July 27, 2007

SHOP 'TIL YOU DROP:

Open-Heart Surgery--90% off (Steve Forbes, 08.13.07, Forbes)(

A fast-growing phenomenon--"medical tourism," which will be a $40 billion industry by 2010--is showing how we can "solve" the health care financing crisis.

More and more Americans are choosing to go abroad for elective and/or major surgeries. What entrepreneurs began more than a decade ago by constructing world-class facilities to lure patients from the U.S. and around the world into traveling for cosmetic surgery has now blossomed into freshly built foreign hospitals offering a wide array of other types of medical procedures. India, Thailand and Singapore are among the countries heavily involved. Panama and others are just entering this arena.

The hospitals and physicians are usually first-rate and, amazingly, can provide operations at 10% to 30% of the cost in the U.S. For instance, knee replacement surgery that might cost $16,000 here can be done for $4,500 in a top-tier (by U.S. standards) Indian hospital. Dr. John Helfrick, president of the International Society for Quality in Health Care, and Dr. Robert Crone, CEO and president of Harvard Medical International, tell of one dramatic example: A patient was in need of complicated heart surgery. His hospital said the cost would be $200,000 and wanted $100,000 up front. The patient's son, a medical student, knew of the medical tourism industry and arranged for his father to have the operation overseas. The complicated surgery was a success. The cost: $6,700.

How is this possible? Excellent hospitals can be built overseas without the bureaucratic red tape found in the U.S., thereby saving construction time. Construction costs are lower, as are nursing, physician and administrative expenses. Expat doctors who have trained here and in Europe are returning home, where money goes considerably further than in, say, New York or California. More and more these foreign hospitals--currently numbering about 120, and growing--are not just mirroring the best U.S. practices but are emerging as innovators. They are certified by Joint Commission International, a not-for-profit subsidiary of the Joint Commission, which accredits U.S. hospitals. The international accreditation process is as rigorous as it is in the U.S.--but without the unnecessary bureaucratic paperwork.

The delivery of health care in the U.S. could become an innovative, infinitely less costly business than it is today. How? By fundamentally changing our third-party-based payment system, which fosters bureaucracy and crushes innovation and productivity. Health Savings Accounts are the answer--but they won't be able to truly revolutionize health care unless obstacles are removed.

Posted by Orrin Judd at July 27, 2007 8:57 PM
Comments

Excellent medical facilities can be built a lot closer to home, the Bahamas come to mind, and the sooner they begin competing with the bureaucracy crazed system we have now, the better. These facilities can also provide much cheaper insurance plans because they don't need to lay in a supply of wooden stakes to ward off the vampires in the trial lawyer community.

Free enterprise -- works first time and every time! Venture capitalists are you listening?

Posted by: erp at July 28, 2007 8:51 AM
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