Medical Tourism Is Booming, Fueled by High Costs and Slow Access
Bridget Snell traveled to Mexico to access an unapproved stem cell therapy for MS.
When Bridget Snell found out she had multiple sclerosis, she knew she would put up a fight. The 45 year-old mother of two, who lives in Duxbury, Mass., researched options to slow the progress of the disease. The methods she had been trying were invasive, often with side effects of their own.
An estimated 2.2 million Americans will travel abroad for medical care in 2020.
Then she stumbled upon autologous hematopoietic stem cell transplantation (AHSCT), an experimental and controversial procedure that uses the patient's own stem cells to try to halt the progress of the disease. The FDA has not approved this procedure and last year issued a warning about unapproved stem cell therapies.
Despite the lack of established science, Snell weighed her options and decided she would undergo the procedure at Clinica Ruiz, a private clinic in Puebla, Mexico, which boasts of the largest volume of cases in the world using the procedure to treat MS. In April 2018, she went to Mexico for treatment, returned home in a month, and continues to do well.
But a positive outcome is far from assured, says Sheldon Krimsky, adjunct professor in the Department of Public Health and Community Medicine at the Tufts School of Medicine.
"Often you can't get a good sense of what the quality of treatment is in another country," Krimsky says, adding that many companies promise procedures whose results have not been clinically validated. "Unfortunately, people are very easily persuaded by hope."
Traveling for Medical Care
Snell is one of many Americans who have traveled abroad to access medical care. Patients Beyond Borders, a medical tourism consultancy, estimates that 2.2 million Americans will do so in 2020. A 2018 BCC report projected a five-year compounded annual industry growth rate of 13.2 percent. Adding to the demand is the aging population, which is expected to reach 95 million people by 2060 – nearly double the number in 2018.
While Snell traveled to Mexico to try a procedure that was not yet available in the United States, other patients do so for a variety of reasons, primarily cost and speed of access. For example, despite having "pretty good insurance coverage," Washington resident Soniya Gadgil needed dental procedures that would have cost thousands of dollars out-of-pocket. An India native, she decided to travel to Pune, India to visit her parents -- and while there, she got the two root canals and implant that she needed. Gadgil saved 60 percent on the final bill.
Leaving the country for medical care is not restricted to dental work or FDA-banned procedures either. Patients visit countries around the world — South America, Central America, and the Caribbean top the list — for a number of other problems, such as knee and hip replacements and bariatric operations. The most common procedures sought abroad are for dentistry, cosmetic surgery, and cardiac conditions.
Traveling abroad to access less expensive procedures is a damning indictment of healthcare delivery in the United States, says Dr. Leigh Turner, associate professor at the Center for Bioethics at the University of Minnesota. "We have people who are being forced out of the system because of high costs. Collectively it suggests a real structural problem in terms of the organization of healthcare in the United States," Turner says.
The Growth of the Online Marketplace
Nevertheless, medical tourism is booming and a number of online businesses now meet patients' demand for discovery and facilitation of medical care abroad, like PlanMyMedicalTrip.com, Doctoorum.com, and Wellness Travels.
Anurav Rane, CEO and Founder of PlanMyMedicalTrip.com, says the company presents each potential client with options, a la Expedia. A knee replacement in India costs $2,500, a significantly cheaper option even with a $1,110 round-trip airfare from the United States, Rane says. The average cost for an inpatient total knee replacement in the United States in 2019 was a little more $30,000.
Once the client chooses a specific procedure at a specific hospital, the company facilitates the necessary groundwork including the medical visa, tickets, hotel stay, booking the procedure and pre and post-op stay, and consults with the surgeons or doctors even before arrival. "The hassle of planning is on us," Rane says. Once patients are settled in the accommodations, they undergo the procedure.
Playing in the Legal Shadows
The online marketplace companies and the medical team execute an orchestrated dance – but what happens if the patient is harmed during or after the procedure?
