Category: Podcast

Interview with MEDecision’s Dr. Henry DePhillips (transcript)

published date
October 8th, 2007 by

This is a transcript of my podcast interview with Dr. Henry DePhillips, chief medical officer of MEDecision.

David Williams: This is David Williams, co-founder of MedPharma Partners and author of the Health Business Blog. I spent yesterday at Caesar’s Palace in Las Vegas, where I was a speaker at the disease management leadership forum. I didn’t hit the jackpot, but did have the chance to interview Dr. Henry DePhillips. He’s Executive VP and Chief Medical Officer of MEDecision, a collaborative care management company, which enables payers to share clinical information with physicians to improve care and lower costs.

Dr. DePhillips, thanks for joining me.

Dr. Henry DePhillips: David, thank you. Thanks for asking us to speak. It’s a pleasure to be with you today.

David: What is MEDecision?

Henry: MEDecision is a 19 year-old collaborative care management company. Let me tell you what I mean by that. I’m the chief medical officer there, so I’m responsible for the clinical content that’s embedded into the software offerings. The software offerings are specifically targeted at entities that are responsible for the cost of administering health care. Our traditional audience has been payers, but we’re also marketing our software products to TPA’s, disability insurance companies, and integrated delivery systems who take on the responsibility for the cost of care.

We have a wide arrangement of software systems to enable them to do their job. We have an integrated UM, CM, DM platform to make care management more efficient. We have an analytics engine to help them analyze their populations and act on the results of those analytics. We have a provider connectivity electronic solution that allows the exchange of information with our target customers and their providers, their networks. We have a turnkey case and disease management offering that allows health plans to administer state of the art UM and DM programs. We have a utilization management tool.

We have tools that deal with enrollment, eligibility, benefits, essentially every software piece that a health plan will need to run their business, other than a claims operating system. We are not in the claims operating system business. We build interfaces to them, but don’t do those.

David: What sort of data do you work with? Is it just claims data, or do you use other data as well?

Henry: Great question. Our historical experience, for 19 years, has been with payer data sets. Payer data sets include mainly claims data: facility data, physician data, any type of medical claims data, behavioral health data. We also deal with pharmacy data sets, which tend to be the highest quality and most timely data, but we also deal with care management data now, lab results data. We’ve been asked for more and more of what the health plans have, and a number of other data sources within the payer.

We also are working to integrate non-payer data sets, and there are some very useful data sets out there. There’s EMR (Electronic Medical Record) physician office data sets, hospital information data sets, and very importantly and exciting now is personal health record data sets. So, there’s a lot of information that patients only know about themselves, that no one else knows: their medication allergies, diet program, exercise program, family history, over the counter medications. Those are data elements that are very, very important to look at, but are not really gotten any other way.

David: What about the electronic health records from the physician office? Are those ambulatory records? Are those hospital records? Are those both? How do you integrate those data sets?

Henry: We have not yet actually integrated an ambulatory electronic medical records system. However, we’re in discussions, and at the request of our customers, we certainly are willing to do that and will do that. We just haven’t had a solid, funded request come through yet.

The direct answer to your question again is, mostly we’re talking about physician ambulatory electronic medical records, although I think there’s an opportunity for hospital information system data to be integrated as well. That data tends to be very deep in the area where the patient was cared for at the facility, but the limitation of hospital information system data is the breadth, the information about the care of the patients outside of the hospital system. That’s where the other data sets come in.

David: One of the case studies that you point to is with an emergency department. Can you tell me why that is a high-value place to be deploying your system, how that worked, and how well?

Henry: You’re referencing a third-party study that was done on some of our software capability. The software we’re talking about is called the patient clinical summary, and it’s a situation where we take all of the data sets we talked about that are available from the payer, run it through our analytics engine and create a summarized, clinically validated, electronic historical record on each patient. It’s stored on a server. It’s done currently on a batch basis about once a month, although we’d like to move to real-time, and we’re building that capability as well.

This information is available to any provider at any point of care on behalf of the health plan. We deployed this over two years ago at Christiana Care Health System, which is the dominant level-one trauma center in the state of Delaware, in conjunction with Blue Cross Blue Shield of Delaware, which insures approximately 50-55% of all Delawareans. So, you have a dominant payer, dominant provider system, it was a perfect testbed to pilot this. We also learned a bit about what it takes to deploy a new technology like this.

The results of the study that was performed by an independent research company called Heath Core were that every time one of these patient clinical summaries was transmitted to the emergency room setting, so that a doc could have that historical electronic health record, medical cost savings was $545. That included all of the costs related to the emergency room visit itself, plus the costs associated with the first day of hospitalization for the patients that were subsequently admitted from the emergency room to the hospital.

The categories where statistically significant savings were achieved included medical and surgical supplies, cardiac catheterizations, laboratory testing (and that last one makes good sense because if you know a test has been done, you may not repeat it).

Another interesting byproduct of that study was a statistically significant increase in the reimbursement to the emergency room physicians for the cognitive care that they delivered to the patient. The example we use is if an emergency room doc is treating a patient as a fractured femur, they would bill for 9928… whatever the appropriate code is.

If, however, they have this electronic historical health record, they would then know this is a case with a fractured femur and a history of heart disease, kidney disease, or COPD, or asthma, and they would bill appropriately for the medical complexity of the patient. So, this is upcoding, not in the negative sense that’s in the industry, but upcoding in the appropriate sense: we’ve made the unknown known.

So we have good news for the docs. There’s a separate study that will be published showing the time through the emergency room for patients that have this historical record is also faster, which leads to more efficiency there.

David: I’m familiar with something that sounds related. In Massachusetts, a group called MA-Share did a program called MedsInfo where they were trying to get the emergency room physicians to look up what medications patients were taking when they came in, and there they found a very low use of the system. Only a few people –if somebody came in and they were passed-out, or the physician thought they were incoherent– did they bother to check. But it sounds like this was actually a greater use. Can you talk about how you achieved higher utilization if that, in fact, was the case?

