Monthly Archives: November 2012

A ‘Case Study’ in Implementing Medical Tourism into Workers’ Compensation

Note: This case study is fictional. It was created to show what is possible for medical tourism to bring down the high cost of certain surgical procedures performed in US hospitals, and to show that employers, especially those already using medical tourism as an option on their self-funded employee health care plans can do so with workers’ compensation claims. The costs mentioned below are from the following website:

http://www.medicaltourism.com/en/compare-costs.html

Three construction workers, Juan, Pablo and Jorge, were working on a construction site, neither man operating heavy equipment. Juan was working with Jorge, putting up drywall, and standing on scaffolding, about ten feet off the ground. Pablo working at the other end of the scaffolding from Juan and Jorge painted the drywall they both put up earlier. As Juan wen to reach for another sheet of drywall, he lost his footing, causing the scaffolding to buckle. But when Jorge tried to catch him, the scaffolding gave way, and all three men fell to the ground.

Juan, who was from Mexico, fell on his left side, injuring his left hip. Jorge, from Costa Rica, had managed to face forward when he fell and hit the ground, injuring his left knee. Pablo, from Colombia, also fell forward, as he put down his paint brush and paint can when the scaffolding began to buckle, and hung it on a hook on the outside left post of the scaffolding. Pablo managed to fall on his right knee, injuring it as well. All three were sent to an orthopedic doctor’s office their employer selected from a list prepared by their state’s workers’ compensation bureau.

They were treated by the doctor, and given prescriptions for pain medication, and were told they could return to work if they felt no discomfort. A week later, all three complained of pain and said they could not work. They filed workers’ compensation claims with their employer. When they went back to the treating doctor, he told them that since they initially did not complain of any serious pain or discomfort, he treated them for the contusions and other superficial injuries, but now order that all three get MRI’s for their injuries.

The MRI on Juan found a hip fracture that owing to his age, suggested a total hip replacement, otherwise he would never be able to walk normally, or even work. Jorge’s MRI showed a fracture of the left kneecap, and Pablo’s showed a similar fracture, but on the right knee. It was further determined that both Pablo and Jorge had injured their ACL’s as younger men playing soccer in their home countries, so it was recommended by the orthopedist that they both get knee replacements as soon as possible.

When their employer was informed of this by their insurance carrier, their Risk Manager happened to speak to the company’s Employer Benefits Manager, who recommended he look into getting the men treated in their home countries through medical tourism. The Risk Manager had never heard of medical tourism, so he asked the Benefits Manager to explain how it works. The Manager told him that the company is self-insured for their employee’s health care plan, and as an option, they allow their employees to choose to get treatment abroad through a medical tourism facilitator company they have contracted with.

When the Risk Manager heard about the self-funded plan option, he wondered if this could be something he could use for his three workers’ compensation claims. He told the Benefits Manager that the hip and knee replacements would cost $50,000 each, and even though the insurance carrier was going to pay for it, it was going to affect his claim severity, which would impact his experience mod, causing a rise in insurance premiums. The Benefits Manager told him that if they so choose, they can each get their surgeries in their home countries at lower cost, and at the same or better quality than in US hospitals. The Risk Manager asked the Benefits Manager to get him comparative prices for each procedure in the three home countries of the injured workers, and he would try to get the insurance carrier to go along with it.

A couple of days later, the Benefit Manager sent the Risk Manager the following table comparing hip and knee replacement costs in the US with the costs for each in Colombia, Costa Rica and Mexico. As seen in Table 1, a hip replacement in Colombia cost $6,500. In Costa Rica a hip replacement cost $12,500, and in Mexico a hip replacement cost $13,000. Knee replacements in each country were as follows: $6,500 in Colombia, $11,500 in Costa Rica, and $12,000 in Mexico.

Table 1


The insurance carrier was unsure of the quality of treatment and skill of the treating physicians in those countries, but as the company vouched for their quality and skill from the employees who had used it under the self-insured health care plan option, they agreed as long as the company was satisfied this was what the employees wanted. All three men, when told of the option of being treated in the US or in their home countries, opted to take the medical tourism option. What had made it possible for them to choose this as an option was the fact that the total cost of the procedure included airfare for each man and his spouse, plus accommodation, as well as the cost of the surgery and hospital stay.

As Juan had older children, his oldest married and living close by to the family; they could watch the other children while he and his wife were away. Jorge’s children would stay with his wife’s relatives nearby, and Pablo’s children would come with him and his wife, since he was able to find a low fare for the two young children. Also, the fact that the hospitals they were going to were some of the best in their home country, made them feel better of themselves that they could get such great care at a very good hospital. It would help their self-esteem and make their friends and families back home very proud.

