If anyone still doubts that medical travel and tourism are having a serious impact on discussions about the future of healthcare delivery in the United States, perhaps they should click on over to this “Let’s Talk Health Care” blog post by Charlie Baker, president and CEO of Harvard Pilgrim Health Care, Inc., one of New England’s leading non-profit health plans. I know the discussion about medical travel has been going on within Harvard Pilgrim for some time, having discussed it last year with Jim Sabin, chairman of the company’s Ethics Advisory Group, who has also blogged about the subject.

Baker notes that — according to a study by the Deloitte Center for Health Solutions — the number of people leaving the U.S. to access care in other countries is now growing at a faster rate than the number of people coming from other countries to the US to seek care. “A lot faster,” he says, and he goes on to discuss the profound implications this may have for healthcare in America. The Deloitte study suggests that U.S. healthcare providers will lose almost $16 billion in revenue in 2007 to outbound medical tourism.

“If Deloitte’s trends are correct, the size of that loss will grow to almost $70 billion by 2010 — as much as 10% of total revenues by 2010,” Baker says.

Vic Lazzaro, CEO of BridgeHealth International, thinks that the Deloitte conclusions are perhaps alarmist

“That under this scenario there will be a loss of revenue to hospitals and facilities in the U.S., over time, cannot be denied,” Lazarro commented. “We also would be surprised, though, if that impact was significant for any one hospital or physician.

“We would hope those factors in the U.S. would result in increasing focus on quality, outcomes reporting, service and cost reduction, as this is now what is being delivered at the international hospital destinations.”

The Deloitte study found that nearly 40 percent of American healthcare consumers would be willing to travel outside the country for care if the quality was comparable and the cost was cut in half or more. Highlights of the study include:

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Erik Steele, D.O., a physician in Bangor, Maine is chief medical officer of Eastern Maine Healthcare Systems and is on the staff of several hospital emergency rooms in the region. He has a terrific article in the Bangor Daily news, headlined, “Consider medical tourism a warning.” in which he discusses the recent news that Hannaford Bros., a supermarket chain with 27,000 employees, is offering a medical travel option as part of employee benefits. The story, initially reported out of Maine, was picked up by the Associated Press and made national news. (Link here.)

Says Dr. Steele:

“Rather than curse Hannaford for its self-interested decision, we would do well to see Hannaford as a corporate canary chirping frantically about the deteriorating conditions brought on by high health care costs in the coal mine of American business. Its action is a warning of things to come. If unheeded, it will not be Hannaford’s action that has brought about the ruin of some hospitals, but the failure of health care and other leaders in this country to listen to the canary.”

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Vic Lazzaro, BridgeHealth International Inc.’s CEO, was featured recently on the EBA Raw Bar, which is the regular podcast of Employee Benefit Adviser. The Raw Bar features “daily in-depth interviews and discussions with the leading employee benefits minds of our time,” and I’ve no doubt Vic is a little amused to be described as among such company. But that’s what happens when you’re ahead of the curve.

In the interview, he describes the role a strong network plays in creating confidence in care abroad and sheds light on the provider selection process. You can listen below — just click the arrow to play the sound file.

The decline of the value of the American dollar vs. other major world currencies has prompted more than one prospective medical tourist to ask me if “it is still worth it” to go out of the country for medical care. The very short answer is: “Yes, it is still worth it.” The dollar has not declined nearly enough to offset the enormous gap between prices for medical services in the United States and medical tourism destination countries.

But it is worth a closer look, because currency exchange rates do have an impact on costs of medical travel to and from different countries.

The dollar has declined sharply in the past two years against other major world currencies, which generally has the effect of making foreign goods and services more expensive for people who are spending dollars, whether in the U.S. or when they travel abroad. In a feature article in the New York Times on April 21, “If Only the Dollar Were Stronger,” Americans who are living overseas talked about how the fall of the dollar has eroded their buying power. Healthcare costs, the article said, has hit Americans who have retired overseas hard:

“Americans think that health care anywhere but in the U.S. is cheap,” said Daniel Prescher, publisher of International Living, a monthly magazine focused on living overseas. “Yes, it’s less expensive, but when you need it often as a resident in a foreign country, it’s something you still need to plan for as part of your budget.”

Note that this is rather a general statement, and that living abroad as a retiree who must pay out of pocket for regular health care is not at all the same as traveling abroad for one-time surgery or care. Specifically, much of the consternation about the falling dollar is about how it has fallen vis-à-vis the Euro, to record lows recently, with little prospect for recovery in the near term.

But the value of the dollar has not fallen as drastically vs. the currencies in medical tourism destination countries and, even where it has fallen, prices for medical services, surgery and dental treatment have remained at a drastic discount from those in the United States.

In Costa Rica, a prime destination for medical tourists, the dollar has been relatively steady against the colon. In fact, the dollar has risen in value vs. the colon for most of the last decade, and prices of medical services to tourists have remained quite stable. Real estate prices have ballooned in recent years in Costa Rica, but not the prices of dentistry and plastic surgery.

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