Henry: Yes, you have hit on the single most important factor related to the deployment of an electronic health record in a real time setting, like an emergency room and that is adoption. Adoption is absolutely key so we learned a lot of lessons through the Christiana care, Blue Cross of Delaware deployment and I am happy to share those with your listeners.

Probably the single most important thing is to integrate the reception of the clinical data into the existing workflow in these settings, in this case the emergency room setting. So we literally sent a team of clinically trained people from our company and from Blue Cross to the Christiana Care emergency room and spent a few days watching the work flow. How do patients present? At what point is information gotten? At what point is it determined that they are with the particular health plan that has information available? Who is it that should be pulling the information?

I am happy to share with you that we initially thought that the doctors would be the ones pulling the information and the adoption on that was almost zip so we gave up on that. Then we went to the triage nurses, who were responsible for helping evaluate and stabilizing the patients at the very initial stages. The adoption there was zip. And then, pity the poor, I say this a little tongue in cheek, administrative support staff at the front desk who are responsible for gathering the insurance type information. We wound up working it into their workflow.

They have something called a COW, a Computer On Wheels. It goes to the patient’s bedside once the patient is determined to be stable, when insurance information is gathered. It was actually a link on that Computer On Wheels that went out to the website to pull the information where it was actually finally integrated into the workflow. These poor administrative staff were essentially told to do it. Now I think they realize the value of the information and how much it helps patient care so I think they are happy to do it. I don’t want to give the wrong impression.

What’s most important is once that workflow analysis was complete and once we found the single best place in the workflow to deploy the thing, virtually 100% of the Blue Cross patients that came into the emergency room over that study period had a patient clinical study query done. That speaks volumes to the adoption issue. It is the workflow analysis and integrating this as seamlessly as possible into the existing workflow that is the key to success.

David: You’ve talked about how your tools are used for the care of individual patients. Do you also have products or solutions that are used on a more aggregate basis so that people can look at populations or you could look at the level of a physician or hospital in terms of how they are performing, to help them improve?

Henry: Yes. We have much broader clinical capability. The patient clinical summary is one of the most exciting to work with. We also offer, for health plans, state of the art, evidence based, case and disease management programs. Clinical content for 30 different case or disease areas that can be embedded directly into the care management engine, which allows a health plan to administer state of the art CM or DM program themselves. That has had huge traction in the marketplace.

We have a full time clinical staff that does nothing other than continually update all of those algorithms so that they continue to comply with evidence based medicine best practices. That is a full time job for a number of people in our company. It is very popular. We do have an automated utilization management tool that we are revamping this year. Utilization management is as old as the hills in managed care. There is still a place in managed care for utilization management. There still are procedures, new technologies with a high propensity for over-utilization that are somewhat expensive and utilization management is still the tool of choice in those limited sort of scenarios.

Last but not least is the capability that you asked me about, David and that is our analytics capability. Our analytics capability is clearly slanted towards clinical care. In other words, there is analytics capability that is offered to health plans that are for actuarial usage, for setting rates, making sure premiums are appropriate and following the finances of health care.

Ours doesn’t do that very well. What it does do extremely well is evaluate populations of patients, identify cases that are appropriate for intervention on a broad scale, measure those populations and allow the health plan to intervene in a very automated way. The results of our analytic capability is to fill, if you will, the care management workflow engine with work for the nurses to do the next time they come in. It’s not a paper output as an example.

You asked specifically about provider performance and pay for performance. We also haven’t really gone down that road. I have to be very honest with you; pay for performance is clearly on the radar of health plans but we have made a conscious decision similar to the GE model. If we can’t be first or second in a certain segment then we don’t go there. We have chosen not to go to pay for performance at the moment.

David: What is the relationship that this would have with other initiatives that people are doing? It sounds like you use data from electronic health records but I know people are talking about clinical data repositories. Some of the same customers that you are working with are Blue Cross plans where they have a huge initiative with the Blue Cross Blue Shield association. People are doing e-prescribing, they are doing tiered networks, they are doing a whole variety of things. Where does this fit in with all those? Of course you mentioned care management where you are at the disease management conference as well. How do you actually not get lost in all this? Where do you see yourself fitting?

Henry: The most important thing about the era of health care that we are in today is the era of clinical data exchange; sharing timely information with clinical decision makers at the point of care to allow for more informed decisions is the generation that we are in today. What is exciting from a technology standpoint –remember that I am a physician and relatively new to the technology side of this business– as a former private practice physician is that once you gather all this information and get it into a format that is usable for a clinician at the point of care and it is in electronic format, you can send it anywhere.

Obviously there are limitations under HIPAA and there are compliance issues that you need to pay a lot of attention to but consider this. You can send it, as we have, to the emergency room doctor so that they can have an historical medication and medical problem record on patients that would otherwise not be able to give a history at all. You can also send it to electronic medical records systems in doctors’ offices.

If you are a doctor you spend $50,000 – $75,000 per physician in your practice for an EMR system that’s great but the first day you have it, what good is it? The answer is that if you could pre-populate those EMR systems with all of the information that the payers have on their members, there’d be an incredible increase in value. Pre-populate it with medications and so on.

Similar to hospital information systems: a complex patient comes into a hospital; the hospital knows all about the care that was given there – but what about the out-of-system data? To have those extra data would be tremendously helpful to the hospitals.

And then the whole industry of personal health records. I think late 2007 and all of 2008 will be the year of the PHR. Imagine: you know, if you’ve done one so far, that, when you went to build your own personal health record, it’s essentially an electronic blank piece of paper: list your medications; list the problems that you have; list the doctors that you’ve seen. It’s a memory-recall sort of thing.

Imagine if all of the data that your payer knows about you, through claims and pharmacy processing and other things, pre-populated that record. The question isn’t then “List all your medications”; the question becomes “Here’s a list of the meds that we have a record of you taking; please, edit the list.” How much more useful would that be?

So it’s an exciting time. And the sharing of clinical information is clearly going to be a focus for the foreseeable future.

