Medical Tourism

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Medical Tourism

In the December 2007 issue of Trends, we told you that nearly 40,000 Canadians travel to the U.S. each year for medical treatments. Even though they receive free healthcare in their home country, a growing number of patients are impatient with the hidden cost: the time it takes to receive treatment. In Canada, it takes 10 weeks to get an MRI, and 10 months to have orthopedic surgery.

People who cross national borders in pursuit of faster, better, or cheaper healthcare are taking part in the trend toward medical tourism. There are two very simple economic reasons underlying this trend. First, the costs of healthcare are rising throughout the developed world; and second, the costs of international travel are cheap by comparison to the savings that people can realize in hospitals in developing countries. Experts estimate that more than 1 million people around the globe went to other countries for medical treatments last year, and spent $60 billion on foreign healthcare.

Consider the case of Kevin Miller, a self-insured American who suffered a herniated disk as a result of a car accident. As Time1 magazine reported recently, Miller couldn’t afford to pay $90,000 to have an American doctor perform the surgery. Instead, he went online and found a hospital in Bangkok where a surgeon trained in the U.S. performed the surgery for less than $10,000. Miller is just one of 55,000 American patients that the hospital treats each year.

Patients who go to Thailand and Malaysia can save 75 to 80 percent of the cost they would pay in the U.S., and costs at the best hospitals in India are even lower. As this trend grows, according to Uwe Reinhardt, a healthcare economist at Princeton University, “This has the potential of doing to the U.S. healthcare system what the Japanese auto industry did to American carmakers.”

For example, a knee replacement operation that costs $40,000 to $59,000 in the U.S. costs just $13,000 in Singapore, $10,000 in Thailand, and $8,500 in India. An operation to replace a heart valve that costs $160,000 to $230,000 in an American hospital costs $20,000 in Singapore, $10,500 in Thailand, and $9,500 in India.

Americans don’t even have to travel as far as Bangkok or Bangalore to find big savings on medical treatments. According to a study by the University of Texas Medical Center, more than 20 million people cross the border between the U.S. and Mexico each year to see doctors on the other side. Some of these tourists are wealthy Mexicans visiting the U.S. to see American doctors, but a growing number of Americans are going in the opposite direction to be treated by Mexican doctors and dentists, who charge a fraction of the fees that patients pay in the U...

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