A View from the Bench: Medical Tourism and its Implementation into Workers’ Compensation


Last week, in response to my post, Knee Surgery in Costa Rica — A Less Expensive Alternative, I received a comment from David Langham, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings.

Judge Langham stated that: “Medical Tourism is a reality. How far will it go?” and then referred me to an article he wrote in the December issue of Lex and Verum, published by the National Association of Workers’ Compensation Judiciary. Judge Langham serves as a Board Member of NAWCJ.

In his article entitled, On Fee Schedules, Medicare, and Medical Tourism, Judge Langham discusses two studies that I previously mentioned in earlier posts this year. The first post, published on February 1st, was called Outpatient Facility Costs Rising Could Benefit Medical Tourism Industry and discussed a study by the Workers’ Compensation Research Institute (WCRI) that analyzed the outpatient facility costs, cost drivers, regulatory mechanisms, and trends in 20 states.

The second post, published on May 23rd, was called If You Have to Ask…Fuggedaboutit!, in which I mentioned that the Centers for Medicare and Medicaid Services (CMS) had studied various inpatient surgical procedures performed in the US and found that inpatient hospital charges varied considerably from state to state, within the same state, and within the same city, which was noted by Judge Langham in his article. He even went on to cite a Washington Post report that said a hospital in Dallas charged an average of $160,832 for a lower joint replacement, while a hospital five miles away charged an average of $42,632, a difference of $118,200.

But what fascinated me about Judge Langham’s article was not the discussion about fee schedules, Medicare and payments; it was that he mentions medical tourism as a possible solution to high cost surgeries. However, the form of medical tourism Judge Langham refers to in his article, is domestic medical tourism.

Citing the two studies above, and describing the disparities in costs from states that have a fee schedule and those that don’t, Judge Langham suggests that sending patients from high cost states such as Illinois to a low cost state like Massachusetts, will save insurance companies money.

“With the vast disparity in reimbursements demonstrated in the WCRI study released last January and the Medicare data released last May, payors such as insurance companies may find savings in sending injured workers to states or localities with greater cost control for outpatient surgery. Such travel may represent a cost in itself, if not within the same city (see Medicare examples above), but may pale in comparison with the savings gained. Taking the example above, with a cost of $10,000 in the average state, and sending the injured worker to Massachusetts First Class ($1,000) and putting her or him up in a nice hotel for a few days ($1,000) to prepare and recuperate would add only $2,000.00 to the $3,900.00 cost of the procedure there. The $10,000 procedure in the average state might be performed in Massachusetts for an overall cost, including travel and lodging, of $5,900.00. This still represents a significant savings compared to the $10,000.00 cost. More persuasive, this same procedure would cost $15,100 in Illinois. An Illinois employer sending their patient to Massachusetts would potentially save over $9,000.00 on the procedure.”

Judge Langham also stated that there are those who dismiss this potential out of hand, and cites data from a medical tourism facilitator company called New World Medical Tourism. Judge Langham explains that medical tourism is a relatively new industry, and that there are a multitude of firms that arrange healthcare in countries like India, Costa Rica, Mexico, the Philippines and others. They advertise, he states, that medical care in foreign countries can cost 70% to 80% less than in the US.

Judge Langham goes on to say that New World Medical states on their website that a spine surgery in the US might cost $80,000 to $100,000, and the same procedure in India would cost as little as $8,000 to $14,000, a savings of 82% to 92%. New World Medical concedes he adds, that travel and lodging costs must be deducted, but that these costs are generally around $2,500. As for knee replacement surgery, New World Medical says, according to Judge Langham, is estimated at $50,000 in the US, compared to $8,000 in India.

According to Judge Langham, medical tourism has an established foothold in the medical industry, but states that physicians in the US recommend against medical tourism. They caution, he adds, that treatments, implants, and medications provided outside of the US may not be approved of by the Food and Drug Administration (FDA), and that follow-up care after surgery may be substandard. Also, verification of the foreign surgeon’s qualifications may also be difficult.

