Podcast interview with Rudy Rupak, Founder and President of Planet Hospital (transcript)

This is a transcript of my recent podcast interview with Rudy Rupak, founder and president of Planet Hospital. You can listen to the audio version here.David Williams: This is David Williams of Medpharma Partners and the Health Business Blog. I spoke earlier today with Rudy Rupak, Founder and President of Planet Hospital, a company that arranges medical travel to fourteen international destinations. Listen in to hear Rudy and me talk about the ins and out of medical travel; what patients can expect when they leave the country for care; how insurance carriers are thinking about coverage, and what happens to patients when they return to the US. Rudy, thanks for joining me today.Rudy Rupak: Hello David. Thanks for having me.David: Rudy, tell me a little bit about how Planet Hospital works. What sort of services do you offer?Rudy: We are in the business of saving our clients lives. We do this by helping them find the best possible care in any of our fourteen different destinations for their health care needs as well as for their financial and time needs. We do this by finding the most appropriate surgeons from one of our destinations and we are able to bring hard-to-find treatments for people who need it the most.David: Now what sort of destinations are you talking about? Are these all outside the US?Rudy: These are all outside the US. However, we have been bringing some patients into the US as of late, especially from the Middle East.David: How would you distinguish what you do from what others do; from what other agencies that are involved in international medical travel do, or from people just arranging these trips on their own?Rudy: We didn't focus so much on price when we first started the company, and we still don't. We focused on quality and in doing so we basically choose the absolute best surgeons we could find around the world, including in the US, and made them part of our network. Usually, with very rare exceptions a good surgeon works at a great hospital in an international location. The hospital benefits by being associated with great surgeons and the destination is an afterthought.If a good surgeon happens to be in the JCI hospital in India then that is where we would recommend our patients to go to. But we don't just provide them with a choice of one surgeon, we provide them with multiple choices...David: How do you identify these good surgeons in the first place?Rudy: Well we review things like medical journals. For... oncology, who's out there that's doing a lot of research and is recognized by their peers in their field? Who is Western Board certified and / or Western educated? What have their success rates been? What is their bedside manner like?I will meet them, I will interview them, and I will do some background research on them. I will also look at their teams. If we have a great surgeon but he happens to work with a local, nondescript anesthesiologist it's a cause for concern for me. If, on the other hand, he's got an outstanding anesthesiologist, an outstanding scrub nurse and an outstanding OR assistant then I know that this is somebody that I would put my life into their hands and I can comfortably feel that the patients can do so as well.David: You mentioned JCI facilities. Can you tell me what JCI is and what that means for a patient who might be looking for medical travel?Rudy: JCI is the International body for JCAHO, which is the Joint Commission on Accreditation of Healthcare Organizations, and this is the body that accredits the quality of a hospital in the US. In fact, any hospital in America must be JCAHO in order to receive work with an insurance company. To work with doctors and Medicare they must be JCAHO. Now, a lot of international hospitals are not JCAHO yet but a lot of the good hospitals are getting there.David: So, if somebody has JCI accreditations is that the same as a JCAHO accreditation or are there some differences in what they are required to do?Rudy: Standards of measurement may be the same but the standards of scrutiny unfortunately are not, and that's where JCI lags. Hospitals here live in absolute dread that a JCAHO inspector will just show up, unannounced. The hospitals overseas at least have the comfort of knowing that that's not going to happen - currently. But we're not worried about that because they are trying to maintain great standards. They have to if they're going to be in the business of international guests.David: Now what specific services would you provide to a patient who is considering traveling overseas for medical care? What would they get if they worked with you compared to just making arrangements on their own?Rudy: Well, patients are kind of divided between what we call "wants" and "needs." A "wants" patient is typically somebody who wants a cosmetic dentistry or cosmetic surgery, IVF or surrogate pregnancy. The needs patients happen to be people who need more elective care such as orthopedics, cardiology, neurology, cancer surgeries and other general surgery.David: And what sort of services would you provide for those different types of patients?Rudy: We offer a complete wraparound service for anybody who wants Medical Tourism. That means when they first contact us they speak to a doctor or a nurse within our company. These doctors and nurses do a pre-consult with the patients. They then recommend the various surgeons that would be appropriate for the care that they are looking for. Ultimately, of course, the patients choose that. We then book the surgery date; we then book their flights, their hotels and even take care of their passports and visas. Then we have staff that meets the patients in the destination country where the procedure will take place and we take care of them from the moment they land to the moment they leave.David: That sounds like a pretty comprehensive kind of a service. Does that tend to erode the savings?Rudy: We charge exactly what the hospitals charge. We don't mark-up the cost of the care so when they're getting all these services it's a 'value add' by working with us versus doing it themselves. We've done the research for them already. They're getting the benefit of our research and then the benefit of our 'strength in numbers' when dealing with the hospitals to get good savings and good care. Optionally the patients could pay $395 for the concierge service.David: And what do they get in addition if they want to have the concierge service?Rudy: First of all we would book the airfare for them and [if] they need to change their return trip there's no penalty charge; that's