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charges for postoperative complications in any of the groups. Second,
American patients having care within the United States incur no charges
for travel and accommodations. Third, patients travel offshore in economy
class with one other party – a spouse or other companion.
This analysis shows that the medical savings for unilateral hip
replacement are 86.5% and 83.5% in India and Costa Rica, respectively.
The calculated savings are actually quite close to the commonly cited
number of 90%. But American patients are not particularly interested in
medical savings. They really want to know what their total savings will
be since this is what truly affects them. For this analysis of hip
replacement, the total cost savings are 75% for both India and Costa Rica,
as compared to what a patient would really pay in the United States,
presuming reasonable efforts to get a discounted price. Although medical
costs are US$ 1200 less in India than in Costa Rica, much of the savings
are consumed by the greater cost of travel to Asia than to Central America.
Opportunity Cost: the Overlooked Factor
Opportunity cost is a very important issue that has not been
addressed in any analysis of savings in medical tourism that I have seen.
If a patient has surgery in their own hometown, their spouse might miss
a day or two of work. But a trip to a foreign country may well result in
prolonged unpaid absence from fruitful employment. Furthermore, if a
patient and partner are away for several weeks there may be expenses for
childcare and/or elder care. On the other hand, in certain situations,
offshore health care allows some patients to enhance their savings by
combining their medical travel with previously considered or planned
tourism activities. Opportunity costs, the expenses created by absence
from home and the enhanced savings are extremely variable and not well
suited to quantitative analysis. Nevertheless, they clearly have a great
impact on the financial decision for patients considering offshore health
care.
In summary, this analysis indicates that patients who have hip
replacement surgery in India or Costa Rica realize total savings of
approximately 75%, compared to estimated best prices that patients
could reasonably get in the United States.
Cost for Hip Replacement at US and Offshore Medical Centers.
Destination United States India Costa Rica
Cost Date
Cost of Medical Care
Physicians
Facilities
Cost to Arrange Care
Commission to agent
Pre-travel evaluation
Pre-operative labs
Cost of Travel
(Patient plus 1 companion)
Air travel
Travel insurance
Cost at Destination
Concierge services
Hotel ( 5 nights)
Meals at destination
Analysis
Medical Cost
Medical Cost (% of US Value)
Medical Savings ($)
Medical Savings (% of US Value)
Total Cost
Total Cost (% of US Value)
Total Savings ($)
Total Savings (% of US Value)
$ 40,000
n/a
n/a
n/a
$ 40,000
100%
$ 0
0.0 %
$ 40,000
100%
$ 0
0 %
$ 5,400
$ 800
$ 2,700
$ 1,100
$ 5,400
13.5%
$ 34,600
86.5 %
$ 10,000
25.0%
$ 30,000
75.0 %
$ 6,600
$ 1000
$ 1,200
$ 1,050
$ 6,600
16.5%
$ 33,400
83.5 %
$ 9,850
24.6%
$ 30,150
75.4 %
For clarity of presentation, some data are aggregated and rounded up or down to
the nearest $50 increment. Travel costs are based on quotes by a medical tourism
agent and confirmed using an online travel web site. Travel costs are for the
patient and one confirmed, in economy class from Atlanta to New Delhi, India/
San Jose, Costa Rica.
2007 Michael D. Horowitz