The latest destination for medical tourism for American patients isn’t a tropical locale – in fact, it’s right here in the US. That’s right – some large employers are negotiating with hospitals in other states and paying for employees covered by the company health plan to seek treatment for major illnesses and surgeries outside their home counties. Hospital care accounts for over 1/3 of our $2.5 trillion annual health spending and this amount is projected to rise drastically according to government data – it rose nearly 6% last year alone. This increase is being driven both by increased use of hospital services and rising prices. In the face of this looming increase, large employers are trying to save money on their company health plans by negotiating a single rate with top-quality hospitals in other states which includes the fees for all medical services until the patient is discharged.
To encourage workers to use the program, companies waive deductibles, cover travel and hotel costs for patients and their families, and reduce co-insurance payments by as much as half. Even factoring in travel costs on the company tab and in some instances monetary incentives to workers, most large employers who’ve tried “domestic medical travel” say they can reduce their costs 20-40% by directing workers to facilities with higher-quality care and lower negotiated prices. Employers who’ve promoted domestic medical travel include Alpha Coal West, BridgeHealth Medical’s group of small and midsize companies, and the Health Services Coalition of employers and unions in Nevada. Alpha Coal West has reported its medical costs have remained flat even as such spending has risen nationwide in the nine years since it implemented the program.
If domestic medical travel becomes popular amongst large employers, health industry experts argue the shift could improve quality of care overall and help drive down costs by “fostering a truly national competition.” Savings with domestic medical travel programs result not only from lower prices (negotiated between the company and the out-of-state hospital) but from fewer complications with procedures done at high-quality hospitals. Better hospitals perform procedures better, meaning fewer costs incurred after surgery to resolve complications. Any necessary follow-up care (like physical therapy) is usually performed at the local hospital and covered under the company’s normal insurance plan.
The concept of domestic medical travel is really nothing new; employers and insurers have always sent patients to very high-quality facilities for complex procedures like organ transplants. Domestic medical travel is taking this idea to another level, applying the same concept to more types of medical care like back, knee, and heart surgeries.
Some critics argue the movement toward domestic medical travel could backfire if employers and insurers forget about quality and focus only on cost-savings. Also, some workers (even with incentives and paid travel for patients and family members) are reluctant to travel for surgery. Though the programs are now voluntary, critics worry they may become mandatory and force patients to travel for their procedures even when they don’t want to. For these reasons, and because such programs can anger the local provider community, some insurers are reluctant to encourage domestic medical travel.
These considerations do not seem to be hindering the trend toward domestic medical travel, especially since major companies like Alpha Coal West have experienced such success (and savings) with their programs. It appears as rising medical costs continue to increase nationwide, domestic medical travel is the way of the future for major companies to flatten escalating costs while simultaneously providing their employees with the best quality of care.