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SPOTLIGHT: Grace-Marie Turner, Founder, President and Trustee, Galen Institute, Inc. May 21, 2015

U.S. Domestic Medical Travel, May 20, 2015

U.S. Domestic Medical Travel (USDMT): What are your thoughts on patients traveling for care to Centers of Excellence (COEs) – domestic or international?

Grace-Marie Turner (GM): Today, health plans, employers and individuals are looking for ways to maximize the value of their spending on healthcare and coverage. With the rising cost of medical treatment, some individuals and companies are looking beyond traditional boundaries of local hospitals and providers to send employees to Centers of Excellence (COE) domestically and abroad for high-quality, cost-effective care.

USDMT: Are COEs reserved for high-profile hospitals such as Cleveland Clinic, or can other facilities compete in this arena?

GM: COEs do not necessarily have to be “mega-systems.” It is important to evaluate hospital networks and individual facilities on their competitive advantages.

Two examples: physician-owned hospitals that focus on delivering high-quality, efficient care for specific medical procedures in which they have particular expertise; and smaller entities that focus on procedures in which they have skills and expertise. Both can have a major market advantage.

USDMT: Are physician-owned hospitals and surgi-centers able to excel because they aren’t burdened by Medicaid and the uninsured?

GM: Some physician-owned hospitals and surgi-centers are able to offer urgent care, but most don’t have the capacity to provide the full range of services required of an emergency room. Nevertheless, they do try hard to be responsive to the needs of their communities without going beyond their skills and resources. Community hospitals that have large Medicaid and uninsured populations resent these practical limitations and have successfully lobbied to curtail the growth of these specialty hospitals. But the mega-hospitals should see them as part of the mosaic of providers serving communities up to the limits of their capacity and expertise.

USDMT: Is bundled pricing the wave of the future?

GM: As consumers become increasingly involved in making personal healthcare decisions, they are going to seek both more and better information, as well as greater transparency and simplicity.

Bundled rates appeal to consumers because they offer certainty, and in turn, shift the financial responsibility to the facility in case something goes wrong.

There will continue to be providers and medical facilities that operate on the traditional fee-for-service service model. The more that consumers are involved, however, the greater the appeal of bundled rates.

USDMT: How is the issue of pricing and quality transparency unfolding?

GM: Our health sector has been opaque to consumers for many decades, and we still have a long way to go to figure out how to bring consumer transparency into this industry. Of course, there are many people and businesses offering services based upon a plethora of transparency concepts because they know there is a high demand for valuable information.

Oddly enough, one of the major pushes for transparency stems from the healthcare law. Today, there are consumers who have $10,000 deductibles before their insurance policy will even pay a penny, and these individuals want to know, “If I need a procedure, how much is it going to cost me?”

At this point, I don’t see a single model for providing accessible data rising above the others, but I think that this industry will evolve as more and more players enter this space, and as we begin to see which ones offer information that connects with consumers.

Continued on U.S. Domestic Medial Travel