| Health Alert | Avoiding Armageddon |
Jun 1, 2009
I have glimpsed at the future of U.S. health care and I am pleasantly surprised. Instead of continuing to rise at twice the rate of growth of income, health care spending will slow dramatically. Future prices will actually be lower than they are today. Providers will bundle their services into easily-understood packages with a single fee. They will compete against each other on price and quality and the data will be transparent. Health care will be provided in a free, competitive marketplace. Third-party insurance will be relied upon only for rare, very expensive events. Medical malpractice suits will be virtually unknown. There is only one catch. All this will happen outside the United States. We Like Guatemala
The National Center for Policy Analysis has written a good bit about medical tourism, the U.S. hospital reaction to medical tourism, and those shopping for health care. Here is the latest on medical tourism from Forbes. Still, I had no idea how easy it would be to solve the vast majority of our health policy problems by simply crossing the border. That is, I had no idea until a recent trip to Guatemala City, where Thomas Saving, Andrew Rettenmaier, Grace-Marie Turner and I toured a facility run by Grupo Hospitalario, a private hospital chain.The CEO of the facility is Erick Herrera, a Cornell University MBA. Most of the doctors who practice there are U.S. trained, and most are board certified. They have all the latest equipment; and as far as I could tell they can do just about anything an American hospital can do. Right now, only 10% of their patients are foreign and only 2 or 3% are American. But as the U.S. health care system becomes increasingly dysfunctional, a low-cost, high-quality alternative only a few hours away could emerge in a heartbeat.
For starters, the hospital we visited looks like a modern hotel — with all the comfort and amenities. And the price is right — better, in fact, than a hotel. A private room is $55 a day. A suite is $85. And it comes with a TV, minibar, Internet hookup and 24-hour room service.
|Almost all medical services cost a fraction of what they would in the United States. Whereas U.S. MRI scans range, say, from $500 to $1,500, the Guatemalan equivalent costs $240 (daytime) or $100 (evening). (Yes, they peak load price.) Gastric bypass surgery, a popular procedure for American patients, costs $8,000 in Guatemala, compared to $25,000 in the U.S. |
Everywhere we looked we saw obvious opportunities to compete for the American market. For example, wealthy people from all over the United States routinely fly to ritzy spas and medical centers for super duper, comprehensive checkups. The fee ranges from $2,500 to $5,000, depending on the services selected. If they flew to Guatemala City instead, they could have most of the same services for $120 to $270.Medical tourism could become the most important export product of Guatemala and other Latin American countries in short order. But would their political systems allow it?
Latin American countries typically have a system of free health care available to everyone. But the public systems are short on resources and ration by waiting. So, almost everyone who can, turns to the private sector for their care. Unlike Britain and Canada, it is not viewed as scandalous when Latin American politicians get their health care privately. Indeed, private care for everyone who can afford it is normal and accepted. The result is booming private sector medicine throughout Central and South America and a potential export industry for patients all over the world.Bottom line: I have no confidence our federal government will solve our health care problems. I have a lot of confidence that Latin American entrepreneurs can do so.
From John Goodman’s Health Policy Blog on the National Centre for Policy Analysis website.
HPU Feature Article / 02 June 2009
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