Health insurance companies have the power to determine the fate of the American health care system — especially when it comes to the growing popularity of "medical tourism," where patients travel outside the country to receive medical treatment at far lower costs than in the United States.

For some patients, traveling abroad is the only option for obtaining treatment, and it’s not just for the uninsured. Even for Americans with health insurance, the rising out-of-pocket costs for insurance deductibles, co-payments and co-insurance can put medical treatment out of reach at home.

The most common surgeries sought by Americans overseas include heart procedures (coronary artery bypass surgery), orthopedic procedures (spinal fusion, hip and knee replacement and resurfacing), laparoscopic surgeries, transplants and elective treatments such as cosmetic surgeries and dental work.

"Most medical tourists are from Europe, the Middle East and their surrounding countries. Right now there is a very small percent of the population from the U.S. going to other countries for medical procedures," says Deepak Datta, co-founder of Medical Tourism Corp. LLC, a Plano, Texas-based medical-tourism facilitation company.

A trip abroad for surgery can be purchased much like a vacation plan. Most medical tourism packages include 24-hour assistance with scheduling appointments and travel arrangements. In many ways, medical tourism combines health care with vacations: cost effective surgeries and recuperation arranged much like an exotic vacation. It is common for recovery centers and aftercare facilities to resemble five-star resorts.

Booking your health care trip

Datta says a medical tourism trip starts with a service provider conducting a patient pre-evaluation for a small fee — typically $200.

"We collect medical data and have a U.S. board-certified physician review the data. A recommendation is made for the best treatment route abroad, and a price for the procedure is quoted," he explains.

Once the patient decides to move forward, 10 percent of the cost of the medical procedure is collected (nonrefundable) and full payment is due before the client leaves the country.

"We work with hospitals that are affiliated with John Hopkins Medical Center in the U.S. A large percentage of the doctors we work with were trained in the U.S. The quality of care is similar, if not superior, to the quality of care in the U.S," he says. "We go through a number of steps to inform the patient about everything they need to know about the doctor and the hospital."

Waving goodbye to American health care costs

Even with the cost of air travel, lodging and food factored in, foreign medical treatment can come cheaper than American medical care. In California, Texas and Arizona, retirement communities organize regular bus tours to Mexico for seniors seeking affordable dental work and inexpensive pharmaceuticals.

"We follow a $6,000 rule. It doesn’t make sense to send a person overseas for a procedure that is less than $6,000 in the U.S.," says Patrick Marsek, managing director of Illinois-based MedRetreat, a medical tourism facilitator. "When you add in airfare, accommodations and essentials . . . the majority of the procedures are over $10,000. The travel is a very small part of it."

Since 45 percent of Americans do not have dental insurance, dental care is a top reason to travel. Americans can travel to Costa Rica to have a crown done for under $500. With dental insurance, patients pay $10 to $50 for a gold crown, while porcelain crowns typically cost between $40 to $100 each. Without insurance, the average cost is between $650 and $1,200 per tooth. Mexican dentists charge one-fifth to one-fourth of U.S. prices.

Most medical tourism packages can save patients 20 to 80 percent of the cost of a medical or dental procedure in the U.S.

American health care providers could lose nearly $16 billion in revenues to medical tourism this year. While this is only 3 percent of the total $1.6 trillion spent on health care, it’s enough to catch their attention. According to the Deloitte Center for Health Solutions, there were roughly 700,000 American medical tourists in 2007. The center predicts that number will increase to 6 million by 2010.

Insurance companies dip their toes in overseas water

A growing number of major American insurance companies are now considering some form of medical tourism coverage. Health insurers are looking at best practices regarding care and follow-up visits, and the possibility of corrective treatment following overseas procedures gone wrong.

Right now, finding an individual health plan to pay for medical tourism could be impossible. One way past patients have obtained coverage is through an individual high-deductible health plan that pays for any provider — but check with your insurer to see if that’s applicable to you.

Patients with insurance coverage for overseas treatment typically belong to group health plans where medical tourism is included.

According to a January 2008 report from the International Foundation of Employee Benefit Plans, 11 percent of surveyed organizations have an employer health plan that covers some form of foreign medical services.

Health insurance companies in California have started to embrace medical tourism to Mexico as a way to provide cost-effective treatment to policyholders.

