Opportunities for Domestic Medical Tourism to Lean Hospitals?


There was an interesting article in the most recent Inc. Magazine called “Domestic Medical Tourism: How one company is saving businesses big bucks on employee medical treatments.

Much of the talk about “medical tourism” has focused on patients flying halfway around the world to India, Thailand, or other low-cost / high-quality destinations, where hospitals are typically built to American and Western standards. The employers who pay for healthcare benefit from lower costs and employees often get incentives to choose such care, including 5-star accommodations for the patient and even a family member.

But are we missing an opportunity that's right in front of our faces in the U.S.?

Medical tourism is not appealing to everyone – there's long flights (which brings the risk of DVT) and American doctors are often hesitant to give follow up treatment to somebody who went overseas, for liability reasons.

The Inc. article highlights something that many of us in healthcare know – healthcare costs can vary wildly within a state or across the country, as Dartmouth Atlas and Medicare data shows. The article points out that you can sometimes save 20 to 40% by flying from, for example, Washington to Arkansas.

“The feedback we were getting from employers was, ‘I'm not sure I want to send my employees on an airplane for 10 hours. But two hours, that's OK,' ” says CEO Vic Lazzaro, a former UnitedHealthcare executive.

There are benefits all around:

… three-way agreement in which all sides seem to come out ahead. Companies with self-funded insurance plans benefit with, typically, 20 percent to 40 percent savings on such surgeries as knee replacements and heart bypasses. Patients willing to get on a plane benefit, too. Because employers save so much, they encourage their employees to use the BridgeHealth plan by waiving copayments and deductibles. And hospitals get access to patients they would otherwise not have, allowing them to fill empty beds.

If you look at ThedaCare being able to reduce their costs for certain types of care by 25 to 30%, starting at a cost far lower than places like New Jersey, why not send lots of patients to Appleton, Wisconsin?

What do you think about traveling across state lines for lower cost / higher quality healthcare? Why aren't more companies and patients doing this? Inertia of current practices? Would a trend of domestic medical tourism provide competitive pressure for those organizations that aren't improving the value the provide?

p.s. Today is day 1 of our 2nd annual Lean Healthcare Transformation Summit. Follow along on Twitter, see details here.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


  1. Theoretically, I like the idea. However, the thought of being away from my family during major surgery is stressful. In addition, the idea of walking through an airport, going through security, and getting on a plane shortly after a knee replacement or a heart bypass sounds very unpleasant. I’d want more recovery time before getting on a plane than I would before getting in a car.

    At a minimum, I’d also want my employer to give me extra vacation time and a first class ticket home. I’d also want them to pay for my loved ones to come with me and pay for their accommodations and rental car.

    Even then, if there were any complications with the surgery, my loved ones may need to fly back home and leave me without any support during a very stressful time. If I’m in my hometown, my loved ones can visit me each day as time allows.

    I’m very used to travel, but the thought of travelling for surgery is very stressful to me on a number of levels and I would be willing to pay a lot more, even out of pocket, to have the surgery done near my home.

    • Good point, this isn’t going to be applicable to each patient in every situation. I’d, for one, be willing to travel for measurably lower infection rates, mortality rates, etc.

      • I’d definitely be more willing to travel for measurably lower infection and mortality rates. If that information and pricing information were easily available, it would affect my decision.

        Are infection and mortality rates of different hospitals and surgeons easily available to the public?

        • It’s still really hard to find good data!

          There’s a government site http://www.hospitalcompare.hhs.gov/ but the amount of data (and the type of data) seems to vary wildly by state from this other sources. Wisconsin has been a leader on this front and has led to efforts to do IN-STATE medical tourism, from say Milwaukee up to Appleton, 90 minutes up the road, as talked about in this excellent book by John Torinus:

          The Company That Solved Health Care: How Serigraph Dramatically Reduced Skyrocket… by John Torinus Jr. http://t.co/2hoXMUF

          There’a also this:


          But when I’ve looked on sites like this, a lot of the DFW area hospitals don’t participate.

            • Yeah, there’s some controversy about the release of that data. For one, it’s prices, not costs (that’s an important nitpick, I think).

              The “chargemaster” is basically just the price that’s charged to those without insurance (I think it’s ridiculous to charge the most to those with, generally, the least ability to pay). There’s debate about whether the chargemaster is even used as a basis for negotiation with insurance companies or if insurance prices are based on the Medicare/Medicaid rates (set by the government) plus some multiple.

              I’m by no means an expert on payment. Here’s a blog post from a former hospital CEO with a lot of comments:


              And I’d be curious to hear what John Toussaint would have to say about this. I don’t think he has blogged about this yet.

  2. John Toussaint just told a story at our Lean Healthcare Transformation Summit… Milwaukee company (Serigraph) offers employee chance to drive to Appleton, 70 miles away, to get colonoscopy done. Gives employee $500 incentive check. Serigraph saves $2,000 in healthcare costs. Patient gets better outcomes…

    Read this book:
    The Company That Solved Health Care by John Torinus Jr.

    • I would participate in that particular program.

      It seems that there needs to be a certain infrastructure in place to make that program happen. The information about quality and cost needs to be readily available, and the company has to set up the program and all related systems.

      Do you know if a health insurance company manages the program for Serigraph?

      • Yes, Serigraph has a company that helps manage this… I would have to go back through the book, but there are a few startups that are helping companies navigate all of this. Serigraph is “self insured” as a company, but they have a traditional insurance company do the administrative work (not an uncommon relationship). They are also working with one of these newer, more innovative companies.

