Health Freedom Watch
Explosive Growth in Medical Tourism and Retail Clinics
Challenges to Health-Care Status Quo on the Rise, Deloitte Center Finds
More than 750,000 Americans left the country last year in search of cheaper medical treatment, a trend projected to grow to six million by 2010 and potentially to cost the U.S. health-care system billions. Meanwhile, the number of U.S. retail clinics in operation soared 220 percent, from just 250 in 2006 to more than 800 by the end of 2007.
Both trends, which are among the findings of research by the Deloitte Center for Health Solutions, present a challenge to the medical status quo in America as consumers seek better care and greater access at lower costs. Deloitte’s research series includes reports focusing on “disruptive innovations” that are creating a shift from conventional models of service and payment to a consumer-centric system of care in which price, quality, and service delivery are key factors.
“The emergence of disruptive health care innovations, such as medical tourism, retail clinics, medical homes, alternative medicines and cyber visits, present an industry paradigm with new players, new delivery models, new ways of partnering and new value propositions," said Paul Keckley, executive director of the Deloitte Center. “Our research suggests that while traditional roles in the health care delivery system are being threatened by these innovations—creating initial worries for physicians, hospitals and allied health professionals—they may also provide new and rewarding opportunities.”
Deloitte’s three latest reports include:
- “Medical Tourism: Consumers in Search of Value," forecasting explosive growth in medical tourism over the next five years in outbound patient traffic (http://www.deloitte.com/us/medicaltourism);
- "Retail Clinics: Facts, Trends and Implications," projecting a rise in the number of retail clinics (http://www.deloitte.com/us/retailclinics); [and]
- "Disease Management and Retail Pharmacies, a Convergence Opportunity," outlining the rapid growth of the disease-management market and new opportunities for retail pharmacies to include these services to attract and retain consumers (http://www.deloitte.com/us/retailconvergence).
Among the key findings:
- Outbound medical tourism currently represents $2.1 billion spent by Americans overseas for care—$15.9 billion in lost revenue for U.S. health-care providers. Americans primarily seek this sort of care for elective surgery.
- The number of outbound medical tourists is projected to rise to 15.75 million in 2017, representing a potential $30.3-$79.5 billion spent abroad by Americans. As a result, the potential lost revenue for U.S. health-care providers could top $228.5-$599.5 billion.
- Medical care in countries like India, Thailand, and Singapore can cost as little as 10 percent of the price of comparable U.S. care, often including airfare and a stay at a resort.
- In 2008 more than 400,000 non-U.S. residents will seek care in the United States, known as inbound medical tourism, and spend almost $5 billion for medical services.
- Many leading U.S. academic medical centers and major health systems are already seizing the opportunity to capture the medical-tourism market by leveraging their strong brands and collaborating with international providers.
- Consumers are flocking to retail clinics not only for convenience but also for low prices. The cost of services provided by retail clinics range from $50 to $75, with the majority priced at $59, compared to a physician's office visit, which can cost from $55 to $250. Additionally, the cost for a retail clinic physical, at $25-$49, can also result in savings over a physical at a physician's office that can cost anywhere from $50 to $200.
- The U.S. market for disease-management services is projected to reach $30 billion by 2013, providing opportunities for retail pharmacies to add these services in order to attract consumers, offering one-stop health-care shopping.
- Retail clinics and pharmacies positioned for market success may also include pharmacy benefit-management (PBM) services that could also attract significant market share, particularly for disease-management services for chronic conditions.
“Hospitals, physicians and health plans will need to quickly adapt to the competition from non-traditional players and develop long-term strategies, such as M&A [merger & acquisition services], alliances and partnerships, to capture market success,” Keckley said. “Those that factor in the unique attitudes and preferences of consumers as they make strategic decisions about partnering and developing new business models and care delivery networks will have a huge opportunity to win the consumer market.”
Deloitte's new analysis expands on its “2008 Survey of Health Care Consumers” which initially revealed several “disruptive” trends, including consumers’ growing appetite for medical tourism, use of retail clinics, alternative therapies and tools, and technology to self-navigate the health-care system. Two in five respondents said they were interested in pursuing treatment abroad if quality was comparable and the savings were at least 50 percent. Sixteen percent of consumers have already used a walk-in clinic in a pharmacy, shopping center, store, or other retail setting, and 34 percent said they might do so in the future. Consumers also expressed interest in seeking care from alternative providers (38 percent), connecting with their doctors via e-mail (76 percent), accessing online medical records and test results (78 percent), as well as using self-monitoring devices at home (88 percent) if they were to develop a condition that required regular monitoring.
Additional reports from the Deloitte research series on "disruptive innovations" previously released include:
- “The Medical Home: Disruptive Innovation for a New Primary Care Model,” profiling a new payment method for primary-care practices that focuses on results for coordination of care. Available online at: (http://www.deloitte.com/us/medicalhome).
