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Investing and Economics Blog

Traveling for Health Care

Record numbers go abroad for health

Thousands of “health tourists” are going as far as India, Malaysia and South Africa for major operations – such is their despair over the quality of health services. The first survey of Britons opting for treatment overseas shows that fears of hospital infections and frustration with NHS waiting lists are fuelling the increasing trend.

More than 70,000 Britons will have treatment abroad this year – a figure that is forecast to rise to almost 200,000 by the end of the decade. Patients needing major heart surgery, hip operations and cataracts are using the internet to book operations to be carried out thousands of miles away. India is the most popular destination for surgery, followed by Hungary, Turkey, Germany, Malaysia, Poland and Spain. But dozens more countries are attracting custom. Research by the Treatment Abroad website shows that Britons have travelled to 112 foreign hospitals, based in 48 countries, to find safe, affordable treatment.

My guess is that traveling for health care is going to increase greatly in the future. Health costs in the USA are enormous. Costs in Europe are different – often in wait time (or costs to avoid waiting) but another option is available – travel. Countries would be very wise to focus on building up this industry in my opinion. The economic benefits could be huge. The market is huge and growing. And the rich countries do not appear to be doing very well – especially the USA. The country needs to invest in a rigorous quality assurance system.

It is almost certain the first attack will be attempts to frighten customers by saying your country is unsafe. And those tactics will be used to try and get the governments of rich countries to impose restraints on the ability of their citizens to seek health care in your country. So if you want to be one of the really big winners you will seek high quality first (don’t be drawn into price wars to see which country can be cheapest). That market will be there but will be much less profitable. The huge rewards will go to those countries that provide world class care at prices much cheaper than the inflated prices in the USA.

Outsourcing Your Heart

UGP’s plans at best cap reimbursement for surgery at $3,000 and hospital stays at $1,000 a day. That would barely cover an afternoon in a U.S. hospital. But in Thailand, says Jonathan Edelheit, UGP’s vice president of sales and marketing, a heart bypass that would cost its U.S. customers $56,000 could be had for $8,000.
…
Companies with traditional plans are also taking the initiative. Blue Ridge Paper, which makes the DairyPak brand of packaging, was carved out of the forest-products firm Champion International when its employees bought a few factories that were scheduled to close. But health-care costs are hurting the company. So a Blue Ridge team plans to visit hospitals in India to assess their quality of care. If it gives the green light, Blue Ridge will begin promoting the option to its 2,000 workers.

Employees who opt for India would get to take along a family member, says Darrell Douglas, vice president of human resources, and the whole experience, including a recuperative stay at a hotel, would be covered. IndUShealth, a medical tourism start-up in Raleigh, N.C., will make all arrangements and coordinate care between U.S. and Indian providers. The sweetener: the company will share with these intrepid employees up to 25% of savings garnered from the outsourcing.


I am sure some don’t like this idea. To me the failure to address systemic health care fixes decades ago has made this almost inevitable. You cannot ignore skyrocketing health costs for decades and then be surprised that the market forces change. Work needs to be done to improve the health system in the USA. But in addition, traveling for health care will increase dramatically in the next several decades. I will be amazed if it does not. By not addressing the issues for decades the situation has become so crazy that the inefficiency of traveling for health care is overwhelmed by the ludicrously expensive costs in the USA.

Related: Comparative Performance of American Health Care – Epidemic of Diagnoses – blog posts on improvement the health care system

October 28th, 2007 John Hunter | 5 Comments | Tags: Economics

Comments

5 Comments so far

  1. Curious Cat Management Improvement Blog » Traveling for Health Care on October 29, 2007 10:44 am

    […] my post on the Curious Cat Investing and Economics blog: My guess is that traveling for health care is going to increase greatly in the future. Health […]

  2. International Health Care System Performance at Curious Cat Investing and Economics Blog on February 9, 2008 2:33 pm

    National health spending – Percent of GDP: Australia 9.5%; Canada 9.8%; Germany 10.7%; Netherlands 9.2%; New Zealand 9.0%; UK 8.3%; USA 16.0%…

  3. Curious Cat: Traveling To Avoid USA Health Care Costs on May 6, 2008 10:11 am

    “Americans are going overseas for increasingly complex surgeries. In addition, more patients seem willing to accept that quality of care in some foreign hospitals may be the same or higher as that found on U.S. soil, at a fraction of the cost…”

  4. USA Spends $7,960 Compared to Around $3,800 for Other Rich Countries on Health Care with No Better Health Results at Curious Cat Economics Blog on January 26, 2012 4:29 pm

    The USA spends twice as much on their health care system for no better results. It is easier to argue the USA is below average in performance that leading. And for double the cost that is inexcusable…

  5. A Wise Way to Subsidize Electricity Rates at Curious Cat Investing and Economics Blog on February 2, 2016 2:21 pm

    Effectively the rich end up subsidizing the low rates for the poor, which is a very sensible setup it seems to me…

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