We’re not sure if this is the start of a trend or just some very creative cost-cutting by a few companies, but Business Insurance notes that some self-insured firms are now sending their employees to other states to save money on medical procedures.
The first wave of the practice of “medical tourism“—going elsewhere for cheaper procedures—was focused on foreign travel. We’ve previously talked about getting your boobs done in Buenos Aires and getting a new crown in Ciudad Juárez, Mexico, and earlier this summer we noted that Mexico City has gone so far as to offer free health insurance to foreign visitors.
Last year, notes Business Insurance, the supermarket chain Hannaford Bros. Co. got in on the trend in a big way when it announced “that it would begin sending its employees to Singapore for knee and hip replacements to save the company money.” Hannaford is located in Maine, and the announcement prompted several hospitals in Boston to say they would match the price of the Singapore hospitals. Ta-dah! Domestic medical tourism.
Unlike foreign medical tourism, patients don’t leave the country. Instead, they travel to another city within the United States to have procedures for up to 75% less than they would pay if they were treated closer to home.
One of the primary reasons some U.S. medical facilities are willing to be paid less is that they are generally compensated upfront, before the procedures are conducted, which enables them to avoid the arduous task of seeking reimbursement afterward from insurers and third-party administrators. The facilities also receive a single package price that is negotiated beforehand.
“In many cases, if you’re self-funded or a cash patient, a hospital is more willing to deal directly with you rather than work through (preferred provider organizations) or insurance companies,” explained Alex Sanchez, managing director of Healthcare Concierge Services, a subsidiary of Miami-based Olympus Managed Health Care Inc.