Medical tourism is an increasingly popular trend that has expanded over the border region of Mexico and the U.S. The economic situation in the U.S. has left a large number of Americans without health insurance and unable to pay for expensive surgeries, prescriptions, or even routine dental care. Therefore, they are opting to travel across the border to access less expensive care in Mexico. This study will be specifically limited to examining high-end private hospitals and dental clinics in the U.S./Mexican border region.
Medical tourism is defined as travel beyond a home country in search of health care that is either less expensive or more accessible. As the first decade of the twenty-first century comes to a close, the entire world faces new challenges brought by the increasing overlap of cultures and economies. America is in the midst of large socioeconomic changes and the health care system is at the forefront of issues.
The American health care system has been under scrutiny lately for its inefficient access to patient care. Lengthy waiting times, low doctor-patient interaction time and rapidly increasing fees have made the American health care system expensive for some and impossible to access for others. Americans are beginning to look elsewhere to meet their medical needs.
Seeking medical treatment from other countries, a phenomenon already popular in other areas of the world, is becoming a viable option for American citizens, especially the uninsured. Medical tourism is becoming an increasingly popular trend: as many as 750,000 Americans sought medical treatment outside the U.S. in 2007 (Horowitz, Rosensweig & Jones, 2007).
Medical treatment abroad allows uninsured patients to afford both necessary and elective procedures that would otherwise be unaffordable for them to pay out of pocket. Medical tourism along the U.S.-Mexico border is of particular interest because it is relatively accessible and perceived to be cheaper.
Many medical facilities in Mexican border towns are located within walking distance of border crossings or less than an hour drive from the border. For this reason, Los Algodones, Nuevo Progreso, Rio Grande Valley, Matamoros and Nogales are popular destinations (Kher, 2006). These facilities exist to serve the needs of cross border patients that can be met in one day, such as dental care, glasses or lenses and prescription drugs.
Of the patients in border town dental clinics, 80-90 percent are Americans (Group Survey, February 20, 2009)1. However, Mexican hospitals operate differently in terms of their customer base. There is not a single hospital currently treating more American patients than Mexicans.
So far, the hospital that treats the highest ratio of American patients is CHRISTUS’s Reynosa, Tamaulipas facility, only ten minutes from the border by car. Americans make up 30-35 percent of the patients there, according to a recent Newsweek article (Peng, 2008).
These findings contradict stories in broadcast media, in magazines and in newspapers that portray American exclusive hospitals in Mexico flooded with uninsured or underinsured American patients. It is true that American involvement in the private Mexican health care system has grown but the medical tourism industry is still evolving and not yet booming.
Major American hospital chains have begun investing money in hospitals along the Mexican border or plan to build more hospitals in Mexico to be staffed with Mexican doctors and nurses who hold Mexican degrees (Peng, 2008). Many Americans who seek treatment in Mexico are driven by their inability to pay for the high medical fees as they are either uninsured or their insurance company does not provide enough coverage.
These people can access medical procedures and dental work in Mexico that cost only around one third of the American price; furthermore, they can access new unapproved treatment unavailable in the U.S. Since the patients pay in cash, it can be more lucrative for the hospital.
The popular procedures include obesity-related surgery, orthopedic-knee/hip replacements, cardiac and coronary procedures such as valve replacement and also plastic surgery (Placid Way, personal communication, March 20, 2009). As these procedures suggest, many obese as well as elderly Americans seek treatment in Mexico. For dental tourism alone, roughly 60 percent are over the age of 50 (Dayo Dental, personal communication, April 2, 2009).
This study focuses on the forces driving American patients to travel, the methods patients use to access facilities and the specific locations they seek. Additionally, the quality of facilities on both sides of the border is compared, as are the reasons for cost differences.
Finally, the future outlook for the industry and trends are discussed. This study only examines private sector Mexican facilities near the U.S.-Mexican border region. Medical facilities beyond the border region are outside the scope of this study.
Who Seeks Treatment ~ General Demographics
In the U.S., persons who are uninsured due to unemployment or lack of funds find it difficult to afford expensive or elaborate medical procedures. In 2006-2007, 15.3 percent of Americans were uninsured. Arizona averaged a 19.6 percent uninsured rate in 2006-2007 (Baumgarten, 2008).