- “Connected Care: Technology-enabled Care at Home,” presenting two applications of in-home technologies that reduce unnecessary visits and hospitalizations and improve care. Available online at: (http://www.deloitte.com/us/connectedcareathome).
Source: “Explosive Growth in Medical Tourism and Rise of Retail Clinics Provide Huge Cost Savings for Patients," Deloitte Center for Health Solutions press release (published in its entirety) from PR Newswire (www.prnewswire.com), July 30, 2008: (http://www.deloitte.com/centerforhealthsolutions).
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Groups Pushing International Health-Care Regulations
As medical tourism increases throughout the world, both national and international medical organizations are pushing for worldwide health-care regulations. The U.S. Federation of State Medical Boards (FSMB) is working with the International Association of Medical Regulatory Authorities (IAMRA) to “create a relevant, effective medical regulatory system that can address the dynamics of global and rapidly changing medical practice environments, technologies and health care delivery systems.”
The IAMRA’s website says its purpose is “to support medical regulatory authorities worldwide in protecting the public interest by promoting high standards for physician education, licensure and regulation, and facilitating the ongoing exchange of information among medical regulatory authorities.” The organization was established in 2002 with eight founding members, including FSMB. The IAMRA currently has 74 member organizations representing 29 countries.
Meanwhile, the United States has already become a state party to the World Health Organization’s (WHO) International Health Regulations (IHRs). The U.S. Centers for Disease Control and Prevention (CDC) explains that the IHRs are a “formal code of conduct for public health emergencies of international concern.” It reports that the IHRs represent an “international agreement giving rise to international obligations” and focus on “serious public health threats with potential to spread beyond a country’s borders, to other parts of the world….” In December 2006 U.S. Secretary of Health Michael Leavitt announced:
“The United States has accepted the IHRs with the reservation that it will implement them in line with U.S. principles of federalism. In addition, the U.S. Government has also submitted three understandings, setting forth its views that (1) incidents that involve the natural, accidental or deliberate release of chemical, biological or radiological materials are notifiable under the IHRs; (2) countries that accept the IHRs are obligated to report potential public health emergencies that occur outside their borders to the extent possible; and (3) the IHRs do not create any separate private right to legal action against the federal government.”
As of February 5, 2008, 194 countries were parties to the IHRs, according to the WHO.
- International Association of Medical Regulatory Authorities: (http://www.iamra.com).
- Federation of State Medical Boards: (http://www.fsmb.org/iamra.html).
- “International Health Regulations: Revised for Today’s World,” Centers for Disease Control and Prevention, July 16, 2007: (http://www.cdc.gov/cogh/ihrMaterial/IHRSlideDeck07-16-2007.ppt).
- “United States Officially Accepts New International Health Regulations,” U.S. Department of Health and Human Services, December 13, 2006: (http://www.hhs.gov/news/press/2006pres/20061213.html).
- “States Parties to the International Health Regulations (2005),” World Health Organization: (http://www.who.int/csr/ihr/states_parties/en/index.html).
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Woman Is Sterilized Without Her Consent
The Arkansas Democrat Gazette reported on August 8 that a physician at St. John’s Hospital in Berryville, Arkansas, tied the fallopian tubes of a patient with learning difficulties without getting the patient’s consent or informing her about the procedure. The newspaper reports that:
- The physician said she performed the tubal ligation surgery in July 2007 because she feared the lining of the patient’s uterus would burst if she got pregnant again. “[Dr. Shirolyn Ruth] Moffett admitted that she did not tell the patient what she had done afterward and did not document the procedure in the patient’s medical records. The doctor said she was afraid to admit what she had done for fear of the consequences. Moffett said she knew she should have let the patient decide whether she wanted the procedure done.”
- The hospital revoked Moffett’s physician privileges after learning of the nonconsensual procedure.
- However, the state medical board voted 6-5 to allow her to keep her medical license.
- The patient agreed to a settlement (never filed a lawsuit) and the details are confidential.
Blogger David Fuchs stressed: “Officials at St. John’s hospital, where the procedure took place, clearly understood the gravity of the situation and stopped Dr. Moffett from seeing any more patients. But regulators at the Medical Board feel a reprimand is more appropriate to the offense and voted last week to allow Dr. Moffett to keep her medical license. How is this possible? I don’t get it and neither do officials at St. Johns, who released a statement expressing surprise at the decision.”
He went on to comment, “If performing an unauthorized and secret tubal ligation is not an offense worthy of losing a medical license, what is?”
- “Doctor Gets Reprimand," Arkansas Democrat Gazette, August 8, 2008: (http://www.nwanews.com/adg/News/233627).
- “Doctor Reprimanded For Secret Sterilization,” South Florida Personal Injury Lawyers, August 13, 2008: (http://blog.southfloridapersonalinjurylawyers.com/2008/08/13/doctor-reprimanded-for-secret-sterilization/).
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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2008 Institute for Health Freedom.