In cross-border insurance programs, like the one offered by California-based Health Net, the cost to insure a family of four in the United States is $631 a month; but if a family uses a physician in Mexico, the rate drops to $306 a month. The interest in providing medical coverage in Mexico sprung from the desire of Latino employees in California who felt more comfortable visiting a physician in Mexico.

"When we started this program seven years ago, we were developing a initiative to increase interest by the Latino market," explains Ana Andrade, vice president of Latino programs for Health Net. "Mexico receives 3 million visitors each year seeking medical care. We saw an opportunity to meet that need and offer a product that would provide cross-border savings with the right care in a culturally relevant manner. We have more than 30,000 members in the plan."

"Some physicians have expressed concern with quality of care in Mexico. Those that work with a licensed health plan don’t have those concerns. In California, there is a tremendous shortage of physicians that are culturally competent to serve the Latino population, who speak Spanish and who understand the culture," says Andrade.

Blue Shield of California has its Access Baja plan, which is designed for Americans who decide to receive medical care in northern Mexico. Southern California residents who live within 50 miles of the border can buy coverage that allows them to go to Tijuana for non-emergency medical care. California is the only state to regulate insurance programs that require crossing the border for basic health care.

"It was born out of trying to serve those employers that had a large population of employees that lived in Mexico or had family in Mexico," says Karla Gil, project manager for Access Baja. "We have 50 to 60 employer groups in the plan and it has grown in the last 8 to 10 months by 15 percent." Gil says that possible coverage expansion is in the works.

In a pilot program, Blue Cross and Blue Shield of South Carolina (BCBSSC) was the first U.S.-based insurance plan to develop a formal relationship with an international hospital. It was also the first insurer in the nation to have an official affiliation with a hospital in Thailand. In 2007, it established a subsidiary, Companion Global Healthcare Inc., a network of hospitals and internationally accredited medical facilities in Singapore, Thailand, Turkey, Costa Rica and Ireland.

BCBSSC created a managed care network of foreign-based hospitals in order to evaluate the next step for insuring Americans seeking surgical procedures overseas. Currently, the plan provides a number of international preferred provider organization (PPO) options for its group health plans.

"Any Blue Cross or Blue Shield member nationwide has access to covered health care at international facilities through the BlueCard Worldwide Network," explains Billy Quarles, a spokesperson for BCBSSC. "Through the program, any Blue Cross Blue Shield of South Carolina member could apply his or her health insurance benefits toward a procedure at a hospital in the network. If the procedure is covered in a member’s health plan and precertification and pre-existing policies are satisfied, the member is covered."

If a patient has adequate coverage in the United States, it may seem unlikely that they would elect to have a surgical procedure overseas. However, Quarles says there are a few things to consider.

"Few members with a $250 or $500 deductible would fly to a foreign country to have surgery," says Quarles. "But there are some, like those with high-deductible plans, those with pre-existing condition coverage exclusions, or those looking for a medical specialty not available in the U.S., who might take advantage of the overseas option."

If your condition is excluded from your insurance plan and you have to pay a high deductible out of pocket, the cost of a major surgery is far less at an overseas hospital.

Quarles adds Companion Global Healthcare is primarily focused on contracting with self-insured employers who want to include its network of hospitals and services in their own benefit plans in order to hold down claims costs and help employees save out-of-pocket expenses.

Aetna provides a pilot option for group health plans, but according to spokesperson Scot Roskelley, the option hasn’t yielded enough interest to come to fruition.

In June 2008, Aetna announced its group health plans would cover hip surgery in Singapore.

"A few employers have expressed interest in this concept and Aetna is willing to explore that option with them on an individual basis. We do not, however, offer a medical tourism program," Roskelley says.

Blue Shield of California and United Group Programs of Florida offer group health plan medical tourism options but with limited coverage.

Health insurer WellPoint will launch a pilot program in 2009 that sends patients to India for some specialized surgeries. Patients can travel to hospitals in either Bangalore or New Delhi for procedures such as joint replacment or upper and lower spine fusion. As a subsidiary of Anthem Blue Cross and Blue Shield in Wisconsin, the company will coordinate medical care, scheduling and travel services for patients. WellPoint will cover travel and lodging costs for both the patient and a companion.

