Category: Podcast

Interview with MedRetreat’s Patrick Marsek (transcript)

published date
July 9th, 2007 by

This is a transcript of my interview with medical tourism entrepreneur Patrick Marsek of MedRetreat. You can listen to the audio here.

David Williams: This is David Williams, CEO of MedTripInfo.com. Patrick Marsek is Managing Director of medical tourism operator MedRetreat, which has helped almost 1,000 Americans go overseas for medical care.

I spoke with Patrick earlier today and asked him about what kinds of patients are good candidates for medical travel, who should use a medical travel agent instead of planning a trip themselves, and what some of the differences are between medical travel to Central and South America compared to travel to Southeast Asia. Listen in and hear what he has to say.

Patrick, thanks for joining me today.
Patrick Marsek: It’s my pleasure, David. Good to be with you.
David: Patrick, tell me a little bit about what MedRetreat does. What sort of services does the company provide?
Patrick: Well, MedRetreat is a medical tourism service agency. We were developed back in July of 2003, so we have about four years of experience. We were formed to be able to help North American citizens receive high quality health care outside of our country, at affordable rates, with world-class medical facilities utilizing state of the art equipment and highly trained physicians.

So because of the high cost of health care in the U.S., people needed an option. We wanted to be able to provide them with that option, in a safe and affordable manner. And as a result of having all the experience we have, we have a lot of successes.
David: Are there particular sorts of procedures that you specialize in? Or is it more general?
Patrick: Well for the first couple of years, it was mainly cosmetic procedures, which are elective procedures, which result in out-of-pocket expenses. So the media had been talking about that for the first couple of years, and as a result of that media exposure, it created an interest for Americans and Canadians.

And so, for the first couple of years, mainly face and neck lifts, liposuction, tummy tucks, blepharoplasty (which is the eyes), rhinoplasty (which is the nose), and various types of procedures on the body. Since then, though, it’s becoming more popular to have more non-elective procedures, such as orthopedics, hip replacements, knee replacements, and spinal fusions, spinal disc replacements, and also gynecological procedures, such as hysterectomies, ovarian cyst removals, fibroids, and things like that.

So slowly but surely, the general public is finding out that there are more options other than cosmetic, which was first talked about.
David: Is there a typical profile that you would say that you have for a customer? It sounds like people are getting different sorts of procedures, but what’s the most typical customer?
Patrick: It seems that the average customer is a woman between the age of 40 and 65, for cosmetic procedures. That being said, you have to be of legal age, so you have to be at least 18. And we’ve had clients from 18 years old, all the way up into their 70s, so it’s really all over the board. It depends on what type of procedure they’re seeking. But quite frankly, we can handle anybody, as long as they’re of legal age and it’s safe for them to travel abroad to receive these procedures.
David: How are these people finding out about you? And has that changed since you started the company?
Patrick: Mainly, they’re finding out about us through the press. I do about a dozen interviews a week, David. So, as a result of these interviews–newspapers, magazines, radio shows, television–as a result of that press, people hear about us, and what they do is they simply do a quick search on “MedRetreat” and they find our website. It’s pretty intuitive, provides a lot of information to be able to allow them to make an intelligent decision as to whether or not we fit into their needs.
David: How many customers would you be serving at any one particular time?
Patrick: Well, in 2005, we started service. The first year and a half, from July of 2003 till January of 2005, we performed our due diligence, traveled around the world to find the best hospital partners for North Americans. So for the first year and a half we did not send anybody.

In 2005, we sent about 200 clients; 2006, a little over 350. This year, I believe we’re going to be sending about 650. So we’re probably at around 800 clients total.
David: It sounds like you’re just getting into the steep part of the growth curve from those numbers.
Patrick: Yes, it seems to be almost doubling every year. So that’s the good news. It’s becoming more talked about and a more accepted option to U.S. health care.
David: What sort of fees are involved? I suppose a patient could just decide to go overseas themselves and make arrangements, or they could utilize your service. What sort of extra costs would a patient incur by using MedRetreat?
Patrick: Well, by using MedRetreat, there are no extra costs. Because we understand how Americans think and how they feel, we negotiated more favorable pricing with our hospital partners. So instead of setting up shop in the U.S., supporting their services overseas, they’ve elected to have us do that: provide them with all the communication and anything necessary for getting a client overseas. So they are willing to give us the 20 percent discount off of their standard price.

So if a client were to try to contact our hospitals directly, they would receive the same prices as if they were to go through MedRetreat. So it’s a tremendous value for Americans, because we understand the model of a medical tourist. We have a lot of processes in place to be able to help them to do this safely.
David: You have a premium Gold Club service. Could you talk a little bit about that and whether that’s something you’d recommend for people?
Patrick: Yes, it’s called a Gold Club Membership. Right now, we have about 450 people in our system. Now, we offer a completely free service. If they’re willing to and have the time to do it, we put them in queue, we take them in the order in which they’re received. So we’ve got a waiting list of over five months now.

