Rice University Study
In a July 2016 study conducted by Rice University and the University of Texas MD Anderson Cancer Center, it was found that the quality of treatment a cancer patient receives is not contingent on where he or she lives in the state.
The Rice University study showed that living in a major city such as Dallas does not guarantee that the quality of your treatment will be better than that provided in a more rural location. Additionally, different regions vary widely in the type of treatment protocols administered.
This means the patient may or may not receive the recommended guidelines for cancer care as published by organizations such as the National Comprehensive Cancer Network or the American Society of Clinical Oncology. [i].
“Texans are no better off in one city versus another in terms of treatment across a broad range of cancers,” said Vivian Ho, the chair in health economics at Rice’s Baker Institute for Public Policy and director of the institute’s Center for Health and Biosciences, who coauthored the Rice University study.
“One might have expected Houston residents to receive better treatment because of MD Anderson’s presence, but any beneficial effects could be offset by a large number of elderly in Houston not being treated there.”[ii]
Due to the geographic and demographic diversity of Texas and the lack of an evident explanation for the differences in treatments, the researchers surmise that these variations probably occur elsewhere in the U.S. [iii] This leads us to an interesting question then.
If we cannot be assured of getting the best treatment in a cancer research city such as Houston, Texas, what other assumptions about our healthcare should we question?
Healthcare in the U.S. is in Danger
Quality, affordable healthcare has become increasingly more difficult to obtain in this country. In August 2016, United Health, Humana and Aetna announced they are pulling back from Obamacare in 2017. Aetna will now only offer their policies in four states. United Healthcare is downsizing to three states.
Even Humana is pulling their policies from 1200 counties that span over eight states.[iv] Why is this happening? We are sicker and more expensive than Obamacare expected. Oh, did I mention that those insurers who are not leaving the market are raising their rates by double-digit percentages?
Premiums for several low-cost plans on the marketplace are expected to increase approximately 11 percent. Some areas of the country can expect to see even higher rates. Portland, Oregon’s premiums are projected to rise by 26 percent. The District of Columbia may receive up to a 21 percent increase. [v]
Employers are not faring any better. It is projected that the cost of health care will grow by 6.5 percent in 2017. However, companies are projecting only 4 percent of that cost will affect them as they plan to make some changes. What are those changes? Charging higher deductibles and co-pays or shrinking drug options. [vi] Are you feeling any better yet? Me neither!
Some U.S. employers are taking matters into their own hands though. Companies like Hyatt Hotels and Wendy’s are self-insuring. [vii] It was estimated in 2013 that 94 percent of employers with 5,000 or more employees were self-funded.
Lest you think most people are not opting into self-insured plans, it is predicted that 150 million Americans will choose one of these plans for themselves and their families. [viii]
What is Self-insuring and Why are Employers Choosing It?
Self-Insuring means that an employer is responsible for covering all of the health care costs and administrative fees of its employees. It is a calculated risk on the company’s part. Will it cost more to pay the insurance company premiums, federally mandated fees and premium taxes or pay for the specific health care expenses of its most valuable asset-its employees?
Going the traditional route by using a fully-insured carrier can cost an employer around $10,000 per employee. Self-insuring can save that company 12 percent. Instead, most businesses that self-insure purchase a catastrophic insurance policy in case a person’s claim exceeds a certain amount.
Additionally, the plan is administered by a Third Party Administrator (TPA). They pay claims, arrange cost agreements with doctors, and basically manage the entire plan. [ix] In many cases, the TPA is a well-known company you would recognize, such as Aetna.
Self-Funding Case Study
The Loomis Company, a video game developer, had 142 employees spread throughout six offices. Their annual insurance premium in 2011 was $876,000 with premiums increasing every year by 10-20 percent. The issue was that their healthcare spending took up almost 15 percent of their total operating expenses. After weighing all their options, Loomis chose to fully self-fund.
By doing so, they saved 28 percent on premiums during the first year and managed to keep the employee renewal fee at the same price for two years in a row. Additionally, and maybe most importantly, employee satisfaction with their healthcare benefits is the highest it has been in several years. [x]
Where Are We Thus Far?
Where you get your treatment may not be indicative of the quality of care you receive. Health care costs are exploding and large insurance carrier fees have gone out of control. Self-insuring helps reduce the burden, but health care in the U.S. is still extremely expensive.
In fact, we spend more than two-and-a-half times that of other developed nations including countries such as France and Sweden. [xi] But we have the greatest health care system in the world, right? We must assume that will cost extra. Au contraire!
According to a recent Commonwealth Fund report, not only is our health care system the most expensive in the world, but we also rank dead last in quality. [xii] Overall ranking for 11 high income countries is shown in the table below (Exhibit ES-1).
Source: http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror
Is there any solution to this madness? Yes! Medical travel has become an increasingly popular alternative for many in this country who are either tired of or unable to pay the exorbitant fees charged by large insurers.
How does it work?
Option 1: Self-funded insurance plans and the employers who choose them are increasingly offering this affordable option to enrollees. It can save you and your employer thousands of dollars.