When they returned to the US, they had healed much faster and in better spirits had they not chosen this option. Although they could not work again at their old jobs, they nevertheless got good jobs with the same company that did not put them in such dangerous positions before their accidents. They became more productive as a result and their employer was pleased with the outcome. The Risk Manager with the approval of the president of the company, included a medical tourism option for all future severe workers’ compensation cases.

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Employee vs. Employer Choice of Physician Revisited: Additional Commentary on How Best to Incorporate Medical Tourism into Workers’ Compensation

Further research into the topic of Employee vs. Employer choice was prompted by a phone call I received over a week ago from an attorney in New York who handled workers’ compensation cases and is a consultant to carriers and businesses on workers’ compensation, group health and disability insurance, cost-containment, claims investigation and claim preparation. The call got me to think about what I had previously stated in my earlier post on the subject of employee vs. employer choice, and to my amazement, new research found that New York State allows employees, and not their employers, to choose the treating physician. I corrected my error in the original post, but decided that a further clarification and elaboration was needed.

Needless to say, when I came across a study by the Texas Department of Insurance comparing state workers’ compensation systems, I found more information, and decided to expound upon my previous writing. What I found was not just that there is employee vs. employer choice, but that choice of physician is determined by six additional categories. The first category is employee choice of physician. The second category is selection from a list prepared by the appropriate state agency. The third category is selection from a list maintained by the employer. The fourth category is employer choice. The fifth category is employer’s choice may be changed by state agency, and the final category is a after a specified period of time, choice falls to the employee.

As seen in Table 1, thirty states allow some form of employee choice of doctor, while twenty states allow some form of employer choice of doctor. This is important to bear in mind, for the purposes of incorporating medical tourism into workers’ compensation, as 60% of U.S. states allow employees to make the initial choice, and only 40% of U.S. states allow employers that choice, as seen in Figure 1, so that in order to incorporate medical tourism into workers’ compensation, it will be necessary to get employees to agree to it before getting their employers, or their employer’s carrier to do so.

Figure 1 – Pct. of Employee/Employer Choice

Table 1 – State-by-State Comparison of Statutory Provisions Relating to Choice of  Treating Doctor

Source: Texas Department of Insurance, Workers’ Compensation Research Group, Comparison of State Workers’ Compensation Systems, 2004.

Note: * If an employer and/or insurance carrier has a managed care arrangement for workers’ compensation, then injured workers are required to choose a treating doctor from within the employer’s or carrier’s network.

Note: ** If employer has designated at least two Health Care Organizations (HCOs), then the timeframe that an employer has to choose the treating doctor is normally extended.

Broken down even further into the three categories mentioned above for employee choice, as well as for employer choice, 24 states allow employee to have initial choice, which represents 80% of all states that allow employee choice. Four states allow the employee to select from a list prepared by the state agency, which is 13% of all thirty states, and three states allow employees to choose from a list maintained by their employer, which is 10% of all the employee choice states, as seen in Figure 2.

Figure 2 – Pct. of Employee Choice Categories

Ten states allow employers to choose the treating physician. Three states allow the employer’s choice to be changed by the state agency, and seven states allow the employee choice of doctor after a specified period of time has elapsed. As shown in Figure 3, half of the twenty states that allow employer choice, or 50%, allow for initial employer choice. The other 50% is split between states that allow the state agency to change the employer’s choice (35%), and the states that allow the employee to choose after a specified period of time (15%).

Figure 3 – Pct. of Employer Choice

To further complicate the matter, one state in the employee choice category, yet unknown, allows the employee to choose their treating doctor if they can prove that they or a family member has a record of previous treatment with a particular doctor. As shown in Table 1, five states allow workers to choose their doctor if the employer or carrier does not have a managed care plan; otherwise they have to choose from within the network. Seventeen of the employee choice states have unlimited choice of treating doctor, but are not ascertained in the report.

It would appear that in order to incorporate medical tourism into workers’ compensation, it would be useful for any facilitator or other entity such as an employer or carrier, to carefully read the statutes in each state they are conducting business in and have considerable workers’ compensation claims that might benefit from the lower surgical cost and quality issues medical tourism affords. To not do so would be foolish, and would create a great deal of confusion and doubt as to the whole efficacy of medical tourism, which would be a terrible mistake for the employee, his employer and the insurance carrier.

Point/CounterPoint: A Virtual Dialogue on the Merits of Implementing Medical Tourism into Workers’ Compensation

The following virtual dialogue was composed from comments made to me by individuals who have read my White Paper on implementing medical tourism into workers’ compensation, or by individuals in a social media discussion group I participated in late last year. The point comments will primarily come from those who read the paper, and one individual in the group discussion. The counterpoint will come from me, and two other individuals in the group discussion, one of whom is a nurse who has her own medical tourism company, and provided a few of the point questions as well.

