Tourist Medicine May Be Coming to a Comp Claim Near You

A Funny Thing Happened on the Way to the Doctor.

I shared a nostalgic conversation last week with a similarly-aged J.D. about our early days of law practice. More than 40 years ago now, I was being groomed by a senior partner for workers’ compensation defense work. My friend, on the other hand, spent most of his work day manhandling—is that still an appropriate word—unwieldy, 45-pound deed books and civil records indexes in the courthouse, searching land titles. He laughed at how title attorneys can now easily sift through electronic registries, all without rising from their chairs. He winked at me and quipped at how some current legal research is being out-sourced to specially trained “experts” in foreign countries. He chortled, “Only health care workers and landscapers are immune from off-shore competition.”

I responded, “You might be right about the landscapers, but have you heard about ‘tourist medicine’? Some insurers have figured out a way to export many elective medical procedures.” I could have added that the phenomenon may soon make its way to a comp claim near you.

Medical Tourism: What is it?

Generally speaking, medical tourism is an elective phenomenon in which people who live in one country travel to another country to receive medical, dental and/or surgical care, while at the same time receiving care that is comparable to (and sometimes better than) that which they would have enjoyed in their own country. They typically travel because the foreign medical care is either more accessible or more affordable. Sometimes it’s both.

Some Medical Tourism Tied to Accessibility

Accessibility is sometimes the driving force. For a number of years now, we’ve heard stories about Canadians who are literally “sick” of their own medical care delivery system and who, therefore, travel to the U.S. for treatment. According to one relatively recent report by the Toronto Sun, 217,500 Canadians left their country to obtain health care in 2017. Most of those Canadians received care in the U.S., although some traveled to the United Kingdom and other countries.

Domestic Medical Tourism Has Been Around for Years

Of course, traveling within the United States to receive medical treatment, particularly specialized treatment, has been occurring for many years. Those who live in rural areas of our country have long sought medical care in nearby (and sometimes distant) cities, where concentrations of physicians around a prominent hospital usually provide a level of expertise not available from the country physician.

Yet in recent years, even when the patient already lives close to a major medical facility, travel elsewhere to be examined and treated by a specialist has become common. In May 2008, for example, when Senator Edward Kennedy was diagnosed with a particularly aggressive form of brain cancer, he maneuvered around Harvard Medical Center, traveling instead here to my home town (Durham, NC) to receive surgical care at Duke University Medical Center by the world-renowned neurosurgeon, Dr. Allan Friedman. As I say, these sorts of medical decisions have been common for decades.

Cost of Care is the Driver for International Medical Tourism

As important as accessibility to care can be, such accessibility isn’t the driver for a newer version of medical tourism—the type that causes Americans to seek medical care outside our country. Instead, it’s the cost of care. Of course, the cost of everything has risen over the years. What that is certainly true, in most cases, it nowhere near the rise in the cost of medical care. According to a recent study by the Peterson Center on Healthcare, health spending totaled $74.6 billion in 1970. By the turn of the current century, annual health expenditures had reached amost $1.4 trillion. The study indicated that in 2017, the amount spent on health had more than doubled to $3.5 trillion.

The significant increase in the cost of medical care has been echoed in the workers’ compensation world. As we note in Larson’s Workers’ Compensation Law, § 94.01, et seq., since the beginning of the current century, there has been an important inversion of costs in claims handling. In 2000, medical care comprised approximately 40 percent of total claim costs. Less than 20 years later, the ratio has reversed. Now, some 60 percent of claim costs now go for the provision of medical care, with approximately 40 percent being devoted to indemnity benefits.

Medical Tourism: How Does it Typically Work?

First, for obvious reasons, medical tourism won’t work for emergency care. The phenomenon depends upon elective procedures. A somewhat typical scenario was described in a recent article published in The New York Times. The patient, who receives health coverage through her husband’s employer, needed knee replacement surgery. Instead of having it done near her home, she boarded a plane and flew to Cancún, Mexico. Spending the night in a nice hotel, she entered the hospital on the morning of her surgery and, several hours later, was greeted by her orthopedic surgeon, who had jetted in from Wisconsin.

The patient’s American physician was quite skilled, having been trained at the Mayo Clinic. The physician performed the surgery, checked on his patient afterwards, and returned to his practice later that day. Another physician, an orthopedic surgeon who practices full time in Cancún, but who had completed a fellowship at Brigham and Women’s Hospital in Boston, checked on the patient for several days after the operation. Following the surgery, she stayed at her hotel ten more days in Cancún, receiving physical therapy twice each day.

Cost Savings Were Considerable

The cost savings over similar treatment in the United States were significant. As noted in the Times article, in the U.S., knee replacement surgery costs an average of about $30,000 — sometimes double or triple that — but at the Cancún medical facility, it was only $12,000. The standard charge for a night in the hospital in Cancún is $300. In the U.S., the average daily charge is $2,000, again according to the article.

