Federal Health Care Legislation Adds to Push for Medical Tourism

Published May 31, 2016

Changes to the U.S. health care system under President Obama’s new law may have the unintended consequence of increasing Americans’ demand for medical tourism.

Providers Fleeing Medicare

David Boucher, president of Companion Global Health Care, says demand will in part originate from Medicare recipients.

“Now that the health care reform bill has passed, we expect more employers to seriously consider medical tourism, for several reasons,” said Boucher. “One impact of the national reform law is that more doctors are going to be giving up their private practices.

“In 2008, 28 percent of Medicare beneficiaries looking for a primary care doctor had trouble finding one. Think about what that’s going to look like in a few years, considering that the number of doctors participating in Medicare has been dropping since 1990s,” he added.

According to Boucher, Medicare recipients are eventually going to find it much easier and faster to get treatment outside the country as hospitals drop their coverage of such patients.

“This trend is becoming evident in surprising ways,” Boucher said. “The Mayo Clinic was named as the number one United State hospital in 2009, and just thirty days later they announced that they would be opting out of the Medicare program.”

Employers Supportive

The federal reform will also increase the likelihood of employers supporting such tourism, says Jeff Koch, former vice president of the employer benefits programs at the National Federation of Independent Businesses, as long as pending regulations do not prevent such activities.

“Regardless of what happens after federal reform, if there is still room for innovative plan design that allows for pooling of small employers, then they would be allowed to build in things like access to medical tourism [and] access to concierge health care, while driving down costs, which would allow small businesses to have a new solution to [high] health care costs,” said Koch.

Competition Increasing Globally

Jonathan Edelheit, CEO of the Medical Tourism Association—currently the only nonprofit trade association for medical tourism in the world, with offices in six different countries—says the next generation of patients will be more open to travel.

“We are in a global world; nothing is domestic anymore. There are nursing and doctor shortages around the world. Everyone is competing for the top talent. More and more doctors are returning to their home countries, and patients are following,” said Edelheit. “New, modern hospitals are being built in every country in the world, with top technology.”

Cost, Delays Will Drive Tourism

Edelheit says cost concerns will also drive the coming increase in medical tourism.

“The estimated cost of health insurance in the United States by 2020 is $13,763 per individual per year and $38,160 per family per year,” he said. “This new health care reform will increase the costs overall. Plus, over 120 million Americans have no dental insurance. The federal law will do little to nothing in reducing health care costs or health insurance costs.”

Roy Ramthun, president of HSA Consulting Services, agrees, and he says people’s desire to receive care on-demand will be frustrated by the new delays.

“I believe that the federal health care legislation passed this year will lead to an increase in medical tourism. New fees and taxes will be imposed on health industry sectors [including] insurance, devices, pharmaceuticals, and more,” said Ramthun. “Wealthy Americans may find a place like Costa Rica to be a very attractive destination, especially if they face longer waiting for care and potential limits on access to new tech and treatments. Americans don’t like to have to wait.”


HSAs Could Also Increase Tourism

Ramthun also says Health Savings Accounts (HSAs) could increase medical tourism.

“People with HSAs are the most likely to be medical tourists. They are willing to travel, internet-savvy, and looking for best value. They are spending their own money and want to save money,” said Ramthun. “As costs increase, provisions that make these charges more clear will build a movement of people toward [greater] awareness of health costs.”

Ramthun says insurance companies are increasingly offering options for out-of-country care.

“Employees with HSAs will care more about cost since they are spending their own money. American employers are going to want to send their employees overseas for care because their costs are growing, and the insurer is going to want to save money,” Ramthun said. “As the differences in quality go away and more locations are available that are convenient to the United States, the more likely [that employers and insurers] are going to [offer] that.”

Overall Tourism Increases Expected

With problems at home and easier access abroad, increasing numbers of U.S. citizens may face this choice and consider these options, Ramthun says.

“Patients are going to be willing to travel instead of waiting around for treatment in the United States. Compare that to going on a Web site, scheduling an appointment, and getting a last minute flight deal, and you see why people will make that decision,” Ramthun said.

Boucher agrees Obamacare is likely to spur an increase in medical tourism.

“I believe that recent reform efforts will be very positive for international medical tourism,” said Boucher. “An increasing number of folks in the United States are going to be leaving the country for care.”

Sarah McIntosh ([email protected]) teaches constitutional law and American politics at Wichita State University in Kansas.