A Health Insurance Plan That Makes Sense.

My son recently had an appendectomy, cost for less than 24 hours in the hospital $33,000.00, a friend of ours had a hysterectomy recently, cost $220,000.00

Now health insurance largely needs to cover these costs, and these costs are high, but what if there were a plan which covered these procedures but for those which didn’t require immediate care, (like the above mentioned appendectomy), it was required that one engage in medical tourism to find a place to have the procedure done. One would have to believe that such a plan could offer significant savings.

A quick search on Orbitz, the online booking service, shows that you can get a first class flight from NYC to Bangalore India on one days notice for $12,314.70, meanwhile heart bypass surgery in India costs about $1,583.00 versus $106,385.00 in the U.S. (Bloomberg http://www.bloomberg.com/news/2013-07-28/heart-surgery-in-india-for-1-583-costs-106-385-in-u-s-.html). According to Wikipedia 50 countries have identified medical tourism as an industry.

So we screen the hospitals and offer materials describing them, then if a patient requires surgery which allows them to travel and can be done within 48 hours we give them a choice of half a dozen hospitals where they may have their procedure done. Then they can be flown there, heck even with one of their loved ones, at a significant savings.

Such a policy would make use of the broad range of global medical care while providing a real impetus for domestic care to contain costs.

About erhoades

6 Responses to “A Health Insurance Plan That Makes Sense.”

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  1. diogene says:

    It would save the insurance companies money–as would allowing Medicare participants to receive health care abroad save the US govt.–but it would weaken the HC cartel system in America, which is outrageously expensive precisely because the quantity of health care is limited (a cartel fixes prices by strictly limiting the supply of what’s available).
    I don’t think the doctors, hospitals, and big pharma companies would like that one bit. Hence, it probably won’t be tried.
    Why did we get an “affordable” care act like Obamacare that isn’t really affordable overall? Follow the money.
     

  2. diogene says:

    Run–
    On a macro level I think the ACA (PPACA) doesn’t do enough to lower the amt. we spend on HC–presently about 18% of GDP, which is about twice the proportion which most other developed nations spend. The proportion of our economy has been rising over the past few decades, and will continue to rise, given the aging Baby boomer generation. It is possible that soon we may be spending more than 1/5 of our entire economy on health care. This means we either have to borrow the money or spend less on other things. This is clearly an unsustainable path.
    On a micro level, the ACA didn’t reduce premiums very much (in some cases premiums actually rose) because there was no public option, and insurance companies are still guaranteed about 20% of HC costs. 

    • erhoades says:

      When the government underwrites parts of the economy without also managing it it is obvious that the result is crazy price distortions. Higher education and health care both saw their costs continue to rise after inflation throughout the general economy cooled. The reason was that these parts of the economy where being underwritten by the government. (Interesting how people will complain bitterly about welfare cheats but turn a blind eye when corporations suck on the government’s teat till it bleeds).

      It’s interesting, though, that the agricultural sector saw just the opposite effect, that of prices being held low while receiving a lot of government aid. The end result was the same however, big corporate entities like Monsanto grew fat by having their interests protected.

    • run75441 says:

      diogene:
      “insurance companies are still guaranteed about 20% of HC costs.”
      Hmmm, no. Previously insurance companies could take more for administrative on “individual policies. Pick up the Fed’s LaFollette and Sheiner study on healthcare costs (this kicks Dougie Elmendorf in the shins). healthcare costs will not crowd out the necessities in the end which s the conclusion of the study. Elmendorf asked for an exparte conversation with Yves Smith when she exposed the silliness of his works by citing this study. 
      From Healthcare taking over the economy which Sheiner.pdf”>Louise Sheiner and Glen LaFollette debunked and Yves Smith at Naked Capitalism portrayed; to http://www.nakedcapitalism.com/2012/11/fed-budgetary-experts-demolish-cbo-health-cost-model-the-lynchpin-of-budget-hysteria.html  http://angrybearblog.com/?s=sheiner#sthash.aY0aupfi.dpuf
       
       

      • diogene says:

        Run–
        I often read the Naked Capitalism site (though not as religiously as you), and have recommended it here and at The Bottom Line.
        Without attending too much to details, my point was we spend too much on healthcare and the insurance companies rake off too much of what we are spending on health care. We are in danger of having a twenty-twenty HC system (spending 20% of our GDP on HC as the insurance companies charge 20% administrative costs). You say the insurance companies used to charge more. This is true, but now with the PPACA they have a larger client base.
         
        The insurance companies are still part of the problem of America’s unaffordable healthcare, not a solution. A truly ‘affordable’ HC system would remove them from the marketplace, as they are gatekeepers, and we don’t need gatekeepers if all Americans are to be covered (for all major-medical conditions). We will eventually have to move towards a British NHS type of system, since it will be what we will be able to afford.
         

What do you think?