David: I know you’re not a salesman. But, if you think about the value proposition that you offer to a health plan, are there particular types of health plans that you approach? It sounded as if, in the Delaware instance, it made sense where there was a dominant plan; they were able to achieve something quickly. Are there particular pitches that are used for different plans? What would the overall rationale be for a health plan to sign on with your service?

Henry: David, also a very good question. Historically, MEDecision has specifically targeted large, complex, regionally dominant payers: Blues plans are a good example of that; they tend to be fairly dominant in the marketplace.

We did that specifically because our mission is to improve the relationship among payers, patients, and providers. We targeted regionally dominant plans because they’re the most influential payers in their respective marketplaces. So it was a conscious decision that MEDecision went out and worked with those customers first.

We now, I think, have a much broader appeal to health plans essentially of all types and sizes – probably above a certain membership level, on the basis of the complexity, and, quite frankly, the cost, of our offerings.

But, nevertheless, we can benefit almost any health plan at this point. What are those benefits? And you’re right: I’m not in sales, so I’m going to have some trouble articulating this.

David: It’s more genuine, though…

Henry: I appreciate that. The benefit is that, if we can automate systems to allow each of the folks inside the health plan who administer the benefit plan to be able to do the work of two or three people, then we’ve brought tremendous value to the marketplace.

The administrative cost of health care is – you know, it may be only nine to eleven cents on the dollar, but that’s a very, very important nine to eleven cents and, if it can be nine instead of eleven, that’s a competitive advantage for any insurance company.

Secondly, our offerings have grown and have a much broader appeal. So, traditionally, maybe commercially insured – but we have very broad appeal on a large number of Medicaid customers; customers who do Medicare risk; TPAs; administrators; integrated delivery systems, who take on the responsibility for the cost of care. So the appeal has gone much broader.

And it’s really nice to see that… We have an annual user-group meeting, which actually started at MEDecision in 2004, the year I started with the company. So it’s a great way to get to know the company. But more than half of our customer base comes in for that user-group meeting and the sharing of ideas.

And some of our customers are doing things with our software that we didn’t even think about, in ways that leverage them even further. And for those customers to share with our other customers some of those best practices has been a lot of fun to watch.

So what’s really cool is that you have a situation in which the people who are responsible for delivering quality care in a cost-effective way – all of us are pulling in the same direction. I’m a doc; my goal is healthier patients. It happens to be in alignment with the insurance industry’s goal of lowering costs, because healthier patients cost less money.

So there’s a fantastic alignment here of incentives in the industry. And I think that’s one of the things that makes it exciting.

David: You talked about it being an exciting time. If you look five years into the future, what do you hope to be able to then that you can’t do now, either from a clinical standpoint or what kind of effect you could expect in that time?

Henry: Wow. Well, I think that technology clearly will continue to advance. And the fun thing about being in technology is that technology does not advance linearly; it advances exponentially: so, five years from today, we probably will have ten times the technology capability that we have today.

My goal is for MEDecision to be a part of that, of driving that. And I truly believe that we will be: our CEO is a very visionary guy; he’s a lot of fun to talk to about what health care looks like five years from today.

But I think there’s a couple of very, very important things. First of all, we can’t forget about the patients, and we can’t forget about the majority of patients. There’s a range of education, ability, technology orientation, even Internet connectivity; and we have to keep that in mind. So we have to bring all of the target population along as we go down this technology journey.

Number two: we have to bring things to the market that add value, because there’s a lot of technology out there that’s very expensive and very fancy but, when all is said and done, it doesn’t produce an increase in value in the industry. And the industry’s pretty good about picking that apart; but, nevertheless, we just have to be cautious about that.

Number three: there has to be a sustainable business model. There’s a lot of grant money and demonstration projects. And I’m not getting on the government or anybody else; but, while, I’m fine with seed money to get something started, there needs, at the end of the day, to be a sustainable business model, in which value is created and the stakeholders who receive the value are willing to pony up a little bit of extra money to attain that value.

Now, they need to get more value than the cost; so it has to be a positive risk benefit. But I think that the whole RHIO industry – which we could spend a lot of time talking about, although I know that’s not the discussion for the day – you see that breaking down. And I think the reason is that there’s been a lot of grant money, but not a sustainable business model, to come out of that.

If you look at – and I’ll highlight our experience in Delaware, with this patient clinical summary: all we did was take information from the payer, give it to the docs; the docs were happy, for they got it for free. The health plan was happy, for medical costs were reduced; and the patients were happy, because more-informed decisions were made about their care. A very simple business model: but it was a win-win-win situation; and there was, quite frankly, a positive revenue model there for MEDecision. So we now have more seed money to go create more technology.

David: I’ve been speaking today with Dr. Henry DePhillips, the chief medical officer and executive vice president at MEDecision, here in Las Vegas, at the Disease Management Leadership forum. Dr. DePhillips, thanks for speaking with me today.

Henry: David, it’s been a pleasure. I appreciate your listening; and I appreciate your listening to our ideas. And it’s really a pleasure to contribute to the information that you get out into the marketplace.

Interview with Medical Tourism Association Founder Jonathan Edelheit

published date
September 27th, 2007 by

This is the transcript of my podcast interview with Jonathan Edelheit.

David Williams: This is David Williams, CEO of Jonathan Edelheit is an executive at a company that sells limited benefit health plans, which are sometimes called Mini Meds. These plans cover day-to-day expenses but they don’t cover major surgery. Jonathan’s involvement in medical tourism began as a way to add affordable major medical coverage to Mini Med Plans. But now, he’s going a step beyond, by founding the Medical Tourism Association.
I spoke with Jonathan about the future of medical tourism as an insurance benefit and his plans for the Association.
I’m speaking today with Jonathan Edelheit, Vice President of OptiMed Health/United Group Programs. Jonathan, thanks for being with me today.

Jonathan Edelheit: Oh, it’s my pleasure. I appreciate you having me.

David: Jonathan, what is OptiMed Health and United Group Programs. Can you tell me a little bit about the company?

