The Economist is running a story on Globalisation and health care -- as it is also referred to "medical tourism." For the most part, the story concentrates on how increased global competition will spur reform in bureaucracy heavy health care systems. From an economic development perspective, however, this might have been the most important paragraph:
Paul Mango, the chief author of a report by McKinsey, a management consultancy, disputes wild-eyed claims that millions of patients are already travelling abroad. Yet even he predicts that the future for medical travel is bright, and that in the long run it may even “largely dispel the idea that health care is a purely local service.”
Exactly -- health care is no longer a purely local service. Yes, some health care will stay local (it does not make economic sense to fly to Singapore for your annual physical). But for major and expensive procedures, offshoring is making more and more economic sense.
So localities that are banking on localized health care as an automatic economic driver need to understand that this is not the case. As I've said before, if you have a jurisdictional advantage (like the brand of the Mayo Clinic or the Cleveland Clinic), then a health care cluster might make economic sense as your key export item. But even then, these locations need to understand that their competition, as the Economist points out, is increasingly global. And then need to strategize accordingly.
What will really cause explosion of the medical tourism trend is when companies begin to offer employees the option (along with incentives) to travel abroad for serious surgery. Swiss Re, a global reinsurance company, just announced that it added a medical tourism component to its self-funded stop-loss employer clients, linking up with medical tourism facilitator WorldMed Assist to handle all the medical travel details for employees. This agreement is new to the US marketplace, making Swiss Re the first carrier to recognize medical travel coverage on a national basis.
It is the first big step enabling employers to reduce their medical costs by offering medical procedures outside the US while expanding options for their employees. Here's a link to the press release on this announcement: http://www.worldmedassist.com/medical_tourism_insurance_swiss_re.htm.
Underlying this agreement is the offering of incentives for employees who choose medical travel as an option. WorldMed Assist will work out incentives with each employer, but might include waiver of deductibles and co-pays, payment of all travel and lodging costs--including expenses for a companion.
Other incentives include coordinated care with the patient's primary US physician, access to some of the world's best doctors at accredited hospitals, and access to procedures not available in the US (like two-level cervical disk replacement).
The more utilized the medical travel option becomes, the more employers will save in lower health plan expenses.