'Medical Travel is Going to Be Part of the Solution'
David Boucher is at the forefront of a movement in the U.S. insurance industry to promote medical tourism—patients traveling to low-cost hospitals overseas in order to reduce their medical bills. The assistant vice-president of health care services at Blue Cross & Blue Shield of South Carolina, Boucher, 49, believes American insurers should be encouraging members to consider going abroad for surgery and other procedures. Since the start of the year, Boucher has made deals with hospitals in Asia, Europe, and Latin America to make them part of Blue Cross South Carolina's network. The first was Bumrungrad Hospital in Bangkok, and more recently Boucher has formed alliances with three hospitals in Singapore as well as medical centers in Ireland, Turkey, and Costa Rica—all of them accredited by the Joint Commission International (JCI), a U.S.-based accrediting body (BusinessWeek.com, 3/13/08).
With the cost of many operations at Bumrungrad or other overseas hospitals just a fraction of the cost in the U.S., Boucher believes more American insurance companies will be offering similar programs. He recently spoke with Bruce Einhorn, BusinessWeek's Asia regional editor, about the future of medical tourism.
Why should people be considering medical tourism?
In South Carolina, a quadruple bypass costs $122,000 if you're uninsured. To be able to get that [same quadruple bypass] for south of $15,000 at a JCI-accredited hospital with a U.S. board-certified cardiologist, it's an appealing alternative.
Maybe for someone without insurance. But why should someone with insurance go?
Would members with a $250 deductible spend $2,000 for a plane ticket and travel 24 hours to have their hip replaced? They wouldn't. But we are selling a high number of high-deductible health plans—with deductibles from $2,000 to $10,000— [because our] customers are saying: "We want to shift more of a percentage of care onto employees; we want our employees to think there is no free lunch."
How common are these high-deductible plans?
The number is growing between 5% to 8% per year in the U.S.
If people travel overseas and something goes wrong, what sort of legal recourse do they have? It's not easy to sue for malpractice in a place like Thailand.
It becomes a buyer-beware market. If your prime motivation is something can go south so you can sue, this is probably not for you. There are efforts afoot to address the question of medical malpractice. We have nondisclosure agreements with companies now developing policies that would require an interested member to sign a whole harmless waiver [in exchange for a package] including cash settlement, home nursing care in the U.S., rehab expenses and air medevac back to the U.S. if something goes south.
Will that be enough to allay concerns that patients are surrendering rights?
It's not a perfect system. We can understand why the legal profession may not be happy. But [providing coverage overseas] would avail our customer group and our employer groups and individual members with a lower cost alternative at quality hospitals.
How long will it take for this to become more mainstream?
It's not going to happen overnight. Some folks look at me with kind of a strange eye—"We want our employees to go to where?" But more and more of our group execs have said, "I've seen something about this. Tell me about that."
What did you find when you first visited Bumrungrad?
I was just amazed at what I saw. I hadn't done much homework before I left, and the whole service, customer approach that the Thais had overwhelmed me. I was amazed.
There's this bias [that Americans have] that we have the best health care in the world.
But we had a great experience. When we were leaving my wife said, "If I or anyone in my family needs surgery, we're coming here." Women make the medical decisions for families in the U.S., and that's when I first thought there could be a business opportunity in medical travel.
How big of an opportunity?
We think this is a long-term blue ocean. There is going to be a growing market to support medical travel over the next 10-20 years. Here in the U.S. you have the "Silver Tsunami:" In 2008, 365 Americans an hour will turn 62. Over half are selecting early Social Security and many do not have employer-sponsored medical plans. The number turning 62 goes to 1,400 an hour by 2010 and the numbers continue to stack up until the peak year of 2017.
What's the impact of those demographic changes on medical tourism?
It leads to a perfect storm: increasing demand and decreasing supply. We think that [over the] long term medical travel is going to be part of the solution. It may not be the only solution, but it's going to be part of it.
And how is Blue Cross& Blue Shield of South Carolina going to do that?
We are in the process of developing a network of overseas hospitals. Today we have seven hospitals in the network. We see a potential network of probably 10 to 12. We are talking to hospitals in India right now. And we're looking at South Korea.
How do you make sure that the hospitals are good enough?
They're all accredited. And we go there and do a similar process as I did with Bumrungrad. In Singapore, I've been to all three of the hospitals from top to bottom.
Why do it yourself?
Because medical travel is an emerging trend, we don't feel comfortable contracting out that on-site survey.
Would you go to an overseas hospital yourself?
I had a colonoscopy at Bumrungrad three weeks ago. I had the discussion with my family practitioner here before I left. I had a good experience, I didn't feel a thing. The doctor trained at the University of San Francisco medical center, spoke perfect English, and had a great sense of humor. I had no issues at all.
What was the cost?
It cost $642.
And if you had done it in South Carolina?
It would have cost between $2,500 and $3,300.