Jonathan: OptiMed Health Plans is a subsidiary of United Group Programs and it’s a special arm of our company that we have that offers low-cost health care to part-time and hourly employees, 1099 contractors, full time employees who aren’t eligible for major medical benefits and also for individuals who are part of associations. And basically, it’s an alternative to expensive major medical insurance for people who need low cost, affordable insurance. It starts at about $50 a month and covers the day-to-day expenses like going to the doctor, getting prescription drugs, going to the ER, but not the catastrophic.

United Group Programs is the parent company. We’re a national health care company. We administer health care plans here and throughout the United States. We’ve been in business for about 40 years and we have about 4,300 corporate and governmental clients throughout the United States and we are really trying to focus on cutting-edge health care products.

David: So would that be a kind of a third party administrator business?

Jonathan: Yes, absolutely.

David: And so, with 4,300 companies, roughly how many covered lives does that represent?

Jonathan: It’s several hundred thousand.

David: You’re a major player then in that space.

Jonathan: Yes, absolutely, and we’re very well known nationally.

David: And on the low cost plans, are those plans what some people call limited benefit plans or Mini Med Plans?

Jonathan: Exactly.

David: How did you become interested in medical tourism then?

Jonathan: It kind of segues, exactly into what we’re doing with Mini Med because with our Mini Med or low cost health care plans, they don’t cover the catastrophic like major surgeries, major hospitalization. We had heard about medical tourism, people going overseas for surgical care. Basically, I think our initial thought was the same thought everybody else had, that America had the best health care and this was substandard care overseas, “health care under a hut”. I ended up talking to several people who had gone over for health care overseas and got the exact opposite impression, that they thought it blew away our American hospitals and they got great care and great service.

So we started to look into it and what we found was our initial perception, which is most Americans’ perception, was wrong and that the health care in certain countries is very advanced and in some ways, it can be more advanced than ours, but especially in the area of better service, people who need more quality time with the providers and better standards in the actual room people are staying in.

David: So it sounds like you’re well positioned to introduce a product like this into the market because unlike somebody who maybe has a comprehensive Blue Cross, Blue Shield plan, and when their insurance says they were offering this as a benefit, they get skeptical, you’re explicitly not offering major medical and this is the way to offer low cost major medical, at least a portion of it, and it’s something that your customers, your members might be paying out of pocket anyway. They might be some of those so called medical tourists who are going on their own nickel.

Jonathan: Oh, absolutely. Now, we’re able to give them the option to say, “Hey, you really don’t have coverage for surgery here in the US and we know you can’t afford it. So now, here’s an option to go overseas for surgery at an international hospital for 80% less than in the United States.”

David: If you look at introducing medical tourism as a benefit, what sort of hurdles do you need to overcome beyond the initial one that you described upfront about people assuming the US health care is the best and if you go overseas, it’s going to be dirty and nasty? Are there other sorts of hurdles and how have you been addressing them?

Jonathan: I think the first hurdle that we have is just convincing employers of the quality of the health care over there and the cost savings, and that’s not very hard. Usually in one meeting, we can convince them and they’re ready to sign up on the project.

The next major phase is actually communicating it to the employee and that’s where I think most people in the industry are completely lost because they’re not focusing on that. You really have to focus on educating the employee and making them feel totally comfortable with the opportunity to go overseas for health care.

David: Are there certain mechanisms that you would use to do that? As I had said up front about Blue Cross telling me all of a sudden it’s a good idea to go overseas, even if it is a good idea, I’m going to be worried, I’m going to take a second or third look at it, to see, “Why are they trying to send me away?”

Jonathan: The key is finding the right partner to go overseas. You’ve got to do your research, you’ve got to do your due diligence to make sure you’re going to a quality hospital by the provider that’s helping you get over there and actually has the experience. I think people will be skeptical at first and we look at it as a long-term project where we educate the employees. We know we have to wait for the first employee who needs a surgery and is willing to go overseas to do it. And when he comes back or she comes back, all the employees at the company are basically going to be waiting there anxiously to find out the stories, whether positive or negative. What our experience shows is that the employee will come back, talk about what an amazing experience they had and how they had a free vacation, and then all of a sudden the other employees at the workplace will start thinking about, “Well, why am I going to, you know, my local hospital when the care isn’t as good and the service is not as good when I can go overseas and get better service and care and actually get a free vacation, too?” Then you’ve changed the corporate climate and attitude at that employer.

David: I’m sure we’re early in that process so far. About how many people have actually gone overseas and have been able to come back and tell the stories around the break room?

Jonathan: We’ve had several. It’s a very long process that I think that most people do not understand or appreciate. What I mean by that is, after you explain to the employer the whole concept of medical tourism, and after that employer signs off on it, it could be six months to a year before you really have a taker on medical tourism, because it’s not just signing someone who needs a surgery, it’s signing that person that’s willing to go overseas. So it’s a very long-term approach, and the idea is that an employer has to buy into it and know that it’s going to take a couple of years for the program to be fully in swing, where they’ll have a change in corporate climate.

So we’ve sent less than 10 people overseas for surgery, and everyone who’s gone over has been very satisfied with their experience. We have a lot more that are in the pipeline of who’s going over, but we’ve been focusing very strongly on the whole concept of educating the employees to the point that we’re going to be getting a lot of them to go over, not just one or two each year.

David: What is the potential overall impact? I understand that for an individual surgery, you could have a major impact, maybe 75, 80 percent, or perhaps even more, on a given surgery. If I’m an employer, and I looked at all the things that I’m trying to do to reduce health care costs or improve benefits, how big of a difference does this make, overall? In other words, those expensive surgeries, how much is that really costing me today?

Jonathan: It can actually make a very significant savings, for everyone they’re going to send overseas, they could save up to 80 percent on the cost of the surgery. So, a surgery that costs $100,000, with airfare and other expenses, the surgery might cost $10,000; it might add up to about $20,000 in costs. For the employers, it’s going to be an immediate, direct savings. We actually believe if an employer gets a lot of their employees to go overseas for major surgeries when they’re needed, an employer can easily see a savings in their health care from anywhere from 20 to 50 percent. But that requires not just one employee to buy into it, but a lot of employees.

