Medical tourism, where a patient is willing to go abroad for the expressed purpose of reducing the cost of select expensive medical procedures, has been one of the hottest topics for the past 12 to 18 months. Overall, many groups favor the idea of offshore medical procedures, assuming the quality of the service remains high and there is sufficient cost savings involved. Everyone from the American Medical Association to the National Business Group on Health has taken note of this recent movement. Everyone, that is, except the majority of the insurance industry, until now.
To date, there have only been several main line insurance carriers; primarily Blue Shield/Blue Cross affiliates that have put their toes in the shallow end of the medical tourism pool. Most of the rest of the medical insurance underwriters have talked about medical tourism, but few have taken any action.
Even more surprising is the lack of action from the medical stop loss community that traditionally provides excess protection for employers who self-insure their employee health insurance. And it is the self-insured employers who were expected to benefit the most from a movement to medical tourism.
Major Changes Coming
However, recently, a major international insurer, Swiss Reinsurance Company, Ltd. (Swiss Re) has announced that it will be including medical tourism as a covered expense under its stop loss policy. According to Matt Leming, Vice President and Sales Leader within Swiss Re’s Commercial Insurance division points out that Swiss Re is trying to “facilitate the availability of top quality health care at more affordable levels than are possible in the U.S.”
He notes that Swiss Re’s innovation is “that we will recognize medical travel as a covered expense in our stop loss policy.” He goes on to note that “if the employer determines, via his plan document, that medical travel and any incentives that may be related, are covered expenses; our policy will cover these types of things as well.”
Swiss Re states that they have been closely following the increasing cost of major medical procedures in the U.S. and “felt that there must be a better way to help employers control the cost of their health insurance programs.” Leming says that they believe that “high cost claims could be greatly offset by medical travel.” And he notes that while, in most cases, the cost of the medical tourism will be less than the “per occurrence” deductible amounts under the stop loss policy; all of these costs will go towards the aggregate limit.
Leming has stated that Swiss Re’s stop loss coverage is available in all 50 states as well as the District of Columbia. He also notes that they began writing coverage on July 1, 2008 through the Westport Insurance Corp., a member of the Swiss Re Group.
The medical tourism coverage is written as part of Swiss Re’s traditional stop loss policy, as opposed to a separate stand alone policy. Leming says it is available to all existing and new Swiss Re policyholders. He also notes that the coverage, as with the self-insured concept itself, “is best suited to employers with 100 employees and above.”
One of the most important aspects of medical tourism is the coordination of the various aspects of the offshore procedures. The same is true with regards to the Swiss Re coverage and in that regards, they have retained the services of WorldMed Assist to help manage this critical area.
Leming points out that Swiss Re does not feel it is qualified to make decisions regarding employee health care, so that have outsourced this function to WorldMed Assist ensures a strong, consistent standard of care regarding the hospitals, medical staffs and any recuperative care facilities. As currently arranged, all hospitals must meet the criteria of the Joint Commission International or an equivalent accreditation.
While Leming notes that WorldMed Assist is their primary logistic provider, if the policyholder has another choice, Swiss Re will consider other options. However, he points out that “we have done a lot of due diligence with regards to our selection of WorldMed Assist, so we have a comfort level with them,” but he says, “we cannot force that choice.”
Obviously, they do strongly encourage the use of WorldMed Assist. Regardless of the logistics provider, Leming indicates that it is most important to secure a qualified provider to assist with this important aspect of service.
In order for medical tourism to continue to grow, it will have to gain the insurance industries backing. Uninsureds and underinsureds have always been clear targets for medical tourism. However, long-term, it will require a broader base of support from employers with insured or self-insured programs. And the self-insured employers should be high on this list.
Swiss Re has made a significant commitment to the medical tourism business. They realize that medical tourism has gained a lot of interest in the marketplace; however, Leming also realizes that “there is going to be a significant educational effort that will be required.” He says, “Employers will need to see how this will impact them.” He also says that the educational efforts will need to be directed at most of the various players in this market.
Everyone from third party administrators, other service providers, employers and finally the most important segment; the employees will need to better understand the features of medical tourism. In that regard, Leming says that word of mouth comments will be a big part; “as positive feedback from people who had procedures done overseas will be very important.”
Swiss Re’s announcement of their involvement in the stop loss market is important. While Leming notes, that they “are very excited about this,” they also understand they are one of the first adopters of this concept. “We see this as a big differentiator in the marketplace in terms of our stop loss policy,” he points out.
And he adds, “I think we are the first to roll this out nationally.” Bottom line, however, Swiss Re believes that “ultimately this is going to assist employers in managing their plan expenses much better.” Further, it will also provide employees with another choice for a cost effective, quality network.
Michael J. Moody, MBA, ARM, is the Managing Director of Strategic Risk Financing, Inc. in Orlando, FL. Over his 20+ years experience he has assisted midsized corporate clients in developing strategies for combating the increasing cost of employee health care. He specializes in establishing self-insured health programs and can be reached at firstname.lastname@example.org