From Kansas City, there is an interesting article using the data from the ESI price variation project that looks at in-state price variation. This raises the eye of local and regional medical tourism to drive medical pricing closer towards a single price with local variations instead of significant regional pricing variations that are driven mainly by payer-provider concentration ratios.
Kansas City-area residents needing a knee replacement might find it worthwhile to drive to St. Louis.
That’s because the average price of the procedure in the KC area is $26,601. In the St. Louis area, it’s $23,114 – a $3,487 difference.
On the other hand, the average cost of an ultrasound in metro St. Louis is $375. That compares with $271 in metro Kansas City, a $74 difference.
According to Google Maps, Kansas City is slightly less than a four hour drive to St. Louis. Insurers that have in-network providers in both cities could save significant money by busing members who are scheduled for preference sensitive surgeries from KC to St. Louis.
There are a couple of major issues with this problem. The first is a network issue. Most insurers don’t have massive out of area providers in their network. Mayhew Insurance as a regional insurer has a concentrated network within our core area and then a smattering of providers contracted for idiosyncratic reasons four hours from our core base. Aetna, United Healthcare and some of the bigger Blues would have the network currently built where members could easily see in-network providers four hours from their house.
The second big issue is a relationship problem. Most people who are told by their doctor that they need a new replacement want their doctor to do their surgery as they trust the doctor. That doctor might have privileges at a couple of hospitals, but those hospitals tend to be in the same metro area. Trying to get a person to drive four hours for a major but elective surgery performed by a doctor that they meet the night before the procedure is tough.
It could be done. Insurers could knock off $1,000 in deductible costs and pick up the cost of a Holiday Inn for a companion to stay in during the hospital stay of the patient. That would cost the insurer $1,600 to $2,000 while allowing them to save a net of $1,500. This would be a gain share arrangement between the insurer and the patient instead of the traditional insurer-provider gain shares.
I think regional day trip medical tourism within the United States would be a far easier sell to most Americans than international medical tourism.
Is anyone doing this on a large scale besides a few large employers using a Center of Excellence model for some of their elective and common procedures?
FlyingToaster
In the real world, I-70 between KC and STL is nearly 5 hours. The extra time is spent navigating at each end. Especially when trying to find hospitals.
(I grew up in KC; both parents worked for TWA so unless we were hauling furniture to college, we flew.)
Amir Khalid
Kind of off-topic, but do “five-star” hospitals exist in the US? It’s international medical tourism with a de luxe twist, where the well-heeled patient is provided with the yoogest, classiest fancy-hotel accommodation and catering, along with the medical treatment. The object apparently being the opposite of saving money on care and meds. I’ve seen one or two such hospitals here in Kuala Lumpur.
Richard Mayhew
@Amir Khalid: Sort of — John Hopkins, Mass General, Mayo, Cedar Sinai, Cleveland Clinic, MD Anderson, Emory, etc all do an aggressive international treatment push and given some of the names treated at those hospitals, accommodations are swank.
Catherine D.
Wunnerful. I would really look forward to a very long car ride after a knee replacement. Most people i know hated being in the car post-surgery.
ArchTeryx
@Richard Mayhew: It goes beyond that. I was actually a patient at the Cleveland Clinic, but I was there on a grad student HMO. While my actual surgery was handled superlatively, the post-op care was almost an afterthought, and I wasn’t even allowed access to the skydeck and certain other things. I found out, toward the end of my stay, it was because a member of the House of Saud was there to get treatment and his entire entourage followed him, so they closed several patient areas specifically for their private use, and most of the nurses were running around constantly trying to keep up with the demands. Being one of those po’ folk on a mere HMO, my care took second fiddle, and IMHO it led to complications afterward.
jl
If a country is going to go the PPACA way, they should do it as much as possible, the traditional Swiss way.
No networks, you can go to pretty much any provider anywhere. And industry wide stakeholder bargaining to set uniform industry wide tariffs for well defined products and services (no lessons the need for tourism of any kind due to price discrimination and other pricing games. And complete open book audits for anybody who decides they deserve a higher price than price guidance bands as part of approval office.
