Two months ago, my medical director and medical services director came to me with an interesting case related to medical tourism. In short, one of our covered members went overseas to Europe to have his spine repaired.
He received two spinal implants that cost a total of $42,000 U.S. He was requesting reimbursement as he had paid the providers directly for the surgery.
The question for me was whether we should pay it, as we had not directed him to have the surgery done "out of network." We apparently had authorized it but had not clearly communicated to him about where he should go for the surgery. We would have most likely sent him to Salt Lake City or Denver. He made up his mind and chose Europe, and went there for the surgery. It appears to have been successfully completed.
One of the benefits of having his procedure done in Europe was the fact that the surgical standard is to have two discs replaced, while we, in the United States, only allow one implant per surgery. In other words, he got two discs repaired while undergoing just one surgery.
In any case, the surgery was completed and he requested reimbursement. He pointed out that the total cost for the two implants and surgery was far less than what it would have cost for one implant and surgery if the procedure had been completed in the United States, and thus he saved us money. He did make good points.
Of course, as a good parsimonious health plan, we asked the logical questions related to liability, precedence, etc. We queried our fellow health plans and got only one response, interestingly from Salt Lake City. Apparently there is not yet a lot of experience, at least among some health plans, with international medical tourism.
With the information that we had, we discussed the case again. My decision, ultimately, was to pay the member for the surgery, subject to some exclusions. It was a practical response, coupled with the reality that we had not been clear in our communication initially. I believe the onus for clarity falls on the health plan, not the individual member.
So, what are the cost differences? They are profound. Surgery itself was much less than in the United States. The cost of each implant in Europe was $17,000, whereas it would have been at least $20,000 in the United States. The manufacturer is an international company and sells its products in the United States and abroad. The pricing surely differs by geography, to our detriment here. Plus, it is customary for U.S. hospitals to take their acquisition cost and mark it up by 200 percent or 300 percent, creating a differential here versus abroad. I don't know how hospitals might mark up that same implant overseas.
This incident was an eye opener that confirmed my concerns about the cost of health care in our country. I am thankful for advanced medical technology and I assume, based upon our approval, that this member needed the surgery so that he could function much better.
Nonetheless, the cost can be frightfully high here, compared to other settings. Medical tourism is an international issue, to some degree, but interestingly, it may become more of a domestic issue. U.S. providers may develop more "value" based approaches to care that might create meaningful differentiation in outcomes, quality, and cost.
I hope so!
David Kibbe is CEO of New West Health Services https://www.newwesthealth.com/