the first benefit. The second benefit is that somebody meets them at the airport when they land, gives them a mobile phone and escorts them to their hotel or the hospital, is with them on the day of the surgery, is with them on the day of they're discharged, takes them to the hotel, arranges any special request that they need. If something should go wrong, there's somebody within our company there to take care of them. Not that we would do that if they didn't pay the concierge, of course we would. At least you know that there's somebody on your side in a foreign country,David: Right.Rudy: It makes a huge difference and for $395 most people don't argue the point. I mean heck; they save more than that if they're changing their flights alone.A lot of people need to change their flights because... they need to stay longer.David: Now are the airlines seeing this as a market for them and are they making any accommodations for patients who at least have some sort of disability when they're going over and then still maybe recuperating on their way back?Rudy: Some are exploring it; one airline and I have just recently partnered together on creating cosmetic surgery packages to Costa Rica and Panama.David: I notice when you talk about your destinations, you have some destinations that are in the Western hemisphere and then some that are over in Asia and my understanding is that typically more of the serious sort of orthopedic or cardiovascular surgeries are typically done in Asia. Are you also seeing the ability to do those in the Western hemisphere?Rudy: Well, if you define Belgium as Western hemisphere then yes. A lot of our orthopedics clients are going to Malta and Belgium right now. They're giving India a good run for their money since the costs --when you're include the air and the hotel-- the cost between India and Belgium, the gap narrows very significantly.David: Can you tell me a little bit about the typical customer? You talked about your "wants" customers and your "needs" customers but can you personalize that or just give me an example of what a typical customer might be like?Rudy: Sure, on the "wants" side they are typically female, 40 plus [years old], whether it's cosmetic surgery or whether it's dental or IVF. In the "needs," I describe them as too wealthy for Medicaid and too young for Medicare. And I often describe them as the rude awakening clients, who have Medicare, but they just learned for the first time that Medicare doesn't cover everything they thought it did.David: So they would be typically someone in their 60s or 70s that's experiencing what looks like it's going to be a costly procedure and they find out that Medicare doesn't cover it and they look for alternatives?Rudy: Right, well Medicare won't give them what they want. Medicare will give them medications but not surgery.David: What happens for patients that have a commercial insurance? Do you have patients whose commercial insurance would pay for them to go overseas? Or do you also find this similar sort of a gap like you described with the Medicare patient where someone may find that something is not covered and they go abroad even though they're insured in the U.S.?Rudy: We believe the future of our business lies in insurance. And to date we've managed to convince the insurance companies to pay for five of our client's surgeries so far. We're working with insurance companies to help them wrap their heads around this. We feel that insurance is definitely a market; I think we're going to get there. This industry will definitely change when insurance companies start to adopt it more and more. We're definitely leading the charge in that area.We've got five different opportunities; I'd say two low hanging fruit opportunities and about three opportunities that would be like a one year's adoption cycle. And I'm going to do an analogy, for a moment, to another form of outsourcing that we are familiar with. Healthcare outsourcing is what we do.12 years ago, [software] outsourcing didn't even exist as an industry. It was a niche beyond a niche and companies that adopted it originally were very small businesses. I think they had some data worked on that they couldn't do cost effectively themselves. Then 12 years later, there's 30 companies in the outsourcing industry that have a market capitalization of over a billion. And seven years ago, overseas call centers entered the field. Year one most people that used them were some marketing outfits and specialty agencies or again, data entry and suddenly there's over eight companies in that field that are a billion dollar market cap.So, the industry has a good future, but how to get there, it can't be consumer driven only. The institutions will have to adopt it.David: What do you see as some of the drivers of that? Obviously there's the high healthcare cost but are there particular issues or barriers that an employer or health plan would have to get over before they could see this as a mainstream sort of outsourcing opportunity?Rudy: What I typically tell a lot of insurers is that America does have the best healthcare in the world. There's no argument about that. But! Only if you can afford it; and healthcare is becoming more and more expensive... Companies get into a crisis over promises made relating to healthcare; whether it's retiree benefits, whether it's employee benefits or union contract. It's starting to hurt a lot and not just in the private sector but in the public sector as well.What we do... drives down the cost, but the quality [is] driven up as well. You [can] get the equivalent of a high-end hospital in America for a lot less, and that's good value. I can get you a surgeon for cheap. The quality barrier we have managed to address very well. They ought to and meet and review the type of surgeons we're talking to.The next barrier is obviously malpractice and there have not been any instances, knock wood, of situations like this.David: What kind of reaction do people get these days when they say they're heading overseas for a medical procedure? I can imagine if you're talking about a Medicare population, these are people who maybe have not traveled internationally before and all of a sudden, they're getting on a plane to go over to Thailand or India. What sort of reaction do they get from their friends and their family?Rudy: We've had patients who've never even left Georgia or Iowa and are now getting on a plane to go to India. So I think it's a huge culture shock! Usually, there is a bit of fear in the patient and then it's exacerbated by friends and neighbors telling them, "Don't do it," and, "You're going to wake up missing a kidney," or