So if the employer believes in it, and what will end up happening is the employees will begin to believe in it. When their health care costs actually don’t go up each year, but start going down, then everyone at the company is going to have a significant interest in trying to work with medical tourism to keep their costs down, because everybody knows their contributions towards health care aren’t going up and the benefits are not being reduced by giving higher deductibles and co-insurance, and that’s because the employees are utilizing medical tourism, which saves the company money.

David: I know you’ve been doing a lot of international travel these days, in order to see some of these different destinations. Can you tell me about some of the places you’ve been and maybe some of those that you’re most impressed with?

Jonathan: I’ve been to Costa Rica. And I just got back from there, and it was a very nice trip. It’s a great location if people actually want to do the tourism part, along with the medical care. I was very, very impressed with the hospitals. I actually felt they were equal to or better than United States’ hospitals. And it was just a very big difference. The level of the care and the service you get definitely, tremendously surpasses the United States.

What I mean by that is the nurses, the doctors, it’s all about being polite to the patient, helping the patient, taking as long as the patient needs. It’s not with the mentality that we have here in the United States, which is you have three to four minutes and then you have to leave the doctor’s office. I spent about 40 minutes with my doctor there, and that’s unheard of here in the United States. It was just a great feeling to have communication and feedback and just kind of go over everything with the doctor, without feeling pressured or raced. The same thing with the nurses, is it’s all about service. Everybody’s there to help you, to make sure you have just a great experience.

To give you a crazy example about it, I had some people I was down there with who actually went ahead and had breakfast at Denny’s, which happens to be one of the most popular restaurants in San Jose, Costa Rica. They were just shocked and surprised, and they were telling us a story with extreme enthusiasm that they went into this Denny’s and they could not believe the level of service they had, how polite the people were, how clean the restaurant was, and how much these employees really cared about the customers. They thought maybe they were in the wrong restaurant. That equates to everything in the culture of Costa Rica; it’s just very high-quality care. Someone that I went down there with got an ultrasound, and it only cost $70. Their prescription drugs that they picked up at a pharmacy down there cost less than their co-pay with Blue Cross Blue Shield here in the United States, and the government doesn’t subsidize prescription drugs, so it’s a very different culture there.

In a couple months I’ll be going to India and also the Philippines to go visit all their hospitals. Then next month, the Medical Tourism Association has a couple board members who are going over to South Korea to inspect the South Korean hospitals, because they’re launching a big initiative for medical tourism.

David: Tell me more about the Medical Travel Association, because I understand that you’ve gone well beyond looking at medical tourism for your core businesses and are instrumental in founding this association. What’s the thinking behind that?

Jonathan: The thinking, really, is that we had really gotten together with a bunch of the top leaders in medical tourism and the top hospitals, and we found that there was no forum for anyone to get feedback or information on medical tourism. Nobody knows what conventions are going on, who’s written books, what hospitals are quality, which are not, who to work with, who not to, or just to get general information on medical tourism. Then, also, there was some real concern by a lot of the hospitals of the horror stories and negative things that could happen by unscrupulous and immoral medical tourism travel companies who send people to bad hospitals or send people to countries for hospital care that don’t have the same standards as the United States, in order to generate extra fees.

There was a big concern to help promote the industry in a positive way, and also to help regulate it. So a bunch of us all came together and made the decision to form this association, to provide information. We’re launching a comprehensive website at, where people can go online and get information on hospitals, on medical tourism, and do all the research that they would want, from a non-biased, non-profit standpoint. They’ll get detailed information on the hospitals themselves and on doctors. We’re also working on launching both a magazine and a documentary, to keep the industry informed of what’s going on. We’re looking at a lot of really neat initiatives that people just don’t know of in this industry unless you’re fully involved in it, such as we’re looking at creating minimum standards and credentialing and accrediting recovery centers, because recovery centers are popping up around the world.

While there’s maybe 100 around the world right now, there’s expected, within one to two years, to be tens of thousands. Americans don’t know that these are unregulated. There’s no government regulation. There’s no standards. The industry has no standards. We want to protect people in getting the best care after they complete medical tourism, so we’re working with all the top international hospitals to come up with minimum requirements and to certify those recovery centers that meet those requirements so that American patients aren’t going to a bad facility where they might get an infection.

David: I understand you have some fairly prominent and important people that are involved. Can you tell me some names of some of the key folks that you’re working on the Tourism Association with?

Jonathan: Yeah. We have Tom Johnsrud, who works for Parkway Hospital in Singapore. And he also used to work for JCI, who accredits all the international hospitals. He’s brought a wealth of experience and knowledge, and has really helped drive a lot of this in the Association. There’s Robert Krone, who’s the president and CEO of Harvard Medical International. We have John Bridges, who’s a Johns Hopkins economics professor who’s heavily involved in medical tourism. We have Mary Ann Keough, who’s a professor at Eastern Washington University, and then Clinica Biblica at Costa Rica is a member of the association. We’ve had several other recent members who have joined. For example, one of the new board members is Ruben Toral, from Bumrungrad Hospital. There’s a couple other very important people on there, and it’ll be posted on our website in a couple days.

But it’s neat because we have the real thought leaders and the people who have really helped, been instrumental in growing this industry and establishing it, coming together to help really promote it and also provide minimum standards and information for the public.

David: You had talked about JCI, and one of the people that’s going to be involved is ex-JCI. How does JCI fit in with your thinking, in terms of minimum standards, accreditation, and rules?

Jonathan: We’re kind of reviewing the whole accreditation process for hospitals, because I don’t think that’s going to be something that we’re going to get into right away, because we’ve got JCI, who accredits hospitals, and there’s several other international accreditation agencies.

So, what we plan on doing is really giving consumers the information as to what are the standards of each accreditation agency, so consumers can be aware of the differences between the different accreditation agencies so they can determine the quality of care and level of service at specific hospitals. The areas that we might look into, regarding any kind of accreditation, might be with the recovery centers, possibly with the medical tourism, like the travel agency type companies, but that’s where it stops.

