Reluctance by health consumers to spend discretionary money and jitters about impending health reforms have stalled the medical travel business in the United States.
While hundreds of thousands of Americans continue to travel outside the country for health care, fewer are packing their bags for hip replacements and restorative dental procedures.
Just five years ago, about 750,000 Americans sought medical care in other countries, many getting breaks of 30% to 70% for nonemergency procedures. But there were just 540,000 medical travelers in 2008, according to a 2009 report by Deloitte Center for Health Solutions, a Washington, D.C.-based research center that studies health-care trends.
One medical tourism company says business has been down 30% since the end of 2008.
“The people we would normally service are the people who are struggling right now financially, who are trying to figure out a way to pay their mortgage and to pay for food,” said Patrick Marsek, managing director of MedRetreat, an Illinois-based medical travel company that was one of the first when it started in 2003. It had a booming business in 2007.
Medical tourism experts thought the drop in health travel during the recession would be temporary, and that a substantial recovery would soon follow. Instead, the anticipated rebound didn’t occur.
The country’s slow economic recovery is one reason, the experts say. But health reform — and all the uncertainties surrounding it — also plays a role in people delaying care, they say.
Beaten by the economy
Researchers at the Deloitte center predicted medical tourism would rebound in 2009 from a pent-up demand for elective procedures, and with more health plans covering out-of-country surgeries. The experts said a 20% growth rate was possible.
That didn’t happen.
“The economy has beaten down the anticipated 20% growth,” said Paul Keckley, the center’s executive director and chief author of the medical tourism report.
The savings are still possible. In the United States a hip-replacement operation can cost $40,000 to $65,000, Marsek said. The same surgery done overseas costs as little as $12,000, including transportation, he said.
But those savings are not enough to drive business in 2010, Marsek said.
“The problem is many people don’t even have that $12,000 to $13,000 right now,” he said.
The economy isn’t the only challenge, Keckley said. While more employers are looking at medical travel as a cost-savings, they’re hesitant to make changes to health plans until more is known about health reform, he said.
Making changes to health plans could threaten protections for those plans under a grandfather clause of the health-reform package, Keckley said.
The clause exempts health plans from implementing the full array of new requirements in the health-reform law. But employers who make major changes — such as significantly raising employees’ annual deductibles — may no longer be grandfathered in. They could be stuck providing new consumer protections, including full coverage of preventive health services.
That can be a disincentive to modify coverage for medical travel.
Fresnobee