Tag Archives: Medical Travel

The Fork in the Road in Medical Travel

Returning to the main theme of this blog, I came across the following insightful article by Ruben Toral last week that posed the question, “Is Medical Tourism Dying a Slow Death?”

As someone who has been interested in opportunities in Medical Travel for some time, and  disappointed in not being able to elicit interest in my idea for Medical Travel, I was interested in seeing what Ruben had to say, and to see if it measured up to my views of the industry, as I know it.

According to Ruben, the industry exhibits the traits of a typical product/business cycle, whereby the first and fast movers establish leadership by developing and commercializing the concept, then late adopters pile in to get in on the action.

He goes on to decry the same speakers at every medical tourism event around the world talking about the same things, which is enough to hit the snooze button and go back to sleep.

He also laments the lack of innovation, and says that key players are just trying to manage the slow growth rather than investing in the next wave.

VC investors, Ruben says, talk of getting burned on medical tourism investments that simply cannot scale like other businesses, because, as they quickly learn, healthcare is a different animal than retail and you burn through a lot of cash fast trying to buy eyeballs and audience.

And investment analysts ask the same question after pouring through hospital financial reports and see how hospitals are managing and protecting profit margins: “Where’s the growth?” And even large meeting and events companies are not “flogging medical tourism” because attendance and interest is way down.

So, is this the beginning of the end or the inflection point for medical tourism?, Ruben asks. For his part, he does not know, but if it is not the beginning of the end, or an inflection point, it is most certainly a fork in the road.

Where it goes from here is as good a guess as mine and Ruben’s, but it is up to those who are serious and dedicated to growing the industry to regroup and start again to build interest and enthusiasm for medical travel, and to address some of the glaring issues facing the industry.

But that won’t happen until there are changes within and without the industry…in technology and in strategy.

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Workers’ Comp Medical Benefits Represent More Than Half of Employer Costs

The National Academy of Social Insurance (NASI) recently issued its 20th annual report on Workers’ Compensation: Benefits, Coverage, and Costs. The study provides estimates of workers’ compensation payments—cash and medical—for all 50 states, the District of Columbia, and federal programs providing workers’ compensation.

Much of the study, as reported today by Workers Comp Insider.com, deals with the decrease in benefits as a percentage of payroll, an issue outside the purview of this blog.

But I was intrigued by the graphic at the bottom, which stated that thirty-three states spent more than half their workers’ compensation benefits on medical costs for injured workers.

And the share of total costs of workers’ comp benefits that are medical costs rose from 1980 to 2015, from 29% to 50%.

WC Benefits

While the study does not provide any insight into what that 50% represents, it is conceivable to assume that a good part of it involves surgery to repair the injury the worker suffered.

So, if this study is right, then the only way to begin to bring down the medical costs in workers’ comp is to look at alternatives that as of yet have not been tried because of lack of will, or a belief that alternatives are not realistic, or because we still cling to the notion that our healthcare system is the best in the world. and no one else comes close.

As Puck said, “Lord, what fools these mortals be.”

Cross-Border Dental Care in Mexico

On Sunday, NBC Nightly News ran a video report on dental care in Los Algodones, Mexico, south of the border from Arizona, and west of Yuma.

According to the report, during the winter months, up to 7,000 Americans travel to Los Algodones for dental care.

Los Algodones, also known as “Molar City”, is the self-proclaimed dental capital of the world. While that sounds like hype, I can tell you from personal experience that it is not the only town on the border where one can find dozens of dental offices.

When I presented at the 5th Mexico Medical Tourism and Wellness Business Summit in 2014, I visited a town east of Reynosa called Nuevo Progresso where I saw some of the dental offices, along with some of the other attendees.

Here is the video from NBC.

http://www.nbcnews.com/widget/video-embed/1018704963518

And here are some pictures from Nuevo Progresso.

I took these pictures in a small medical center on the main street of Nuevo Progresso, just over the border from Texas. To the left of the picture on the left, is the bridge crossing the Rio Grande (Rio Bravo) into the US.

And the people I saw on the street were not Mexicans, they were Americans.

Still think medical travel is a stupid and ridiculous idea? Try telling it to the thousands who go across the border.

A Deeper Dive into Medical Cost Rising for Lost-Time Claims

It is said, a picture is worth a thousand words, and I have ten pictures, courtesy of NCCI’s Barry Lipton’s presentation on that subject.

It was brought to my attention by my fellow blogger, James Moore, of J&L Risk Management Consultants. I met James back in February at the NCCI 2017 Data Education Program in West Palm Beach.

