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Special Senate Hearings
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Chaired by Senator Gordon Smith and Ranking Member Senator Herb Kohl, the U.S. Senate Special Committee on Aging was first established in 1961 and has served as a focal point in the Senate for discussion and debate on matters relating to older Americans. On June 26, 2006, the Committee held a Special Hearing, “The Globalization of Health Care: Can Medical Tourism Reduce Health Care Costs?” that explored the growing trend of medical tourism. This meeting provided a range of perspectives – from a patient who had heart surgery in India, to a self-insured company that is considering adding overseas hospitals as an option in its employee health plan. The following provides brief highlights
of each participant’s testimony at the hearing with a link
to their complete statement. A webcast
of the entire hearing may be viewed on the U.S. Senate web site. Senator Gordon Smith According to Senator Smith, medical tourism is defined as the practice of patients seeking lower cost health care procedures abroad – often packaged with travel and sightseeing excursions. Time magazine recently reported that 55,000 Americans traveled last year to Bumrungrad Hospital in Thailand for a variety of elective procedures, and the West Virginia legislature is considering options for encouraging state employees to travel abroad for less expensive medical care. Additionally, three Fortune 500 companies are investigating the best places to outsource elective surgery. Why is the globalization of health care evolving at a rapid pace?
What will be the long-term impact of medical tourism on the U.S. health care system? Senator
Smith’s entire statement (1
page PDF file) Senator Herb Kohl Medical tourism is taking off in the United States, which accounts for $1.7 trillion of the $3.3 trillion spent annually for health care worldwide, yet ranks 37th worldwide in quality of care. Even more unsettling: there are 45 million Americans without any form of health insurance. I look forward to hearing from our panel on both the benefits and risks of medical tourism. Senator
Kohl’s entire statement (1
page PDF file) Maggi Ann Grace and Howard Staab, Howard Staab was diagnosed by his doctor as having “a flailing mitral valve with severe mitral regurgitation”, a severe heart problem that required immediate surgery. Although Mr. Staab owned a successful business, he chose not to have health insurance. So, in September 2004, Maggi Ann Grace accompanied Mr. Staab to New Delhi, India for the heart surgery he needed, but could not afford in North Carolina. In New Delhi, Dr. Naresh Trehan replaced Howard’s mitral valve at Escorts Heart Institute and Research Center for a total cost of $6,700, as opposed to the estimated $200,000 at a local North Carolina hospital. Mr. Staab was the first American to have heart surgery at Escorts. Ms. Grace and Mr. Staab stayed in India for one month, and several months later Mr. Staab was back at work full-time. His cardiologist in North Carolina reports that he is fine. While in New Delhi, Ms. Grace stayed in the hospital with Mr. Staab for three weeks. Since then, Ms. Grace has slept in the recliner of North Carolina hospitals beside her mother and father, Mr. Staab and several friends. Ms. Grace would sooner leave her loved ones in the care of doctors and nurses in the Indian hospital than in any of the American hospitals she has visited. Skilled nurses in U.S. hospitals are stretched beyond limits that are humanly possible. Patient care is given accordingly to nurses’ schedules and availability and to the level of emergency. This means patients wait. As a result, Ms. Grace has changed bed linens herself, bathed and fed patients. She has caught a disoriented patient climbing out of bed, tangled in her IV lines. Her father awakened from spinal surgery and announced he was hungry. The nurse on duty apologized that the kitchen was closed, and couldn’t find any food. Ms. Grace is a card-carrying insured American, but she would seriously consider flying to India for any elective medical procedure, even if her insurance covered 80% of the cost to have the procedure performed in the U.S. Maggi
Ann Grace’s and Howard Staab’s entire statement
(9 page PDF file) Arnold Milstein, Chief Physician, Several innovative large American employers have asked Dr. Milstein to assess the feasibility of using technologically advanced hospitals in lower wage countries to provide non-urgent major surgeries for their self-insured health benefits plans serving U.S. residents. They intend to add them to their U.S. hospital networks and use positive economic incentives to reward employees and dependents who use them. The large employers are pursuing this option for three key reasons:
Comparison of Hospital Reported Combined Average Expected Facility and Professional Fees for Elective Coronary Artery Bypass Graft Surgery, 2005
The fastest percentage point rise in uninsurance among working adults is in the middle quintiles of American household incomes, and the average health spending for a working family of four exceeded the entire annual earnings of a minimum wage worker. Arnold
Milstein’s entire statement (6