Employers find it increasingly difficult to enroll employees in affordable health insurance plans and are moving away from ample but expensive HMO benefit plans towards less comprehensive plans (Baumgarten, 2008). Many workers who once were adequately or well insured now find themselves underinsured.
Consider the health care system of Arizona: for 2006- 2007, Arizona averaged 47.7 percent of the population insured through employers and 27.69 percent through Medicare/ Medicaid. Arizona was 4.21 percent above the national average for uninsured. The decrease in managed care plans offered by employers has been offset by growth in Arizona Health Care Cost Containment System (AHCCCS) enrollment–Arizona’s Medicaid program (Baumgarten, 2008).
AHCCCS insures a majority of poverty-stricken Arizonans, such as individuals living alone and making under $903 per month and families of three making under $3052 per month. The requirements vary by coverage plan (Arizona Health Care Cost Containment System, 2009). As these figures indicate, individuals insured by AHCCCS cannot afford expensive or complicated medical procedures beyond the coverage of AHCCCS.
For these underinsured Americans seeking a value in services rendered outside of their home state, difficulties often arise in insurance coverage. For AHCCCS members, out-of-state services are not covered except for emergency procedures. Private insurance companies, however, will typically provide coverage for out-of-state procedures.
In some cases, private insurance companies will even cover out-of-country procedures, emergency or not. For example, Blue Shield of California offers a cross-border health insurance plan that grants reduced premiums to patients undergoing certain procedures in Mexico (Peng, 2008).
Locating Facilities: Availability of Information in a Growing Industry
Most American patients make their medical journeys with some form of outside help. More adventurous patients research independently through online free listings, personal references or published directories. Free listings provide a medium for patients to directly contact the facilities, but offer few auxiliary services.
The free online listings method offers a greater range of facilities, including small clinics like dental clinics owned by a single dentist, allowing the patient to directly email the doctor with specific case information to compare prices. The free listings are anticipated to be the most popular research method for border patients because they list small facilities that appear most frequently on the border.
Traditional methods, such as personal references and published directories, provide legitimacy and reassurance to patients, but little aid in arranging the process. An example of a formal travel guide for medical tourism patients is Mexico: Health and Safety Travel Guide by Dr. Robert H Page and Dr. Curtis P Page.
Both the travel agencies and the free listings offer long lists of available procedures including cosmetics, orthopedics, fertility, surgical dentistry and progressive procedures like stem cell therapy. There are few restrictions on types of procedures offered. The major barriers are the location of facilities and the willingness of the patient to travel.
With the growth of medical tourism, travel agencies that arrange medical trips have become an integral part of the medical tourism industry. They provide legitimacy, reassurance and travel ease to patients seeking major procedures. The role of the travel agency is to connect the patient with their corresponding facility and coordinate all the travel and medical procedure plans. Services offered include travel arrangements, hospital locations, transportation of medical documents and often, insurance logistics.
They guide the patient through the whole process to make cultural and language barriers less intimidating. Each patient’s case is first evaluated before a binding commitment is made, and the travel agency has arranged for a doctor to perform the procedure. Doctors may not accept certain cases for safety reasons.
An example of such a tourist agency is Dayo Dental, a dental tourism company that provides optional transportation for dental patients via chartered vans that travel every week from Phoenix, Arizona (the suburbs of Avondale and Tempe) to Los Algodones, Baja California, a town with 200 to 300 dentists and a population of only 4,021 (2005 Mexican Census). Dayo Dental, based in Phoenix, Arizona, has partner dental facilities within walking distance from the U.S.-Mexico border.
The first transport and the initial dental consultation are free, while any follow-up transportation is $45 per person (Dayo Dental, personal communication, March 18, 2009). The patient’s entire dental trip is completed within one day. It is unique in that it is the only tourism agency in the United States that focuses solely on dentistry.
One of the tools used by American medical tourists and medical tourism companies to evaluate facilities abroad is JCI or (Joint Commission International) accreditation. The accreditation demonstrates the high quality of patient care, and safe environment (sanitation and infectious disease control) to reduce risks to patient and staff. It has gained worldwide reputation as an effective quality assessment and management tool.
The JCI accreditation process is lengthy, expensive and thorough, lasting for at least three years and costing approximately $42,000 USD (Timmons, 2007). It is therefore only appropriate for major hospitals. Only eight hospitals in Mexico are JCI accredited but more are currently completing the process, preparing to apply, or evaluating its value.