The Judge says that these are all valid concerns, and as many of us already know, these issues are paramount in solving if medical tourism is to be a viable alternative to high-cost surgery. Judge Langham also states that any patient considering surgery would be interested in reassurance on such questions before agreeing to undergo surgery.

Another point Judge Langham makes is the following:

“These quality of care concerns are not as persuasive in the argument for medical tourism to Massachusetts. Certainly, the quality of care concerns are also a more difficult argument in the distinction between the two Dallas hospitals cited above. The savings may not be as persuasive either, but the Medicare data cited by the Washington Post and others may drive payors to analyze the selection of provider facilities and perhaps even the benefits of medical tourism in or outside the United States.

In the conclusion of his article, Judge Langham says that both the WCRI data and the Medicare data support the idea that medical tourism within the US may become increasingly attractive to payors in coming years. States like MA, MD, and CA that have lower outpatient costs may attracts workers’ compensation medical tourists from IL, VA, or FL. There are some states, the Judge says, that have statutory or regulatory restrictions that confine any attempt to force an insurance carrier to provide medical services outside the state in which the injured workers lives or was injured in, but that these restrictions are generally limited to the injured worker, and does not preclude the insurance carrier from voluntarily providing such care and the travel costs associated with it.

In my blog post, Medical Tourism and Workers’ Compensation: What are the barriers? and in three other posts that summarize, or link to my White Paper, or are the paper itself, I highlighted many of these and other barriers to implementing medical tourism into workers’ compensation as Judge Langham points out. My paper’s conclusion stated that “the courts are willing to allow some measure of medical tourism in workers’ compensation; how future courts will decide is unclear, but there is at least some precedent for ruling in favor of medical tourism.” It is clear by his article that Judge Langham is concurring with my conclusion. Having someone of his stature in the workers’ comp judiciary sharing my idea is very encouraging, to say the least. It is a sign that there are others who share my thoughts on the subject.

It is also a sign that the “crowd” is beginning to catch up to my idea for medical tourism in workers’ comp, which was why I titled my blog post Far In Front of the Crowd back in August, when Joe Paduda commented on a prior post that I was ‘far in front of the crowd’ on medical tourism and workers’ comp.

In a recent article posted on Insurance Thought Leadership.com by Kevin Bingham, et al., called Workers’ Compensation Comes of Age, the authors wrote that:

“Medical tourism continues to grow as an option for patients all across America. An airline magazine recently had advertisements from hospitals outside the United States showing savings of 50% to 80% on procedures such as knee and hip replacements that are common in workers’ compensation. The general cost in the United States for a knee replacement was shown at $34,000, versus the overseas cost of just $10,000. A hip replacement was listed as $35,000 versus the overseas cost of just $11,000. Even with the cost of airfare, transportation, and hotel accommodations, the potential savings are significant (acknowledging that we aren’t attempting to control for quality or safety differences). With several companies and health insurers investigating offering medical tourism options to their employees and insureds, there could come a day when workers’ compensation insurers could leverage these tremendous savings to help drive down severity for certain procedures. While businesses may welcome the cost savings, we recognize that persuading state legislatures and injured workers to agree to these practices could be difficult.

Mr. Bingham is a principal with Deloitte Consulting’s Advanced Analytics & Modeling practice, and his fellow authors have a diverse background, ranging from Actuaries to a Registered Nurse. The last statement by the authors was another point I raised in my White Paper, but in the case of injured workers, could be handled by offering them a financial incentive of between $2,000 and $2,500 from the savings realized by medical tourism, provided the savings was greater than $5,000, as was pointed out to me some months ago by the president of a health care company that negotiates lower costs for their clients’ workers’ compensation claims.

But despite the difficulties involved at this time getting medical tourism accepted, the medical tourism industry itself needs to do a whole lot of work before they can expand into the workers’ compensation market. As Judge Langham noted, the treatments, implants and medications provided outside the US must be approved by the FDA. It is true that many patients go abroad because certain treatments and procedures are not currently approved by the FDA, such as experimental treatments and procedures for cancer and heart disease, etc. But, for those more routine treatments and procedures that are either too expensive, or for which the patient does not have adequate insurance, complying with the FDA or even surpassing them, should be another goal of the industry.