POINT 1

Only about 1% of all workers’ compensation claims are catastrophic and these usually require high dollar emergent care. There is some room for controversy concerning follow on procedures and whether these need to be handled within the same clinical realm as the original or earlier procedures.

COUNTERPOINT

This would only apply to non-emergent care, but it would depend also on how large that 1% of all workers’ compensation claims was. If we are talking about 1% of a 100 claims, then yes, that would be a small number of claims, but if we are talking about thousands of claims every year, 1% of that number would be considerable, and thus large enough to permit some claims to benefit from medical tourism.

 

POINT 2

Workers’ comp tries to avoid paying for knee or other joint replacements except in the rare instance of traumatic injury requiring joint repair. The great majority of joint replacements are due to chronic, co-morbid conditions which are not work related and it is the job of a good workers’ comp TPA to deny coverage for these procedures.

COUNTERPOINT

Much of the joint surgery performed with workers’ compensation claims are arthroscopic joint repair surgeries, which also is quite expensive, and would be natural procedures that medical tourism could offer at lower cost and the same or better quality that in the US.

  

POINT 3 (This point was raised by three people, two who read my paper and one who did not)

A. You have not looked at the cost of airfares, family participation and other costs attendant on overseas medical care. This is handled by medical tourism brokers or facilitators, who include airfare, accommodation of one other person and other costs.

B. What about adding on the travel expenses (e.g. airfare, meals, including a family member’s hotel and related expenses? (I see you note that even with this added in, it’s still cheaper.) What if the claimant has small children and they’re suddenly being shipped away for treatment? What happens to the children and who pays for that?

C. Regarding the provision of travel aid for loved ones, my experience is that job or family care demands of the loved one are as big a barrier to their traveling…To my knowledge no medical tourism program provides income replacement to replace income a spouse loses to travel abroad to be with a patient getting care through medical tourism. I would also note that this problem may be more manageable when a patient travels domestically away from home to get care but exists here too. All that it takes to test the theory that traveling for care undermines the availability of family support and presence is to visit patients getting care several hours from home whose visits from family are limited by these proximity and other demands of life challenges. These issues are only magnified when the care is provided abroad. As a result, the families that can attend a patient getting care abroad are usually those with more resources.

COUNTERPOINT

A. That is the benefit of medical tourism, it is a package deal. You should learn more about it by checking into some of the medical tourism companies out there.

B. The airfare, hotel and expenses are covered in the total cost. The basic package is generally the patient, one companion, airfare, hotel, and expenses. If you saw the hospitals I have seen online, they look like hotels, and even have rooms for the guest to stay in so that they are not far from the patient. These hospitals have food courts like shopping malls here in the US with all the major food groups, McDonalds, Burger King, Wendy’s, KFC, and even local fare, but if the patient is there for heart surgery, I would not think they’d let them eat that. You keep using the term “shipped away” as if traveling abroad is some kind of torture or punishment. Don’t you think that working people deserve to see a little bit of this planet of ours? Don’t you think that such travel will bring better understanding of foreign cultures and people, and will benefit both the patients and those who care for them? I think it is a great way to bridge the gap between the west and the east, and to see that everyone wants the same life we all take for granted. As for the issue of small children, while that was never mentioned in any articles I used for my paper, I am sure that some accommodation could be made, or barring that, another family member or neighbor or friend of the family could watch the children while the patient and spouse or companion are away. This is not a big deal, nor should it impede the implementation of medical tourism.

C. The Family Medical Leave Act of 1993, signed into law by President Clinton requires covered employers to provide employees job-protected and unpaid leave for qualified medical and family reasons. Qualified medical and family reasons include: personal or family illness, family military leave, pregnancy, adoption, or the foster care placement of a child. While it does not include salary for the family member, even if an employee were to stay home and take care of an ill family member, they would lose their salary for that time period, but still have a job when the illness was over, or the employee could no longer stay home. As medical tourism is usually a planned event, the family could always make some provision to cut back certain expenses so that going abroad will not impose a financial burden on the family.

 

POINT 4

Re: the statement that workers comp claimants are generally in lower-middle class–claimants are in a range of “classes” but they’re not treated differently based on their “class”. They don’t receive different medical care based on class. Evidenced based medical treatment guidelines are applied to all claimant/patients regardless of “class”. In workers comp, claimants don’t care how much medicals cost because they’re not responsible for the bill so their “class” is irrelevant – it’s “free medical care” for them.