JCI accreditation does enhance the prestige of Mexican hospitals that have attained it–at least from the perspective of Americans since only 20 hospitals had received the accreditation in the world.
Popular Medical Tourism Locations in Mexico: What is the Target Demographic?
Despite major American hospital corporations investing money in Mexican hospitals or building facilities along the Mexican border, the majority of patients are from Mexico. If the hospitals do not have first-world comparable technology, wealthy Mexicans can afford to travel to Texas or California and have their procedures performed by top American doctors there. Wealthy Mexican patients demand the same or similar levels of expertise from Mexican doctors.
These Mexican doctors acquire their medical degrees in Mexico, but typically undergo post-graduate or specialty training at top American, Canadian or European schools such as Mayo, Baylor and Harvard (R. Page, personal communication, March 20, 2009).
The largest private hospital chain in Mexico, Grupo Empresarial, is building 15 new hospitals. The percent of American patients of Grupo Empresarial hospital chain is currently at five percent and is expected to grow to 20 percent by 2010 (Peng, 2008). Dallas-based CHRISTUS Health has also entered the Mexican medical care industry (Peng, 2008).
In 2001, it bought a majority stake in Mexico’s Grupo Muguerza, thereby increasing its number of hospital facilities from two to eight nationwide. Representatives from CHRISTUS state that they have witnessed growing numbers of American patients (Peng, 2008). Two facilities of this corporation are located adjacent to the Texas border in Reynosa and Monterrey.
The map in Figure 1 shows all of the major Mexico border cities that provide medical care to U.S. citizens. The stars denote private hospital chains and major hospital facilities. The circles denote popular dentistry service towns. Each Mexican city is shown corresponding to its nearest U.S. city.
Medical and Dental Cost Comparison: The United States and Mexico
There are three reasons for the high cost of health care in the United States: physician-induced demand, third-party payments and defensive medicine. Physician-induced demand wastes resources on unnecessary health care procedures (Edgmand, Moomaw, & Olson, 2004). According to the Dartmouth Atlas Project, an estimated 20 percent decrease in U.S. medical costs could occur if unnecessary procedures were eliminated (Edgmand et al., 2004).
Furthermore, studies conducted by the RAND Corporation to determine the necessity of medical procedures revealed that one-third or more of all procedures performed in the United States are either not beneficial or questionable. In 2007, the U.S. spent $2.26 trillion on health care (NHEP 2009). In 2000, 85 percent of national health care expenditures were paid for with third-party payments (Edgmand et al., 2004).
Hospital bills not involving insurance coverage could be reduced by 40 to 50 percent because insurance companies inflate the cost of billing process (R. Polheber, personal communication, March 20, 2009). The final reason for higher medical costs in the U.S. is defensive medicine.
Due to of the risk of malpractice suits and the sky-rocketing cost of malpractice insurance, defensive medicine is utilized to diminish the risk of litigation and middlemen (such as insurance companies) who are involved as third-party payers. Because doctors do not need to worry about patients paying the full medical cost, they perform supplemental procedures.
The lower cost of medical care in Mexico comes from several factors including the low salary level of doctors, nurses and other staff, a lower cost of living than in the U.S., significantly lower malpractice insurance rates, lower construction fees and cheaper overhead costs.
Salaries of personnel in Mexican hospitals are considerably lower than the salary of American doctors (L. Gonzalez, personal communication, March 13, 2009). Mexican private hospitals hire few U.S. board certified doctors since the wage gap is huge.
Whereas the biggest cost for American hospitals is the salary of doctors and employees, it is the cost of medical equipment and imported supplies in Mexico (L. Gonzalez, personal communication, March 13, 2009; R. Polheber, personal communication, March 20, 2009).
In the field of dentistry, laboratory costs are significantly lower in Mexico. Many dental hotspots have good laboratories with highly trained professionals. In the dental town of Los Algodones, the technicians are highly skilled but also offer inexpensive services. This has led some U.S. labs to consider outsourcing to locations such as Juarez which houses one of the bigger laboratories.
Another reason for the cost differential in Mexican dental clinics is the lower cost of the staff, including the receptionist, the manager, support technicians, the dental hygienist and the cleaning staff. In Mexico, the average staff member is paid $3 to $5 an hour, compared to $10 to $15 an hour in the U.S. It is typical for a dentist in Mexico who is working on a patient in the dental chair to have one or two support personnel such as a technician and a dentist-in-training.
