“Medical Tourism” The Latest Outsourcing Niche to Take Off

Thu, Dec 11, 2008


In the May 29, 2006 issue of Time magazine, you can read all about Wayne Steinard, a general contractor from Winter Haven, FL, who had a clogged artery that needed to be taken care of right away. But Wayne couldn’t afford medical insurance, and so he obviously also couldn’t afford the $60,000 it would cost in the US to have the artery cleared and a stent installed.

So, what did Wayne do? Well, along with his daughter, he got on a plane to New Dehli where he was checked in to Max Healthcares Devki Devi Heart & Vascular Institute. And, once there, it turned out Wayne needed much more than just a simple stent, his artery was 90% blocked and he required immediate double bypass surgery.

The surgery was a success, and here’s the kicker: Steinard’s total bill from the hospital in New Dehli came to $6,650, less than a tenth of what it would have cost in the US!

The so-called medical tourism phenomena where patients who lack adequate medical insurance and the money for high-cost, often-life-saving surgical procedures opt to travel from the US to countries like India, Thailand, Singapore, Mexico, etc., is an example of a booming outsourcing niche. And it’s only going to get bigger from here.

One of the most intriguing aspects to the story in Time discusses how small business owners in the US are just beginning to explore ways to offer their employees the option to head overseas for much less expensive medical procedures: heart bypass, hip replacement, spinal fusion, etc., as a way to combat medical coverage costs that have simply spiraled out of control. An entire industry of global private hospital networks, consultant companies, and medical accreditation organizations have sprung out of seemingly nowhere in the past several years to handle the booming need for their services.

For small and medium size companies in the US and elsewhere, is this a truly viable solution for a huge and growing part of their bottom line expenses? There are many pros and cons to weigh, for sure, but it does appear to be a new outsourcing trend that is here to stay.

What are the implications of the medical tourism trend for US hospitals, and the US health-care system, overall? Nothing too good, I believe – at least in the short-run. But perhaps it’s time they wake up to global competition, like everyone else in the US has had to do.


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