page PDF file) Bonnie Blackley, Corporate Benefits Director, Blue Ridge Paper Products, Canton, NC In 2000, Blue Ridge Paper’s health care claims were projected to be $36 million by 2006. Because of innovative programs, Blue Ridge’s cost at the end of 2006 will be closer to $24 million, but still representing a 75% increase since 2000. Half of U.S. companies have recently stated that increasing health care costs have contributed to slower profit growth, lower wage hikes and delayed hiring of new, permanent workers. For Blue Ridge, from 2000 to the end of 2005, its health care claims amounted to nearly $107 million, and the company has lost $92 million. In order to help reduce costs, Blue Ridge has eliminated retiree medical benefits for salaried employees hired since March 1, 2005. Employers are angry, fed-up and desperately seeking relief from a system that ranks 37th worldwide in quality of care, but costs more per capita than other industrialized nations ($5,267 in U.S.; $2,193 median; $9,000+ Blue Ridge). We do not get commensurate value for our health care dollar, are not seen as customers, must pay for medical errors and hospital-acquired infections and are patronized by constantly being told that American health care is the best in the world. Blue Ridge must compete in a global economy, yet U.S. health providers have little or no competition, resulting in monopolistic health care suppliers. With healthy competition, U.S. health providers will become more efficient, lean, cost effective and productive, provide better services and products and reimburse customers for inferior products, or go out of business. Should I need a surgical procedure, I would take an all expense paid trip to an accredited hospital that compares to a five-star hotel, with a surgeon educated and credentialed in the U.S., a registered nurse around the clock, no one pushing me out of the hospital after a few days, a several-day recovery period at a beach resort, at a fraction of the U.S. price. Bonnie
Blackley’s entire statement (4
page PDF file) Rajesh Rao, CEO, IndUSHealth, Raleigh, NC There is a major imbalance in spending, with over half of U.S. health care expenditures attributed to the wealthiest 5% of the population. Even though U.S. health care costs are rising faster than any other developed nation, we remain behind others in our life expectancy and infant mortality rates. Our per capita expenditures are double the average of other developed countries and our health care spending represents a disproportionately large percentage of our Gross Domestic Product (GDP) when compared to other nations, expected to reach an alarming 20% in the next five years. This will result in a growing competitive disadvantage for U.S.-based companies as they vie for economic growth opportunities in a global marketplace. In this new era of globalization, we are poised to take advantage of the benefits of the shrinking-world phenomenon and to leverage the global marketplace to help reduce our health care expenditures, while introducing elements of competitive pressures into the system. There are now 45 million uninsured Americans, of which over 12 million have annual family incomes of $75,000 or more. When faced with the need for expensive medical treatments, they often have to choose between bankruptcy and putting their life at risk. The size of our aging population is growing, and the number of centenarians is expected to reach over 1 million by 2050. Changes are being made to retiree benefits to accommodate this growing segment of the population, forcing an increasing number of elderly citizens to consider other suitable alternatives for health care. U.S. employers are being squeezed between pricing pressures due to global competition and the increased costs of maintaining a healthy workforce. Many small-to-medium size employers can no longer afford to pay annual insurance costs of almost $10,000 per family. As a result, they are forced to reduce health benefits, downsize or consolidate their operations. Federal and state governments are challenged with widening financial shortfalls associated with their obligations to fund Medicare and Medicaid programs. If other businesses can effectively tap knowledge workers in other countries (i.e., manufacturing; IT; etc.), why not health care? India is rapidly emerging as the world leader in global medicine with over 150,000 foreign patients having visited the country for medical procedures in 2005. Super-specialty hospitals in India have made significant investments in recent years to build and staff state-of-the-art facilities with the latest equipment and consumables. The quality of care at these leading hospitals is comparable to the best institutions in the U.S. Above all, India is able to offer a large, sustainable cost advantage. Indian hospitals are able to offer pricing that is a mere fraction of corresponding costs at U.S. hospitals, per the following chart.
For
Rajesh Rao’s entire statement (5
page PDF file) Bruce Cunningham, Plastic Surgeon and President, American Society of Plastic Surgeons, Minneapolis, MN The American Society of Plastic Surgeons is the largest organization of board-certified plastic surgeons in the world with more than 6,000 members. Although numerous factors are likely involved in the growth of medical tourism, there is at least anecdotal evidence to suggest that patients considering medical care outside of the U.S. do so primarily through a price-driven lens. Patients should be aware that risks might increase when procedures are performed during cosmetic surgery vacations, since vacation activities are not always appropriate for recovery after cosmetic surgery. Additionally, travel combined with surgery can also significantly increase risk of complications. Patients should be aware that long flights and surgery combined could further increase risk. In many cases post-operative care is nearly as important as the procedure itself. Follow-up care and monitoring is a critical part of any surgery. Patients should consider who would be providing this care once he or she returns home. The potential for post-surgical complications presents particular challenges for medical tourism patients. The key is determining what happens to the patient once they return home if they have complications or are unhappy with the results. Patients should have all the information they need to make a truly informed decision and one with their best health in mind. Bruce Cunningham’s entire statement (3 page PDF file)
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