A third reason for the cost disparity is real estate. A location in high-traffic area in Mexico will cost $1,000 to $1,500 to rent per month, compared to $3,000 to $6,000 per month in the U.S. There is also a large difference in education costs. In Mexico, one goes to dental school for right years right after graduating from high school. The entire five-year education costs $20,000 to $40,000. In the United States, one needs a bachelor’s degree and must attend dental school for four years.
American dental school costs approximately $25,000 a year. Paying off student loans is another overhead cost most American dentists must carry. The take-home pay is another cost factor. A successful, reputable Mexican dentist will make $30,000 to $50,000 a year. An American dentist makes $100,000 to $250,000 a year (Dayo Dental, personal communication, April 2, 2009).
Mexico has a high level of healthy competition among dentists that leads to lower pricing. This competition is due to a large supply of dentists, a trend that is driven by demand that started decades ago from both American and Mexican patients spreading details of their experiences by word-of-mouth. Dentistry has become a lucrative profession for Mexicans and many quality dental schools have opened along the border.
The pool of professionals and knowledge has been building over time. Los Algodones has an especially large supply of dentists (200-300), which leads to very low prices (Dayo Dental, personal communication, April 2, 2009) (See Table 1).
Mexico’s weaker economy in relation to the U.S. also drives down the price. The average income is $6,230 a year in Mexico, so dentists must price their services to be affordable to the average Mexican citizen (Mexican Dental Vacation, 2009).
Quality: Should Americans Worry?
Most of the major private hospitals along the border offer technology comparable to first world countries. In fact, some high end private hospitals employ medical technologies that are more advanced than those available in the United States because they can purchase technologies from Europe that have not yet been approved by the FDA. (R. Page, personal communication, March 20, 2009). Such equipment can display 3D views of the heart and create mammograms without pressing against the breasts.
The border area is served by a series of private hospital chains, major hospitals and private dental clinics. The CIMA hospital chain is an example of hospitals that began to tap into medical tourism by investing on infrastructure. In cooperation with International Hospital Corp of Dallas, Texas, it has built hospitals at five locations in Mexico, including three near the border: at Monterrey, Nuevo Leon adjacent to Rio Grande City, Texas, Chihuahua, Chihuahua nearest to Presidio, Texas and Hermosillo, Sonora, two to three hours drive from Nogales, Arizona. All locations claim to offer excellent quality.
CIMA Chihuahua is certified by the General Health Council for its great efforts and the good performance of its hospital personnel. The nutrition services area was awarded the “H” Emblem certification by the tourist department for passing a review on the compliance of quality standards, programs guidelines, safety conditions, and hygienic management of foods. The same location is certified by the General Health Council of Mexico and is preparing to be accredited by the Joint Commission International.
Recently on February 20, 2009, CIMA Monterrey was accredited by the Joint Commission International. The incidence of foreign patients is two to five percent at the CIMA hospital in Hermosillo and is expected to increase to ten to15 percent soon (Alvarado, 2009). This facility accepts 30 different types of insurance, including Metlife and AIG InterAmerica.
Centro Medico Internacional (CMI) located in Matamoros, Tamaulipas is also very progressive and maintains relationships with Christus Muguerza Monterrey, the United States consulate, IMSS, and Seguro Social. CMI offers healthcare membership to both Mexican and United States citizens.
As far as the overall hospital experience, patient care is often more pleasant in high-end private Mexican hospitals as compared to U.S. hospitals. In the CIMA hospital at Hermosillo, all rooms are for single occupancy and are equipped with new beds, nurse calls, internet and TV. Personnel that can speak English are also available at the hospital (L. Gonzalez, personal communication, March 13, 2009).
The patients who had been to Nogales, Mexico for dental treatments expressed high customer satisfaction, and they were impressed with the high quality of professional doctors and friendly nurses. They also declared that prices for dental services in the U.S. were too high. Most of the patients that took the group survey were uninsured or underinsured (Group Survey of the Mexican Dentists and American Patients in Nogales, 2009).
While family practice physicians in the U.S. see 35 patients per day, there are some Mexican family practice physicians who see only ten patients per day (R. Page, personal communication, March 20, 2009). In Mexico, a specialist will spend between 30 minutes to an hour with a patient as compared to only a few minutes in the U.S. (R. Page, personal communication, March 20, 2009).