But for people who are very serious and want to do this in a relatively short period of time, we suggest our Gold Club Membership. That is $195. That $195 is then applied to their procedure costs. So it costs them nothing extra. But this $195 up-front shows that they’re very serious, and it’s a vehicle we’ve created to be able to bring them to the front of the list.

Everybody is offered this option. Not everybody takes it, but the people that are very serious do.
David: It’s sort of a self-selection process, and they give themselves a little bit better service in exchange for being a little bit more committed?
Patrick: Well, actually, a lot better service, because as soon as they come into the system through Gold Club Membership, a program manager works with them daily. So instead of having to wait in queue, it’s priority service. It’s as-needed, based on the client’s response as well.
David: You talked about this world tour, which sounds like it was fairly extensive in visiting a variety of countries. I noticed that you have provider affiliations in Malaysia, but not in Singapore, which is next-door. And that’s, I think, a little bit unusual. Can you talk about that?
Patrick: Well, when visiting Singapore, we found that the prices are quite a bit higher than they were in Malaysia. See, you have to remember, the reason people contact us is because of cost. A lot of these people are middle-class Americans, uninsured, they don’t have lot of extra money to spend. However, they do want to take care of their procedure, and in many cases improve the quality of their life.

Singapore, when we visited, was about 30% higher than Malaysia. So we just opted not to even set up affiliations, because it was a cost problem. I’m not saying that they don’t have quality care, they do. Just as every other country does.
David: And Malaysia’s able to hit the same sort of standard of care, at least your providers?
Patrick: Absolutely, yes, yes. Of the highest quality. In fact, many of the surgeons that we work with in Malaysia are U.S. Board certified. So they have got experience, they have worked in the U.S., and they understand Americans.

And also, Malaysia was colonized by Great Britain back in the 1800s. Since then — 1958, I believe — they gained their independence. So English is their second language. It’s very easy to communicate, very easy to navigate in that country.
David: Since you have been doing this for a few years, I am wondering whether you have any repeat customers? Is it the sort of experience where people have an initial minor procedure and then they go back for something more major? Or does it tend to be a one-time experience?
Patrick: No, we do have quite a few clients that are repeat customers. We call them perpetual medical tourists. They really enjoy the experience as much as having the procedure taken care of somewhere else. In fact, we have got one person who is going to be going on their fourth medical tour.
David: Wow.
Patrick: That is out of the norm. However, this person loves to travel, loves to see different parts of the world. And as a result, as an example, one time she went for implants, one time she went for Crohn’s, one time she went for face and neck lift and blepharoplasty — so whenever she has something that comes up that she wants done, she would much rather travel to another culture and experience that at the same time as having her procedure performed.
David: You’ve talked about experiencing other cultures while away for medical care, using this term “medical tourism.” How realistic is it for people to combine a surgery with what would be more often part of vacation or a kind of tourist excursion?
Patrick: It really depends on the procedure. We are very upfront. In fact, we make the claim on the home page of our website that medical tourism is very serious.

You should not be concerned with excursions. The most important thing is receiving high quality medical care and then recuperating to a level where it is safe to travel home. Now, that being said, if you are feeling better and you wish to book an excursion, it could be done within a day. We have destination program managers who can take care of that for you.

There is no reason to have to pay a deposit up front for a tour, especially if you are not going to be able use it. Initially, in the beginning stages of the business, we used to do that, but then we found that a lot of people weren’t able to do this because they just weren’t feeling quite up to it. So they would lose their deposit.

There is no need to do that in advance. We provide a lot of information about the culture and things to do so that you are aware of what the options are, and then once you are there and feeling better or if you prefer to go there a couple of days earlier, then you could certainly do that.
David: Along those lines, are regular parts of the travel industry making any accommodations for medical travelers? For example, it is hard to know exactly how long your recuperation is going to take, but a lot of airline tickets are fairly rigid. Are airlines being more flexible or hotels making accommodations for people and so on?
Patrick: Hotels definitely are. Airlines, they have their policies. If you are buying the lowest rate ticket then there would be a charge to rebook. I believe it is about a hundred dollars, so it’s not that bad.

Based on each procedure, we know how much time, first of all, they will have to be in the hospital. By the way, nothing, except for dental, is done as outpatient. It’s all inpatient. We want to make sure that people are receiving great care and that they are attended to, making sure infection is not setting in, and that they are recuperating properly. And then after the hospital stay, we also know how long they should remain in the destination.