        It’s not all the detail of the book, but some info on the book website:

  3. I traveled to the Cleveland Clinic from the East Coast for open-heart surgery in 2010. I can provide some customer (patient) perspective on the primary factors that went into my decision-making process:

    (1) Need for a highly specialized procedure (septal myectomy) that is only performed in volume at a few centers around the country. Several heart surgeons who were more geographically convenient likely would have operated on me if I had permitted them. However, the experience difference was overwhelming: for example, 12 procedures (lifetime) versus 12 procedures (every month). The former was a surgeon at a tertiary cardiovascular teaching hospital that most would recognize.

    (2) Strong preference for privacy and solitude during the immediate postoperative period. Making travel difficult for my family – no matter how well intentioned they were – was actually a benefit. It sounds cold, but when planning a major operation, the patient’s wishes have to come first.

    (3) The benefit of time for reflection and planning. The importance of this is hard to overstate. My procedure was necessary but not emergent, and I had the luxury of comparative evaluation and advance scheduling 3 months ahead. In fact, starting with my diagnosis in 2008, I was doing contingency planning if my condition began to deteriorate to necessitating surgery. A more urgent or emergent health crisis would have limited my travel options.

    (4) Cleveland Clinic’s clear commitment to Lean process and procedure, and overarching commitment to managing the customer (patient) experience. Everything has a protocol, and every protocol is designed with the patient in mind – not the doctor, nurse, or anywhere else. It’s why their outcomes are the best.

    I spent thousands of dollars more in hotels, food, airfare, etc. to go to Cleveland as opposed to a local medical center or even a closer center of excellence for my condition. Every penny was worth it, as both my experience and outcome were stellar. Yet process and outcomes only account for 2 of 4 of my decisive factors. Change my preference for solitude or the urgency of my condition, and my decision to be a “medical tourist” becomes much more difficult.

    • Thanks for sharing your personal story, Michael. I think the details of your story emphasize how this should be a patient’s choice. Some of your story illustrates what’s been going on for a long time – patients choosing to travel long distances for specialized and high quality care (think people traveling internationally to the U.S. for care – when they can afford it).

      The new wave of medical travel is mainly about cost – lower cost. I don’t want to see patients forced into traveling for lower cost, lower quality care. Medical tourism is going to be about travel for lower cost, HIGHER quality care. But again, I wouldn’t want to see people forced into that.

      What Serigraph is doing, with it’s incentives and paybacks to employees might seem a bit forced, especially when somebody is in a precarious financial situation – traveling to a foreign country so that you don’t have to pay a co-pay or a deductible might not seem like a choice to some… which is all the more reason to ensure that medical tourism is based on VALUE, not just on being cheap.

    • Michael, thanks for sharing that story. I can see why you chose to travel for the surgery.

      How did you get the information that Cleveland Clinic as the best for performing the surgery? I suppose the fact that very few places perform the surgery helped you narrow down the options.

      I find it difficult to find information about local doctors and feel overwhelmed by the thought of shopping around the country for a doctor. I can imagine doing the research for a specialized procedure done in very few locations. However, I’d have no idea where to even start looking for something as common as a knee replacement.

      Even with the two websites that Mark posted, I can’t figure out how to answer the questions, “What hospital in the US has the highest quality knee replacement surgery?” or “What hospital in the US has the best value for knee replacement surgery?”

      I think that for medical tourism to work well on common procedures, it will require a lot of easily digestible information. I think that Serigraph’s model works well because someone who has time and expertise already identified an excellent option. I don’t feel that I would have had the time, expertise, or information to determine that it was worth driving from Milwaukee to Appleton for a colonoscopy.

      • This data either doesn’t exist in a consistent way or it’s really hard to find.

        Case in point, my insurance provider has a website to “compare costs.” They compare “in-network” versus “out of network.” That’s not really “cost,” that’s a comparison of PRICE. They negotiate with the in-network providers… so the price might be 50% lower to you as the consumer, but you don’t know if that provider has less waste (lower cost) or better quality.

        Also, if you pick a random procedure, there was only cost data from 1 provider, the rest said “This facility fees are currently not available.” So that’s not really helpful yet.

        But as you said, I want both QUALITY and COST comparisons – best value, not just who is cheap.

      • Kevin,

        Ironically, it helped that I had a rare condition, hypertrophic cardiomyopathy. There’s a strong patient advocacy organization, oddly enough called the Hypertrophic Cardiomyopathy Association (www.4hcm.org) that works tirelessly to collect data and steer patients to centers of excellence. I don’t entirely buy into their doctor/hospital ranking methodology, but their information sharing is great, their intentions are noble, and it was a great starting point to further critically evaluate options.

        Through this discussion, I’ve been thinking a lot about moral hazard, the tendency to overpurchase care when someone else (insurance) foots the bill. I could not have cared less that Cleveland Clinic was a preferred center by my insurance for having relatively low cost (which it was). All I wanted was the best shot at getting better and minimizing risk. But had my insurance given me a bonus to travel, and backed it up with outcomes data, I would strongly have considered it. And likewise, for a routine procedure such as colonoscopy, if my insurance wants to give me $500 (hypothetically) to travel from Philadelphia to Wilmington to use a preferred provider, and I’m satisified that the center meets my needs for quality, then I’d do it.

        How to assess quality from the patient perspective is a much broader, murkier question. I’m in an advantageous position because I’m in the pharmaceutical field and can somewhat interpret medical literature, but it must be daunting to laypersons.

  4. I just discovered that John Torinus has a blog where he talks about some of their data from Serigraph – how their healthcare costs are lower because they’ve done a better job with preventive care and their number of employees admitted to the hospital are about half of the peer group average.


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