Leonardo Gonzalez, the CFO of the CIMA hospital branch in Hermosillo, Mexico, stated that physicians in Mexico interact differently with patients, spending more time with patients on a one-to-one basis. In the intensive care unit (ICU), the nurse to patient ratio is 1 to 1 and for regular patients, the ratio is 1 to 3. Similarly at Hospital Angeles in Ciudad Juarez, in the ICU the nurse to patient ratio is 1 to 2 and for regular patients, the ratio is 1 to 4 (Public Relations representative, personal communication, April 13, 2009).
Rich Polheber, CEO of the Holy Cross hospital in Nogales, Arizona stated that the ratio there is 1 to 5 or 1 to 9, depending upon the severity of the illness. The ratio for long-term care is 1 nurse to 25 patients. At the University Medical Center, Tucson, Arizona, the average ratio is 1 to 4; this is the lowest ratio in the state and one of the lowest in the U.S. (UMC, 2009).
Accurate quantitative comparison of the quality of health care facilities in the U.S. and Mexico is difficult because of lack of accurate statistics and lack of a widely-used standard for evaluating facilities. While some medical tourism agencies make efforts to screen medical facilities, the absence of standards and regulations makes it difficult to eliminate poor quality facilities and under qualified doctors.
Mexican hospitals that serve an almost entirely Mexican native population have little use for the pricey label of JCI. Therefore, the lack of JCI accreditation may reflect either a poorer facility or a difference in target population. Of the eight hospitals in Mexico accredited by JCI, six of them are located close to the border, showing the influence of the neighboring American patient market (Joint Commission International, 2009).
The other indicator of quality is the incidence of malpractice. An institution under the Mexican health department, CONAMED, arbitrates and reconciles problems between patients and health service providers, both private and public. Yet it would be relatively complicated for American patients to go through the Mexican legal system to file a case against a Mexican doctor or facility.
Furthermore, most of the doctors in private facilities do not have malpractice insurance. Despite the lack of qualitative support for Mexican hospital quality in terms of JCI accreditation and data on malpractice issues, there is substantial evidence to suggest that high-end privately Mexican hospitals are comparable in quality to first world hospitals (Joint Commission International, 2009).
Before boarding a plane for a domestic or international flight, one can buy life insurance for the duration of the flight. Similarly, it is just a matter of time before U.S. insurance companies will offer insurance to U.S. patients for specific medical procedures in Mexico. The patient can then decide whether it is worth the cost of insurance.
The medical tourism industry will grow based on increasing activity on both sides of the U.S./Mexico border. As more Americans learn about Mexican health care and view it as a viable alternative, there will be an upward trend in its use. Healthcare providers will have an increasing interest in medical tourism as the demand rises, leading to improvements in its utilization.
Insurance companies such as Blue Shield of California are planning collaborations with Mexican hospitals, including CIMA Hospital in Hermosillo (Alvarado, 2009), a development which will allow more Americans to receive insurance coverage for medical procedures performed in Mexico.
Already, American patients who are members of BCBS can go to the CIMA hospital for several designated procedures such as cardiology, gynecology and orthopedic surgeries and the insurance company will cover the costs, which are usually about 60 percent lower than the comparable price in the U.S. (Alvarado, 2009) (See Table 2).
Gradually, more hospitals will be built across the border in Mexico. Steven Foster, the CEO of the CIMA hospital in Hermosillo, said more than 20 private hospitals are being constructed in resort border communities like Puerto PeÃ±asco in Sonora (Alvarado, 2009).
He believes that medical tourism in Mexico offers great potential because American patients already travel to Thailand and India. Mexico is a superior option based on geographic proximity, quality of service and cost efficiency (Alvarado, 2009). The CEO of CHRISTUS, Dr. Thomas Royer, is quoted as saying that there are 40 other Mexican border towns suitable for hosting similar types of hospitals (Peng, 2008).
The dental tourism industry will follow a similar trend. Gradually, more persons will deem that traveling to another country for dental treatment is a good alternative, even after taking the travel expenses into consideration. Awareness of dental tourism is already common in retirement communities because they are close-knit.
Private hospitals and dental clinics along the border offer advantages of geographic proximity, comparable quality of service and lower prices. Unequivocally, the medical tourism industry will thrive along the border and an increasing number of American insurance companies and hospital chains will associate themselves with private hospitals and dental clinics in Mexico. Gradually, the system will become more structured.