COUNTERPOINT

I never said that claimants are treated differently based on their class…That is not the point I was trying to make. I was trying to bolster the point made prior to that that medical tourism will benefit those without adequate health insurance coverage. I pointed out that lower-middle-class individuals will benefit most from medical tourism, and which is why I cited the study by Du and Leigh about claimants generally being lower-middle-class…yes, sometimes, the wealthy do file comp claims, but the bulk of claims I handled as an adjuster and as the Claims Administrator for a OCIP “Wrap-up” program in NY were with middle-class and lower-middle-class claimants, and many of the No-Fault claimants I handled were the same, and some were even immigrants. Finally, you are correct that medical guidelines apply to all. But I think that at some point, some claimants may come to accept medical tourism, especially if the insurer or employer has contracted for it as part of their health plan, or by sheer cost considerations.

 

POINT 5

But if we ever tried to ship a claimant overseas for treatment, state laws governing would certainly prohibit this particularly noting that most states have specific requirements that providers be located within ‘X’ number of miles from a claimant’s home. Additionally, what about recovery, follow up care, complications, etc.? While some countries report on their quality standards, not all do and finding this information (much less establishing the validity of such data), is a daunting task. Not all facilities are going to opt to participate in Joint Commission accreditation because it is prohibitively expensive.

 COUNTERPOINT

Again, these state laws you mention here will need to be changed or modified. I did, however, bring up the fact that Oregon and Washington State allow claimants to choose doctors outside of the US, and even mentioned that Washington State has a page on their website with doctors in foreign countries the claimants can choose from. How different is that from the panels we looked at during my internship? If GA has a panel of six or so doctors and WA has a list of several doctors in countries around the world, is that any different, other than the fact that those doctors are overseas? As to recovery, follow-up and complications, recovery is covered in the basic medical tourism package. They don’t do the surgery and then fly you home saying “bye-bye”. They allow you to recover in the hospital in rooms that make US hospitals look like college dormitories. There are always going to be complications, whether here in the US or abroad, that cannot be helped, but given the fact that JCI is accrediting more and more hospitals, and nations becoming medical tourism destinations are eager to adopt international standards of quality, which is more than I can say for US based hospitals, which I also point out in the quality section. You say that not all facilities are going to opt to participate in JCI accreditation because of expense; however, those hospitals already accredited like Apollo Hospitals or Bumrungrad in Thailand, are already accredited, many are collaborating with US medical schools, and those that aren’t are either not going to be destinations, or will get help from those medical tourism experts such as a woman I know from the social media site I am a member of, and from a company that I learned of at the 5th World Medical Tourism & Global Healthcare Congress recently in Florida.

 

POINT 6

Medical tourism doesn’t necessarily disproportionately benefit the under/uninsured. These people may not even have the financial means to travel away for care. I would hypothesize that people who are wealthy are much more likely to use services like this and yes, they would also make a vacation out of it.

COUNTERPOINT

That may be true, but not all of the more than 500,000 Americans who have gone abroad for medical tourism are wealthy. And your hypothesis is not holding up to the fact that many Americans who have health insurance, but cannot get certain procedures performed here in the US or paid for by their insurance company, are going abroad, even if they are not wealthy as those who can afford it. Medical Tourism is for everyone.

POINT 7

Expenses in the US are positively exorbitant. There are many other things that need to be done to control costs.

COUNTERPOINT

Yes, and that is why I wrote the paper, to make it clear that this is one way to bring down costs. If you saw the chart I based my Introduction figures on from NCCI, you will see a clear twenty year upward trajectory of medical costs in comp, but so far, they have only managed to slow the rate of increase, not move the line down towards lower medical claim costs. Most of what the industry is trying to get a handle on, the re-packaging of drugs by physicians, opioid use abuse, better case management techniques, better software to monitor losses and experience mods, and the myriad other services offered by the workers’ compensation services industry have not, according to the annual NCCI State of the Line reports, moved the average medical cost per lost-time claims trend line down to a more manageable level. It currently is just below $30,000, so it is obvious that these measures are meager at best.

POINT 8

One last point, medical tourism is not intended to take the place of primary care or treatment of workers’ comp injuries. That will, of course, happen in the days right after an injury occurs.

COUNTERPOINT

Yes, that is true, but when surgery or treatment can be delayed, then one factor that will necessitate the implementation of medical tourism is the cost savings. The main point I wanted to make was that there is an alternative to high cost, post-primary treatment of certain work comp injuries such as knee, hip, or back surgery, or as Dr. Merrell points out, repetitive injuries such as carpal tunnel and the like. It is not for everything or for everyone, but it should be an option nonetheless.

POINT 9

Does the risk of blood clot increase during a long flight?

COUNTERPOINT

Of course, that’s why we have medications that substantially lower such risk. In addition when a person has surgery abroad, they cannot travel home immediately due to the risk of embolism. That’s why one must relax after surgery before returning home. The doctor in charge makes the determination concerning when it’s safe for the person to return home on a long flight… to help reduce the risk of such complication.

