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Leveraging Medical Tourism for Self-Funded Employers


Health payers face an overwhelming burden of rising healthcare costs as healthcare spending has grown exponentially in the last decade. Recent KFF survey has shown an exponential spike in employer spending on health as the crisis looms.  

In a recent webinar coordinated by Jonathan Edelheit, Chairman and co-Founder of Medical Tourism Association and Global Healthcare Resources, Tim Isenhower, Director of Benefits at HSM Solutions to talk about HSM’s medical tourism program and how it has thrived for the last decade, and how other self-funded employers can make the most of medical travel to reduce cost and improve employee healthcare outcomes.


Jonathan: Can you tell us a bit about yourself and HSM Solutions?

Tim: HSM Solutions is a family-owned business that has been around for 75 years, right now we have more than 3,000 employees. We are a manufacturing company with manufacturing facilities in more than 15 states and about 50 locations. We started looking at medical tourism in 2011 as a cost-control strategy for our employees. It was also challenging to attract and retain employees, so we rolled out some innovative benefits, one of which is medical travel for their health needs, to lower healthcare costs and also attract the best talents.  

Do you have an estimate of how much money you have saved from sending your employees abroad for healthcare?

We have saved millions and millions of dollars over the years from medical tourism. I recall we were on ABC News in 2013 talking about our medical travel program. At that time, we were only about three or four years into the program and had recorded more than $11 million in savings. Since then, we have expanded the program to include prescriptions and complex procedures that are more affordable abroad, and this has led to much more savings than what we had back then.  

From an employer perspective, what propelled you to implement a medical tourism program almost 10 years ago and what obstacles did you face when you started?

HSM is spread out all over the country and the world actually, we have expatriates in China, Lithuania, the UK, and Italy, and we're already paying for healthcare offered to our workers in other countries. The expatriates just send me their claims, and we process them here in the United States.  

So, we were already exposed to healthcare in other countries through that mechanism, but I went to a program in Raleigh, North Carolina where the facilitator noted that he was sending workers who had no insurance or have high out-of-pocket, to India individually for healthcare at very affordable rates. it was a great eye-opener, and most participants were shocked that anybody would send a patient over to India for healthcare.  

After the conference, I got into conversations with some of the organizers, and I went to India, took a tour of the hospitals there and visited a Harvard-affiliated hospital there and was blown-away by the efficient system they operated as well as the quality of care that surpassed many centers in the United States. Then, I decided this could be a good fit for us at that time.


How did your employees initially respond to getting healthcare solutions in some of these countries, some of which, like India, are considered lower-middle-income economies?

Well, some people loved it, and some people hated it. I personally loved it, they had a very different and interesting culture from ours, and then their hospitals had a unique standard and architecture that attracted international patients from around the world.  

But for some of our employees, India was too far away, so we had to also seek collaborations with hospitals that could cater to our Hispanic community, which made up close to 20 percent of our workforce.  

What benefits did participants see, and what are some of the savings and outcomes from your medical travel program?

The first interesting thing we saw was the misdiagnosis and unnecessary procedures that had gone on with our employees in the United States.  We sent a lady from Tupelo, Mississippi to India for a weight-loss procedure, but when she got to India, she had thorough examination and investigations, and they found that she had a pituitary tumor, which had caused the excessive weight gain. So, the weight-loss procedure was cancelled, and she had surgery to remove the tumor, which helped her achieve a healthy weight loss.  

We had another employee who was told he needed a knee replacement, and we sent him to India for a second opinion. The doctors in India reviewed his records and investigations, and told him that his knee problems are caused by a lower spine problem, which was missed here in the U.S. So, he had a back surgery instead of a knee replacement, and he was completely fine afterward, saving us thousands of dollars and preventing an unnecessary procedure.  

The misdiagnosis and unnecessary procedures were the first thing that stood out as one of the main disadvantages of healthcare in the U.S. for our employees, and medical travel helped reduce that. Over time, our employees embraced the program, but it was challenging at first, having to get them buy-in into the idea of going to India for treatment, but after one or two employees went there and had an excellent feedback, other employees soon registered and got started on the medical travel pathway.  

When you first rolled this out, what incentives did you offer for your employees to buy in?

What we offered to our employees, and we still do, is for them to travel abroad for treatments at zero costs to them. The procedure they are traveling for costs $0 to the employees, but if done in the United States, depending on their plans, they could pay up to $5,000 in out-of-pocket costs. The employees were saving these out-of-pocket expenses by traveling abroad for treatments.  

Further, we also offer a medical bonus, which is 20 percent of what the procedure saved the company up to $10,000. So, while others might think we are paying employees to go receive treatment abroad, we don’t see it that way. We are just seeking the best interests of our employees and sharing the cost savings with them. These incentives increased their interest in the medical travel program, and got more buy-ins.


What is the most that an employee has saved or received for medical treatment abroad?

Just last week, we had an employee who had been diagnosed with Multiple Sclerosis for a few years, He had been receiving an infusion therapy that cost more than $198,000 per session, and he had two sessions every year. After he had the first one, we considered hospitals abroad that could offer a similar treatment at a much more affordable rate, and we found a hospital in the Cayman Islands that could provide the infusion for $26,000.  

Disc replacement surgeries also come with enormous savings. In the United States, back surgeries are very expensive, running into more than $100,000. We had a neurosurgeon in Costa Rica who could perform the procedure with great clinical outcomes for $15,000. For hip replacements and knee surgeries, we could save up to $20,000 to $30,000 per procedure.  

Does this suggest that medical tourism is one of the biggest healthcare cost-saving strategies?

Our healthcare costs what now 20% this year, and we were just trying to figure out where the changes were coming from. We found that this program has made our employees healthier and more productive, and our spending per employee has drastically reduced thanks to the program.  

