“Medical tourism” is a concept that every benefits professional has heard of, but is difficult to implement in practice. The idea of asking employees to travel across the globe to get procedures done in many cases isn’t really realistic.
In spite of the difficulties, the practice of traveling to get procedures done is growing. In 2008, over 35 countries were serving more than a million medical tourists annually, 1.3 million of which were American. Even with cost per procedure being up to 70% less than U.S. price tags, the medical tourism industry is expected to reach $100 billion market value in 2012.
Medical tourism is a more likely possibility when considered on a more local scale. Even across cities, costs of routine procedures can vary dramatically. Just one example: if you need a spinal MRI in the Milwaukee area, it can cost anywhere from $400 to $1000 for facilities ranked equally in quality. A short commute can mean $600 saved!
There are a number of insurance carriers that have their own medical tourism cost comparison tools. For example, Anthem Blue Cross Blue Shield’s Care Comparison provides an easy-to-use way to compare providers on key metrics like price, quality, number of procedures done annually, and other decision factors. United Health Care and Humana also have similar tools available. Just having access to this information is the first step in helping employees become smarter healthcare consumers.
When employees shop smart for their health care needs, it saves them and the employer money. To encourage “shopping around”, you need to design your plan in a way that creates an incentive for people to do so.
There are two core ways to structure incentives around medical tourism: 1) a uniform credit for using the tools, or 2) a variable credit based on the cost of the procedure or the amount of money they saved by choosing a particular provider.
A uniform incentive plan is one way to motivate employees to consider their healthcare options when planning a medical procedure. The uniform incentive would offer a set credit amount (say $100) for an employee that compares prices and quality for their procedure at different locations.
To implement this incentive with your employees, make a list of the applicable procedures based on their relative cost and availability in the area (MRI/CT scans, knee or hip surgery, childbirth, colonoscopy, mammography, and back surgery could be a possible list).
Before they get care, have the employee print out their comparisons and the EOB after the procedure to receive a credit to their HRA or HSA.
An incentive plan could also be structured to offer different amounts depending on the overall cost of the procedure or the amount saved by using a different facility. Employees will still have the freedom to choose where they go for healthcare, but they will also know how much they will be rewarded for choosing that location for their specific procedure.
With the cost transparency tools many insurance carriers are introducing, medical tourism at least on a local scale is more possible than ever. Incorporating an incentive for employees to be more informed health care consumers can help minimize costs for employers and create a more competitive environment in health care as a whole.