According to the hospital administrator in Cancún, the other significant cost savings was in the cost of the actual medical device. The identical implant the patient would have received in the U.S. cost $3,500 in Cancún, compared with nearly $8,000 in the United States.

The American surgeon was quite happy with the setup. The doctor, who spent less than 24 hours in Cancún, was paid $2,700 — roughly three times what he would have received from Medicare, the largest single payer of hospital costs in the United States. As we know, private insurers often base their reimbursement rates on what Medicare pays.

Oh — one more thing. By consenting to the treatment in Cancún, the patient avoided all the normal deductibles and out-of-pocket co-pays. She also “walked away” with a check for $5,000. Even with the incentives, according to the Times article, the cost to the employer was less than one-half of what it would have been if the surgery had been performed in the United States.

American Surgeon Was an Important Thing

As pointed out by the Times, one important factor in the “transaction” was the American doctor. Having an American doctor meant generally that if something went wrong with the patient’s surgery, she could file a malpractice suit in the United States. Opponents of medical tourism point out that following surgery, some American physicians are reluctant to provide treatment where the surgery has been provided by a non-American doctor. To state the obvious, if the surgical notes and other treatment details from the surgery are preserved only in a foreign language, the American doctor may find it difficult to ascertain exactly what went on during the surgical procedure.

The market, of course, abhors a vacuum. In an attempt to handle some of the difficulties in scheduling, securing, and following up on the medical tourist phenomenon, several medical care providers have stepped forward. For example, one Denver company, North American Specialty Hospital (NASH) has organized foreign treatment for a several dozen Americans.

How Might All This Work Within the Workers’ Compensation System?

At first blush, medical tourism might appear to be a phenomenon that is ill-suited for the workers’ compensation setting. After all, all state (and federal) Workers’ Compensation Acts require the provision of all reasonable and necessary medical care; there is no ordinary means by which an insurer could impose foreign treatment on a patient merely because it’s cheaper. Certainly, as noted above, emergency care will never be provided as part of a medical tourism plan. Yet, much of the care provided in the workers’ compensation setting is not acute care provided on the spur of the moment. A sizable portion has an elective characteristic to it. Moreover, in many situations, the parties may legitimately disagree as to whether the requested medical care/treatment is actually reasonable and necessary. Often, this is due, at least in relevant part, to the joining of the worker’s compensable injury with other, “co-morbid” conditions.

Co-Morbid Conditions Are a Complicating Factor

As we note in Larson, an important, complicating factor in many workers’ compensation cases is the existence of so-called, co-morbid factors. By “co-morbid,” we generally mean the all-too-common situation in which an employee suffers a work-related injury or occupational disease while he or she simultaneously suffers from a preexisting, separate, chronic, medical condition unrelated to the workplace–e.g., diabetes, aging, cigarette smoking and/or obesity. As I have separately written here, here, and here, as well as in other publications, practitioners, claims adjusters/ managers, employers, judges, and administrators must all come to grips with the legal (and economic) implications of co-morbidity since, as is often said, “the employer takes the employee as it finds him or her” [see Larson’s Workers’ Compensation Law, § 9.02].

Hypothetical Situation That Might Call for Medical Tourism

Take a typical situation. The injured worker needs knee or back surgery, but he or she is not a good candidate for further treatment because of obesity. Gym memberships haven’t worked. Weight-loss programs have failed to provide any relief as well. The worker requests gastric bypass surgery. The employer/insurer argues that such expensive surgery is not reasonable and necessary to treat the work-related injury. While there have been a number of decisions in some states awarding weight-loss surgery, the issue is still fact-dependent and unsettled.

Enter medical tourism. Considering the costs and risks of litigating the question, the employer/insurer might propose a compromise: payment for the surgery, but on a negotiated medical tourism basis. The parties could enter into a settlement agreement solely related to the issue of the weight-loss surgery. The insurer might even sweeten the pot by offering a small cash bonus. The worker gets his/her surgery. The insurer gets a smaller bill. Everyone wins, at least to some degree.

Indeed, not only might the parties consider settlement of the weight loss surgery issue by means of medical tourism, they could handle the knee or back surgery the same way. To be sure, any settlement agreement would need to be approved by the Commission or Board administering the state’s Act, but in most cases, particularly when the injured worker is represented by counsel, the approval would be perfunctory.

Medical Tourism Won’t Replace Regular “American” Care

Medical tourism won’t ever replace the provision of care in the U.S. That, of course, isn’t the goal. There are situations in which it might well be another tool in helping an injured worker recover from an injury (or be treated for an occupational disease). I suspect that it will used on the periphery, where there is a legitimate disagreement over the provision of care, and in situations where elective surgery can be scheduled with significant lead times.

As we often say, “The world is getting smaller.” As medical care in the U.S. continues to be more and more expensive and as non-U.S. medical centers continue to get the word out about their excellent provision of care, medical tourism will be one arrow in the medical care quiver for treatment.