Choosing a medical tourism facilitator

Medical tourism facilitators offer services that centralize appointments, travel services, case management and follow-up care in the United States. According to Jonathan Edelheit, President of the Medical Tourism Association, the weakest link in the medical tourism process is follow-up surgery care.

"We know where checks and balances have to occur," he says. "There are so many medical tourism start-ups and no real way to regulate them that there has to be a program in place that will not only look after patients when they arrive, but also when they leave."

Before a patient leaves the U.S., his doctor must approve the medical procedure and country of choice and agree to follow up with the patient after his return to the U.S, he says.

Employers discover medical tourism reduces costs

Companies with more than $1 million in health care costs are sometimes looking to have necessary and elective surgeries in their medical insurance plan provided overseas.

Peter Hayes, of supermarket chain Hannaford Brothers Co. in Maine, began offering medical tourism in January 2008 for employees that need hip and knee replacement. The company worked with Aetna to create group health insurance coverage for these procedures in Singapore.

Hip and knee replacements generally cost around $50,000 in the United States and the employer pays 70 percent of the cost, Hayes says. Overseas, the employer will cover 100 percent.

New medical treatments available sooner overseas

Datta says that sometimes treatment overseas is the only option for patients, especially when it comes to "experimental surgeries" that aren’t approved in the United States. This includes hip resurfacing, an alternative to hip replacement; facet joint replacement, an alternative to a spinal fusion; sleeve gastrectomy with fewer complications than gastric bypass surgery; gastric lap band surgery for teenagers; and metabolic surgery (surgery for type 2 diabetes).

"Successful treatments such as hip resurfacing have been going on in countries like India for quite some time," Datta says, adding that certain medical procedures take a long time to be available in the United States because they must first be approved by many regulatory organizations.

Uh oh: Who pays for medical complications?

If you have a procedure done abroad at your own expense, your American health insurance is still liable for treating you for complications once you’ve returned.

In cases where employers have facilitated medical tourism, "It takes only one person to have a complication for this concept to go down the drain," says Sandra Morris, senior manager of employee health care benefits at Procter & Gamble. "Medical tourism does not address liability. Some of these issues are obvious and some of them are not. If something goes wrong, does the employer assume the responsibility for obvious malpractice? Who pays for the extended stay to correct complications, and also who pays for a family member who wants to be at the bedside of a critically ill patient? What about expatriating a body if something goes terribly wrong? There is no clear definition about who would be held responsible."

To keep prices down, overseas providers use simple reimbursement systems with cash payments or a single-payer insurance model. Limited ability for patients to sue is also one of the reasons the cost of care is lower. However, if problems arise from a medical procedure, foreign hospitals may be unable to pay financial damages awarded by a court because they do not carry insurance for medical malpractice. For those that do carry medical malpractice insurance, premiums are much lower overseas.

Walter Koppel of Medex advises against using medical tourism as a solution to high-cost surgical procedures.

"There are so many areas of medical tourism that you can’t control," says Koppel. "Someone who has a heart attack in Thailand can’t control the care they receive or have control over what is needed to get them home. An orthopedic surgeon doesn’t know how to administer to a heart attack. Until the hospital and doctors are standardized and credentialed, there will always be that risk."

"Long flights could cause breathing problems and increase sensitivity to healing wounds," adds Koppel.

It’s best to book treatment at a credentialed facility. The organization charged with regulating the safety and quality of medical care internationally is the Joint Commission International (JCI), a not-for-profit division of the Joint Commission that awards accreditation to more than 15,000 health care organizations and programs in the United States. To date, JCI has accredited 10 hospitals in Brazil, eight in India, two in Mexico, 12 in Singapore and four in Thailand.

A catalyst for change

On the domestic front, Edelheit says that medical tourism may serve as a catalyst to promote competition between international health care providers and the United States.

If health care dollars continue to go overseas, American hospitals will have to respond.

"If more health care providers look for ways to compete, that will raise the dialogue about medical tourism. It has yet to be determined if this move to compete with hospitals overseas will totally change the current health care crisis in the U.S. because medical malpractice reforms have to happen first. I think insurance companies feel this is a very compelling point and it will embolden them to customize a health insurance plan for medical tourism to meet the needs of their members," Edelheit says.