For one, getting access to these high-end procedures at affordable rates or even zero costs reduce a lot of the mental burden for our employees. In the United States, the high cost of these procedures could cause people to avoid treatment altogether, causing poor overall health outcomes as they deteriorate and even become substance abusers.

We also have on-site clinics; our practice nurses could order imaging investigations for our employees when they need it. We also have an on-site physiotherapist that could assess our employees who might have musculoskeletal problems and tell when they might need surgery vs. conservative treatments and vice versa.  

How would you explain your medical travel programs to employers that already have good incentives and healthcare plans for treatments at local hospitals?

The difference for us is that we’re a manufacturing company and we pay an hourly rate to our employees, who may be earning cumulatively about $50,000 a year. With that income, they simply can’t afford these high-end healthcare expenses and an out-of-pocket payment of about $3,000-$6,000. So, our medical travel program ensures our employees have access to these treatments quickly and when they need it.  

Our employees love the medical tourism program, they feel it is a very relaxing way to get healthcare. For instance, if you undergo a knee replacement surgery here, and you are discharged back home, recovery might not be the same when at home struggling with household responsibilities versus spending your post-treatment recovery vacationing in choice places in Cost Rica or Cayman Islands after your treatment.  

In these countries, there’s a patient advocate that takes you around to exciting places while you recover and after about 10 days, you head back home, and are way ahead in the recovery phase.


Do your employees have to pay anything at all for these medical trips, including companions?  

We pay for all the travel logistics: flight tickets, hotels, transportation, meals, and even for their companions. Knowing that some of these employees are going abroad for some complex procedures, we pay for business class tickets to help them travel more comfortably. This is nothing compared to the huge cost savings these medical trips afford the company.

Did you get any pushbacks from local providers when you rolled out this program?

We did get some pushbacks, but it was mainly from local surgeons. We had one local surgeon who got very angry with the program, mentioning that most of our employees get these surgeries done abroad only to come back to local emergency rooms to fix the complications. However, I did a thorough background check and realized he got his facts wrong. Then he came clean and told me he wanted to have a piece of the program and have us send some of our patients to his hospital at cheaper rates, but then I never heard back from him.  

Nonetheless, we do work with local hospitals, who help arrange diagnostic procedures, including imaging procedures, on a direct contract plan. We also have some direct contracts with local hospitals and physiotherapists that help with post-treatment follow-up, including physiotherapy.  

In my experience, I had a tear in one of my knee ligaments that caused me a lot of discomfort and pain. I had initially consulted with one of our local orthopedic surgeons, who was against me traveling to Costa Rica for any treatment for the knee. He had suggested a knee replacement procedure for me, and scheduled an MRI test, for which I had to wait for two weeks.  

By the time I got the MRI scheduled and done, I already consulted one of the surgeons in Costa Rica and had a surgery date booked to reconstruct the torn ligament, whereas I was told I needed an entire knee joint replacement here in the U.S.  

To lighten the conversation, there was a program in Cancun, Mexico, where a large hospital brought in doctors from the United States to come perform elective procedures on a Saturday and travel back to the U.S. on Sunday. Guess who was the first doctor to sign up for the program? The doctor who had warned me about receiving any treatments in Costa Rica.

How would you respond to employers who are concerned about implementing medical tourism programs for fear of complications and local hospitals refusing to manage these complications?

In my experience, complication rates have been minimal since we began the program. For one, when we’re sending patients to these countries for surgeries, it is typically to their best doctors, those who have treated presidents and high-profile personalities. It’s also noteworthy that some of these doctors are U.S.-trained and have trained in some of the best centers across the world’s also n

We’ve had more complications for patients who have had back surgery here in the United States than in Costa Rica. The one time we had a considerable complication in a patient that had back surgery, she was not allowed to travel back to the U.S. until the complication was managed and resolved.  

In addition to sending our employees to providers that we have a direct contract with, our medical travel facilitators could also refer them to local hospitals for primary care follow-ups or physical rehabilitation if they are not near hospitals we partner with.  

How would you respond to employers concerned about medicolegal liabilities from complications of procedures done abroad?

So far in our program, we have not experienced any complication that would warrant medicolegal issues as our employees are well aware of the risks of any procedure before consenting. The program is also voluntary, and employees are not coerced to participate in the program as they still have other options for seeking medical care.


How much do you see pharmacy tourism growing in the future?

The pharmacy tourism sector is one area that people really need to look at, as it holds enormous potential and opportunities. The Multiple Sclerosis infusion therapy I mentioned earlier is just a drop in the bucket, there are several other prescription drugs and treatments, such as Harvoni that are offered at high rates in the U.S. but can be provided at comparable quality at affordable rates in other countries. Harvoni, for instance, costs over $120,000 in the U.S., but available at $11,000 in other countries.

This employee who we sent to Cancun, Mexico for his infusion treatment also went with his spouse and spent five more days enjoying the beaches and other attractions in the town for a fraction of the cost for just the infusion alone in the United States.  

We have several aged patients that go to the Cayman Islands every quarter for their medications. They go after work on Friday afternoon, see the doctor on Saturday morning, get their prescriptions, get a day at the beach on Saturday, and they are back home by Sunday night.

Where do you see medical tourism in the employer market going in the future?

I get a lot of calls from employers and other organization leaders talking about starting medical tourism and integrating it into their healthcare programs, even President Trump was talking about medical tourism in the pharmacy side, so I see it expanding in the coming years.  

Any parting words?

Just to mention that we are proud of what our medical tourism program has done for our employees and healthcare costs, our employees are proud and have embraced it, and we hope more employers key into this.  

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