The concept of medical tourism is easily understood: Faced with the high costs of medicine in developed countries, patients are looking to obtain the same quality of care at a fraction of the cost by traveling abroad for treatment, and perhaps enjoy a foreign holiday at the same time.
However, how the industry works in practice is less clear.What makes medical care so expensive in countries such as the United States? How is a country like Costa Rica able to provide the same services for so little? Firstly, how much can you really expect to save by traveling abroad for surgery?
The answer is: a lot.
According to Saroja Mohanasundaram, CEO of the U.S.-based medical tourism agency Healthbase (www.healthbase.com), which deals with more than 3,000 clients annually, in Costa Rica “the cost savings are 40-70%, depending on the procedure,” compared with the United States.
Cosmetic or nonelective surgery is the traditional backbone of the industry, and these treatments provide a good indication of the disparity in pricing compared to the United States and the potential savings available. As an example, one of the most common cosmetic procedures is a tummy tuck, a treatment that would cost approximately $7,000 in the United States.
Clínica Bíblica Hospital in San José offers the same treatment for $4,200, for a savings of 40%, as well as offering a “mini-tummy tuck” for just $3,000.
What’s more, that price includes more than just the surgery. The patient also enjoys the benefit of a personal health care assistant (HCA) from the clinic’s international department.
The HCA is responsible for helping with immigration procedures, organizing medical consultations and appointments, handling all appropriate hospital paperwork and coordinating telephone and e-mail contact between the patient and family members.
The price also includes all transport to and from the airport, the patient’s hotel and the hospital, as well as scheduled nursing care at the hotel as the patient recovers.
In addition, patients can now rest easier knowing that the hospital has been awarded accreditation by the U.S.-based Joint Commission International, a guarantee that the quality of care meets or exceeds the most stringent international standards (TT, Jan. 25). Other hospitals, such as La Católica and CIMA, which offer or plan to offer similar services, are in the process of obtaining this same accreditation.
Costa Rica also compares well with other medical tourism destinations for cosmetic work. Another popular cosmetic procedure, liposuction, again would cost approximately $7,000 in the United States. The same treatment costs as little as $2,200 in India, according to Healthbase, while Clínica Bíblica charges $2,500, just $300 more. This means that, in total, given the higher cost of traveling to India, liposuction in Costa Rica costs on average $3,000 – that’s $700 less than if you were to travel to the subcontinent.
Such has been the growth in the industry that many patients now come to Costa Rica for nonelective procedures. Alongside their cosmetic surgery departments, the country’s principal private hospitals are just as keen to emphasize their other specialist care units in fields such as cardiology and orthopedics.
Bill Cook, international patient coordinator at Clínica Bíblica, says that 35% of foreign patients at the hospital are treated for nonelective surgery. This figure may be surprising at first but becomes far less so when you consider the savings involved. A knee replacement costs approximately $11,000 in a Tico hospital – a whopping $34,000 less than the average of $45,000 at a U.S. hospital (TT, Oct. 5, 2007).
So how are Costa Rican hospitals able to offer such huge savings without compromising the quality of patient care?
The consensus is that it is not that Costa Rica is especially cheap, but rather that costs in the United States are exorbitantly high.
The primary reason for this seems to be the cost of human resources. Mohanasundaram cites a U.S. Centers for Medicare and Medicaid Services report that states that more than 70% of health costs are labor-related.
Carole Veloso, CEO of CIMA Hospital in the western suburb of Escazú, furthers the point, saying, “Technology is certainly important, but all the technology in the world does not run itself. You use a lot of human resources to deliver patient care – that is why it is called care.”
“Human resources are much more expensive in the United States,” she adds.
“Nurses receive higher salaries, physicians have higher incomes, medical technicians, etc. – it runs from A to Z.”
The second factor is the simple economics of supply and demand. According to Veloso, “In the United States you are looking at a whole bunch of dynamics that cause a much greater demand on the health care system.”
And if there is more demand for services than capacity to deliver, prices are inevitably higher.
“I believe that (supply and demand) is a huge player,” she says.
Another reason is the cost of medical supplies.
According to Mohanasundaram, “If you are doing a hip surgery, for which you need implants, the implant companies provide them abroad for cheaper than in the United States,” sometimes by as much as a factor of three or four.
Similarly with drugs: “In the United States, drug companies really charge incredible amounts, whereas down here you can usually get the same drugs much cheaper,”Cook says.
A final issue is the well-documented problem of malpractice and litigation in U.S. medicine. Cook points out that in the United States, “Doctors have to have a lot of insurance to cover that. Here it is not so much of an issue.”
So is there a danger that, as health tourism grows, wages for medical professionals will go up and an increasingly litigious patient body may bring higher health costs with them – that the industry could become a victim of its own success?
“We don’t expect that,” Cook says. “The laws are different here. They don’t allow the exorbitant amounts that are charged when people sue in the United States, and it is also harder to sue here.”
Mohanasundaram is similarly optimistic.
“I think the medical tourism industry is going to be around forever,” she says.“Just the procedures people go for may be different.”
Their confidence seems well founded. It is a striking fact that all of San José’s main private hospitals are investing heavily in expanding their capacity and services, with La Católica Hospital alone spending more than $20 million on new and improved facilities (see separate story).Moreover, hospitals are specifically targeting foreign patients in their business plans.
The patients may be traveling, but it looks like medical tourism is here to stay.