Elise O’Keefe, a 48-year-old office manager in Las Vegas, was a candidate for a total hip replacement, and while her husband Clark's health policy would cover the surgery, she was facing paying about $5,400 of expenses herself.
Then Clark overheard a coworker discussing domestic medical travel, the emerging practice of traveling to a U.S. hospital that provides surgery — from joint transplant to heart bypass — at a substantial discount.
In mid-June, Elise and her mother traveled to Newport Beach, Calif., where James Caillouette, M.D., who has performed thousands of hip and knee procedures, implanted the artificial hip.
“It cost me nothing out of pocket, and it could not have gone smoother," O'Keeffe says. "It really seemed like it was too good to be true, but it was everything they said it would be."
After an overnight stay at a surgery center, O'Keeffe spent several days resting at a hotel, with daily visits from a physical therapist before flying home.
Paying less for the best
Cost-conscious patients are starting to follow O'Keeffe's lead, as medical travel firms negotiate attractive rates with doctors, clinics and hospitals and market them to insurance companies, employer-funded health plans and individuals. While hospitals don't like to tout the fact that they offer good deals on some of their specialties, patients across the country are now traveling to some top-notch medical centers, including the Mayo Clinic and the Cleveland Clinic, to save money on their procedures.
"We've been contracting with major insurance companies and administrators to offer this service," says Victor Lazarro Jr., cofounder and CEO of BridgeHealth Medical, the Greenwood Village, Colo., company that O'Keeffe used.
Since its launch in September 2007, BridgeHealth has built a network of 25 hospitals around the United States, Lazarro says. "We only contract with a hospital for what they do well," he says. So joint replacement cases are sent to hospitals and surgeons with a lot of experience performing replacements, while patients seeking a heart bypass would go to places where that is a specialty.
More surgical experience correlates with better results, Lazarro says, yet most insurance plans send patients to preapproved local hospitals, regardless of their areas of expertise.
BridgeHealth offers patients and insurance companies a fixed fee — typically 20 to 40 percent less than what an insurer would pay for a procedure performed locally. Meanwhile, it assigns case managers who arrange all medical and travel logistics on behalf of the patient.
Companies like BridgeHealth can negotiate such attractive rates in part because they bring in patients that the hospitals would otherwise not have seen. Many hospitals have excess capacity, Lazarro says, so filling those empty beds — even at a reduced fee — makes financial sense.
Closer to home
Medical tourism has been around for some time, with prestigious U.S. hospitals courting well-heeled foreign patients and Americans flocking to places like Mexico and Costa Rica for affordable dental and cosmetic procedures that their insurance wouldn't cover.
But as Americans faced escalating medical costs, some found they could receive joint transplants and heart procedures in places like Thailand, India and Singapore for a fraction of what they would pay at home. For example, a coronary bypass costing $100,000 in the United States might cost only $8,500 in India.
About 750,000 Americans traveled abroad for medical care in 2007, according to figures compiled by the Deloitte Center for Health Solutions. The numbers dropped in 2008 as the U.S. recession took hold, but the forecast is for resumed growth in coming years.
Meanwhile, American hospitals and doctors have taken note, says Renée-Marie Stephano, president of the Medical Tourism Association. Patients choosing to travel abroad for their care have "changed the domestic health care market," with hospitals and doctors now more open about what they charge.
Employers who fund their workers' health coverage are also eager to contain mounting medical costs, Stephano says. They may offer a range of inducements to persuade a patient to have a more affordable procedure, she says.