Turner says that medical malpractice, if it occurs, can be difficult to pursue abroad. "There are countries where the courts are notoriously slow and it's very difficult to get any kind of meaningful action and settlements," he says, even if the claims have a legitimate basis.
The industry's biggest challenge is trust.
Snell signed a waiver absolving her surgeons in Mexico of any legal claims. But, she points out, that's standard process even for procedures in the United States. "I signed just as many waivers as I would going into any surgery [in the US]."
While that might well be true, Turner argues, Americans don't waive legal rights when they sign consent forms. "There are some protections for patients here in the United States."
Beyond U.S. Medical Tourism
As expected, it's not just Americans who travel abroad for medical care. Lithuania-based Wellness Travels sees a significant percentage of its clients from the EU. PlanMyMedicaltrip.com has 15,000 surgeons and doctors from 12 countries in its database. Egypt-based Doctoorum works with professionals in its own country and attracts clients from the Middle East. It is looking to expand to include doctors from Jordan and India, among other countries.
The term "tourism" is misleading here because it muddies the picture about what post-op should really look like, says Gediminas Kondrackis of Wellness Travels. "Unfortunately a lot of medical travel facilitators mislead their clients by advertising beach holiday packages and the like. Post-op is really about quiet recovery inside for a few days; being out in the sun is not advisable."
The industry's biggest challenge is trust. "The dentist I went to is actually a friend of mine who has a successful practice for several years," says Gadgil, the Washington resident who had dental work done in India. "I'd hesitate to go to someone I don't know or to a place I have no experience with." Her apprehensions are not unusual. After all, anxiety is an expected reaction to any surgery. Word-of-mouth, cost savings, and thorough research may alleviate some of these trust issues.
"I had natural apprehensions and would have had them had I gone up the road to Brigham and Women's (in Boston) just as I did over the border," Snell says, "but I had done my homework extensively. That took a lot of the fear out of it."
Medical tourism will only increase, predicts Kondrackis. "There is still a lot of room to grow. Higher numbers of medical travelers could help reduce the strain on local healthcare systems by reducing wait times and controlling costs."
While patients who have benefited from medical tourism swear by it, the best cure would be to start at home by establishing healthcare equity, Krimsky says.
On the flip side, says Turner, it is debatable whether medical tourism actually benefits host countries, where local residents might get priced out of procedures at these exclusive clinics. Even if laws in host countries such as India might mandate "charity care" for poorer local patients, that does not always happen, Turner says. The trickle-down theory that these more expensive clinics will broaden access to care is often a pipe dream, he adds.
While patients who have benefited from medical tourism swear by it, the best cure would be to start at home by establishing healthcare equity, Krimsky says. "Now if we had universal healthcare in the United States," he adds, "that would be an entirely different story."
Or maybe not. Rane, of PlanMyMedicalTrip.com, has observed an influx of patients to India from Canada, a country with universal healthcare.
The reason they say they travel for care? Long wait times for procedures.
Breakthrough therapies are breaking patients' banks. Key changes could improve access, experts say.
Single-treatment therapies are revolutionizing medicine. But insurers and patients wonder whether they can afford treatment and, if they can, whether the high costs are worthwhile.
CSL Behring’s new gene therapy for hemophilia, Hemgenix, costs $3.5 million for one treatment, but helps the body create substances that allow blood to clot. It appears to be a cure, eliminating the need for other treatments for many years at least.
Likewise, Novartis’s Kymriah mobilizes the body’s immune system to fight B-cell lymphoma, but at a cost $475,000. For patients who respond, it seems to offer years of life without the cancer progressing.
These single-treatment therapies are at the forefront of a new, bold era of medicine. Unfortunately, they also come with new, bold prices that leave insurers and patients wondering whether they can afford treatment and, if they can, whether the high costs are worthwhile.
