Chasing the best deal for health
With four black belts in his closet and a mountain bike worth more than the car in his garage, Alan Hesker never dreamed a hip disorder would sideline him at age 46. The single father also never imagined that, with a good job and health insurance, the out-of-pocket expenses for the surgery he needed to get back in the bike saddle would be more than he could afford.
“I still would have been left holding a bill for three or four grand,” said the father of twin 11-year-old girls. “It might not sound like much to some people, but when you’re a single dad, that’s a lot of money,” said Hesker, an employee of MDC Holdings in Denver.
He put the surgery off for more than a year, until the pain finally pushed him through his human-resources director’s doors. But she had yet another surprise for Hesker: If he were willing to board a plane for another state¸ she told him¸ he could have his hip replacement without paying a dime, travel expenses included.
Hesker was ready to pack his bags.
The Lafayette resident became one of the hundreds of thousands of Americans joining the medical-tourism trend each year. But rather than traveling to a faraway foreign country to save a few dollars, or finding a beach resort to recuperate on, Hesker was able to have his surgery closer to home.
At least three Denver-area medical–tourism companies launched between 2007 and 2009, when predictions were that the industry was set to explode. All are still sending U.S. patients overseas, to such countries as Mexico, India, Costa Rica and Panama for everything from dental crowns and tummy tucks to weight-loss surgeries and in-vitro fertilization. But at least two of them are responding to the slower-than-expected growth with a change of direction.
“The first couple of years, we focused on international medical travel, but we felt we weren’t getting the attraction we wanted,” said Vic Lazzaro, CEO of BridgeHealth Medical in Greenwood Village. “In late 2010, we started building our domestic network,” Lazzaro said. “Since then, we’ve been growing at a relatively rapid pace.”
Today, BridgeHealth has 3 million-plus members, with about 140,000 employer members and 30 domestic providers across the country. The company supplies employers with a network of health-care providers who offer medical procedures at a flat, reduced rate.
Patients who choose international travel reap bigger savings: A September report by the National Center for Policy Analysis compared a $40,000 U.S. hip-replacement fee to $15,000 in Singapore and $8,000 in India. On average, savings are in the 40 percent to 50 percent range, said Taras Kuzin, CEO of MedVacation in Denver, which has maintained its international focus.
Although he has fielded calls from patients inquiring about domestic packages, spurring him to explore the idea with some U.S. dental providers, Kuzin decided against adding domestic options. “The costs savings isn’t there,” he said. “The benefits are not overwhelmingly convincing.”
But Lazzaro said his domestic-travel clients save anywhere from 20 percent to 45 percent in medical fees, which can be substantial with surgeries and complicated medical procedures. “We wouldn’t be in the business if there weren’t enough cost savings.”
Some of the obstacles that are holding international medical travel back disappear or become less intrusive with the domestic approach, such as a need for passports, long travel times, language barriers, medical-emergency concerns, follow-up-care logistics and fear of lawsuits.
“Companies are still sitting on the fence, waiting to see what happens with some of these issues,” said Kuzin, who has had little success in his marketing attempts with Colorado companies. “One problem is doctors don’t want to handle these patients when they come back to the United States because of the risk of being sued.”
A 2008 report by the Deloitte Center for Health Solutions estimated that 750,000 Americans sought health care overseas in 2007 and predicted that the number would rise to 6 million by 2010, estimates that turned out to be “grossly inflated,” said Dr. Arlen Meyers of MedVoy in Denver. Many businesses that jumped into the low-barrier-entry industry back then are searching for new business models today, Meyers said. Although the industry is so fragmented that no one knows for sure how big it is, a more accurate estimate is that about 50,000 to 60,000 Americans are traveling abroad for health care each year, he said.
Lazzaro’s company, one of the first to take an aggressive domestic approach, has gained some national attention, as some industry experts predict the niche could become a bigger attraction for U.S. employers and health-care insurers slow to jump on the international travel bandwagon. “Even though the savings aren’t as great, I think it’s just the peace of mind of staying in the United States,” Lazzaro said of the attraction to domestic packages.
