Five or six years ago when the concept of medical travel - seeking less expensive medical care at a location some distance away from the patient's home, be it domestic or international - was still new, most everyone was skeptical about the process, says Jonathan Edelheit, CEO, Medical Tourism Association. Today, nearly everyone knows about it, but persistent questions about the quality and legal issues surrounding the practice remain "two of the barriers for entry into the industry," he adds.
"Some insurance agents and brokers have gotten over those barriers and they're comfortable with it," says Edelheit, "and there's others that still see that as an issue."
However, the quality question is overcome, says Edelheit, by the fact that The Joint Commission, which accredits U.S. hospitals, has an international arm - Joint Commission International. And for those concerned about potential litigation if something goes wrong with a medical procedure, Edelheit points out that self-funded companies "have almost no liability for getting sued for medical malpractice" because such suits are governed by ERISA in federal courts and they typically, even in gross negligence claims against doctors, will not find the employer liable. "That's a huge piece that has not really been communicated to employers," he says.
On the other hand, the process is completely different with a fully insured health carrier. Because the jurisdiction for such cases is in state court, both the carrier and employer are liable, Edelheit points out.
With that in mind, agents and brokers must be careful which medical travel companies they work with, paying close attention to associated hospitals, doctors and the trip facilitator. Some do not meet HIPAA privacy requirements, and "that exposes the broker to a lot of liability," says Edelheit.
Self-funded employers, or brokers, entering into contracts with reputable providers allows for the provider to take on the liability issues, he adds.
Meanwhile, Perry Braun, executive director, Benefit Advisors Network, believes "medical travel will be more and more the future." He sees an increasing number of employers forming partnerships with hospitals to purchase expert services, such as cardiac care, that operate outside of a health plan, "like a carve in."
For example, The Cleveland Clinic has such a program that allows for prepayment and includes post-surgery follow-up with guaranteed outcomes, similar to a warranty program. Braun is exploring something similar for BAN's members and clients, he says.
Health reform impact
On a fast pace for growth, the medical travel momentum slowed down once the Affordable Care Act took center stage in the national health care discussion a few years ago, says Edelheit. While he's seen more and more employers implement the practice, they're doing so under the radar.
Insurance companies, however, "fighting for their lives with health care reform," put the idea on the back burner, because they see it "as a political problem if they did it right now," adds Edelheit. "The White House might come down on them for 'outsourcing health care overseas.'"
But, in the self-funded market - "no politics there, it's all about the bottom line" - Edelheit predicts ethnic medical tourism is "a big area for growth that's absolutely going to take off" thanks to health reform.
For employers in blue-collar industries and the service sector that have not offered benefits historically, the ACA's $2,000 per employee penalty for not offering health insurance could lead those companies to start offering benefits. And Edelheit believes around 80% of employees who already have family ties to other countries will be open to medical tourism.
Braun is not as sure. He also believes employers are focused on the "pay-or-play" mindset, but "for the most part the employers are still right now trying to tackle the big issues" surrounding administrative and operational requirements of the ACA.
Eyes on 2014
Once the ACA settles in with more provisions going into effect in 2014, Edelheit predicts medical travel will be "exploding domestically and internationally" because employers are "going to need to move forward with something to lower costs."
Up to 40% of employers are looking at implementing domestic medical travel in the future," says Edelheit, adding that it will be a boon for international travel as well, since "once they get into their mind that it's OK to do domestic they're already involved in incentivizing and letting their people travel within the U.S. The next step is international."
Brokers that are implementing medical travel now, or at least looking into the process, are cutting-edge innovators, he adds, but "we're seeing with a lot of brokers that are just so terrified because of health care reform, it's either survival or it's sit and wait to see what happens."
But waiting is not the right move, says Edelheit, as the field has a learning curve that is different from the traditional workplace benefits.
"I think a lot of the agents are going to wait until it's too late, when a lot of the huge rate increases come in and costs skyrocket," he says, adding that brokers should at least be advising clients on the option of medical travel so that they don't lose a client to a competitor who does bring it up.
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