Wednesday, November 12, 2008

A new kind of outsourcing

Indianapolis' own Wellpoint health insurance company has approved a new program to save money and provide better care for its patients through outsourcing to India. No, they're not outsourcing the forms processing or telephone centers... they're outsourcing the actual medical care itself! From the Indianapolis Star : "Are you in need of a new knee?
WellPoint is testing the concept of arranging and paying for you and a companion to travel to India for a joint-replacement procedure that could cost a fraction of what it would at your local hospital. Think of it as a form of medical outsourcing. Indianapolis-based health insurance giant WellPoint is jumping into the emerging world of "medical tourism" -- the practice in which U.S. patients cross international borders in search of cheaper medical care."

There's no catches or hidden costs to the patient- "Under the pilot program, a patient heading to India for surgery would pay no out-of-pocket expenses, including the cost of travel for the patient and a companion." A local TV story, with an interview with one of the first patients, confirmed this- the whole things was completely covered. And we're not talking about some fly-by-night clinic, either: "WellPoint said the hospitals it is working with in India are accredited by the Joint Commission International. The company said its test program also complies with the American Medical Association's guidelines for medical tourism." The benefits for Wellpoint are clear: "Hashmi said a knee replacement in the U.S. could have a price tag of $60,000 to $70,000 for the procedure, initial rehabilitation and other costs. In India, total medical costs might run $8,000 to $10,000 for a 15-day stay."

Medical tourism itself is not new- "An estimated 750,000 Americans traveled abroad for medical care in 2007, according to a report on medical tourism by consulting and advising company Deloitte. The report noted that care in countries such as India, Thailand and Singapore can cost as little as 10 percent of comparable care in the U.S." What is new is an insurance company the size of Wellpoint paying for it.
Contrary to the natural assumption, a doctor interviewed on the TV news story said that the difference is not in doctors and nurses' salaries, but in legal and administrative costs. It will be interesting to see the fallout from this.

1 comment:

Tirya said...

The biggest cost driver in the US is, I believe, malpractice insurance. Medical tourists need to be aware that if something goes wrong, their legal remedies are limited to the laws of the country in which they received the procedure - which can be a lot less "generous" than the US.

It will be interesting to see how this affects procedures here in the US, and how it all shakes out.