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Redefining Healthcare: American Health Payers Shift Focus to Medical Tourism amid Rising Healthcare Costs

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In the last few decades, the cost of healthcare in the United States has continued to spike, leaving many Americans not only in debt for seeking healthcare but still unhealthy or even worse. With the average annual worker contributions climbing $4,316 to $6,106, and employer premium contributions rising from $15,745 to $22,563 in the last decade, more and more Americans are withholding their treatment to avoid further debt and out of pocket expenses. Now, health payers are looking out of the box, literally, to find more affordable ways to access first-rate care.  

The coronavirus pandemic was an eye-opener for many health consumers. Following the economic and health crisis that followed the pandemic, many health buyers have become more health-aware and are rethinking their health choices, budgets, and decisions. One of the shifts that is slowly gaining fresh traction post-pandemic is the push for medical travel. Health payers and  are seeking destinations that offer top-notch healthcare at a fraction of the U.S. costs.  

Korean Tourism Organization and the Medical Tourism Association had a recent roundtable led by Jonathan Edelheit, Chairman and Co-founder of Global Healthcare Resources and President of Medical Tourism Association, in which more than 25 US medical travel stakeholders, insurance companies, employers, and insurance agents along with some leading Korean hospitals discuss the paradigm shifts in healthcare in the U.S. and the drive for medical travel toward outstanding medical travel destinations, particularly Korea.  

The Push for Overseas Healthcare  

There has been a shift in healthcare excellence around the world in the last few decades, While the U.S. started out as one of the best places in the world to receive healthcare, this status is slowly changing as many destinations expand their frontiers of medicine and integrate systems that drive efficient healthcare delivery.  

Wade Larson, Chief Human Resources Officer at Wagstaff Incorporated, describes cost difference and net cost savings as a major driver of medical travel. Sharing his experience sending his employees across the border to receive medications and specialty drugs, Wade said he saves up to $32,000 per employee traveling across the border to Mexico to receive Humira.  

Tracy Simmons, President, and Founder of Customs Assurance Placements Ltd. shared similar thoughts while citing a personal experience on getting an MRI procedure done abroad for $100 in a walk-in setting, when it would have taken weeks of waiting and several thousand dollars out-of-pocket in the U.S.

Warren Kaminsky, President of Bluesky Insurance Services, pointed to other drivers of outbound medical travel. Warren noted that there has been a general decline in the quality of the U.S. healthcare system, as more and more patients complain about delays in receiving treatment, poor infection control protocols, and the undue profiteering of healthcare in the U.S.  

The problem is not just in the U.S., but in countries that have historically being regarded as the major players in medicine and healthcare.    

“Right now in Canada, there is a three-and-a-half year wait list for knee replacement surgeries, and it is going to get worse as people age,” Travis Kraft, Founder and CEO of Passport Medical, a GHA-accredited medical travel facilitator, noted. Travis described it as a broken system, which necessitates an urgent search for solutions for health consumers outside the box.

“Why are people coming back to the U.S. when there is first-class healthcare overseas? What we are doing is to try to take overseas patients to places like Korea to get their medical treatment, and we are sending U.S. patients to these places to also receive first-class medical treatment” said Ralph Weber, President, and CEO of Medibed, an innovative company that connects health buyers and payers to affordable and top-line care around the world.  

Ralph, who has been a healthcare consultant for more than 27 years, explained that inflations in pricing is driving an overcharge of healthcare in the U.S., where a patient pays a few hundred dollars for a procedure and another, who has some form of insurance coverage pays thousands for the same procedure. This is not only reducing trust in U.S. healthcare, but it is also leaving more Americans in debt and still unhealthy.  

Ignorance and Poor Perception of Overseas Healthcare

Although there might be opportunities abroad for people to get the best care outside the U.S. and at affordable rates, there are certain challenges that preclude that.  

Warren explained that one of the factors that have precluded medical travel over the years has been ignorance about the quality and affordability of care overseas. He further pointed to media and U.S. healthcare professionals as heavily influencing the negative perception of healthcare in several overseas destinations.  

