Wednesday, August 26, 2009

Markets In Everything: Domestic Medical Tourism

BUSINESS INSURANCE -- When Scarborough, Maine-based supermarket chain Hannaford Bros. announced last year that it would begin sending its employees to Singapore for knee and hip replacements to save the company money, it attracted the attention of several hospitals in Boston that offered to match the price. What the company probably did not realize at the time was that it was at the forefront of an emerging market: domestic medical tourism.

Unlike foreign medical tourism, patients don't leave the country. Instead, they travel to another city within the United States to have procedures for up to 75% less than they would pay if they were treated closer to home. One of the primary reasons some U.S. medical facilities are willing to be paid less is that they are generally compensated upfront, before the procedures are conducted, which enables them to avoid the arduous task of seeking reimbursement afterward from insurers and third-party administrators. The facilities also receive a single package price that is negotiated beforehand.

MP: Market competition is a wonderful antidote to rising medical care costs. Even if there's no interstate competition for health insurance (see related CD post), there appears to be a growing market for interstate hospital care.

Originally posted at Carpe Diem.


At 8/26/2009 9:53 AM, Anonymous Anonymous said...

Maine offers yet another example in health care:

Want a preview of ObamaCare in action? Sneak a look at what has happened in Maine. In 2003, the state to great fanfare enacted its own version of universal health care. Democratic Governor John Baldacci signed the plan into law with a bevy of familiar promises. By 2009, it would cover all of Maine's approximately 128,000 uninsured citizens. System-wide controls on hospital and physician costs would hold down insurance premiums. There would be no tax increases. The program was going to provide insurance for everyone and save businesses and patients money at the same time.

After five years, fiscal realities as brutal as the waves that crash along Maine's famous coastline have hit the insurance plan. The system that was supposed to save money has cost taxpayers $155 million and is still rising.


At 8/26/2009 9:55 AM, Blogger mario17b said...

How feasible would it be to have set price ranges for basic health care treatments throughout the nation?

At 8/26/2009 12:47 PM, Blogger bob wright said...

It seems ironic.

People claim they want high paying jobs in their community. The medical profession provides high paying jobs.

People then complain about the high cost for medical care.

So what do you want?

1) High paying jobs or
2) Government set prices = low paying jobs?

How does a politician provide "high paying jobs" without the concomitant high prices?

If Taco Bell workers were beneficiaries of "high paying jobs" legislation, let's say a minimum wage of $50,000/yr, could you buy a taco for $0.99?

At 8/26/2009 3:38 PM, Blogger KO said...

Bob, what they seem to want is akin to the university system. High paying jobs subsidized by the government. Since the pain gets spread around, it's a win-win for politicians and the emolyees.

At 8/26/2009 3:52 PM, Blogger Craig Howard said...

How feasible would it be to have set price ranges for basic health care treatments throughout the nation?

Oh, it's feasible enough -- the government can make us do just about anything it wants. But just because prices were controlled doesn't mean that the costs of providing those services would necessarily be the same.

And why would you want it anyway?

At 8/27/2009 1:46 AM, Anonymous Ian Random said...

Bob, high paying jobs are still possible with low prices as long as productivity is high enough. That is highly automated like Europe where employment laws suck for the employer.

At 8/27/2009 3:33 AM, Blogger bob wright said...

"what they seem to want is akin to the university system"

So the solution is more government control?

We need to get the government out of

health care

If you want to see what the future of government controlled, single payer health care looks like, just look at the Detroit Public Schools (DPS), a.k.a. government controlled, single payer education.

Go to the Detroit News and read about so-called education par excellence in these government run, education plantations.

Now imagine that the DPS also provided your health care.

Contrast privately delivered health care in Detroit to government delivered education. Which do you think has better outcomes?

Here's what happens when government gets involved in energy (subscription may be necessary).

At 8/27/2009 2:20 PM, Blogger KO said...

No argument Bob. I was just pointing out the 3rd option - have others pay.

In California, to help balance the budget they cut services like welfare and child healthcare rather than firing employees. Not a single news agency asked the basic question of "Is the government there to provide services or is government there to employ government employees?"


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