Mr. Lipton is the Senior Actuary and Practice Leader, and his presentation was called, “Medical Cost Trends Then and Now.

Yesterday’s posts regarding the slight increase in the average medical costs for lost-time claims only scratched the surface of the subject. I hope this post will dive deeper into it, so that we can see the whole picture.

In my first post from yesterday, “Slight Increase in Average Medical Costs for Lost-Time Claims, Part 1”, I discussed how physician costs and prescription drug costs impacted medical costs for lost-time claims.

On the issue of physician costs, Mr. Lipton showed that there was a decline in the 2015 medical payments per claim due to physician costs, but as the following chart proves, despite this decline, physician costs contribute a larger share of the total costs.

Chart 1.

Chart 6.

Source: NCCI Annual Issues Symposium 2017

According to James, the main reason for the reduction in costs is the physician utilization per claim. Even though it is only a3% reduction, it is significant, James says, in a time of upward spiraling medical costs. Chart 2 bears this out.

Chart 2.

Chart 7.

Source: NCCI Annual Issues Symposium 2017

The second part of my post yesterday, “Slight Increase in Average Medical Costs for Lost-Time Claims, Part 2”, looked at the steady rise of the average medical cost for lost-time claim.

If we compare the chart from yesterday’s post to the one Mr. Lipton presented, we will see that his chart does show increases and decreases over time in the average medical costs per lost-time claim, but my chart indicates that ever since 1995, it has been rising steady.

Both charts, do show that the average medical cost per lost-time claim is hovering around $30,000, and if the numbers are consistent with ones for earlier years, represents almost 60% of the total claims cost.

My Chart.

Chart 2.

Chart 3.

Chart 4.

Source: NCCI Annual Issues Symposium 2017

To examine this in greater detail, Mr. Lipton broke down the Accident Years into three separate periods and slides, to show the change in medical cost per lost-time claim. He compared the change in Personal Health Care (PHC) Spending per Capita with the Medical Cost per Lost-Time Claim.

In the period, 1995-2002, the average growth rate (AGR) for WC was 9%, and the AGR for PHC was 6%. In the next period, 2002-2009, WC AGR was 6%; PHC AGR was 5%, and finally, in the last period, 2009-2015, the WC AGR was 1%, while the PHC AGR was 3%, as seen in chart 4.

Chart 4.

Chart 10.

Source: NCCI Annual Issues Symposium 2017

To understand what was driving the decline in Accident Year 2015, Mr. Lipton identified six different drivers, as indicated in chart 5.

Chart 5.

Chart 8.

Source: NCCI Annual Issues Symposium 2017

Finally, Mr. Lipton discussed how hospital costs contributed to medical cost per lost-time claims by highlighting the difference between inpatient and outpatient costs, which are rising.

The following chart looks at the four years prior to the 2016 Accident Year, 2012-2015.

Chart 6.

Chart 9.

Source: NCCI Annual Issues Symposium 2017

In 2012, Hospital Inpatient Paid per Stay amounted to $19,514, in 2013, it rose to $22,944 (18% increase), in 2014, it was $24,558, or a 7% increase, and last, in 2015, it was $25,320, or 3% increase over the previous year.

As for Hospital Outpatient Paid per Visit, the number are considerably lower for each year when compared to Inpatient Stays, but nonetheless have been rising.

So perhaps this, at the end is why the average medical cost per lost-time claim has been rising over a period of over twenty years, from 1995 to 2015.

I wrote to James last night when I saw his recent posts on this presentation, and he responded that we are both correct in our analysis, but looking at it from different points of view.

My conclusion after reading this presentation and my discussion with James suggests to me that there are two things going on here. One, when a worker is injured and receives medical care, unless and until he or she goes to a hospital, the best way to lower costs is through what James calls one of his six keys to reducing workers’ comp costs. One of those keys is medical control by the employer, which James said reduced cost by 75%.

But I also realized that when an injured worker goes to the ER or an Ambulatory Service Center as an Outpatient, has an Inpatient stay, that this is where the medical costs go up.

Naturally, Workers’ Comp medical spending is only a fraction of the overall health care spend of the US, and as costs for health care in general rise, so too does costs in workers’ comp.

So, while many have argued or shown that they can lower costs on the front end, from time of injury to return to work for most claims where no surgery is required, one of the largest reasons for the steady rise in the average medical cost per lost-time claims is hospital costs.

On this, both James and I agree. However, it is important that many in the industry see this as well. Keep thinking that it will change by doing this or that has not worked, the numbers prove that. Maybe it is time for something out of the box.

