Analyst Eyes Impact of Health Reform Uncertainty on Med Travel
by Nick VerrastroThe political and legal uncertainties surrounding U.S. healthcare reform could impact the medical travel market, according to healthcare expert Irving Stackpole.
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Stackpole is president of Stackpole Associates, a medical tourism consultancy in Cambridge, Mass., and author of the book Medical Tourism Marketing.
Two factors may affect the outlook for medical tourism under President Obama’s healthcare reform, he said – the Supreme Court decisions on cases related to healthcare reform, expected early next year, and the 2012 elections.
“A considerable amount of uncertainly will persist as the provisions of ACA (the Affordable Care Act) are enacted, tested and refined. This uncertainty has a major impact on health insurance companies and their willingness to engage with the medical tourism sector,” Stackpole said.
Analyzing reform’s impact
Stackpole recently provided an analysis of the impact on medical travel of U.S. healthcare reform enacted in 2010. His analysis was based on his reading of the 1,000-page Patient Protection and Affordable Care Act (PPACA) and his experience in the healthcare field.
“While the demand for traditional medical tourism services should remain strong and perhaps even grow, it may be another two to five years before demand for other types of services will return.”
Stackpole said that the Affordable Care Act “will have significant impact on the way healthcare is insured, practiced and paid for, with the federal government playing a central role.”
Services still in demand
The most popular medical tourism services will continue to be in demand, according to Stackpole. These include:
• dental and cosmetic procedures
• fertility treatments
• bariatric surgery
• stem cell treatments
• procedures not available in the U.S.
Mid- and long-term opportunities in medical travel will be in those healthcare services that have long waiting lists and delays – or that leave patients with high out-of-pocket costs, said Stackpole.
ACA impact on insurer market
Until the impact of the ACA legislation becomes clear, health insurance providers will not be good target markets for destinations or providers trying to access the U.S. market, Stackpole said.
Patients covered by Medicare and Medicaid may never be a good market for medical travel, he noted.
“ACA repeats and reinforces the longstanding prohibition of foreign health care providers being reimbursed by the U.S. Centers for Medicare and Medicaid Services,” Stackpole said.
“Those individuals who are covered by Medicare or Medicaid (instead of private health insurance) can choose to pay out of pocket for services from a non-U.S. provider, but it is unlikely that many people will select this course of action if the government pays for those same services in the U.S.”
Other limiting factors
Another challenge for medical travel is the fact that large-group, self-insured plans, like General Electric’s, are exempt from many ACA requirements. The same is true for private health insurance plans that were in effect when the law was passed, except if they change their benefits plans.
“It is not clear if adding a medical travel benefit will be considered a ‘change’ as defined by ACA,” Stackpole said.
“Until this definition is clear, these insurance companies may not want to risk adding this (medical travel) benefit if it puts them at risk of having to comply with all of the provisions of ACA.”
