Strategy

Medical tourism: The world is your hospital

Waiting too long for a medical procedure? Offshoring isn’t just for companies.

It happened four years ago. Patricia Melo had just dropped her two children off at the babysitter before driving to work. As she waited at an intersection for a car to turn left, her vehicle was rear-ended, and Melo was left sandwiched between two other automobiles. Her back was hurt so severely that, in the weeks that followed, she was constantly hunched over at a 45-degree angle. Her first doctor said she was not a candidate for surgery, and prescribed her morphine to blunt the excruciating pain. But the Hamilton native’s condition deteriorated. She searched — unsuccessfully — for a different medical evaluation. Eventually, she ended up confined to a wheelchair and was forced to leave her retail management job. “I was horrible to be around,” says Melo, now 33.

Last year, a friend made a suggestion that changed her life: why not get surgery in India?

Earl Smith had a cocaine addiction. The Manitoba-based small-business owner had tried quitting on his own and was no more successful with self-help treatment programs such as Cocaine Anonymous or Alcoholics Anonymous, where he felt uncomfortable and out-of-place. “They were seedy,” says Smith, who didn’t want his real name used in this story. “They let people in off the street. I just didn’t want to get to know them — I know that sounds horrible.”

Then a friend recommended an anti-dependency program in Cuba, and Smith contacted a medical tourism agency to book his stay at sunny Villa El Cocal. Two weeks after making his initial phone call, Smith was on a plane bound for Holguin City, Cuba.

Melo and Smith are not isolated cases. Medical tourism around the world is booming, and is expected to grow to an estimated US$40 billion annually by 2010 as patients opt to visit another country for medical care. Such travel used to be reserved for the rich and famous, but it’s gaining ground among just about anyone with a solvent bank account. Smith covered the $13,000 cost of his three-month treatment program out of his savings, while Melo borrowed the $25,000 she needed from family. And the aging boomer demographic could well be a boon for the industry: their relatively deep pockets would make it easier for them to bypass wait times in Canada and head abroad for treatment.

But if middle-class Canadians reach into their pockets to pay for care overseas, what impact will that have on medicare? The country’s top doctor says it’s an opportunity. “This could be one of Canada’s biggest industries,” says Dr. Brian Day, president of the Canadian Medical Association. Should the day come when medical wait-lists are eliminated, Canada could attract — and charge — foreigners to use its health-care system on weekends or at other times. Day says they would come because they wouldn’t have to fly as far as Asia, but the prices wouldn’t be much higher. The revenue generated could offset the cost of providing care to Canadians.

Someone else who sees the potential is Daren Jorgenson, founder of Choice Medical Services. Based in Winnipeg, Choice Medical has served 1,000 patients in its 18 months of operation (including co-ordinating Smith’s drug rehabilitation program) and claims it is on track to break even within a year. Jorgenson says he has met privately with three provincial health ministers and has meetings set up with U.S. health management organizations (HMOs) for the World Medical Tourism & Global Health Congress in September. His goal is lofty: Jorgenson wants to be the medical tourism agency of choice for the HMOs and the provinces. Jorgenson has a track record in such transborder business: he operates an Internet pharmacy that boasts the states of Minnesota and Wisconsin, and the cities of Boston and San Francisco, as clients.

A handful of medical tourism agencies operate across Canada. They determine whether prospective patients are eligible for procedures by submitting health records and details to doctors in the host country. If the patient qualifies, the agency co-ordinates meetings with the foreign doctors and follow-up care, and makes travel plans.

The woman who organized Melo’s trip to India — Yasmeen Sayeed, founder and chief executive of Vancouver-based Surgical Tourism Canada Inc. — says business is steadily growing. She opened the agency in 2005, capitalizing on her 20 years of health-care management experience in India, England, the Middle East and Canada. Following health employees’ strikes in Vancouver in 2004, Sayeed, who was regional manager for medical transcription services for the Vancouver Coastal Health Authority, was charged with reducing wait times by placing patients in local private clinics. She felt that sending clients overseas could help alleviate the wait-list problems in the province, so she created a business plan and approached the government with a proposal. “I thought they could use the service until the wait-lists were eliminated,” she recalls. “But even though there was interest, they couldn’t endorse it because politically it would be unpopular.”

