Companies Offshore Medical Care
All businesses have a similar complaint. The cost of health care is becoming increasingly burdensome to companies faced with so many other cost and competitive pressures.
To help it keep costs under control, Blue Ridge Paper Products is testing a new approach. It is sending an employee who needs operations overseas to India to have the procedures done. Beginning in 2007, Blue Ridge Paper will offer employees a health benefit plan that includes obtaining medical services overseas.
As it turns out, many individuals can fly across the ocean and get the medical care they need at a fraction of the cost in the U.S.
Carl Garrett, the paper-mill technician who is going over to India, said his procedures will save Blue Ridge Paper $50,000. Mr. Garrett will also see some payback from going overseas. First, he’ll get to see the Taj Mahal as part of a two-day tour he’ll take prior to going to the hospital. Secondly, he will receive a check for up to $10,000 from Blue Ridge as his share of the savings the company realized by Mr. Garrett seeking his medical care outside the U.S.
Darrell Douglas, vice president of human resources, told The Christian Science Monitor, “We want to help our company but also help to drive healthcare reform. We’re very much homebodies … and the idea of going abroad for fun, let alone healthcare, is foreign to some people. But we do have some adventuresome people, and [Mr. Garrett] is one.”
Alain Enthoven, senior fellow at the Center for Health Policy in Stanford, Calif., said there will be more companies and individuals following the route of Blue Ridge Paper and Carl Garrett in the future.
“Global healthcare is coming and American healthcare, which is pricing itself out of reach, needs to know there are alternatives,” he said.
Tom Keesling, president of IndUShealth, a firm specializing in offshoring serious medical cases to India, said, “We’re dealing mostly with companies that are self-funded and have essentially run out of options. It’s an amazing trend, and it speaks to the tremendous frustration people feel with how to provide healthcare services in our current environment.”
Discussion Question: Will companies in the retail and related industries see offshoring medical care as a means to keep costs under control?
Many of them aren’t paying benefits, or full benefits, as it is, so why would they start shipping employees around the world? In a word, I guess I’d have to say “NO!”
After having led the benefits area for a Fortune 1000 corporation, I certainly agree that healthcare costs in America are out of control. Will the trend of offshoring healthcare catch on? In a small way, maybe, but not to any significant level in the foreseeable future. Some companies will experiment as they try to find ways to reduce the really large costs they may face from covered employees and dependents who have significant health problems. But, the stress of travel, being away from support groups, and unfounded but lingering concerns about the quality of care will keep most from trying this experiment. Companies also will be wary of what happens should the treatment not go as expected. Will they face liability claims? What happens to follow up care?
The idea points out that pressure is rising to address the healthcare cost issue in the United States. If nothing happens, more companies will reach a tipping point where they will pursue or force alternatives on employees.
In the little survey, I couldn’t decide whether to say much more prevalent, or somewhat more prevalent. This seems like a no-brainer. I’ve actually read a lot about this, and it’s becoming increasingly common. Outcomes, thus far, seem about the same as they are in the U.S.–at least from what I’ve read. Costs are way out of control here. I expect many more companies will explore this — especially those that are self-insured, and there are a growing number of those companies, too.
I’d hope it would be “optional” for people. Some surgeries are large-scale and expensive, but essentially routine. If I had a loved one with life-threatening cancer, and had a choice of Sloan-Kettering (or a similar cancer-specialist hospital) for surgery, or a hospital in India, I know where I’d want to go.
For the opportunity to receive a check for $10,000 to share in the cost savings, there will be people willing to have surgery offshore. If the savings are substantial, companies may be willing to pay the whole cost and save money rather than pay partial benefits at a much higher cost. While the practice is not likely to encompass the majority of health care in the US, the more companies and individuals pursue this alternative, the more pressure will be put upon the US system to change their cost structure. Until there is enough urgency, the current system is not going to change.
I don’t see retail business jumping on board. Most don’t offer the best benefits to begin with. If competition from abroad does start impacting sales at US hospitals, the US hospitals will just find a way to better compete and lower their prices. Perhaps if US hospitals cannot compete by having facilities in the US, then they could build hospitals along the border in Mexico. Everyone might feel a bit more comfortable if they are going to a US owned and operated hospital outside the country. Maybe the insurance companies should invest in this. This would also make follow up care more convenient as well.
I guess, technically, my answer would be “much more prevalent, but still rare.”
While this is an interesting idea, I’m not sure it has much applicability: how many of these “out of control” costs are due to routine checkups, medications, emergency procedures, etc. that could never be “offshored.” And it’s only a matter of time before some case goes awry and the predictable flood of alarmist articles appear.
Offshore medical care is a great way for employers to save big bucks. Most group medical insurance plans follow an extreme version of the 80:20 rule, where a tiny number of cases cause the majority dollar claim value. Furthermore, offshore medical care is a great fit for retired people whose employers can spare the extra time needed for the travel. For those employers who cover retiree medical expenses, offshore medical care might make the difference between keeping this benefit and having to scrap it.
A huge proportion of Medicaid spending is for people in nursing homes, yet no state will pay for it outside the state, let alone outside the country. And it’s terribly labor-intensive, which is perfect for labor arbitrage outsourcing. The US imports Filipino nurses yet will not pay for medical care in the Philippines. Many US doctors are also graduates of foreign medical schools.
The medical facilities in India are very good. Costs are much less than USA hospital charges. In fact, my father was in the hospital in Philadelphia for four days with eye problems. We did lots of medical test and paid $19,000.
Back to India, he had cataract eye surgery, which cost us $1300. That is the difference in cost. It’s a good idea and innovative.