Price not greatest concern in medical travel

Although the price difference between procedures performed in the United States and in developing countries might suggest that U.S. payers could gain if they extend their coverage to include treatments abroad, there are a number of factors holding back the flood of medical travelers.

They include the inaccessibility of networks of providers in some medical-travel destinations, the lack of sufficient transparent worldwide data on the quality of health care, the inconvenience of travel, and the desire to undergo medical procedures in familiar settings. The findings are published in a report issued by McKinsey called “Mapping the Market for Medical Travel.” The report also says that most medical travelers seek high quality and faster service, not lower costs.

“If U.S. payers embrace medical tourism, within three to five years, medical tourism will grow substantially,” says Paul D. Mango, a McKinsey director and coauthor of the report. “The medical tourism market, without the U.S. involved, is stable at best and vulnerable at worst.” Medical travelers from the United States report that they would consider “receiving treatment abroad if it saved them at least $10,000, after accounting for treatment and travel costs,” says Mango.

Opportunity for payers

If payers covered medical travel, the potential U.S. market would probably range from 500,000 to 700,000 patients a year, compared to 5,000 to 10,000 today. The report suggests that if this were the case, the savings might be on the order of $20 billion.

Source: The McKinsey Quarterly, May 2008