Our main purpose is to kind of inform the consumer of the differences. Most people don’t know the international accreditation forum, the Joint Commission, is actually different and has a lesser standard than the United States’ version of the Joint Commission accreditation. So our mission is to really make the public aware, so they can make more informed decisions about their health care.

David: Jonathan, what advice would you give to a consumer who, right now, is considering going abroad for a medical procedure?

Jonathan: The advice that I would give is they really need to do their due diligence. They need to make sure they’re going to a quality hospital that’s accredited, or has certain minimum standards, or might be getting accredited shortly.

They need to be very careful if they’re working with a medical tourism travel agency type company, that they choose one that has tremendous experience, knows what they’re doing, and is going to send them to a top hospital and not just send them to a hospital that they’re going to get the biggest kickback from.

You need to make sure that you’re dealing with companies that, if they’re facilitating you getting overseas to a hospital, that they know the people at the hospital, that they’ve been to the hospital, that they can actually make recommendations. Because one of the complaints we’ve gotten from a lot of the hospitals is medical tourism type travel companies misrepresenting and making fraudulent statements to consumers about knowing hospitals, being in hospitals, and recommending hospitals, when, in fact, a lot of these hospitals don’t know who these people are and have never met them before.

If they’re going with a quality source, they won’t have to do as much due diligence, but to give you an example of why it’s so important, in the country of Costa Rica, if a hospital has under 20 beds, it’s not regulated by the government. There are Americans going over to hospitals that might have less than 20 beds, and the Americans have no idea that there’s absolutely no regulation or oversight of these facilities whatsoever.

David: I’ve been speaking today with Jonathan Edelheit, Vice President of OptiMed Health and United Group Programs, and a founder of the Medical Tourism Association. Jonathan, thanks very much for your time.

Jonathan: Thank you.

Interview with MedHelp CEO, John de Souza

published date
September 25th, 2007 by
I spoke today with John de Souza, CEO of MedHelp, a popular website where patients can post questions about their health and receive answers from leading physicians. The service is advertising supported and attracts 4 million visitors a month. Although MedHelp fits into the Health 2.0 bucket, the company’s actually been around since 1994.

John and I spoke about how patients use the site, why physicians and hospitals participate, and MedHelp’s growth plans.

John was born in Ethiopia, left during the revolution and ended up at MIT where he studied medical robotics. The highlight of his academic career was getting accepted to Harvard Medical School, but he decided not to attend once he found out that US immigration rules would force him to go back to Africa before he could practice here! He’s been an adviser to MedHelp almost since its inception, and took over as CEO a little more than a year ago.

Interview with Milica Bookman, author of Medical Tourism in Developing Countries (transcript)

published date
September 21st, 2007 by
The audio version of this interview is available at MedTripInfo.

David Williams: This is David Williams, CEO of I spoke today with Milica Bookman, who along with daughter Karla Bookman, wrote “Medical Tourism in Developing Countries.” While most of the authors of books on medical tourism take the perspective of the American consumer, this book examined things from the perspective of developing countries. Utilizing Milica’s training as a development economist and Karla’s as a lawyer, they tackle the nitty gritty of economic theory and legal reality.

Milica, thanks for joining me today.

Milica Bookman: Thank you.

David: Milica, you’re quite bullish on the prospects for medical tourism to drive the economic growth in developing countries. Can you tell me more about why that is?

Milica: Well, I’m bullish only in some cases. I think that medical tourism is not a strategy for economic growth for all developing countries. There are very few places in Africa or the Middle East where, at this point, I would say that it is a strategy for development. A few more in South and Central America but mostly, it is true of some Asian countries.

Let me back up a little bit to try to explain why I think that. All developing countries want economic growth. And all developing countries have had to look outside of their borders in order to drive growth. Even China that has a large domestic demand and a large domestic market has turned to outside markets.

And so I think that medical tourism, for some of these countries in Asia especially, they can use it as a source of growth. I think they will and I think they should. And as I say in the book, in Chapter five for example of the book, certain conditions have to be met. And as most of those conditions were not met, it’s not going to happen.

David: So, for the countries for whom the proper conditions are in place, what is the potential impact that medical tourism can have on them. Is it something significant? And in what sort of areas do you see an impact?

Milica: It can be huge. It can be huge because it can be one of the major sources of foreign currency, infusion of foreign currency into the country. And what that means is that, you know, there will be jobs, there will be investments, there will be a ripple-through effect in the economy.

There’s something called the multiplier which works itself through the economy which means that, you know, every dollar that comes in to the country can have several dollars’ worth of effect throughout the country as people have jobs and then they spend their income that they earned and then there’s more demand for other secondary goods and tertiary goods.

So, those countries such as Malaysia, India, Thailand, they really do expect and we do expect that there will be huge economic benefit.

David: One of the things that all those countries have in common is a lot of US trained physicians who in the past may have stayed in the US. Do you see any kind of reversal of a brain drain going on so that some of those physicians are coming back to their countries to work in the medical tourism sector?

Milica: Yes. There definitely is evidence of the reverse brain drain. But at this point, it isn’t huge. It’s not huge at all. I provide some numbers in the book. I actually don’t think that there’s going to be, in the short run, such a decrease in foreign doctors coming to the West, to the US, Britain and other Western countries for training.

And part of the reason why I don’t think there will be that decrease is that in order for medical tourism to be successful in developing countries, there will have to be a large number of Western trained doctors. So, in order to get accreditation, in order for Western patients to feel comfortable going to many of these countries, they’re going to want to see Western credentials.

David: When you evaluate the impact of medical tourism within a country, you use the terms “crowding in” and “crowding out”. Can you describe what those are and which one is likely to predominate?

Milica: OK. Just let me specify. I use those terms to talk about the impact of medical tourism on public health, not on developing countries in general. So, the impact on public health then can be both positive and negative and let’s, for a moment, see what those are. The crowding out effect would be the negative effect of medical tourism on public health.