some strange story like that. But they come back with amazing stories and they turn skeptics into believers.So what happens is that I hear the word "dignity" used a lot. "I was treated with dignity at this hospital." That I hear, over and over again, because they are so tired of that mistreatment that they seem to receive in American hospitals.David: Now do you think that there is going to be any impact on the US healthcare system from competition, if you will, overseas and in terms of improvement of customer service, the sorts of things that you are talking about for dignity or even on the price side?Rudy: I hope so. I mean, healthcare is one of the few companies, industries in America that has no competition. Hey, competition is healthy --if you would pardon the pun. I remember my mother describing a hospital in Connecticut where it was like going into the Shangri-La hotel. It was bright, it was beautiful and she was a private payer. They took such great pampering and care of her. Now the same hospital no longer does that. They have been cowed by malpractice and cowed by cost control just to provide the most basic of services and doctors are practicing defensive medicine, you know, because they are hearing of lawsuits and so a lot of their cost has been because of a litigious society more than anything else.David: Do you see any changes already underway? I am thinking, for example, in the area of cosmetic surgery, which has been self-pay for long time and which has been popular for overseas travel. Do you see any impact on the US cosmetic surgeons?Rudy: No, not really. US surgeons are still busy. They are still making millions and they are still doing well because there's a certain population that just will not go overseas for that kind of care and they believe that American doctors are the best. And I agree with them, they are the best.The changes I am seeing are certain American plastic surgeons are now working with us to travel overseas to do certain cases as well.David: You are actually finding that you got US physicians coming with you overseas in order to enhance their reputations?Rudy: We have got this program called "Best of Both the Worlds," which is one of the low hanging fruits I was talking about in the insurance world, where an American physician travels to a foreign destination and takes care of American patients, ...and then the follow-up care is back in the US. Only the geography of the surgery changes. That change has significant impact on the cost.You could have your executive health checkup overseas. We are now doing this program: colonoscopy, cardio test, lab test, EKG, and 64-slide CT scan, all for $1995 with air, hotel, and meals included.David: Now Rudy, tell me about how you got into the field because you are obviously one of the trailblazers and you had Planet Hospital for a bit. How did it all start for you?Rudy: We started the company in 2002 when my fiancee and I were traveling overseas in Bangkok. I describe her as a professional patient and she got ill while we were in Bangkok and refused to go to a third-world hospital. She had visions of...you know, tents instead of buildings. And I tell her, at least get a shot of painkillers and come back to the hotel room or something. Now we go there and this hospital was just truly amazing. And, she had her own private nurse, a doctor who saw her within 20 minutes of her arrival, took ownership of the problem, and a chef to take care of her meal requirements based on the doctor's orders. After three days stay with her medications, tests, etc., her bill was a staggering 411 dollars. And that's when I thought there is a business here.David: What if someone travels all the way to India for a hip operation and then they find out when they are there that the surgeon thinks that it's actually a different diagnosis? Does that happen and how do you deal with it, if and when it does?Rudy: Let me give you a bittersweet story. We have a client who needed tour help... we sent her to Singapore ultimately for her breast cancer and follow up on her radiation. She was also told that she was going to get cataract surgery done [in the US], but she decides to put it off, and get the breast surgery done instead. And since she was going to stay there for six weeks and get radio, we thought why not get the cataract surgery done there, too. Now the surgeon in Singapore did some tests and said that you don't have cataracts. I don't know why your American doctors told you have cataracts; you do not have a cataract problem. The problem seems to be behind the eye. So we did a diagnosis and discovered that she had cancer [in her optical nerves]. So here's a patient from America who was ready to get cataract surgery even though it would have done nothing for her and she learned, you know, that she had a different condition now. It's a good thing that happened there because it obviously got caught there and it is going to cost her a lot less to get it fixed there. While she is there now she is taking care of this issue as well.David: How about coordination between the US and overseas? Some of these patients, I imagine, don't have a good primary care relationships, but what happens when the patient inevitably needs some sort of follow-up even if there is not a complication from the procedure? Do there tend to be tensions between the US physician and the fact that the patient was treated overseas? How do people handle that?Rudy: Not really. I mean, because they don't have insurance, they are used to being cash-paying patients and so we have a network: it's small now, but it is growing. A network of physicians, primary care practitioners, and specialists throughout the US that we recommend...David: These are people within the US who are...Rudy: ...willing to see my patients after they come back.David: OK, so you have a real international network that's both here and abroad.Rudy: Correct.David: How do you expect the field to evolve? What do you think we will see if we look back five years from now? What will we see?Rudy: I think we will see a lot of insurance companies adopting the concept of medical tourism. I think it will become a more common, acceptable practice with, on one side baby boomers going to exotic locations to get plastic surgery done where they can lose a decade in a day, to retirees and employees of companies being given the option of getting healthcare carried out in the US or abroad.David: I have been speaking today with Rudy Rupak, Founder and President of Planet Hospital. Rudy, thanks for very much for your insights today, I really appreciate it.Rudy: It was a pleasure, thank you again for having me.