POINT 10

I won’t know the doctor overseas.

When you are admitted to a hospital in the USA, you don’t know that doctor either. Plus in today’s world, as an inpatient, you will probably be assigned a hospitalist. This is a doctor that is employed by the hospital and its common practice for the hospital to actually pay “outside” doctors to not visit their patient. This allows the hospital to make more money. Of course you may know the surgeon, because if this is non-emergent care, more than likely you had an office visit or two before the surgery. Again this is no different from medical tourism procedures; here too you will meet with the surgeon a couple of times before surgery. It’s the same…

Before anyone goes abroad, they should at least get to know the doctor who will oversee their treatment, even if they are not physically there to do so. Long distance communication through Skype and other such resources are making the world smaller, so that is no longer an issue.

POINT 11

I won’t know the people.

COUNTERPOINT

If you are a patient in an American hospital, you’ll be lucky if you are even acquainted with any of the hospital staff. Normally the hospital staffs are people you don’t know. Of course patients who participate in medical tourism are encouraged to bring a travel companion, so the patient does know someone else. A travel companion lowers stress levels, which strengthens the healing process. Even when you factor in the cost of travel for two, you still save thousands of dollars. So how does this compare to hospitalization in the USA? Not much different, so obviously this too is a weak argument.

POINT 12

As for your question concerning worker’s compensation, I am curious as to why an employer would want to limit such an advantage to worker’s compensation?

COUNTERPOINT

As for workers’ compensation, I never said that employers would limit themselves to that for the advantage medical tourism offers them. My research showed that there are companies offering medical tourism as part of their health plans to individuals as well as employers. There have been issues with union objection and some state governments, particularly West Virginia, that have explored it, but have never passed bills to allow their workers to get medical treatment abroad. And when I attended the 5th World Medical Tourism & Global Healthcare Congress in October, I learned that large employers like American Express and Google, and smaller companies like Phillips Services Industries (PSI) are offering it as an option to their employees as part of their health care plans. Two individuals I connected with from the Congress are working on self-funded employer health care plans in Latin America with Aetna to offer medical tourism.

POINT 13

A key challenge for those who advocate that medical tourism options be used for US based workers needing occupational injury treatment as well as those advocating that Medicare/Medicaid and other government systems pay for medical tourism options is the regulatory restrictions on those treatments and their reimbursements. In the case of US worker’s compensation programs, most states regulate both what insurers and employers can do to require or influence the care provider and site, as well as in many instances restrict the provider to an approved provider except for emergency treatments.

COUNTERPOINT

As for the subject at hand, my paper was on the legal barriers to implementing medical tourism for WC. There were many legal barriers that I found, some of which seemed outdated given the ease of travel today in the US, and the ease of communication between doctors in one state and specialists in other states, especially at larger, more prestigious and better equipped hospitals. However, the three cases I cite in the paper, two on medical tourism to a foreign country (Mexico) and one on domestic medical tourism, opens the door slightly to allowing medical tourism for WC. The two cases concerned Mexican workers in CA and FL, respectively, who received treatment in their hometowns in Mexico, and the courts in both states, granted claimants petition to have Work Comp pay for it. FL law even recognizes that claimants will travel to their country to have care, so it was granted by the Supreme Court. It may take time, but there is no stopping the process of globalization, and that includes the globalization of medical care for Workers’ Compensation, because the costs will become so high here, that an alternative will have to be found, and that will break the dam, IMHO.

See COUNTERPOINT 5 regarding Washington State and Oregon.

No doubt what you say is true at the present time, but you should know, and I mention this in my paper, that medical costs of WC claims is rising, and as of the latest figures I got from NCCI, the average medical cost per lost time claim was $26,000 in 2008, and medical losses in 2008 represented 58% of all total losses. Given that, don’t you think there will come a time in the near future that insurance carriers will say ‘enough”, pressure legislatures to change laws and open the market to medical tourism to bring down costs? And as for choice of which facility is best, it would have to be one accredited by the international arm of the Joint Commission, such as Bumrungrad in Thailand, or those in India, Singapore, etc. I also think Americans need to be more globally aware that the rest of the world is not only catching up to us, but in many respects is passing us by. We can no longer hide our collective heads in the sand that the US is number one in everything, because it is not so. The doctors in these hospitals are trained in western medical schools, including US schools, and these schools are partnering with these hospitals. We are foolish and naive to think “America is No. 1”, and therefore we should not seek the best care wherever it may be. And as for leaving loved ones, these hospitals provide accommodations for loved ones or friends to stay with the patient until they have recovered enough to return home. It is a new world out there, and Americans must learn to embrace it, or we run the risk of becoming a third world nation ourselves.