Sayeed decided to offer her services directly to the public. Within two weeks, she had her first client. She made a profit in the last fiscal year, and has served about 180 clients in three years. And she is so confident about the industry’s potential that she opened an office in Seattle in June, viewing a market of 45 million uninsured or under-insured Americans as a business opportunity that can’t be passed up.

Despite the seemingly frivolous name, medical tourists become so for serious reasons. A recent study by international management consultants McKinsey & Co. found that 11% travel for plastic surgery options, such as a tummy tuck or facelift. More than 70% are looking for enhanced treatment: 40% want the best technology available; 32% are seeking better care. Another 15% want faster access to necessary procedures, and 13% are looking for cheaper treatments. Almost half of medical travellers are seeking general surgery or orthopedic care.

Paul Mango, co-author of the McKinsey study, said Canadians make up about 6% of all medical tourists. Most of those — about 60% — flock to the United States, most often for cardiovascular, neurosurgical and cancer treatments. High-profile U.S. medical centres such as Johns Hopkins Hospital, the Cleveland Clinic and the Mayo Clinic have had Canadian patrons for decades. Indeed, the Mayo Clinic saw its first Canadian patient in the 1920s.

The McKinsey study predicts the market will grow to between 500,000 and 700,000 patients over the next 15 to 20 years. (It should be noted that the McKinsey study offered a conservative estimate of growth; others predict millions of patients over the same period.) “Growth will hinge on the United States,” says Mango, adding that a large factor will be whether third-party payers allow Americans to go elsewhere for health services. It could also provide a lower-cost alternative to treatments not covered by insurance companies.

Melo and Smith both felt the financial investment in their own health was worth the money. But what if something had gone wrong? “It’s a case of buyer beware,” says Dr. Lloyd Carlsen, a plastic surgeon at Scarborough General Hospital and the Cosmetic Surgery Hospital, who has been taking Canadians to Grand Cayman for 30 years for plastic surgery. Carlsen has also treated patients after they returned from medical voyages gone bad. He has seen problems related to facelifts not being symmetrical, and substandard materials used in injections and implants. “If you want to go to another country for health care, one risk is there might not be any genuine legal remedy,” adds Allan Hutchinson, a professor at Osgoode Hall Law School of York University. Some countries have less advanced legal systems, and it’s questionable whether proceedings launched in Canada could be enforced elsewhere. “Whether you get the money or not is another story,” Hutchinson says. Clients looking for quality service rely on the Joint Commission International, a not-for-profit organization in Illinois that accredits foreign hospitals.

As the public become more aware of the possibilities of travelling for healthcare, is there any chance governments will step up and reimburse clients like Melo and Smith? Some provinces already do, albeit on a restricted basis. Ontario will reimburse health travel costs if the medical procedure is unavailable in Canada and the entire trip was pre-approved. Yet some people are fighting for their out-of-country costs. And reimbursement for private health-care bills, which could further stimulate the medical tourism industry’s growth, could soon be a legal battleground. “It’s a constitutional requirement for Canadians not to be deprived of medically necessary treatment,” says lawyer David Baker of Toronto-based bakerlaw, which has handled about 200 out-of-country health-care cases since 2000. If a procedure isn’t available, or is delayed to the point where the wait would jeopardize an individual’s health, a case could be made for partial reimbursement, he says.

Paying the entire cost of treatment didn’t deter Smith or Melo. (Melo, however, is trying to recoup from the government a portion of her $25,000 fee; she’s not optimistic since her surgery was not approved in advance.) Smith says he has been drug and alcohol free for more than a year after his three-month stay in Cuba, and he recommends the program for anyone looking to end an addiction. For her part, Melo wants to spread the word that there is no reason to continue suffering. She went overseas in February for surgery that included the insertion of discs and screws into her spine. Just six weeks afterward, she was working half-time and slowly building back to a full workweek. Her free time is spent enjoying her husband and two children. She is no longer in a wheelchair.

Melo believes that her recovery will be complete after a year. She is in continual contact with her Indian surgeon. She has sent him digital photographs documenting her progress and is following his rehabilitation program. Whenever she has questions, she calls his cellphone or writes to his personal e-mail address. “I saw little of India — there was no shopping or tours,” says Melo, who had never been to India before, and never had any particular interest in going there on holiday. “But the Indian experience was beyond amazing. If I had known about it earlier, I would have worked on going there earlier.”