Community hospitals and large health systems in the U.S. are insulated from market forces, when compared to other businesses, because of their non-profit status, the reimbursement system, and the lack of competition from other hospitals in many communities. One of the reasons that I personally favor medical tourism is that it can introduce an element of competition with respect to some common surgical procedures such as hip and knee replacement. A recent health blog note in the Wall Street Journal underscored this point about competition and suggested that some hospital systems are beginning to get the message (see: Medical Tourism Starts at Home). Below is an excerpt from the it:
More than 20 years ago researchers at Dartmouth found huge variations in the intensity and cost of health care depending on where patients with the same conditions were treated....Now some employers are finally taking advantage of the price discrepancies by sending their workers across the country to get care that costs less and has comparable or better quality than at hospitals close to home, the WSJ reports....Employers just threatening to send employees overseas for care has prompted some domestic hospitals to step up with offers to match the foreign prices. Supermarket chain Hannaford Bros, based in Maine, offered employees the option of getting hip and knee replacements at a hospital in Singapore. A hip replacement there costs about $43,000 in the U.S. compared with $9,000 in Singapore, WSJ writes. Several U.S. hospitals told Hannaford they would match Singapore pricing. Hannaford is self-insured and it turned to Aetna, which manages the company’s health benefits, to vet the U.S. hospitals. Hannaford has negotiated a deal for hip, knee and spine surgery with a hospital in Boston and is still negotiating with a hospital in Maine for a better deal.
In addition to the point about U.S. hospitals trying to match the Singapore hip and knee replacement pricing, another interesting element in this article is that Hannaford Bros, the supermarket chain, turned to Aetna to "vet the U.S. hospitals" that were willing to match the Singapore prices. I envision an interesting cottage industry developing to assess both the overseas hospitals offerings to perform various surgical procedures and the U.S. hospitals that are offering to perform the same procedures at a competitive price. Travel costs will presumably be factored into these calculations. The process for evaluating hospital quality and morbidity/mortality associated with major surgical procedures will be well known to health insurance companies like Aetna. Hospital/procedure quality data are also available to the general public. Hospital Compare, as one example, describes itself on its home page in the following way:
Welcome to Hospital Compare. In this tool you will find information on how well hospitals care for patients with certain medical conditions or surgical procedures, and results from a survey of patients about the quality of care they received during a recent hospital stay. This information will help you compare the quality of care hospitals provide....Hospital Compare was created through the efforts of the Centers for Medicare & Medicaid Services (CMS), the Department of Health and Human Services, and other members of the Hospital Quality Alliance: Improving Care Through Information (HQA). The information on this website comes from hospitals that have agreed to submit quality information for Hospital Compare to make public.
The State of New York offers an assessment of the quality of hospitals in the state (see: New York State Hospital Profile). One may quibble about the quality of these ranking services but it's a good start.
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