Implementing International Providers


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This presentation is based on a paper I wrote for a class in Health Law as part of my Master\'s in Health Administration (MHA) degree program. The paper was then turned into an article, that is as of yet unpublished. If you would like a copy of the article, or can publish it, contact me at

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Implementing International Providers

  1. 1. Implementing Medical Tourism for Workers’ Compensation What are the Legal Barriers? Richard Krasner HSA 6425 Health Law April 14, 2011
  2. 2. Medical Tourism A rapidly emerging segment of global healthcare industry Motivated by desire to seek lower cost health care, avoid long wait times, or provide services not available in one’s own country Many foreign hospitals affiliated with U.S. medical schools such as Harvard Medical School Estimated 500,000 Americans traveled abroad for treatment in 2005
  3. 3. Medical Tourism and Health Care Trade-off for consumers, allows them to opt-out of increased regulation in favor of looser restrictions and greater cost savings Cardiac surgery India = $4,000; U.S. = $30,000 Partial hip replacement Argentina, Singapore or Thailand = $8,000 - $12,000; U.S. = $16,000 – $24,000 Knee replacement Singapore and India = $18,000 and $12,000; U.S. = $30,000
  4. 4. Medical Tourism and Health Care, continued Cost savings more likely benefit those with inadequate health coverage Lower-middle-class will benefit from medical tourism Disproportionately benefits uninsured or under-insured Self-insured & private insurance companies have integrated medical tourism Large HMO’s and health insurance companies established plans
  5. 5. Workers’ Compensation and thelegal barriers to Medical Tourism Average WC medical cost per lost time claim was $260,000 in 2008 (6% increase from 2007) Medical costs in 2008 were 58% of all total claims 40% of WC costs are associated with medical and rehabilitative treatment In 1980’s & 1990’s, medical costs fluctuated, rose in 2000’s, and totaled $41.7 billion annually (as of 2002)
  6. 6. Comparison of Costs for Common Workers’ Compensation Procedures U.S. U.S. Procedure Retail Price* Insurers’ Cost* India** Thailand** Singapore**Hip Replacement $75,000 $31,485 $9,000 $12,000 $12,000Knee Replacement $69,000 $30,358 $8,500 $10,000 $13,000Spinal fusion $108,127 $43,576 $5,500 $7,000 $9,000 *Retail and insurer costs are mid-point between high and low ranges. **U.S. rates include one day hospitalization; international rates include airfare, hospital and hotel. Source: (Herrick, 2007)
  7. 7. Legal BarriersState WC laws – CA, FL, NY, TX – Medical providers must be licensed in state to practice medicineFederal & State laws intended to protect consumers, instead increase costs and reduce convenienceFederal & State regulations restrict public providers from outsourcing certain medical proceduresFederal STARK laws inhibit collaborationState licensing laws prevent certain medical tasks being performed by providers in other countries
  8. 8. Workers’ Compensation Case Law & Medical TourismState Compensation Insurance Fund v. Workers’ Comp. Appeals Bd. (1977)  Mexican worker fell from ladder; treated in Tijuana; WCAB ordered reimbursement.  SCIF petitioned – MD’s not licensed under CA law. CT of Appeals affirmed award of WCAB; CA Lab Code does not exclude physicians licensed to practice in another country.
  9. 9. Workers’ Compensation Case Law & Medical TourismBraewood Convalescence Hospital et al. v. Workers’ Comp. Appeals Bd. (1983)  Domestic Medical Tourism; cook slipped and fell; told to lose weight; went to obesity clinic 3000 mi from home. WCJ awarded temp disability prior to going to clinic WCAB granted reconsideration, affirmed WCJ’s award Employer appealed Sup. Ct., CA affirmed award of WCJ for reimbursement for all costs and future costs.
  10. 10. Workers’ Compensation Case Law & Medical Tourism AMS Staff Leasing, Inc. v. Arreola (2008)  Undocumented Mexican worker in FL struck in rt. leg; had 12 surgeries  Seen by Dallas orthopedist, recommended add’l surgery  Returned to Mexico, no documents to return to US  Had surgery in hometown of Jalisco  Employer claimed “no known orthopedic doctors in Mexico qualified … according to FL WC statutes”  FL Ct of Appeal ruled state law did not preclude medical care in Mexico, FL WC law contemplates coverage for non-citizens, worker not prohibited from receiving treatment outside of state
  11. 11. Conclusion Nothing of real substance to prevent WC cases from benefitting from medical tourism. Several legal barriers remain, but can be overcome. Cost savings, quality of care matches and surpasses that found in US is reason to implement medical tourism. Courts willing to allow limited medical tourism; how future courts will rule is unclear; some precedent exists for ruling in favor of medical tourism in WC.
  12. 12. QUESTIONS?