Many Americans who desire to receive care for their pent-up medical needs do not often know that there are affordable opportunities overseas. Bad media and wrong information from patients or even medical professionals may sell these outstanding destinations short.

“If something goes wrong with a medical procedure overseas, it makes all the headlines and papers, whereas there are procedures that go well every day in these destinations that we hear nothing about,” Warren explained.  

Tracy Simmons cited an example of a friend of hers who upon follow-up assessment had achieved a considerable improvement in his heart function after having a cardiac pacemaker procedure done at a cardiac center in the Dominican Republic. All his efforts at having it published in U.S. media were blocked by media and healthcare lobbyists who obviously did not want the word to go out.  

Travis, whose company, Passport Medical, connects health buyers and payers to first-rate medical providers across the world, says educating people about the potential of medical travel, both in terms of quality of care and cost savings, is crucial to getting more buy-ins.  

Building Trust in Medical Travel

Trish Freeman, a licensed insurance agent in Louisiana, says building trust in medical travel destinations and programs is the first step to ramping up buy-ins in medical travel, adding that stakeholders can achieve this through strategic partnerships and marketing.  

Strategic collaborations and networking with external quality watchdogs, centers of excellence, and medical travel companies are the essential recipes for a thriving medical travel industry. Stakeholders need no longer to operate in silos but integrate their systems to make affordable, overseas healthcare accessible and visible.  

After the pandemic hit the globe, people’s perspectives on health changed significantly, and there has been a shift toward healthcare providers and programs that can safeguard the health and safety of their patients. As a result, the dynamics in healthcare have been disrupted, as healthcare consumers and payers beam their searchlights on healthcare providers that do not mold.  

“The pandemic has led to a great opportunity for the industry to be more structured, such that large organizations and institutions will not buy in into the market until there is some form of structure in the ecosystem,” says Jonathan Edelheit.  

For Bill Cook, Head of Marketing and Business Development at Global Healthcare Accreditation, accreditation has become the game changer and a determinant of quality in the post-pandemic era. Accreditation demonstrates to potential clients and health payers that a healthcare provider is committed to the quality and safety of healthcare as well as patient satisfaction.  

As a key marketing tool and differentiator, many healthcare programs around the world are investing in accreditation not only to up their standards of care to meet evolving patient demands and global best practices but also to increase their visibility. With accreditation, overseas healthcare programs can be easily seen by health buyers and payers searching for alternatives to U.S. healthcare.  

Medical tourism centers, around the world, including Korea’s Asan Medical Center and Seoul National University Bundang Hospital have achieved the Global Healthcare Accreditation for Medical Travel to expand their reach and demonstrate their redefined healthcare standards.  

Global Healthcare Accreditation

With the evolving healthcare ecosystem, medical travel providers need all the resources and tools they can get to reposition themselves to meet the pent-up demands for healthcare. Global Healthcare Accreditation for Medical Travel equips medical travel programs with strategic collaborations, resources, training, and tools to remodel their offerings to meet global standards of safety and quality.  

With a focus on the patient experience, GHA helps medical tourism providers around the world to learn, learn, and relearn the tools of the trade, repositioning them to better serve the needs of health payers and buyers seeking the best healthcare service there is.

Korea Tourism Organization

Korea Tourism Organization (KTO) is an organization of the Republic of Korea (South Korea) under the Ministry of Culture, Sports and Tourism (MCST). It is commissioned to promote the country's tourism industry. The KTO was established in 1962 as a government-invested corporation responsible for the South Korean tourism industry according to the International Tourism Corporation Act.  

The organization promotes Korea as a tourist destination to attract foreign tourists. Starting in the 1980s, domestic tourism promotion also became a function of the KTO. Inbound visitors totaled over 17 million in 2019 (17,502,756 visitors) and the tourism industry is said to be one of the factors that has some influence on the Korean economy.

KTO continues to lead changes in its medical tourism industry to drive more inbound medical travel and expand its market. With record advances in medicine and strategic partnerships in the industry, Korea has repositioned itself to become a key stakeholder and major player driving medical tourism.

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