Reactionaries who flacked Swizz system as a free market health care nirvana a year or so ago would surely approve.
Though, apparently Swiss are doing some experiments with managed care, but I haven;t found a report of how that is turning out yet.
John Revolta
Hell, you could go to Mexico or Cuba for a week or two and a new knee and probably still come out ahead.
Amir Khalid
@ArchTeryx:
The five-star hospitals I’ve seen here are dedicated facilities, rather than prestigious hospitals with a VIP wing. So a regular person in a regular hospital would not be troubled by the hangers-on of the rich and famous hogging the amenities and monopolising the staff’s attention.
JaneE
Before Kaiser started doing bariatric surgery in house, they contracted with hospitals and doctors who specialized and were centers of excellence for the procedures, one was 200 miles away, another close to 100. Caregivers were accommodated for 3 days if the hospital they chose was more than 50 miles from their Kaiser one. People I talked to had excellent care, but still would have preferred to be closer to home.
cmorenc
Having just had a right knee replacement done in late January 2016, I am keenly aware of how crucial to the likelihood of a good outcome your informed choice of particular surgeon is – and I had one of the very best in the Raleigh-Triangle NC area, and a little over four months out I’m on my way to as good an outcome as I could have hoped for. A woman I know well from our daughters having played youth competitive and high school soccer together, I re-encountered several years later at the same physical therapy outfit I got to – she is currently attempting to rehab from her second knee replacement, because her first surgeon apparently did not do such a hot job with her first.
KNEE SURGERIES ARE NOT AS FUNGIBLE as your statistical-financial based approach would make it seem, Richard. A wise person should gladly pay the extra $3K difference for a local surgeon of whose surgical competence they are solidly competent of from knowledgeable local reputation, over the bargain of some surgeon they know nothing of except that the price is lower and the recommendation is that they are approved for payment by the insurer. You can wind up cursing that decision for months or years of a less than satisfyingly functioning implant and an extra-difficult struggle through rehab, and have to eventually do a revision and go through the Hell of the first four post-surgical weeks and the PITA of the next many weeks of rehab.
Soprano2
There’s a Spine Center of Excellence three hours south of KC, in Springfield, MO – it’s Mercy, which is headquartered in St. Louis. So for spine procedures they could go a shorter distance.
StringOnAStick
@cmorenc: I just did a phase 2 clinical trial for a replacement meniscus in my “good” (eh,not so good to be honest) knee The only doc in the trial in my area is on the other side of Denver, and that has been a PITA; no way I would do it for the knee replacement I’ll be getting in October. I did the meniscus implant because it should save me from a replacement for at least a decade, maybe two or more. This was hard enough surgery to have to deal with the surgical center a d doctors office being so far from home, for a knee replacement it would be insane.
J R in WV
@cmorenc:
I’m agreeing with this 100%. My family Dr has been practicing in the same place for 30+ years, and knows the local medical community like a book he wrote. I had both shoulders replaced in 2015, Mrs J had right knee replaced last March 15th, same surgeon, same PT expert.
My shoulders exceeded expectations, right one first, went so well I was anxious to get the left one. The second one was harsher, took more pain meds, longer to rehab, but nearing the end of therapy, my PT guy said, looking at the periodic evaluations, I progressed as fast on the second shoulder as I did on the first. It just hurt more.
Mrs J was kicked out of PT weeks ago with an A+ score, surgeon at second follow-up had a resident with him, asked wife to flex as far as she could, her heel went way up beyond 90 degrees, surgeon says to resident “Isn’t that phenomenal?” Now her other leg is the bad leg.
Met a guy in the mechanic’s waiting room, he had his knee done 6 months ago, still hurts, doesn’t have mobility he hoped for. Different surgeon. Is that the issue, or the implant itself, or the hard work at therapy? Mrs J saw the PT shop twice a week, did exercises at home twice a day, as miserable as that could be – I did the same thing, worked hard exercising. But less than 3 months after her procedure, she is pain free and able to work around the house and gardens.