“Most pharmaceutical leaders are there to improve and save people’s lives,” says Jeremy Levin, chairman and CEO of Ovid Therapeutics, and immediate past chairman of the Biotechnology Innovation Organization. If the therapeutics they develop are too expensive for payers to authorize, patients aren’t helped.
“The right to receive care and the right of pharmaceuticals developers to profit should never be at odds,” Levin stresses. And yet, sometimes they are.
Leigh Turner, executive director of the bioethics program, University of California, Irvine, notes this same tension between drug developers that are “seeking to maximize profits by charging as much as the market will bear for cell and gene therapy products and other medical interventions, and payers trying to control costs while also attempting to provide access to medical products with promising safety and efficacy profiles.”
Why Payers Balk
Health insurers can become skittish around extremely high prices, yet these therapies often accompany significant overall savings. For perspective, the estimated annual treatment cost for hemophilia exceeds $300,000. With Hemgenix, payers would break even after about 12 years.
But, in 12 years, will the patient still have that insurer? Therein lies the rub. U.S. payers, are used to a “pay-as-you-go” model, in which the lifetime costs of therapies typically are shared by multiple payers over many years, as patients change jobs. Single treatment therapeutics eliminate that cost-sharing ability.
"As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket,” says Patricia Goldsmith, the CEO of CancerCare.
“There is a phenomenally complex, bureaucratic reimbursement system that has grown, layer upon layer, during several decades,” Levin says. As medicine has innovated, payment systems haven’t kept up.
Therefore, biopharma companies begin working with insurance companies and their pharmacy benefit managers (PBMs), which act on an insurer’s behalf to decide which drugs to cover and by how much, early in the drug approval process. Their goal is to make sophisticated new drugs available while still earning a return on their investment.
New Payment Models
Pay-for-performance is one increasingly popular strategy, Turner says. “These models typically link payments to evidence generation and clinically significant outcomes.”
A biotech company called bluebird bio, for example, offers value-based pricing for Zynteglo, a $2.8 million possible cure for the rare blood disorder known as beta thalassaemia. It generally eliminates patients’ need for blood transfusions. The company is so sure it works that it will refund 80 percent of the cost of the therapy if patients need blood transfusions related to that condition within five years of being treated with Zynteglo.
In his February 2023 State of the Union speech, President Biden proposed three pilot programs to reduce drug costs. One of them, the Cell and Gene Therapy Access Model calls on the federal Centers for Medicare & Medicaid Services to establish outcomes-based agreements with manufacturers for certain cell and gene therapies.
A mortgage-style payment system is another, albeit rare, approach. Amortized payments spread the cost of treatments over decades, and let people change employers without losing their healthcare benefits.
Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
The new payment models that are being discussed aren’t solutions to high prices, says Bill Kramer, senior advisor for health policy at Purchaser Business Group on Health (PBGH), a nonprofit that seeks to lower health care costs. He points out that innovative pricing models, although well-intended, may distract from the real problem of high prices. They are attempts to “soften the blow. The best thing would be to charge a reasonable price to begin with,” he says.
Instead, he proposes making better use of research on cost and clinical effectiveness. The Institute for Clinical and Economic Review (ICER) conducts such research in the U.S., determining whether the benefits of specific drugs justify their proposed prices. ICER is an independent non-profit research institute. Its reports typically assess the degrees of improvement new therapies offer and suggest prices that would reflect that. “Publicizing that data is very important,” Kramer says. “Their results aren’t used to the extent they could and should be.” Pharmaceutical companies tend to price their therapies higher than ICER’s recommendations.
Drug Development Costs Soar
Drug developers have long pointed to the onerous costs of drug development as a reason for high prices.
A 2020 study found the average cost to bring a drug to market exceeded $1.1 billion, while other studies have estimated overall costs as high as $2.6 billion. The development timeframe is about 10 years. That’s because modern therapeutics target precise mechanisms to create better outcomes, but also have high failure rates. Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
Skewed Incentives Increase Costs
Pricing isn’t solely at the discretion of pharma companies, though. “What patients end up paying has much more to do with their PBMs than the actual price of the drug,” Patricia Goldsmith, CEO, CancerCare, says. Transparency is vital.