Infographic on Mobile Health

Here’s an infographic courtesy of URAC. What will this mean for workers’ comp, health care and medical travel?

Millennials and Mobile.png

Washington State Workers’ Comp Accepts Foreign Medical Providers

Seven years ago, when I was working on my MHA degree, I wrote a paper which has become the basis of this blog.

During that time, I found the website of the Department of Labor & Industries for Washington State, and was surprised to find landing pages that listed physicians in Canada, Mexico, and other countries. These countries were mentioned in my paper, and I have referred to it in subsequent posts from time to time.

However, in the period since, I have noticed that the landing page for other countries was removed. I contacted WA state a while back and was told they were updating it. Yet, as of recently, it is still not been replaced, so I contacted them again yesterday.

I received a reply from Cheryl D’Angelo-Gary, Health Services Analyst at the WA Department of Labor & Industries. She indicated in her response that she is the business owner of the Find a Doctor application (FAD).

According to Ms. D’Angelo-Gary, “our experience showed that most of Washington’s injured workers who leave the country travel to one of these adjacent nations. Workers who travel further afield are advised to work with their claim manager to locate (or likely recruit) a provider. All worker comp claims with overseas mailing addresses are handled by a team of claim managers who have some extra training to help the worker find a qualified provider.”

I asked her to clarify this statement further in my next email by asking if this means that any claimant who travels outside of North America will have to ask the claims manager to find them a doctor.

She replied, “interesting questions!” She also differentiated between an injured worker who is traveling versus one who has relocated out of country.

She went on to say that, “a worker who is traveling and needs claim-related care would be instructed to seek treatment at an ER or urgent care clinic, where the providers do not need to be part of our network and would not be providing ongoing treatment. To be paid, the provider would have to send us a bill and a completed non-network application (available online). Under no circumstances should the provider bill the worker.”

However, she continued, “a worker who has relocated overseas must send in a change of address (required whenever a worker moves). That allows us to transfer management of the claim to a unit that specializes in out-of-country claims. The claim manager would work with the injured worker to help the worker find somebody in their new location. It’s critical (per state law) that the worker choose their own provider, though the provider must meet our requirements and standards of care. Proactive workers tend to handle this well, and find a provider in very little time; less proactive workers can find this challenging. We’re currently looking at this process to see how we can do this better.”

And in final emails to her last night, I tied the first scenario to medical travel, and the second scenario to ex-pats living abroad, but needing medical care. I also asked about workers who wanted to travel back to their home country for medical care, and said that I write about medical travel for workers’ comp.

As of today, I have not heard back, but it is early, and there is a three-hour difference between us.

It must be pointed out that WA state is what is termed a ‘monopolistic state’ in that the state does all the work of handling workers’ comp insurance and claims. Thus, when Ms. D’Angelo-Gary says that worker must work with the claim manager, the claim manager in question is a state employee, and not an employee of a commercial insurance company.

It may be possible, therefore, for medical travel to be implemented in workers’ comp, and it should be something that the medical travel industry and the state should explore together. Ms. D’Angelo-Gary did say they were looking at this process to do better. What better way to improve the process then by utilizing medical travel?

H-1B Visa Order To Limit Number of Foreign-Born Doctors

Before most of the Risk Management and Workers’ Comp industry goes to Philadelphia for next week’s Risk and Insurance Management Society (RIMS) annual conference, I want to share an article on Kaiser Health News about what the recent executive order on H1-B visas will have on healthcare, and by extension, workers’ comp.

I wrote about this two weeks ago when I said that the travel ban will affect the physician shortage in the United States.

According to Kaiser, limiting the number of foreign doctors who can practice in the US could have a significant impact on certain hospitals and states that rely on them.

A study in JAMA found that more that 2,100 US employers were certified to fill nearly 10,500 physician jobs nationwide in 2016, representing 1.4% of physician workforce overall.

States such as New York, Michigan, and Illinois account for most of the H1-B visa applications for foreign physicians. a third of the total.

North Dakota, on the other hand, had the most applicants as a percentage of its workforce, or 4.7%.

While the focus of the executive order was to clamp down on the loopholes in the program that allowed tech companies to hire foreign workers for high skilled jobs that Americans could take, it will also have a negative effect on how patients will receive care in some US hospitals.

And coupled with the fact that the process of getting to practice here without an executive order is difficult and time-consuming, means that both general health care and workers’ comp patients may not be able to get necessary treatment due to the predicted physician shortage.

So while general healthcare can offer an alternative in the form of medical travel, it is high time that work comp does the same.

Or do you really want your claimant patients to wait months before getting needed surgery or other medical procedures?