My procedures took 4+ hours each, after being told to expect a two hour procedure. Asked why, “Your musculature was difficult to work around compared to most patients…” I am (was) active with hobbies that required using muscles all over my body, like construction and rock collecting (with shovels, picks, sledgehammers, carrying large rocks long distances to the truck, etc) which I don’t do much of any more, having worn two shoulders out, not planning to replace the replacements.
Going to a surgeon that your long-time family doctor knows has good outcomes is the only way to go with these procedures in my book.
Interestingly, our surgeon chooses to do his procedures at a smaller local hospital which has both ORs and recovery rooms dedicated to joint replacement procedures. I spent one night after each shoulder, Mrs J spent two nights after her knee. They had her walking within 3 or 4 hours after surgery. She walked up a set of stone steps into our house on the third day.
amygdala
@Amir Khalid: Sort of. Hospitals situated in wealthy neighborhoods sometimes adjust their services and amenities to the wealthy. Cedars-Sinai in LA is like that. It’s adjacent to Beverly Hills and West Hollywood; even though it’s a nonprofit institution and a teaching affiliate of UCLA and USC, it’s pretty fancy.
Even so, most US hospitals have emergency rooms and laws that essentially require them to provide needed care (including hospitalization) for emergencies or childbirth, regardless of ability to pay. So even places that lean 5-star will have patients from across the 99% getting care.
I interviewed for internship at Cedars-Sinai. Even in interview drag, I felt seriously underdressed. High-end everything as far as the interiors were concerned, including original art on the walls.
Luigidaman
Around 1985, one of my workers developed a hernia. He had. Them twice before in The same place. The company’s president called me in and told me of this new procedure in Canada using mesh that would prevent re-occurence of the hernia. No one in America performed the surgery back then. So, we sent my employee via plane to Toronto where he paid for the surgery with a cashier’s check written on the company account by the owner. All went well. He’s never had another hernia. I guess we were ahead of our time.
Ohio Mom
This is a rhetorical question, I really don’t want an answer. But have you ever had inpatient surgery Richard?
I did and the last thing I’d want to add into the mix is a four or five hour car drive. My twenty drive home the next day was enough. Every bump was an ouch! Then there was a complication in my recovery a couple of days later and I had to be driven the twenty minutes back.
Now I suppose if there was some cutting edge surgery that was going to be something of a Hail Mary pass, I could see traveling a long distance. But most of us are just getting very common surgeries.
There was a piece at Vox about the hidden, unpaid work patients must do to keep the health system going. I’d say that having patients drive across states fits under that heading.
pseudonymous in nc
It’s not simply that. It’s that there’s a good likelihood that your local metro area’s specialists have affiliations that provide greater access to records than those held at Other Metro.
When health issues cover multiple fields and providers in the American non-system, it falls on the patient to sign releases and ferry notes and lab reports and other medical records, or get one provider to fax (fax!) shit from one to the other, then call to make sure that the receiving provider has checked the fax machine and has all the pages because you never know when the fax machine’s going to run out of paper.
That’s fucking stupid.
We know what the answer is, and it’s not a four-hour drive and a night in a motel for procedures that are sufficiently common that they aren’t confined to a handful of specialist centres. It’s a fixed and publicly-circulated tariff for reimbursement, per jl’s comment, hammered out between insurers and providers instead of the current bistromaths. If that’s done on a state-by-state basis, so be it. It’ll be annoying if a KC-M resident sees things that are cheaper a mile away in KC-K, but better that than insurance across state lines that inevitably creates a market for dogshit policies from whichever state has the most buy-offable legislature.
This is one of those situations where the ‘interesting’ way to try and level out price variability is just Rube Goldberg bullshit that’s obviously absurd to anyone outside the belly of the beast.
Alex
Patients would have to be able to get easy and accurate price info for this to have a chance of working. Try it sometime and you may not be so sanguine about this method of potential cost savings. And some of the biggest barriers to accessing care for Medicaid patients are transportation and time off work– expecting them to shop regionally will not work for that population.