For example, a bypass surgery in the United States is estimated to cost over $75,000. The same surgery in Switzerland is $36,500. [xiii] This is a 51.5 percent reduction! Even if you spent $10,000 on flying yourself and a companion over there for 30 days, you are still saving almost $30,000!
Case study: Traveling abroad for medical care
In 2007, HSM Solutions, a North Carolina manufacturer, began to offer its 2,500 employees and their dependents a medical tourism option. There was resistance at first. However, with incentives such as waived copays and deductibles, all travel expenses covered for the employee and companion, and a nice bonus check, it was only a matter of time before someone decided to give it a try.
The results? Between 2009 and 2014, HSM has saved $10 million in healthcare costs. During that time, almost 250 employees have traveled abroad for their own medical procedures. [xiv]
Option 2: Self-pay is another option to consider especially if you need dental, cosmetic or elective surgery. A root canal in the U.S. can cost as much as $1000. That same root canal in the United Kingdom is $350. [xv]
A Tummy Tuck in the U.S. is $8,500. In Malaysia, it is $2,500. [xvi] Malaysia is widely known as one of the cosmetic surgery capitals of the world due to the quality of their medical treatment and facilities. [xvii]
Closer to home
Are you concerned about traveling too far from home for your medical care? Then go to Puerto Rico! This U.S. commonwealth recently launched a medical tourism campaign aimed at the U.S. mainland market.
Not only are their medical procedure rates 40-60 percent less than that of the continental United States, but since they are a part of the U.S., their medical staff and hospitals must comply with this country’s laws and healthcare standards.
In fact, over 50 hospitals in Puerto Rico are Joint Commission Accredited. Additionally, most of their doctors are U.S. board certified and bilingual.
Some cost comparisons between Puerto Rico and the continental United States: [xviii]
- Mitral valve replacement, $100,000-$160,000 in United States; $25,000-$30,000 in Puerto Rico
- Coronary angioplasty, $37,000-$52,0000 in United States; $10,000-$15,000 in Puerto Rico
- Hip replacement, $33,000-$64,000 in United States, $14,000-$18,000 in Puerto Rico
- Knee replacement, $30,000-$59,000 in United States; $12,000-$16,000 in Puerto Rico
Check out their new website Star Concierge Hub Inc. http://www.starhealthcarepuertorico.com for more information.
Conclusion
Thanks to studies such as the one recently conducted by Rice University, consumers are continually being empowered with knowledge that allows them to make more informed choices over their own healthcare. In the past, we were apt to assume medical care in a medical teaching city such as Houston was superior to that of a more rural location.
However, we know this is no longer a fact. Additionally, due to rising medical expenses, we are being faced with the necessity of finding alternative methods for obtaining the care our families need. Employers face similar issues. Rising medical costs are forcing them to look for creative ways of insuring their employees while also maintaining employee satisfaction. This is where self-insuring becomes so valuable.
An additional method for getting quality care at an affordable price is by traveling outside the U.S. borders to receive treatment. Destinations such as Puerto Rico and Malaysia offer superior service and quality with costs 40-60 percent less than in the United States.
You can still have it all! The medical treatment you need at a price you can afford and the quality you demand.
[i] http://news.rice.edu/2016/07/25/rice-u-study-texans-are-no-better-off-in-one-city-versus-another-for-cancer-treatment/
[ii] http://news.rice.edu/2016/07/25/rice-u-study-texans-are-no-better-off-in-one-city-versus-another-for-cancer-treatment/
[iii] http://news.rice.edu/2016/07/25/rice-u-study-texans-are-no-better-off-in-one-city-versus-another-for-cancer-treatment/
[iv] http://money.cnn.com/2016/08/17/news/economy/obamacare-insurers/
[v] http://www.foxnews.com/politics/2016/06/15/double-digit-obamacare-premium-hikes-projected-in-2017.html
[vi] http://fortune.com/2016/06/21/health-care-rising-costs/
[vii] http://www.fldfs.com/division/wc/Insurer/Active-List-of-Self-Insurers-Private.pdf
[viii] http://www.beckersasc.com/asc-coding-billing-and-collections/8-things-to-know-about-self-insured-employers.html
[ix] http://www.benefitspro.com/2015/03/09/the-rise-of-self-funding?&slreturn=1472057717
[x] http://www.loomisco.com/benefits/case_studies/142Employees.pdf
[xi] http://www.pbs.org/newshour/rundown/health-costs-how-the-us-compares-with-other-countries/
[xii] http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror
[xiii] http://www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-care-from-a-global-perspective
[xiv] http://www.medicaltourismmag.com/self-funding/
[xv] http://www.mymedholiday.com/blog/2013/04/247/healthcare-cost-comparison-part-ii-how-much-can-you-save-on-dental-tourism/
[xvi] http://www.mymedholiday.com/blog/2013/03/165/a-healthcare-cost-comparison-cosmetic-surgery-tourism-can-mean-significant-savings-for-you/
[xvii] https://www.mtqua.org/media-center/prince-court-named-top-10-worlds-best-hospitals-2014/
[xviii] Rivera, Y. (November 17, 2013) Apuesta al Turismo Medico. El Nueva Dia, p, 13
