Tuesday, April 15, 2008

Swallowing Medical Tourism Claims

It intrigues me how easily respected publications swallow and reproduce false and misleading claims by self-promoters. I belatedly came acrosss this story in the March 24th issue of BusinessWeek titled "Outsourcing The Patients."

It's about medical tourism taking off, and US health insurers like the Blue Cross & Blue Shield of South Caroline letting US patients get treatment in good foreign hospitals. The comparative cost data presented in the accompanying table caught my eye as it looked so wrong. The cost of a standard heart bypass procedure in the US, Singapore, Thailand and India is shown as $130,000, $18,000, $11,000 and $10,000 respectively. Though figures vary by source my best "apples-to-apples" estimates for these countries would be $70,000, $30,000, $18,000 and $10,000 respectively.

The $130,000 for US based procedures appears to be based on the inflated "list" prices that are billed by U.S. hospitals to the hapless uninsured walk-ins. But these cases are less than 8% of the total, and even among these the providers on average realize only a fraction of the charges. Instead, the providers are typically paid "negotiated" rates that are about half the list prices. The rates listed for Asian countries should be for comparable JCI accredited "five star" hospitals. Singapore's own hospital administrators say that their prices are about half of US prices and several other sources including medical tour operators confirm this. The same sources can confirm Thailand hospital prices that are about half to two-thirds of Singapore prices (or one and a half to two times the Indian prices.)

Why did BusinessWeek so understate Singapore and Thai prices? Their listed source is the Thai Public Health Ministry. This ministry doesn't appear to have the data on their website, and gave numbers to make Thai hospitals look good compared to their Indian counterparts. BusinessWeek could have easily caught the errors by using other sources to check this information.

However, this misinformation pales in comparison to the claims by Thailand's Bumrungrad Hospital mentioned in my earlier post of August 17, 2007. Another BusinessWeek article of March 17, '08 quotes the American CEO of Thailand's Bumrungrad Hospital as saying that 65,000 Americans were treated there in 2007. A back of the envelope calculation exposes the absurdity of this claim. Bumrungrad's total revenue in 2007 according to their financial disclosures was 9.4 billion Baht, or $299M (not the $555M reported in the article.) Now assuming an average payment of $8,000 per American patient, the revenue from 65,000 Americans alone would be $520M, not counting all the other million or so patients. I'll be surprised if more than 2,000 US patients visited Bumrungrad in 2007, so they're exaggerating by a factor of about 30 or 3000%.

Given this, I worry about how much faith we can place in the integrity of such medical institutions, or their quality of treatment. The chicanery of one or two prominent hospitals can give a bad name to medical tourism as a whole. But here I'm focusing more on the accuracy of reporting and maintaining journalistic standards. BusinessWeek is not alone in this. The New York Times and The Pittsburgh Post-Gazette were taken in by similarly outrageous claims by Bumrungrad in 2006. I noticed another contradictory statement in the BusinessWeek March 17th article - that said "The big problem, though, is that Bumrungrad is now too popular... [with a low] 70% occupancy rate.." Huh?

I'm aware of the tremendous pressures on the harried and underpaid staff of these publications to rush stories to the press. But they owe their trusting readers a little fact-checking and verification, while saving themselves from serious embarrassment in the bargain.

7 comments:

Anonymous said...

Medical Tourism is becoming very popular. Many Canadian patients, who are becoming impatient and frustrated with long waiting times for surgery in the Canadian Health Systems, have turned to this as a cheaper and faster alternative. And when a post-operative vacation package is thrown in, it becomes difficult to resist.

But as you say, one should compare 'apples to apples', and I've gained some insight to cost comparison, which you have given, as well as from the in-depth CBC news article given on the link below:
http://www.cbc.ca/news/background/
healthcare/medicaltourism.html

'Part 2' of the article, mentions that the costs incurred abroad are reimbursed by the provincial health care sytems in Canada. So everyone wins in the end.

And this is how globalisation works.

Rene.

kenrod said...

Has the falling US dollar affected prices?

Sandip Madan said...

Rene, thanks. That link was very useful, especially the second part of the article about costs getting reimbursed in Canada.

Kenrod, the falling dollar has indeed raised the prices in dollars, but the differential is so vast (especially for India) that most of the savings are still realized. For example, the heart bypass cost for India has gone up from about $7,000 to $10,000, as compared to $70,000 in the US.

kenrod said...

Thanks for those numbers.

Bumrungrad hospital is still a bum deal, however.

Sandip Madan said...

Kenrod, I presume you mean bumrungrad is still a good deal compared to US prices. I agree. My worry though, is about the competence of many of their doctors, based on my admittedly anecdotal information.

For major cardiac cases I would certainly not go there, and this may hold for other major surgeries as well. Part of their problem may be that they only hire doctors of Thai origin. I don't mean to denigrate anyone on the basis of nationality, but this limits the talent pool. There may not be enough highly talented, experienced and foreign trained Thai doctors who are available to go back and practice in Thailand.

kenrod said...

Will you suffer political pressure if the Indian or Thai govt say you are treating foreigners better than locals because the payment is so much more than a local can afford? I mean, theoretically, a doctor is supposed to take the Hippocratic oath. But in reality, if a patient comes in offering $8000 vs a patient comes in offering $3000, who gets the bed?

Sandip Madan said...

The foreign patients paying a premium price for more upscale facilities help to subsidise domestic patients, and some of the surplus is ploughed back to create more capacity.

I think both governments have recognized this and hence encourage medical tourism. There are (misplaced in my view) discordant noises and rhetoric by some other quarters. Though not much at present.