Also, the industry must find a way to guarantee superior aftercare and follow-up care, which is crucial for the patient’s speedy and successful recovery. This will go a long way in making medical tourism a reliable and safe alternative to medical care at home. And finally, the qualifications and credentials of the surgeons must be known well in advance of surgery and verified. But above all, transparency on cost, on quality of care, on travel arrangements and on the reputation of the medical personnel and facility must be provided to the patient before any decision is made to leave the country. It is the duty and the job of the medical facilitator to guarantee this both verbally and in writing, and to make all necessary arrangements and preparations for the patient.

But the industry itself must work with each and every country that seeks medical tourist dollars to bring about standards and regulations and legal frameworks that will make medical tourism more attractive to patients, employers and insurance carriers in both general health care and workers’ compensation. To do anything less imperils the entire industry.

So, it would seem that medical tourism in workers’ comp is not so far-fetched an idea now as it once was over a year ago when I first started writing my blog. As I said above, the crowd is catching up to me, and I welcome the company, especially when it comes from the second highest workers’ comp judge in the State of Florida and a principal from a major consulting firm. HAPPY NEW YEAR!


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This entry was posted in Health Care Costs, Legal Barriers, Medical Tourism, Workers' Compensation and tagged , , , , , , , , , , , on by .

About Transforming Workers' Comp

Have worked in the Insurance and Risk Management industry for more than thirty years in New York, Florida and Texas in the Claims and Risk Management spheres, primarily in Workers’ Compensation Claims, Auto No-Fault and Property & Casualty Claims Administration and Claims Management. Have experience in Risk and Insurance Business Analysis, Risk Management Information Systems, and Insurance Data Processing and Data Management. Received my Master’s in Health Administration (MHA) degree from Florida Atlantic University in Boca Raton, Florida in December 2011. Received my Master of Arts (MA) degree in American History from New York University, and received my Bachelor of Arts (BA) degree in Liberal Arts (Political Science/History/Social Sciences) from SUNY Brockport. I have studied World History, Global Politics, and have a strong interest in the future of human civilization in all aspects; economic, political and social. I am looking for new opportunities that will utilize my previous experience and MHA degree. I am available for speaking engagements and am willing to travel. LinkedIn Profile: http://www.linkedin.com/in/richardkrasner Resume: https://www.box.com/s/z8rxcks6ix41m3ocvvep

7 thoughts on “A View from the Bench: Medical Tourism and its Implementation into Workers’ Compensation

  1. Gwen Tomaszewski, RN WC Case Manager

    While I agree with this article regarding the various options that should be explored, I do have a practical concern regarding follow-up medical care especially with WC procedures. Physicians are often reluctant to care for a surgical patient when they did not perform the surgery. i have spoken to numerous claimants who have relocated to another State and face problems with finding medical treatment. Providers state an unwillingness to accept medical liability or fee schedule reimbursement. Ongoing prescription needs, therapy, pain management and repeat surgery can be problematic unless the Carrier and WC Judiciary intend to commit to repetitive travel expenses. Physicians/Hospitals seeking medical tourism dollars must partner with a local Physicians/Hospital systems to make out of State or Country procedures a practical medical option.


    1. richardkrasner Post author


      Thank you for your comment. I just have one question to ask you, and I would like you to think about it before your answer the question. Suppose two people have injured the same body part in the same manner, and both require surgery, but one person was hurt on the job and the other was not. Yet, they both sought their surgery out of the country. The person who was not injured on the job is having their surgery paid for by their employer, with all travel and other expenses covered. The worker who was injured on the job was also having their surgery paid for by their employer, who was self-insured for workers’ compensation and thus was paying for it out of their pocket. My question is this: if the employer is paying for one person under their health plan and the other under self-insured comp, why should it matter that follow-up care is a problem for the injured worker, but not an issue for the employee covered under the health plan?

