May 17 2012 12:00am

I have had a long interest in medical tourism , partly because I think that the U.S. health system would benefit from the foreign competition and also because, in some cases, the care delivered might be superior to care given in some U.S. hospitals. There are at least two key factors that need to be addressed in order for medical tourism to flourish in the U.S. The first is public-private partnerships in countries seeking to attract patients from the U.S. This topic was discussed in a recent article (see:  Public-Private Partnerships for Sustainable Growth of Medical Tourism ):

The Ministry of Public Affairs in British Columbia...defines PPP in the following terms: Public-Private Partnerships (PPPs) are arrangements between government and private sector entities for the purpose of providing investment in public infrastructure, community facilities and related services. Such partnerships are characterized by the sharing of investment, risk, responsibility and reward between the partners....

[and]

[The]Government of India (2003) budget for the first time announced...support [for] private sector medical tourism, and promoting India to developed countries as a world class-high-tech healing destination for low cost medical treatment and procedures. Combining tourism with world-class medical expertise became a government policy in 2003, when the Finance Minister, in his budget speech called for India to become a “Medical Tourism Hub” (PC 2007). Various international medical tourism accreditation bodies such as: International Society of Quality in Health Care (ISQUAH) has approved India’s accreditation process along with National Accreditation Board for Hospitals (NABH) certification body, of the Indian Government. Further, Joint Commission international to date have accredited 17 hospitals in India. Indian National Health Policy, which was drafted by Prime Minister’s advisory council on Trade and Industry, states that, “the treatment of foreign patients/expatriates is legally an “export” and the same is eligible for all fiscal incentives extended to export earnings” 

This part of the puzzle is fairly straightforward. Foreign countries need to create an environment which is comfortable for U.S. patients who may be nervous about the various medical and surgical procedures facing them. Red tape and bureaucratic obstacles need to be reduced and substantial capital investment needs to be made in the country's healthcare infrastructure in order to compete with U.S. hospitals. 

The second factor relates to expanded financial support for medical tourism by U.S. health insurance companies. No clear picture or trend is emerging here. Below is a quote from a recent article on this topic (see: Will health insurance providers adopt medical tourism? ):

Lessons for the US insurers [regarding medical tourism]: In the USA there have been many high profile pilots and schemes launched. Some are sending people to other countries, but in very small numbers. The pilots have been a key driver in developing internal/domestic medical tourism. Some pilots sent nobody overseas, some are too new to assess the results, while others launched in a wave of publicity and have quietly died, as sometimes have the insurers and agencies that launched them. They have provided many valuable lessons for insurers across the globe. The real problem for US insurers is that health reform is a fast moving beast and it will not be until after 2014  - or perhaps even after 2018 – that the survivors will have adapted everything they do; until then, medical tourism may be an irrelevant sideshow to them.

I have come to the tentative conclusion that U.S. health insurance companies will never promote or support medical tourism in any substantial way in the short-term. Their relationship to various U.S. provider organizations such as health systems can be confrontational but, in may other ways, is quite cozy. All of the players understand the rules of the current game regarding services and reimbursement. And, as noted in the excerpt above, the rules may be changing with healthcare reform. I believe that all parties will wait until they understand how reform will help or hurt them and their bottom lines until they embark on any major changes to the status quo.

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