In other words, the effect of decreasing resources for the poor population, decreasing the facilities that are available for the poor population because hospitals and doctors and everybody involved in the medical field is going to want to go into the more lucrative medicine namely medicine for foreigners, for cash-paying foreigners. The government might also experience distortion of its priorities because here’s this possibility of bringing in a lot of foreign currency which they would want to do and maybe they will favor the private medicine that caters to foreigners over the public health.

So in that way, we could say that medical tourism, which is flashy and lucrative will crowd out public health which is, you know, not very interesting. So, what you can have with the crowding out effect is the emergence of a dual medical structure. And let me just give you one example that we talked about in the book. In Malaysia, private hospitals have about 20% of the overall bed capacity in the country but they hire 54% of the doctors. And this is an example of how medical staff prefers to work in the private sector that caters to the foreigners rather than the public sector. So, that’s the negative crowding out effect.

The crowding in effect of medical tourism would refer to the way in which the existence of medical tourism actually helps public health in a country because it might improve and expand access to high tech facilities that poor or non-paying poor would otherwise not have. It might give them access to doctors and physicians and technology that they otherwise might not have. And of course, the most important thing about the crowding in effect is that medical tourism brings in profit and taxable income. And governments can tax that income and then redistribute it into the public health system.

And which of these will predominate? David, that’s hard to say. I think that depends on government policy.

David: Early on in the book you talk about dependency theory and how that applies to the case of medical tourism. Could you describe that a little bit? And also about the case of reverse dependency and whether that’s something that Western countries should be worried about.

Milica: Dependency theory is an economic development theory that came out in the 1960s, 1970s. And if we first took the fact that less developed countries had been producing goods and exporting goods that the global economy doesn’t really, doesn’t keep on demanding; whereas the Western countries produce an export good that the global economy does keep demanding. Let me give you an example. Less developed countries in the ’50s, ’60s and early ’70s used to export a lot of raw material; food products, peanuts. I use the example of peanuts in our book.

David: Plastic surgery is not peanuts.

Milica: Right. Because what happens as global income, as the world gets richer and global income grows, people have more money all over the world; and they are going to buy more goods and services. But they are not going to buy that many more peanuts or food products. There is only so much food that you can eat as your income goes up. But what they will buy more of is automobiles, then VCRs and sort of technological goods; which are the goods the third world countries did not produce. So in that way dependency theory says that less developed countries will be dependent on the West for the manufactured technological goods and the West did not really depend on them for peanuts.

Now what we have is the possibility that the developing countries will be producing something that the West actually, really wants. And the West would want more of, as it gets wealthier and wealthier. And hence, you know, it is a product or a service that the West will depend on. Less developed countries will no longer have that kind of dependency on the West.

Now we may have reverse dependency. We may have a situation in which the more developed countries are starting to have dependency on less developed countries, for health care in the way they have it on petroleum for their economy.

David: What you saying is that even without medical tourism that may be happening to some extent with reliance on medical graduates, for example to fill positions in the US.

Milica: Sure. People have said that. People have definitely said that.

David: I have noticed that a lot of medical tourists or people who are traveling from the West to less developed countries to have care, have some kind of connection to that country already. Maybe they grew up there. Maybe they have family member from there, maybe their spouse is from there. Is that in fact the case and do you think that’s going to continue to be the predominant model?

Milica: That is the case. And I do not think that will continue to be the predominant model. And I will tell you why. Medical tourism took off in the last ten years, specifically because it was viewed by diasporas in the US and in England. In other words Indians who lived in England and South Americans who lived in the US; when they went home to visit their families they would do their medical care. Whether elective or not they would do their dental care; they would take care of their medical needs in their countries while on vacation.

That’s how it started. Then they would come back and they would tell their friends and neighbors, ‘listen I got such and such procedure at one tenth of the price that it costs here.’ And slowly other people are starting to go. But we are still in the stage where people tend to go where they have some kind of familiarity with the culture; whether it’s their direct involvement or because they traveled there or worked there or something. This is what I consider stage one of medical tourism. Which is the one that were in now. Which is one that has been extremely lucrative for many countries.

But it’s not the one that is really going to change the global health picture. The global health picture will change when people other than the diasporas travel to developing countries. In other words, it’s going to happen when employers and insurance providers get involved. Because then when you have that middle person, then it’s not just you, Mr. Smith, that is going on the Internet and finding a hospital all the way across the world, but rather if your insurance company is sending you there then it’s no longer going to be diasporas only.

David: I have noticed that you embrace the combination of medicine and tourism, and I wonder whether that has any impact on the adoption that you see from health plans. It may feel like it’s not a serious thing if they are offering tours as part of their benefit. Do you think medicine and tourism go together? And do you think that affects the uptake among the more traditional sector of health plan employers?

Milica: I think you raise a very important point. We are now in a situation where a lot of people are feeling we should change this term “medical tourism.” But nobody has come up with an alternative that everybody feels comfortable with. And at this point medical tourism has become a very popular term. I think you are right. I think that the tourism part of it makes it seem less serious.

But remember that it did start off as tourism. It did start off with people traveling, and the medical part was an add-on. And what’s happening now is that the medical part is becoming the primary reason for traveling.

And as Karla and I discussed in the book, a lot of medical facilities are offering these tie-ins. But increasingly, David, I think we want to see fewer and fewer medical touristic tie-ins and more and more people just going for their medical care. And the reason for that is that we are no longer talking about an industry that just does face lifts, or plastic surgery or even LASIK surgery and then you can go on a safari after that.

We’re talking about an industry that has been transformed and that is increasingly going to be supplying very high tech invasive surgery that people are not going to feel like going shopping or going to lie on a beach afterwards.

David: One of the things that seem likely to happen if medical tourism becomes very popular is that the big differences in prices across borders won’t hold up. You give an example of that with Serbian physicians in Italy that are charging people from Serbia and living in Italy rates that are comparable to what they pay in Belgrade because they worry about losing those patients who may get worked on when they go home. Is that a unique case or are we seeing other examples of that? Are there any other examples, for example, in the United States of competition on prices with foreign providers?