The reason we do that is because we want to make sure that a patient is well on their way to recovery before returning home. It becomes a continuity of care issue. We don’t want them to have to worry about seeing a doctor when they return home and potentially the doctor saying, “I am sorry, I didn’t do the procedure, I don’t want to work on you.”
David: What sorts of steps can a patient take to figure out if they are a good candidate for medical travel? It sounds like you’ve got some of these perpetual medical tourists, and then there are probably some other people for whom it is probably not a great option, and then there are people in between.
Patrick: It is very, very subjective. First of all, you have to be willing to experience something new. The cultures are different, but that’s what makes it exciting. That being said, the quality of care is not an issue at all in the hospitals.

As an example, if you go to India, do you like Indian food? If you don’t like Indian food, maybe that’s not the right destination for you. You really have to look deep inside and say, “Am I willing to experience something out of the norm?” And this is out of the norm. The main issue is, is it safe? Are you in good enough physical condition to be able to travel to receive this?
David: It sounds like you do a lot on the quality side, in terms of selecting providers and monitoring them, and shepherding people through the process. Are there any independent bodies, either within individual countries or internationally, that are looking at quality and accreditation issues?
Patrick: Well, each country has their own accreditation process. JCI, which is based out of Oak Brook, Illinois has been very instrumental in going out and accrediting hospitals overseas, just as they have through their JCAHO arm here in the US.

You’d be surprised, over the past ten years, these hospitals have been spending time and money in making their facilities true international, world-class hospitals. Many of them have affiliations with U.S. hospitals such as Johns Hopkins, the Mayo Clinic, Harvard International, hospitals like that where they share information, they have training back and forth.

You almost have to take a leap of faith as a medical tourist, because how can you really know until you have experienced it? What we have done is, we have set up a program to allow you to take that leap of faith.

Before you leave, you will pay us a 20% deposit to be able to book the surgery. Now that 20% ultimately, if everything works out, we keep that. That’s our fee. But if you get to the destination country, you have your doctor’s consultation and you take a tour of the hospital and you don’t feel 100% comfortable in what you have seen and heard, you are free to come back home. We will refund your entire deposit, the only cost to you will be your airfare and however many days you spent in a hotel.

So if worst comes to worst, you could still just take a vacation even if you didn’t feel comfortable. Now knock on wood, that has never happened. Everybody that’s gone, has gone through with it.
David: Now some of these international hospitals are obviously not catering just to the US market. I know they have customers from Europe from the Middle East, maybe elsewhere in the region. How do American medical tourists compare with their counterparts from other countries and how do international hospitals think about addressing those different markets?
Patrick: Because I’m an American, I can speak like this. We are very high maintenance. We’re very persnickety. We have high standards and we expect to be served at a high level. That’s one of the reasons why we have to go and inspect these facilities. We need them to understand the model of an American medical tourist. We spend quite a bit of time with these hospitals going over what is necessary to be able to make them happy.
David: It sounds like a lot of the original procedures that you are covering are more cosmetic and elective procedures that could be done in Central or South America, a little closer to the U.S. than having them all the way to Asia. Do you expect that there’ll be more opportunity for Americans to have major procedures done in Central or South America? Or will there continue to be more of a division between what you can do in one continent versus another?
Patrick: The closer you are to the U.S. the more expensive it is. The farther away, the better the value – that just seems to be the way it is. It has something to do with the economics. So because people are coming to us, as a result of cost, they’re looking for the best value. That’s why Southeast Asia, right now, is the place to go to be able to maximize the dollars that you have.

Of course, the hospitals in Central and South America are going to try to be more competitive. We’ve been there. In fact we do have affiliations with hospitals and clinics in Central and South America. When someone fills out our online application on our website they are asked to rate a series of 10 criteria in order of importance. The price is most often up at the top, so we have to present them with options based on the best value and that just seems to be halfway around the world.
David: Will that change over time? I’m wondering whether, for example, insurance plans will start to reimburse for procedures and include overseas hospitals in their network. Do you see that happening?
Patrick: Yes, we do see that happening. In fact right now, we’re in many discussions with major insurance companies as well as mid-level insurance companies, major, mid-level and small corporations to be able to offer the service. One of the concerns is the length of trip. If you have to travel 20 hours to go overseas, that requires pretty much two extra days of travel time whereas if something was closer, it would be a lot easier for them to facilitate and to offer.
David: Would you expect that MedRetreat would follow the same model if it were serving insurance companies? For example, when a patient who happens to be a member of a health plan or an employee of a company that’s offering the benefit come to you, would you take him through the same process or would there be some other kind of offering for his health plan or for his employer?
Patrick: Well, obviously the best process is the safest process. Unfortunately that takes quite a bit of time. It takes us about 20 hours collectively as a company to facilitate each medical tourist. Perhaps if the insurance companies do the work in educating their insurees about the safety and viability of this concept, it could cut a few hours off of our process, but we’re going to provide mainly the same high level of service. We’re looking at each person as an individual. We’re not going to say “Okay, this is part of the group. How can we cut the cost?”
David: What sort of hurdles need to be overcome for there to be widespread reimbursement by insurance companies? I’m sure they’re worried about liability, reputation and so on.
Patrick: I sit on a panel called the Strategic International Work Group, with JCI. I won’t mention any names but major insurance companies, the biggest, major corporations as well as hospitals from overseas. I was fortunate to be invited as well.From those meetings we found two main criteria that have to be met: Number one is liability. What happens if there’s a problem? There’s a product being developed right now by an insurance company. They will offer two hospitals overseas to the clients.

