New Stories on Medical Tourism and the Northwest

The notion of ‘medical tourism‘ is the idea that patients (and payers) can use simple arbitrage strategies to find the lowest cost, high quality medical provider – regardless of geographic location – and receive medical services there.

In other words, this is called being a savvy shopper.

And while you won’t fly across the country to get a hair cut (unless you’re fmr. Sen. John Edwards, in which case you have other problems), you might fly across the country to get health care.  You might do that if one or both of two things exist.

1.  Prices are exceedingly high, as they are in Alaska.  If it’s cheaper, including travel and accommodation costs, to fly somewhere else for care, you might consider it.

2.  Quality variations are wide.  Seattle has very high quality indicators in some areas, compared to the rest of the country.  In others, Seattle is about average or below.  If quality is something you’d fly across the country for – and for life altering medical care, it might be – then you want to go to the best.

Two stories in the last week bring this to the fore for the northwest, and particularly Seattle. Both stories are from the Seattle Times.

Boeing to send some insured workers to Cleveland for cardiac care (link)

Boeing’s deal with top-rated Cleveland Clinic means about 83,000 managers, some retirees and family members can get a big cost advantage on heart procedures, as well as free travel and lodging, while the aerospace giant will get a fixed-price menu for complex, often unpredictably pricey surgeries.

 

Virginia Mason among top hospitals tapped by Walmart (link)

Walmart has chosen Virginia Mason Medical Center in Seattle as one of six top-ranked hospital systems in the nation to deliver specialty care to its insured employees and family members. Others on the list include the Mayo Clinic and Cleveland Clinic.

These stories are important for at least two reasons.

1.  They highlight the role large employers are actively taking in managing the cost and quality of their benefits.  Neither Boeing or Walmart are liberal companies doing this for altruistic reasons.  I’d guess they’re doing it because it’s smart business:  paying for high quality, low cost care, that will serve to retain good workers and heal them quickly when they are ill.

2.  They show how commonplace such activity is.  All companies, which are self insured, choose their provider network based on cost and quality.  Given large enough variation in cost and quality, building a provider network that will send you out of state can become a ‘no brainer.’  This same activity – the selection of provider networks across state lines – is something we’ll see more of when exchanges take off.  You’ll see it called ‘tiered network’ plans.

Stay tuned.