Milica: I don’t know of any specific cases. However I would assume that it is already happening and, yes, it will happen even more. Pricing is a very creative process that responds to supply and demand conditions. Since supply and demand conditions are dynamic so will the pricing process be.

So we are likely to see a lot more competition in pricing, in areas such as Southern California where there are more substitutes for people. You’re not going to see it someplace where people don’t have any alternatives, but if they do have an alternative to easily get on a plane or easily get in a car and cross the border, yes, suppliers will be more flexible in their prices.

Moreover, I think that we will also see creativity in the packages that are offered, not just the price, but something that I think is very amusing and we’ve already seen in Thailand, is that hospitals are offering frequent-flyer miles along with their procedures. So this is a kind of price competition, they’re not going to decrease price but they’re offering you something else instead.

David: You pointed out an interesting situation that is faced by by American retirees who are overseas, which is that they can receive their Social Security benefits — and perhaps they’re living in a low-cost place where that Social Security check goes farther than it would at home — and yet Medicare, which they would also qualify for, won’t pay for their health care out of the country. Is that a distinction that is likely to end or to be eroded, and what sort of impact do you think that might have if it does

Milica: I suspect, in the long run, that it will have to change, but I do not think that the US government is going to be at the forefront of accepting medical tourism. I think that it’s going to be private insurers that are going to be at the forefront – they are more flexible, they are more concerned with the bottom line… You see, what the government would have to do, in order to pay for medical services outside of the country, is almost have to admit that the government is incapable of providing health care for its own population. That’s hard to do and I don’t see that coming very soon. I think it’s going to come from the private sector before it comes from the government.

David: Today it’s a relatively limited number of Americans, or Westerners in general, that are traveling to these less-developed countries and receiving high-quality and low-cost medical care. If there were to be a significant part of the demand from the US that is actually fulfilled abroad, is there actually the capacity, either now or in the foreseeable future, to handle a significant amount of the demand that would be ensuing? What kind of impact would that have on the pricing levels and how service is delivered?

Milica: OK. There’s a lot in that question, so let’s start off with the first part of it, and that is that I do think that there would be certain bottlenecks that would have to be resolved. Let me tell you one of the things that comes to mind first, that is that health care in developing countries is regulated. It is regulated by the international community, and hospitals and medical-service providers that want to be centers where foreigners come, they have to uphold certain international standards, and they will want to be accredited.

In order for the international community to accredit them and to make sure that they pass these standards, there are a lot of steps to go through. It takes a long time. We’re talking about probably over a year to several years for the accreditation process to be completed. Under those conditions, it takes time, so I see that as one of the major bottlenecks that will occur.

The second bottleneck will be in capacity in developing countries – health capacity in terms of beds, in terms of hospital facilities, in terms of doctors, etc. If there were a really large sudden increase in demand, I don’t know that many countries outside of Singapore, India and Thailand, at this moment, could satisfy the demand.

Finally there’s going to be a bottleneck insofar as the infrastructure in many developing countries is probably lagging behind. By infrastructure I mean, for example, transportation. How are all these large number of people going to get to their destination? So I think that if the increase in demand is slow then adjustments will happen gradually, but if there is a very large increase in demand, such as if suddenly several major US health insurers decide to start experimenting with medical tourism, then we might see that there are some bottlenecks.

David: You mentioned at the start that medical tourism is a good economic-growth strategy for certain countries, as long as they meet the proper conditions, and quite a few of those countries are in Asia, maybe there are some in the Americas… I was in Singapore and very impressed with what they were doing there in terms of a strategy from the whole country standpoint, and you see other organized Asian countries – India to some extent, Thailand, even the Philippines, Malaysia…

When you look at the Americas at least I don’t see the same kind of organization, and this isn’t specifically in health care. But do you see real opportunities in Latin America, which is obviously much closer, in general, to the US market geographically? Will those countries eventually catch up and be able to surpass the Asian countries because the Asian countries, no matter what they do, aren’t going to become closer to the US?

Milica: Well, I don’t know if they will catch up and surpass, because as Central and South America develops its medical-tourism capacity, the Asian countries aren’t going to be sitting still – they’re also going to be developing. So, you know, everybody may be developing and I don’t know that the gap will close between the two.

I do think that there is a problem in the Americas right now, and that is that Central and South America simply does not have the capacity, in terms of beds and in terms of clinics, facilities and people, the capacity that Asia has. Moreover, they don’t have the same standards. Let me just give you an example: if we look at the number of hospitals that are JCI accredited, Singapore has 13 JCI-accredited hospitals, Costa Rica has none, Mexico has none…

So, for the American patient who is thinking about where they are going to go, sure, Mexico is closer, but there is this whole quality concern that they are going to think about. Moreover, just to give you another example about this, when you think about the Singaporean hospitals, those 13 JCI-accredited hospitals, they all have websites where everything is in English. That makes people very comfortable. Brazil has some JCI-accredited hospitals, but only one has a website in English.

David: Right…

Milica: So, even though Brazil is closer, it seems as though it’s culturally less accessible.

David: I’ve been speaking today with Milica Bookman, who is author of “Medical Tourism in Developing Countries”. Milica, thank you very much for your time.

Milica: Thank you, David.

Interview with MEDecision’s Dr. Henry DePhillips

published date
September 18th, 2007 by

Dr. Henry DePhillips is EVP and Chief Medical Officer of MEDecision, a “collaborative care management company” that enables payers to share clinical information with physicians to improve care and reduce costs. Dr. DePhillips and I were both speaking at the Disease Management Leadership Forum at Caesars Palace in Las Vegas and found time to catch up between sessions. We spoke about how MEDecision uses payer data, pharmacy data, care management data, lab data, PHRs and EHRs to provide useful information to providers in ways that fit into existing workflows.

I was particularly intrigued by MEDecision’s experience with providing information in the emergency department, a setting where it’s often hard to get physicians interested in accessing outside information. After a couple of false starts with physicians and nurses, MEDecision found a way to integrate into the workflow of the administrative staff. In the end the payer saved money and yet physicians also came out ahead financially. Patients benefited, too.