PBMs control patients’ access to therapies at three levels, through price negotiations, pricing tiers and pharmacy management.
When negotiating with drug manufacturers, Goldsmith says, “PBMs exchange a preferred spot on a formulary (the insurer’s or healthcare provider’s list of acceptable drugs) for cash-base rebates.” Unfortunately, 25 percent of the time, those rebates are not passed to insurers, according to the PBGH report.
Then, PBMs use pricing tiers to steer patients and physicians to certain drugs. For example, Kramer says, “Sometimes PBMs put a high-cost brand name drug in a preferred tier and a lower-cost competitor in a less preferred, higher-cost tier.” As the PBGH report elaborates, “(PBMs) are incentivized to include the highest-priced drugs…since both manufacturing rebates, as well as the administrative fees they charge…are calculated as a percentage of the drug’s price.
Finally, by steering patients to certain pharmacies, PBMs coordinate patients’ access to treatments, control patients’ out-of-pocket costs and receive management fees from the pharmacies.
Therefore, Goldsmith says, “As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket.”
Transparency into drug pricing will help curb costs, as will new payment strategies. What will make the most impact, however, may well be the development of a new reimbursement system designed to handle dramatic, breakthrough drugs. As Kramer says, “We need a better system to identify drugs that offer dramatic improvements in clinical care.”
In today's podcast episode, law professor Gaia Bernstein talks about the challenges of keeping control over our thoughts and actions, even when some powerful forces are pushing in the other direction.
Each afternoon, kids walk through my neighborhood, on their way back home from school, and almost all of them are walking alone, staring down at their phones. It's a troubling site. This daily parade of the zombie children just can’t bode well for the future.
That’s one reason I felt like Gaia Bernstein’s new book was talking directly to me. A law professor at Seton Hall, Gaia makes a strong argument that people are so addicted to tech at this point, we need some big, system level changes to social media platforms and other addictive technologies, instead of just blaming the individual and expecting them to fix these issues.
Gaia’s book is called Unwired: Gaining Control Over Addictive Technologies. It’s fascinating and I had a chance to talk with her about it for today’s podcast. At its heart, our conversation is really about how and whether we can maintain control over our thoughts and actions, even when some powerful forces are pushing in the other direction.
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We discuss the idea that, in certain situations, maybe it's not reasonable to expect that we’ll be able to enjoy personal freedom and autonomy. We also talk about how to be a good parent when it sometimes seems like our kids prefer to be raised by their iPads; so-called educational video games that actually don’t have anything to do with education; the root causes of tech addictions for people of all ages; and what kinds of changes we should be supporting.
Gaia is Seton’s Hall’s Technology, Privacy and Policy Professor of Law, as well as Co-Director of the Institute for Privacy Protection, and Co-Director of the Gibbons Institute of Law Science and Technology. She’s the founding director of the Institute for Privacy Protection. She created and spearheaded the Institute’s nationally recognized Outreach Program, which educated parents and students about technology overuse and privacy.
Professor Bernstein's scholarship has been published in leading law reviews including the law reviews of Vanderbilt, Boston College, Boston University, and U.C. Davis. Her work has been selected to the Stanford-Yale Junior Faculty Forum and received extensive media coverage. Gaia joined Seton Hall's faculty in 2004. Before that, she was a fellow at the Engelberg Center of Innovation Law & Policy and at the Information Law Institute of the New York University School of Law. She holds a J.S.D. from the New York University School of Law, an LL.M. from Harvard Law School, and a J.D. from Boston University.
Gaia’s work on this topic is groundbreaking I hope you’ll listen to the conversation and then consider pre-ordering her new book. It comes out on March 28.