POINT 14

For workers compensation care, promotion of medical tourism as an option is a problem because most US worker’s compensation laws require that the employee have choice, or otherwise restrict the ability of insurers and others to restrict employee choice of care. Add to that, except for workers already working abroad, most workers don’t want to leave their families and communities for care and recovery in a foreign country where they don’t know the provider or the people. Existing worker’s compensation laws are not generally going to allow an insurer or employer to force an employee to go abroad for care because it’s cheaper. What regulatory restrictions don’t obstruct, these and other practical barriers likely will also limit the options. While there are many wonderful facilities around the world, most US based Americans are not sure how to tell which ones are top notch and which ones are not. While this already presents some challenges, the widely held skepticism of injured employees about the care provider choices of insurers and employers would generally go through the roof if the recommendation is made because the insurer or employer can get a cheaper rate by sending the worker oversees. Furthermore, while some Americans are willing to travel, most don’t want to leave their counties, much less their countries to get care unless they feel that the care provider is extraordinary or they have no other choice. In worker’s comp, employees have even more options to allow these and other concerns to control their care choices.

COUNTERPOINT

Actually, the truth is, the majority of states allow employers to decide choice of physician, in whole or in part, as the following graph shows. The difference lies in whether or not there is a medical provider network (MPN) or a health care organization (HCO), as in CA, or in those states that require an employee to choose from a panel of doctors selected by the state, or the employer.

I am not saying that employers or insurers should force employees to choose medical tourism, but rather offer it as an option with the understanding that it will be more cost-effective and will be good for the employee and his recovery. Regulations can be changed, and since two states are already allowing employee choice abroad, shouldn’t that choice be made available for all workers? Medical tourism facilitators should be part of the conversation to implement medical tourism, as they are the ones who know the hospitals and the destinations that are best suited to handle the care and treatment of the patient. And yes, there will be many people who will not want to travel, but for those who would, especially those who are from some of the newer medical tourism destinations like the Latin American and Caribbean countries I saw at the Congress, it will be easier for them to be treated in a culture they understand and where the people speak their language.

CONCLUSION

I am trying to lay out a possible scenario for the future of medical tourism and Workers’ Compensation. Do I have all the answers? NO, but I have some knowledge of both, and have a belief that all things are possible if people only apply themselves to finding the answers and setting out policies and procedures for this to happen. Maybe yes, or maybe no, but we have to try. Not trying is failure and that is worse than trying.

Nothing is perfect, but to hide one’s head in the sand when there are alternatives that are better and more affordable is just plain silly. Obstacles can be overcome; they should not be written in stone that it cannot be done. Laws can be changed and rules can be put in place to make medical tourism work effectively through approved medical tourism facilitators recognized by the Workers’ Compensation Boards or Industrial Accident Commissions of states, and by the insurance carriers paying for the claims. Also, the employers, whose WC Experience Modification Factors (Mods) are determined by the frequency and/or severity of their claims, which impacts the premiums they pay for Comp insurance, have a stake in making sure the employee gets the best treatment for the lowest cost, because in the end, they will pay for it in the form of higher insurance premiums. Saving money should be paramount for any employer in this day and age, and if they want to do the right thing for themselves and their employees, medical tourism offers them the opportunity to do so.

Medical Tourism and Workers’ Compensation: What are the barriers?

Over the last twenty years, the average medical costs associated with lost-time workers’ compensation claims have gone up dramatically. As of last year, the average medical claim cost per lost-time claim is $28,000. This figure does not take into account workers’ compensation policies with high deductibles, nor does it give us any detail about what sort of medical care was provided, or whether any surgery was performed, and if so, what each surgery cost employers and their insurers.

As shown in Figure 1, the last twenty years has seen a steady climb in medical claim costs for workers compensation. In 2008, medical losses represented 58% of all total losses. The annual percentage change per lost-time claim from 1991 – 1993 was +1.9%; from 1994 – 2001, it was +8.9%, and from 2002 – 2010, it was +6.0%. Despite attempts to bring down costs, the costs are now closer to $30,000 per lost-time claim, and may continue to rise in the very near future.

Figure 1

Image

2011p: Preliminary data as of 12/31/2011

Source: National Council on Compensation Insurance, 2012

Given these facts, it appears that the U.S. workers’ compensation system is in need of some outside influence on costs that will provide both employers and insurers of high quality medical care at lower cost for workers who sustain injuries on the job. Much of what the workers’ compensation industry is already doing to bring down costs, only treats symptoms, and not the disease or the cause of the disease itself.

Implementing safety procedures and insuring the proper use of safety equipment, implementing return to work programs and better case management, eliminating the re-packaging of drugs by physicians and cracking down on opioid use, which are some of the current issues facing workers’ compensation, in the short-term may be beneficial, but as we have seen above, have not made a dent in the overall rise in medical costs for lost-time claims.