Both BridgeHealth and MedVoy have launched efforts to expand in Colorado, which turned out to be a bonus for Hesker, whose hip surgery was arranged by BridgeHealth. Initially told he would have to fly to San Diego or Houston, Hesker was offered a change of plans at the last minute: He had his surgery at OrthoColorado Hospital on the new St. Anthony Medical Campus in Lakewood.
“How fortuitous, right?” Hesker said, adding that he had actually already visited the top-ranked local hospital for a second opinion and liked what he saw. Suddenly, his only concern with the initial plan – travel time – was taken down to a 40-mile ride home.
BridgeHealth has also contracted with Denver CyberKnife and Loveland Surgery Center, and MedVoy has signed on CereScan in Denver and Denver Cosmetic Surgery in Lone Tree.
“We think the future in medical travel, particularly in Colorado, is inbound,” said Meyers, who co-founded MedVoy in 2009. A professor at the University of Colorado at Denver and Health Sciences Center, Meyers said the state is rife with world-class medical centers that already attract patients from around the world. “There’s no reason Colorado couldn’t be a destination location.”
The company has launched an aggressive marketing campaign, working with such players as the Colorado Tourism Board and the Mexican Consulate, to put Colorado on the medical-travel map. “Whether it’s a hospital in Aurora or Steamboat Springs, it doesn’t make any difference,” Meyers said. “We should be able to attract some of that market share.”
If the business ventures are successful, all Coloradans could see health-care prices come down, Meyers said, something medical-tourism’s short history has already shown. Some U.S. providers, responding to international pressures when the industry began to take hold, lowered their fees, according to the National Center for Policy Analysis report.
“I think that will continue to happen,” Meyers said. “I think one of the things you’ll see in the future in health care is more consistent pricing and more transparent pricing. As they become more transparent, then hopefully market forces will drive prices down.”
But it might not happen quickly. Denver CyberKnife has had only one contracted patient since signing on with BridgeHealth more than a year ago, which the relatively new cancer treatment center did to expand its scope. “We thought we had a lot to offer patients, not just in the Denver area, but around the country,” said Mark Frank, CFO of Denver CyberKnife.
Frank said he believes another barrier to medical travel – the doctors left behind – could be partially to blame for the lack of participation. Doctors might not want their patients to travel for treatment for many reasons¸ he said, including their own business interests. “There’s a financial motivation for the doctor not to recommend travel for the patient. Unfortunately, that’s the brutal truth.”
Still, Frank said he’s optimistic that medical travel will overcome the barriers and take off in Colorado¸ with its Rocky Mountains and other attractions. And CyberKnife, despite the slow business so far, would sign on with other medical-tourism companies, he said. “On the flip side, there’s really no other work on our end besides the initial set-up. We’d definitely be open to working with other companies.”
Hesker also wouldn’t mind seeing a new medical-travel benefits trend flourish. “For me, the whole thing was a very big deal, and I’m grateful that my company gave me that option. I had no idea something like this existed.” As he recovers from surgery, Hesker said he’s growing anxious about the mountain bike awaiting him in his garage. “Soon, I’m going to be able to get back on that thing for the first time in over a year. That’s a pretty big gift.”
Medical Tourism Benefits
Although employees might be the biggest winners if medical-travel benefits become more commonplace, providers and employers also gain, according to Vic Lazzaro, CEO of BridgeHealth Medical in Greenwood Village. Industry experts emphasize that benefits hold true only when working with reputable medical-tourism agencies that assure high-quality, U.S.-accredited care.
Benefits for employers:
Reduces medical expenses.
Offers employees a wider range of treatments.
Rewards employees with part of the cost-savings.
Often offers higher-quality care for quicker return to work.
Benefits for providers:
Brings in extra business.
Allows for scheduling during downtimes to offset overhead costs.
Provides national recognition.
Offers payment in advance without insurance hassles.
Companies experimenting with domestic medical travel with Colorado ties
Lowe’s Cos. Inc. launched a domestic medical-tourism program in April 2010 for employees enrolled in its self-funded insurance plan, contracting with the Cleveland Clinic, a top-ranked heart-surgery facility in Ohio. Since then, more than 30 successful surgeries have been performed, well beyond the company’s goal of 10 by this time, according to spokeswoman Karen Cobb.
Alpha Coal West has reported success with a domestic travel package it began offering in 2001 to its Wyoming employees. One of the company’s contracted providers is located in Fort Collins.