The following Op-Ed commentary by Judy Dugan was published in The Los Angeles Times on Tuesday, November 3, 2009:

Pitching lower costs, ‘international hospitals’ are trying to make inroads into the U.S. healthcare system. But are they just a remedy for insurance companies?

At a luxury hotel conference center in Century City last week, "international hospitals" from Singapore to South America set up half an acre of colorful display booths in an attempt to attract more business from American insurers and employers. Glossy brochures and videos offered hip replacements, cancer treatments and cardiac care in Turkey, Thailand or Costa Rica. Send a patient and a companion on business class, the basic pitch went, and we’ll give them deluxe private rooms, a concierge and a driver. You’ll still save half or more of the U.S. cost — tens of thousands of dollars.

The name for this is medical tourism. It’s not a phrase that has come up openly in the national debate on healthcare reform. But the medical tourism industry has its hopes set on embedding the globalization of healthcare in standard health insurance packages. At the convention in Century City, meeting rooms buzzed with sessions on how to sell insurance companies and major employers on the idea.

If the reforms being decided in Washington don’t clearly reduce costs for healthcare and insurance — and right now they’re headed in the wrong direction — American workers may find themselves facing "incentives" for overseas surgery that border on coercion.

Medical tourism is known today as a path to lower-priced plastic surgery, dental implants or laser eye surgery, and a last resort for the middle-class uninsured who can scrape together $50,000 for a liver transplant in India, but not the $200,000 it would cost in the U.S. The business end of medical tourism, however, sees major growth potential in the already insured.

But there is a problem: No public data on quality and little recourse for injured patients. Despite the industry’s assertion that it offers U.S.-quality care, there is no backup to that claim. A new U.S.-based accreditation system for international hospitals adds some reputational sheen but doesn’t let patients compare results of, for instance, cardiac bypasses. Patients are often faced with signing airtight waivers that free providers from liability for negligence or error, starting with the paid "facilitators" who arrange travel, visas, lodging and hand-holding during the process.

For insurers and employers looking at a $45,000 hip replacement in the U.S., the lure of a $5,400 hip replacement in India — even with $10,000 or $12,000 in travel and lodging costs added on — is hard to resist. So what if there’s a lack of public, comparative data on outcomes, complications and long-term recovery?

Hospitals in the Third World pay a fraction of U.S. salaries. A doctor in the Philippines, for instance, makes far less than a U.S. nurse. In nations including India, Thailand and Mexico, government intervention steeply reduces drug and other costs. Hospital construction costs are low, and physical safety requirements such as earthquake-proofing are generally absent. Hospitals for the international trade don’t have to care for indigent patients. And, because the deeply ill aren’t candidates for a 15-hour pre-surgery plane trip, the overseas hospitals skim off healthier patients needing less complicated — and expensive — care. This could leave U.S. hospitals and medical professionals to treat the sickest patients — and raise U.S. costs even more.

Here are a few early indicators of insurer interest: The Blue Cross Blue Shield website touts "Blue Cross’ Companion Global Healthcare," a wrap-around travel planner and network of overseas providers, selling to individuals and to employers in South Carolina. In California, Blue Shield and HealthNet offer plans for employers of Mexican immigrants that cover treatment in Mexico. And United Health Group, the parent of PacifiCare, sent a speaker to the medical tourism conference to advise on how to get employers to include overseas surgery in health plan networks.

In 2008, West Virginia legislators considered a proposal promising state employees a waiver of all co-payments and deductibles, payment of all travel expenses for the patient and a companion, a week of "free" sick leave and a rebate of 20% of savings if they chose overseas surgery. The measure didn’t pass. But except for the rebate, it’s close to what an Anthem WellPoint pilot program offers and what a few smaller U.S. companies are trying out.

When overseas surgery goes well, the insurance company — or an employer with a self-funded health plan — ends up with a fatter profit and a satisfied patient.

If the surgery doesn’t go so well, or a long flight home generates a deadly post-surgical blood clot, the patient has little recourse.

Overseas surgery or cancer treatment is as drastic as cost-cutting gets, putting the whole burden of risk on the patient. Yet Congress is heading toward a bill that forbids cost efficiencies such as direct government drug purchasing or Medicare-style price-setting. Medicare-for-all never even got serious consideration.

That’s why medical tourism should be under a microscope now, before employers and insurance companies decide it’s part of their own cost — and profit — solution.
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Judy Dugan is research director and a health policy advocate for Consumer Watchdog, a nonprofit, nonpartisan consumer advocacy organization in Santa Monica.