Medical tourism would present an opportunity to bring down claim costs by offering high quality health care at lower cost, and to open the system to competition. Both the employer and insurer will need to be pro-active in order to realize savings for their workers’ compensation claims. Medical tourism will also provide an opportunity for foreign-born employees to get treatment in their home country, and in familiar surroundings, since many American workers today have emigrated to the U.S., mainly from Central and Latin America, as well as allow those workers not born abroad to see a part of the world they otherwise would not see.

While many of the medical tourism destinations previously receiving medical tourists are in Asia, “rising stars” in Central and Latin America, and the Caribbean, are areas that would satisfy the workers’ compensation industry because of its closeness to the U.S. mainland, and because the climate is more temperate in most of these countries compared with those in Asia. Medical tourism would not be a panacea for everyone, and would not be needed in every case, but in the long run, it can be an option that employers and insurance companies can utilize that will benefit all parties.

However, there are barriers to implementing medical tourism into the U.S. workers’ compensation system. Some of these barriers are minor issues that can be resolved by working around them, should an employer or insurance company wish to pursue medical tourism for their workers’ compensation claims, as some are now doing on the group health care side. It is the purpose of this article to outline some of the most important barriers, and to offer some ideas as to how medical tourism can overcome these barriers, so that injured workers can receive the best medical care available, no matter where it is located.

Among one of the minor barriers that prevent medical tourism from being implemented, are the laws about the distance from a claimant’s home a provider can be in order for the claimant to reasonably get to the doctor’s office. This would not be a problem for medical tourism, as the best way it could be utilized would be on a secondary care level. If a treating physician recommended surgery to the injured employee, it would be up to his employer or the insurance company, to have the patient go abroad for medical treatment, or if the employee so wished. The likelihood of this happening would be negligible because most injured workers would not be concerned about how much their treatment would cost, but his employer or their insurance company certainly would, and therefore, if given an option, they might suggest to the employee that this was the best course of action.

Another minor barrier is the result of entrenched interest groups, such as physicians, lawyers, pain management centers, and other parties in the workers’ compensation industry that wish to avoid competition with low-cost providers. Outdated federal and state laws that were intended to protect consumers, instead increase costs and reduce convenience also impact medical tourism. State and federal regulations that restrict public providers from outsourcing certain expensive medical procedures; federal laws that inhibit collaboration, and state licensing laws that prevent certain medical tasks from being performed by providers in other countries are a hindrance to health care medical tourism, as well as to workers’ compensation. Also, foreign physicians lack the authority to order tests, initiate therapies and to prescribe drugs that pharmacies in the U.S. are able to dispense.

Some laws, which should have been removed with the invention of the telephone, let alone the Internet, make it illegal for a physician to consult with a patient online without an initial face-to-face meeting. It is illegal for a physician who is outside the state and who has examined the patient in person to continue treating via the Internet after the patient goes home. Lastly, it is illegal, in most states, for a physician outside that state to consult by phone with the patient residing in that state if the physician is not licensed to practice there.

This brings our discussion to the major barriers to implementing medical tourism into workers’ compensation. In four of the largest workers’ compensation states, California, Florida, New York and Texas, medical providers must be licensed by the state to practice medicine. Florida statutes contain a provision to allow certain foreign-trained physicians to practice in the state, but do not mention doing so outside of the state.

Two states, Washington State and Oregon, both have statutes or rules that allow workers to choose an attending doctor or physician in another country. Washington State’s Department of Labor and Industries has a page on their website that allows workers to find an attending physician in the U.S., Canada, Mexico, as well as countries outside of North America such as England, Germany, Honduras, New Zealand, the Philippines, Spain, Thailand and Ukraine. Oregon’s statutes recognize the right of the worker to choose an attending doctor in another country with the prior approval of the insurer or self-insured employer. For this to be realized in other states, insurance companies, employers, business groups, unions and even workers’ rights organizations must get involved and lobby their state legislatures to change or amend their laws.

It would seem that medical tourism has already made some inroads into the U.S. workers’ compensation system. Issues of licensing and other barriers mentioned above are not insurmountable, and can be overcome with reasonable ease if medical tourism is conducted through medical tourism facilitators working in conjunction with employers and insurers. One more likely scenario would involve self-insured employers who may or may not be currently utilizing medical tourism for their group health care plan, and wish to realize savings for both their health care and workers’ compensation costs.

The last major barrier to incorporating medical tourism into workers’ compensation is the issue of Employee vs. Employer choice of treating physician. State Workers’ Compensation laws recognize four different categories of choice of physicians: Employer Only, Employer/Insurer, Employee/Employer and Employee Only.

