This is a bit troubling…
From CNN Money:
While disruptive to U.S.-based hospitals and HMOs, the overseas stampede is already spawning a brand-new business opportunity: medical tourism agencies. Not only do these companies act as middlemen between patients and foreign physicians, but they also find hospitals, schedule surgeries, buy airline tickets, reserve hotel rooms, and, yes, even plan sightseeing tours for recovering patients. Most important, they aim to reassure customers that cheap does not equal poor quality.
The best balm for anyone setting up a medical tourism agency is this: There are no licensing requirements, either in the United States or overseas. And thanks to free Internet phone services and online advertising, operating costs are relatively low.
“I see the market exploding,” says Ted Mohr, an American who runs the Adventist Hospital in Penang, Malaysia, whose non-national customers now make up more than 30 percent of the institution’s $32 million annual business (up from less than 5 percent a decade ago). “American health care is getting too expensive for too many people.”
Europe, where Polish dentists advertise in in-flight magazines and budget airline Ryanair (Charts) promotes trips to cheap medical havens like Hungary, is ahead of the curve. But U.S. entrepreneurs are beginning to catch up.
MedRetreat, based in Odenton, Md., sent its first patient overseas two years ago. This year MedRetreat expects to ship 320 patients, mostly for cosmetic surgery, to partner hospitals in Brazil, Thailand, and Turkey. The average length of stay: 17 days.
Patrick Marsek, MedRetreat’s managing director, says the company makes most of its money through commissions for booking hotel rooms and by pocketing the 20 percent discount on treatment costs that its partner hospitals grant in exchange for referrals.
Revenue is in the six-figure range, Marsek claims, adding that it will hit $1 million before long – especially now that he’s looking to branch into more lucrative procedures like spinal fusions and hip resurfacings. “We’re getting hundreds of inquiries a week,” he says. “We’ve got our hands full.” Marsek doesn’t have any medical training.
Neither does Ken Erickson, who was running a fund-raising website in 2004 when a friend who owns call centers in India started talking about that country’s first-rate private hospitals. Erickson, 44, hopped a plane to New Delhi, where he toured hospitals and met U.S.-trained doctors. His first thought: “My God, this is the perfect arbitrage situation. Buy below market and sell below market.”
In May, Erickson founded GlobalChoice Healthcare, an Albuquerque, N.M., company with $1.5 million in angel funding and 14 employees. The startup has teamed up with medical providers in Costa Rica, India, Panama, and Singapore. It also has a deal with the five-star Taj Hotels Resorts and Palaces chain in India.
In June, GlobalChoice sent a patient to Punjab for a hip replacement that cost about $13,000, including airfare and a 20-day hotel stay. The estimated cost in the United States for the surgery alone? $40,000.
Erickson believes that the big money in medical tourism is in two markets: uninsured retirees ages 50 to 65 for whom Medicare hasn’t yet kicked in, and self-insured companies that can no longer afford benefits for workers. He has met with Fortune 100 companies, though “they want to see the market mature first,” he admits. If they do sign up, Erickson believes, he’s sitting on a $500 million gold mine.
He has reason to be optimistic. Blue Ridge Paper Products, a Canton, N.C., paper manufacturer, may soon allow its 5,500 employees and dependents to go to India for certain company-insured treatments.
In West Virginia, a legislator is pushing a bill that would give incentives to state workers for seeking treatments overseas. “The early adoption has begun,” says Arnold Milstein, a Mercer consultant hired by PlanetHospital, a Los Angeles-based medical referral startup, to strike deals to coordinate foreign-based care on behalf of employers and insurers.
What can I say, it is their bodies, but I don’t like employers pushing this on their employees.
The biggest cost in healthcare is lawsuits, so of course the health care is cheaper in countries without rampant lawsuit problems. This is actually a call for americans to wake up and demand tort reform. We have got to reign in these lawsuit awards or we are going to have a serious health care crisis in this country. This is just the beginning, the tip of the iceberg if you will. But, we are doing it to ourselves and have no one else to blame.
Hat tip: Uncooperative Citizen, Well Seasoned