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Bringing Medical Tourism Home: "All In" Orthopedic Surgery Pricing American Style

Written by  Blair Rhode, MD, Sports Medicine Orthopedic Surgeon and owner, RoG Sports Medicine | Monday, 17 October 2011 19:19
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This article was written by Blair Rhode, MD, Sports Medicine Orthopedic Surgeon and owner, RoG Sports Medicine.

Thinking of going abroad for medical care because of cost…think again.
America has the best healthcare on the planet — bar none. The world's wealthy people come to the US for their care. But yet we have 500,000 Americans leave this country to gain access to fairly priced medical care. Why? It is because patients that may not have health insurance (15 percent of the population) are effectively boxed out of access. This is due to our health system's refusal to become part of a retail style healthcare system.  

If an uninsured patient went to a local hospital and asked to pay cash for a knee replacement, they would likely be quoted a number close to $40,000-$50,000, and this only represents one component of care. There is also the surgeon ($10,000), anesthesiologist ($2,500), labs ($1,000) and x-ray ($500). To put this into perspective, the numbers that Medicare agrees to pay are much different. Medicare pays approximately $10,500 to the hospital, $1,300 to the surgeon and $300 to the anesthesiologist. This is a grand total of $12,100 to have a knee replacement. Mind you, it is not our belief that this is a fair price and actually, some people feel that Medicare cost shifts actual costs to the backs of people that actually pay for their care.  

We often call these face value rates charged by doctors and hospitals "Rack Rates." The reality is that we rarely get these rates from carriers that we have chosen to sign payment contracts with. I am by no means saying that we as healthcare providers should be required to offer our services for the same fee that we have signed contracts with. I call this the "pack of gum, stick of gum" argument. When you buy insurance, you buy a risk pool. When we sign an insurance contract, we buy into the volume discount (pack of gum). If you elect to "go alone" (stick of gum), you are not buying into the volume discount and should be charged accordingly. But what charge is fair?

This is where free market, retail medicine comes into play. When a person goes to buy a new LCD television monitor, their biggest concern is that tomorrow there will be a larger, sharper and cheaper version available. This is the value of free market innovation. When this business model has been applied to the areas of medicine that has allowed it, similar results have been achieved. When LASIK eye surgery first became available, the procedure cost in excess of $4,000 per eye. Today, ADs promote $269 LASIK procedures. On top of that, the results have improved with new technological innovation. This is also witnessed in plastic surgery, walk-in medical clinics and mail order pharmacy. The one common truism to all of these markets is that the consumer — the patient — is a participant in the process. They are a participant based upon the simple fact that they bear a significant, if not all, portion of the cost of the care.  When the patient spends their own money, they became a value based consumer and the market is held accountable.  

I now come back to those 500,000 citizens that leave our country to obtain healthcare. People go to India to have their knee replaced at a cost of approximately $18,000.  This does not include the transportation (for two) or the fact that your loved one who came with you will serve as your nurse. That doesn't seem to be as great of cost savings when compared the price Medicare pays. There are other downsides to leaving the country for medical care. Traveling to doctors that you do not know, usually not American trained, requires a leap of faith. Complications require traveling back to that country as US doctors are hesitant to fix someone else's mistake.

Having surgery in the United States affords the patient access to American rights, which includes access to the American tort system if you are the victim of a medical mistake. This may not be appealing to the physician, but to the patient that loses a leg due to a medical error is has a certain appeal. People that have the means come from all over the world for healthcare in the US because we have the best doctors, best hospitals and equipment. Why would you leave the best care on the planet if you could get it for a fair price?

There are people in the United States that are becoming part of the retail market.  OneFeeSurgery (www.onefeesurgery.com) and FairCareMD (www.faircaremd.com) are two such entities. These are web-based portals where healthcare providers offer reasonable prices for common orthopedic procedures. I created OneFeeSurgery with the belief in "all in" pricing. One of the most daunting aspects of the self-pay market is getting one fair fee quote for a particular procedure. There are multiple components to medical care that are independent of each other. The doctor, the hospital, the anesthesiologist, labs and X-ray may all be separate bills. By bundling all fees into a single quote, the consumer can determine who is going to be their physician, where they are going to receive treatment and what they are willing to pay. You would be surprised at how reasonable and competitive the pricing actually is. Current pricing on a knee scope is around $6,700 and a shoulder scope is around $7,700. Need an ACL fixed? – That's $12,600 (double bundle!). That is the entire fee that the patient will pay for the surgeon, facility, anesthesiologist and pre-operative work-up. The doctor is local. No travel to India for the surgery never to see the doctor again. The patient actually gets to benefit from the 90 day post-operative global.  

FairCareMD is a similar concept that was founded by Doctor Howard Luks, MD.  He came up with the idea when he was shopping for a dentist and decided to apply the concept to medicine. His goal was to streamline the process in an open and transparent environment.  

In summary, I feel that free market solutions such as these are the real solution to the healthcare crisis. With the central governmental control, the consumer is effectively spending someone else's money. This results in the patient not caring about cost control. This is why this system resorts to rationing and arbitrarily assigning value to procedures and products, which is an inherently inefficient method to control costs and Innovation is not appropriately rewarded.  

In the free market, one can expect better quality at a cheaper price, similar to the person buying a new computer or cell phone. There is no rationing happening when Apple releases its new iPhone. Rather, more features and quality is offered at a cheaper or similar price.   

Blair Rhode, MD is a sports medicine orthopedic surgeon from the Chicago Suburbs. He has been innovating with solutions to the healthcare crisis with his generic orthopedic implant company RoG Sports Medicine (www.buyrog.com) and his website that offers "all in" pricing (www.onefeesurgery.com). If you are a surgeon and interested in becoming part of this concept, please contact Blair Rhode MD. He can be reached at blairbones@gmail.com.


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