Employer Only is self-explanatory; Employer/Insurer means that either the employer or his insurance carrier can choose the treating physician for the claimant. Employee/Employer means that the employee has the choice to choose the treating physician, or failing to do so, gives that right to his employer. Employee Only means that the employee can choose his physician.

Among the fifty states and the District of Columbia, a slim majority of states allow some form of employer choice as described above, and as indicated in Figure 2. As seen in Table 1, choice of physician is marked by an ‘X’ under each category, for all fifty states and the District of Columbia.

Figure 2

Table 1

The percentage of states for each category is shown below in Figure 3. The 50% of states  recognize Employee choice, but if you add together the Employer Only, Employer/Insurer and Employee/Employer categories, the majority of states, 52%, would favor employer choice in whole or in part.

Figure 3

What this all means for medical tourism is this, the best approach to take in implementing medical tourism into the US workers’ compensation system is to get employers to choose it as an option for their injured employees who will need secondary treatment, i.e., surgery that would be more expensive in the U.S., but at a much lower and more reasonable cost and better quality in fully accredited hospitals in medical tourism destinations.

For self-funded employers, especially those already using medical tourism as an option for their employees’ health care plan, doing the same with their workers’ compensation claims will allow them to realize considerable savings in workers’ compensation costs, as they are ready realizing in their health care costs. Employers, who are getting coverage on health care for their employees through the commercial market, will want to approach their workers’ compensation carriers to get them on board with a medical tourism option. Some commercial insurance companies that provide both health care coverage and workers’ compensation coverage would be the best companies to work with in this regard.

If there is some resistance on the part of employers and their insurers because of state workers’ compensation laws, then a concerted effort to amend, remove or change these laws will need to be considered, not just by a few companies, but across the board in the business world. To do anything less would be to allow the status quo to continue and to see medical costs for workers’ compensation claims to rise even higher when there is a viable and reasonable alternative available, within a relatively short distance from the US mainland in Central and Latin America, and the Caribbean,  the so-called “rising stars” of medical tourism. Only time will tell if U.S. employers and insurance companies will be open to implementing medical tourism into workers’ compensation. Conservative solutions, already tried and not yielding much success in bringing down medical claim costs, will have to give way to more “radical” solutions such as medical tourism, which when thoughtfully considered, is not that radical after all.

To read my White Paper on Implementing International Medical Providers into Medical Provider Networks for Workers’ Compensation, go to the following link: https://www.box.com/s/77inqpo9pa91y6rxt133

Employee vs Employer Choice of Physician: How best to Incorporate Medical Tourism into Workers’ Compensation

One of the obstacles to incorporating medical tourism into workers’ compensation is the issue of Employee vs. Employer choice of treating physician. State Workers’ Compensation laws recognize four different categories of choice of physicians, Employer Only, Employer/Insurer, Employee/Employer and Employee Only.

Employer Only is self-explanatory; Employer/Insurer means that either the employer or his insurance carrier can choose the treating physician for the claimant. Employee/Employer means that the employee has the choice to choose the treating physician, or failing to do so, gives that right to his employer. Employee Only means that the employee can choose his physician.

Among the fifty states and the District of Columbia, a slim majority of states allow some form of employer choice as described above, and as indicated in Figure 1. As seen in Table 1, choice of physician is marked by an ‘X’ under each category for all fifty states and the District of Columbia.

Figure 1

Table 1

The percentage of states for each category is shown below in Figure 2, the majority of states, 48% recognizing Employee choice, but if you add together the Employer Only, Employer/Insurer and Employee/Employer categories, the majority of states would favor employer choice in whole or in part.

Figure 2

What this all means for medical tourism is this, the best approach to take in implementing medical tourism into the US workers’ compensation system is to get employers to choose it as an option for their injured employees who will need secondary treatment, i.e., surgery that would be more expensive in the U.S., but at a much lower and more reasonable cost and better quality in fully accredited hospitals in medical tourism destinations.

For self-funded employers, especially those already using medical tourism as an for their employees health care plan, doing the same with their workers’ compensation claims will allow them to realize considerable savings in workers’ compensation costs, as they are ready realizing in their health care costs. Employers, who are getting coverage on health care for their employees through the commercial market, will want to approach their workers’ compensation carriers to get them on board with a medical tourism option. Some commercial insurance companies that provide both health care coverage and workers’ compensation coverage would be the best companies to work with in this regard.

If there is some resistance on the part of employers and their insurers because of state workers’ compensation laws, then a concerted effort to amend, remove or change these laws will need to be considered, not just by a few companies, but across the board in the business world. To do anything less would be to allow the status quo to continue and to see medical costs for workers’ compensation claims to rise even higher when there is a viable and reasonable alternative available, within a relatively short distance from the US mainland in Central and Latin America, the so-called “rising stars” of medical tourism.