It seems like a no-brainer: patients in consumer directed health plans –which combine a Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) with a high-deductible PPO– should be early adopters of medical tourism. And sure enough, a lot of people are saying that’s the case. AIS’s Health Business Daily picks up on the theme today with a reprint from Inside Consumer-Directed Care, inanely headlined as follows:
Here’s how it begins:
Medical tourism, once an indulgence of Hollywood jet-setters who wanted a discreet facelift or the desperately ill seeking unconventional treatments, is poised to enter the mainstream as a component of consumer-directed health (CDH).
The article cites an internal Towers Perrin memo laying out the familiar facts on medical costs and goes on to tout the potential for consumer directed plans:
A hip replacement that costs as much as $80,000 in the U.S. can be obtained in Singapore or Thailand for $12,000, according to an internal Towers Perrin memo. A prostatectomy costing $60,000 in the U.S. can be done in India for $7,000…
It’s only a matter of time” before medical tourism takes hold in the CDH market, says Jay Savan, an employee benefits consultant in the St. Louis office of Towers Perrin.
I agree that medical tourism has a place in the insured market, but the link with consumer directed plans isn’t so clear. After all, in a traditional CDHP, the patient is indifferent to the cost once their HSA balance is exceeded. There’s often literally no difference in out-of-pocket costs for a $7,000 surgery and a $60,000 surgery. That’s why CDHPs have been such a failure in curbing surgical and major medical costs.
Savan offers some decent ideas in the article: employers could waive the deductible for surgery abroad, pay for a companion’s trip, or offer extra paid time off. But these suggestions really have nothing to do with consumer directed health plans as currently configured. It could just as easily be done with a traditional managed care –or even an old-fashioned indemnity– plan.
If I were an employee I’d want a better deal. How does a 50 percent share of the savings sound to you?January 17, 2008