Deciding on Medical Tourism: A guide for an Insurance Company

Deciding on Medical Tourism: A guide for an Insurance Company Ankit Sharma UNIVERSITY OF KENTUCKY MARTIN SCHOOL OF PUBLIC POLICY AND ADMINISTRATION MASTERS IN HEALTHCARE ADMINISTRATION CAPSTONE PROJECT SPRING 2009

Background • 46 million people in US uninsured. • 25 million underinsured • 120 million US citizens without dental insurance. • Medical bills #1 cause of bankruptcy in US. • Healthcare spending is >$1.4 trillion, 14% of GDP. • Medicare spending 2.7% of GDP, 21% by 2015. • Employer based insurance is the primary source of insurance. • In US, quality is not proportional to cost. • Gag clauses.

Medical Tourism • Medical Tourism is a term coined by travel agencies and mass media to describe the rapidly growing practice of travelling across international borders to obtain healthcare. • Approximately 750,000 Americans went abroad for obtaining health care in 2007.

Benefits of Medical Tourism • Lower cost: Please see appendix 1.0 • Easy availability of healthcare services overseas. • Hospitals specializing in Medical Tourism provide exceptional quality and service in order to attract more foreign patients. • People who have no hope of getting organ transplants in US can still get legal transplants done overseas. • Reproductive tourism. • Free vacation

Risks of Medical Tourism • Licensing and certification process different overseas. • Flying immediately after or within a few days of the surgery can lead to serious complications . • Follow up care after return in US? • Chances of acquiring other infections overseas? • Personal safety is an issue. • Quality of Pharmaceuticals produced overseas? • Legal options limited. • Visa acquisition in rare cases can get difficult.

Ethical Issues • Many cases of illegal purchase of organs and tissues have been reported in several countries. • Some women have been reported to be abused while surrogating pregnancies for foreign couples. • Outsourcing in itself is an ethical dilemma since it takes away jobs and money from the native country’s economy.

Quality Assurance • To take care of Quality concerns, the Joint Commission has accredited >100 hospitals all over the world. • Many accrediting agencies have come up since then e.g. Medical Tourism association ,SOFIHA, UKAF, Trent association etc. • Additional information is provided in Appendix 2.0

Project Purpose • Analyze an Insurance Company’s decision of whether or not to initiate a Medical Tourism plan, as a means to improve insurance coverage. • The project also analyzes which country to send the patients to, if the answer to part (i) is yes. • the capstone also provides and analyzes the various benefits and risks associated with Medical Tourism.

Decision Tree for the Insurance Company(the decision maker)

Methods • Multi Attribute Utility (MAU) model: I used an additive MAU model to calculate a utility score for a multi-dimensional alternative. • Sensitivity Analysis

Results • PART 1: Start a Medical Tourism plan: YES/NO • The presentation will focus on the results of the five factors and two factors models. • For Details please see appendix 3.1 through 3.4

Part 1 MAU model 1

Inference to Part 1 MAU model 1 • Based on the above model with five attributes, it is better for Insurance Company to send their patients to JCAH overseas for treatment of expensive, nonemergency healthcare conditions.

Inference to Part 1 MAU model 4 • Based on the above model with two attributes, it is better for Insurance Company to send their patients to JCAH overseas for treatment of expensive, nonemergency healthcare problems.

Sensitivity Analysis of Part 1 • Start medical tourism program: YES, as long as cost of treatment is 33% or more important to the consumers. • For details please see page 19 and 20 of the Capstone project.

Results to • PART 2: MAU MODEL: Which country to chose? • For details please see appendix 4.1

Inference to Part 2 MAU model 1 • Based on the above model using Cost/Benefit ratio and Communication barrier between patients and providers as attributes, it is best for Insurance Company to send their patients to a JCAH in India. China offers the second best option.

Study Limitations • The quality in overseas hospital approved by Joint Commission is on par with the hospitals in US. • The potential buyers of this plan do not have other options. • The Pharmacy cost is not going to decrease in US. • The Pharmacy obtained overseas is safe & effective. • US would not shift to socialized medicine. • Asymmetry of information would continue to exist between consumers and providers. • The levels of the attributes used in this model are not realistic, discrete and continuous variables.

Discussion and Recommendations • Based on the hypothetical models developed for this project, I would recommend the Insurance Company (decision maker), to go ahead and introduce a Medical Tourism plan. • The plan would be significantly cheaper than the existing plans and the consumers of this plan would fly to a JCAH overseas for expensive treatments which are budget drainers for Insurance Companies. • The recommendation however holds good only if the potential buyers/consumers of this plan place at least 33% of the importance weight on the cost of treatment

Discussion and Recommendation • As far as the choice of the country to which patients should be sent, India offers the best solution. India far outscores its nearest competitor, China, which could serve as the second best alternative. • Should start the project first as a pilot program. • Set up an office overseas. • Set up telemedicine/video conferencing facilities. • Arrange for the visa and streamline the entire process. • Try to capitalize the advantage over medical tourism agencies.

Acknowledgements A special thanks to Martin School Capstone Committee: • Dr. Sarah Wackerbarth • Dr. Scott Hankins • Dr. Martha Riddell

Questions or Comments THANK YOU

Deciding on Medical Tourism: A guide for an Insurance Company