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Outsourcing legacy upgrades -- knees, hips, looks -- to India

Patrick Thibodeau | Aug. 17, 2009
IT offshoring may boost outsourcing of another kind: medical tourism

FRAMINGHAM, 14 AUGUST 2009 - Rising medical cost has been helping to foster medical tourism for the same reason companies send code overseas: lower cost.

Take the case of Terry, a public school teacher in Texas, who asked that her last name not be used. She went to India in June for cosmetic surgery to remove excess skin after a major weight loss. The cost of this surgery in the U.S. was somewhere between US$25,000 and $30,000 and not covered by her insurance carrier.

Terry said the hospital also wanted to do it as day surgery, and the idea of dealing with the post surgical care on her own was something that struck her as appalling.

Instead, Terry contacted her travel agent who connected her with BridgeHealth International inc., in Greenwood Village, Co., one of number of firms that arrange overseas medical treatment. Costa Rica or Mexico was closer, but Terry, an experienced traveler, had never been to India and so the decision was made.

The medical work on her body and arms cost $9,000, plus travel, and included a six night stay and private room at a facility in Delhi operated by Max Healthcare. Her doctor had received his training in the U.K. "I would rate it as very comparable [to the U.S.] with maybe a slight plus in the service aspect of it," Terry said.

U.S insurers are beginning to test programs to pay for elective medical work overseas. The incentive for patients may include elimination of deductibles and travel for a spouse, as well as paying the cost of hotel and travel.

In these insurance programs, the operative words are "non-emergency" and "cost-effective," according to Dr. Virginia Cardin, a senior healthcare consultant with Frost & Sullivan. The latter involves measuring immediate outcomes and required follow-up care that would be done in the U.S.

India's medical tourism industry may benefit in a number of ways, some direct and some indirect, from U.S. IT offshore outsourcing.

For one, the expertise that offshore firms acquire in upgrading hospital systems can be applied to Indian environments. Increasing familiarity by U.S. residents with the India may help as well.

It's also possible that IT outsourcing in India and elsewhere may make some companies comfortable with the idea of offering medical tourism as an employee option.

However, Annica Blake, managing director of Grail Research, said a company's experience with an offshore vendor can hurt as well. The critical barrier for medical tourism "is what happens if something goes wrong, what are the legal ramifications," said Blake. "Who is on the hook for the heart transplant that went bad?"

In 2007, it's estimated that 750,000 U.S. residents went overseas for care. According to the Medical Tourism Association, a heart bypass in the that might cost $144,000 in the U.S. will cost $8,500 in India, $25,000 in Costa Rica, and $24,000 in Thailand.

 

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