US health insurers sending insured overseas for operations.

Costs in the U.S. continue to rise while there is little or no attempt to control them. The U.S. system is both costly inefficient and unable to provide insurance for many people.

More U.S. health insurers are slashing costs by sending policyholders
overseas for pricey procedures

by Bruce Einhorn

For years, Americans have been traveling abroad to save money on
elective procedures or dental work. David Boucher, 49, doesn't fit the
usual profile for such medical tourists. An assistant vice-president
of health-care services at Blue Cross & Blue Shield of South Carolina,
he has ample health benefits. But Boucher recently chose to have a
colonoscopy at Bumrungrad International Hospital in Bangkok, mainly to
make a point about the expanding options available to Blue Cross
customers. And his company happily picked up the $640 tab—a bargain
by
U.S. standards.

Blue Cross and other insurers would like to see more policyholders
traveling abroad for medical care. Since the start of the year,
Boucher has signed alliances with seven overseas hospitals and hopes
to add five more by yearend, including them all in coverage for his
company's 1.5 million members. As health-care costs continue to rise
in the U.S., "medical travel is going to be part of the solution," he
says.

Yes, just like manufacturing facilities and call centers, health care
is moving offshore. "All of the largest U.S. insurers are starting to
educate themselves or are putting [offshore] programs in place," says
Jonathan Edelheit, president of the Medical Tourism Assn., an industry
group formed just last year. Companies that self-insure are also
bombarding Edelheit's group with requests for information.

Getting covered employees to leave the U.S. won't be that hard, says
Edelheit. An insurance company could waive all deductibles and
co-pays, offer to cover travel costs for the patient and family
members, even throw in a cash incentive, and still save tens of
thousands of dollars. After all, a heart procedure that costs $100,000
in the U.S. runs only $10,000 to $20,000 at some of the best private
hospitals in Asia. And the quality of care? Foreign hospitals in such
arrangements are typically approved by Joint Commission International,
part of the same nonprofit organization that accredits American
hospitals.

Blue Cross took the lead in medical offshoring when it formed its
first partnership, with Bumrungrad Hospital, in February. Since then
the insurer has signed similar pacts with the Parkway Group
Healthcare, owner of three hospitals in Singapore, and hospitals in
Turkey, Ireland, and Costa Rica. Three members of India's Apollo
Hospitals Group are also joining the network. And another large Indian
chain, Wockhardt Hospitals, is talking with U.S. insurers as well.
"Americans haven't come to grips with having their heart surgery in
Thailand," says Curtis Schroeder, the American CEO of Bumrungrad. "But
that will change."

The shift is sure to leave some policyholders disgruntled, of course.
Offering international coverage might make it easier for employers to
limit benefits at home, for instance, by raising the deductibles on
U.S.-based procedures. It's also extremely difficult for patients to
sue for malpractice in most Asian countries. Bumrungrad has offices
for marketing and promotion in 20 countries, but not the U.S.—in part
because having a U.S. office would open the door to potential
liability, hospital officials say. So it will take a while for the
trickle of insured U.S. patients in Asia to become a torrent. But over
time, for policyholders and payers alike, the price may be hard to
resist.

With Catherine Arnst

http://www.businessweek.com/magazine/content/08_12/b4076036777780.htm