      Given that all things are relatively equal, follow-up care for one should be the same follow-up care for the other. I think we assume there is a difference because there is a regulatory regime in work comp that does not exist in health care. Case in point, a company in North Carolina sends their employees to India and Costa Rica for health care surgery and is saving a ton of money doing so. Yet, they are not concerned with the issue of follow-up care, medical liability, therapy, pain management issues. In an article last month in Business Insurance, this company, HSM, which was also featured on ABC’s Nightline program, sent an employee to India for back surgery. The director of benefits for HSM went along with him. Because a lot of their injuries are back injuries, the employees did not want to undergo spinal fusions, which is the typical treatment here in the US. Indian surgeons perform disk replacement surgery, and the surgery in India cost the company $38,000 as opposed to $300,000 t0 $400,000 in the US.

      I am sure that the employee who was chaperoned by the director of benefits needed follow-up care, and rehab, and prescription medication and all the rest, but the difference is it was not done under a regulated, state-mandated, broken-down workers’ compensation system that is more beholden to special interest groups like the AMA and the various specialty associations, the pain management vendors, the rehab vendors, the pbm vendors and all the other hangers-on that drag down the system and forget that the main reason for comp is the injured worker, not their bottom-line.

      So I believe that while your points are valid ones, it should not make any difference if someone goes overseas for knee, hip, shoulder, carpal tunnel, or other kinds of surgery or goes for cosmetic or plastic surgery under a health care plan or out of pocket, the follow-up care and other issues are still going to apply as part of the recovery and recuperation period, so the only reason there is reluctance on the part of US doctors is that they are not getting their cut, which given the high cost of health care today, is the reason to seek less expensive alternatives. Don’t you think?


      1. richardkrasner Post author


        I had a conversation with the director of benefits for HSM on Thursday. I caught him in an apparent lie, or at least a dishonest backtracking from what he said in the BI article when I emailed the writer of the article. She responded to me with her exact notes. She is a Senior Editor of BI, a publication of Crain Communications, a well-known and respected business publishing company. He is a liar and an admitted coward because when I asked to answer some questions for use as an interview, he declined citing not wanting to get into trouble with doctors, hospitals and state work comp boards; yet, his company has lowered their comp costs by sending people abroad for what are work-related injuries under their health care plan. If companies like his would go public, then perhaps they could change people’s minds and the statutes for workers’ comp and take care of injured workers, instead of lining the pockets of special interests like lawyers, doctors and hospitals.


  2. Kim

    All interesting / informative / beneficial / and adjective after adjective.
    And for the sake of argument lets also level the Work Comp / Group Health conversations since patient care “should” be the same (and can be) …
    And get down to the nitty gritty of medical ~ On top of follow up care concerns (and those stated previously are valid both for thoughts based in actual care and even coin), what about complications or unexpected outcomes (even fatality issues), and all that can come in the wake of that cross state/border/country problems (from medical liability to political structure) … I have worked in so many capacities in both the pure medical (ER nurse) and claims (from managed care to even international insurance coverage’s) just as yourself, and would argue that those thoughts are actually the ones that can be daunting at best when the surgery as planned on paper doesn’t go well ~


    1. richardkrasner Post author


      I am not sure if your comment is positive or negative regarding medical tourism, but I will say that there is risk in everything we do, from crossing to street to getting on a highway, or to getting on an airplane, but we don’t engage in the self-fulfilling prophesy of actually experiencing something bad happening to us as we keep going over in our minds the thought, “What if this should happen, or what if that should happen, or what if this person or that person does something wrong, etc.” We would never venture out of our homes. And yet, people are going abroad and crossing borders for health care and will continue to do so without thinking too much about the consequences, for if they did, they’d turn right around and crawl back into bed, which if they needed the surgery or medical care, would be foolish and unwise.

      I think like everything else, these issues will work themselves out because the situation will force a solution or a remedy for liability issues, malpractice, complications and all the rest. And as for complications, I am sure you are aware that complications can happen even if someone goes to the nearest hospital in their city or town, just as it would if they went across the country or around the world. That is what needs to be addressed every time a patient goes into surgery, how to minimize or eliminate complications from occurring. But just because they might, does not mean we should not pursue it. Nor should it mean that patients should not seek better medical care at lower cost outside of their home country. The world is catching up, and may even surprise us.



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