When they come, they’ll be offered a policy for somewhere I believe between $150 and $300 depending on the procedure. This policy will allow them in case of a problem to sue up to $1,000,000. Okay, so it’s a financial reward if something happens.

The second issue is continuity of care. As I stated earlier, the reason why you have to stay overseas for a designated amount of time is to alleviate the problems of complications. Once the medical tourist gets back, they should be out of harm’s way without any major issues unless of course an infection sets in.

What’s done is just see your doctor. If there’s a problem with the procedure as a result of negligence or some type of mistake by the hospital, they will pay for the procedure to be re-performed. You just have to get back there.
David: If we look back five years from now, do you think a lot of these issues will be resolved? Will medical travel be more mainstream than it is today? Will we be talking about tens of thousands of patients rather than hundreds working with you? What’s your expectation?
Patrick: As I’ve said, I really do see that happening. Unless the U.S. can come up with a way to resolve the issues of health care in the U.S.
David: Patrick, it sounds like MedRetreat offers some excellent services for patients. Do you think everyone should be using a company like MedRetreat or are there patients for whom it would make more sense just to make the arrangement themselves?
Patrick: Well, I guess it depends on the medical travel agency used. In our case, this is not going to cost you anything extra. Why not utilize our knowledge and expertise in going forward and experiencing this in the safest possible way? There are plenty of people who have done this on their own and I’m sure they’ve done it successfully. But we like to take the surprises out of the medical retreat. We want you to know as much as possible before you go.

Here’s a quick example, before you travel overseas you should notify your credit company that you’re going to be doing so. Because if you get overseas and you use your credit card to purchase something, the credit card company may view that as a suspicious activity.

If you’ve never been there, they’ll say “Whoa, somebody got his credit card; deny the claim.” Then try to take care of the situation while you’re there, it’s much tougher to deal with. Whereas if you contact the credit card company before you go, you let them know the countries you’ll be visiting and the approximate cost of charges that you’re going to be placing on the credit card; you won’t have any issues.
David: I’ve been speaking today with Patrick Marsek, Managing Director of MedRetreat. Patrick, thank you very much for your time today.
Patrick: It’s my pleasure being with you today, David.

Interview with Stephanie Sulger from Medical Tours International

published date
June 28th, 2007 by

I spoke recently with Stephanie Sulger, who founded Medical Tours International back in 2002. Stephanie and many of her colleagues at MTI are nurses, and she described to me how she’s translated her nursing perspective into how MTI cares for its customers. I also spoke to her about quality control, SiCKO, travel friendly doctors in the US, and several other topics.

Listen in and hear what she has to say.

Interview with MedRetreat’s Patrick Marsek

published date
June 27th, 2007 by
Patrick Marsek is Managing Director of medical tourism operator MedRetreat, which has helped almost 1000 Americans go overseas for medical care. I spoke with Patrick earlier today and asked him about what kinds of patients are good candidates for medical travel, who should use a medical travel agency instead of planning a trip themselves, and what some of the differences are between medical travel to Central/South America and travel to Southeast Asia.

Listen in and hear what he has to say.

Podcast interview with Jeff Schult, author of Beauty from Afar

published date
June 20th, 2007 by
I spoke earlier today with Jeff Schult, author of Beauty from Afar: A Medical Tourist’s Guide to Affordable and Quality Cosmetic Care Outside the U.S.. Jeff began writing the book when he journeyed to Costa Rica for major dental work. What started out as a magazine article turned into a full length book once he got to Costa Rica and learned the extent of the medical travel phenomenon. As the name implies, Beauty from Afar focuses mainly on cosmetic and dental procedures. However, he does delve into some of the more “serious” treatments as well. The afterword of the book is written by Curtis Schroeder, CEO of Bumrungrad International in Thailand.

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

published date
June 12th, 2007 by

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.