More on Medical Tourism

Justinian Lane

More on Medical Tourism

After reading Eve’s post about medical tourism, I did a little digging to see if I couldn’t debunk the claim that Thailand’s cost of medical procedures are so low because of low malpractice premiums. It wasn’t hard to do. The following quotes are all from Bumrungrad Hospital, the same hospital mentioned in the article:

Employment Costs:

“The lower cost of healthcare in Thailand can be explained in part by the country´s lower employment costs. Medical staff and administrators earn around a third of equivalent staff in Europe or the US, but the cost of living is much cheaper as well: the the purchase price of a 4 bedroom house in Bangkok is between 50,000 and 80,000 Euro.”
“All this has paid off in quality and cost effectiveness. All Bumrungrad staff, from top surgeons to cleaners, are paid lower salaries than their Singapore equiva-lents. The cost of staying in a four-bed ward at Bumrungrad is US$20; a Class B1 bed in a public hospital ward here would charge about $150 a night.Treatments are also cheaper.”

Operational Efficiency, Subsidization, and Economies of Scale:

But at Bumrungrad Hospital, operational efficiency also contributes to the lower operating cost. Ruben Toral, manager of Bumrungrad’s International Program, explains that the structure and organisation of the hospital allow significant cost savings: “We have 554 beds, over 2,500 outpatients a day and 800,000 patients per year. A similar 500 bed hospital in the US typically treats only 100,000 patients per year. Without our IT system, we would not be able to handle this many patients.”
“But Bumrungrad’s appeal isn’t due solely to the weak baht and lower salaries. The way Bumrungrad is run produces huge economies of scale which are passed on to patients. One example: The hospital pays for the entire infrastructure - the nurses, equipment, pharmacy, appointments and billing. The hospital’s 600 doctors simply turn up at the hospital with their stethoscope, and are assigned a consultation room. One result: ‘Our consultation rooms are used 16 hours a day; ECG machines, 100 times a day; CT scanners, 20 hours a day,’ says Bumrungrad’s chief executive, Mr Curtis Schroeder. ‘That allows us to keep price per unit at costs impossible for an independent physician to compete with.’”

Advanced Computer Systems:

“In order to assist patients in their own language, Hospital 2000 has been designed to handle multiple languages. Medical record files, bills & drug labels can be translated automatically and printed in English, Chinese & Japanese. The system handles 1.7 billion transactions per year, yet it has had 99.999% uptime since its introduction. Bumrungrad is also the first hospital in Thailand where patients can set up appointments using the internet. ”
“Almost all administration is done online. The hospital’s two-million-patient database goes back 20 years. The system records all the drugs the patient has ever been prescribed. Said Mr Schroeder: ‘I can tell patients what size Q tips they ordered 15 years ago.’ Singapore hospitals are now starting to make their records accessible online, but Bumrungrad’s system is more comprehensive. It shows not only a patient’s hospitalisation records, but even the X-rays and ultrasounds, and other test results. ‘I can access an X-ray as soon as it is taken, real time,’ said Dr Virat, as he watched a series of slides on the screen. “

“At Bumrungrad, every medical test that has been done on the patient, from blood tests to high-tech magnetic resonance imaging scans, can be called up at any of the 900 terminals in the hospital, by anyone authorised to do so. This means that a patient walking into the hospital without a prior appointment does not need to wait for his records to be found and delivered. The 3,000 patients who use the hospital’s clinics every day wait an average of just 10 minutes to see a doctor, as the computer always assigns patients to the doctor with the shortest queue.”

Naturally, Ted and the peanut gallery at Overlawyered have their blinders on and continue to argue that the way to fix the high costs of our medical system is to gut the tort system. Does anyone else really believe that if we were to slash salaries, increase operational efficiencies, and implement a 21st century IT system at our hospitals that the cost of care wouldn’t go down as much as if we changed the tort law?

Posted at 11:05 AM, Sep 27, 2006 in Civil Justice | Permalink | Comments (4) | TrackBack (1)

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» Medical tourism from Overlawyered
Bumrungrad International Hospital in Bangkok, Thailand, treated 58,000 American patients in 2005, and looks to treat 20 percent more this year. Why? At Bumrungrad Hospital, [spokesman Ruben] Toral said, the lower cost of living is... [Read More]

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Where's the refutation? As long as you're quoting the hospital, why not include the full picture, like the supposedly blindered Overlawyered did?

At Bumrungrad Hospital, [spokesman Ruben] Toral said, the lower cost of living is a major factor in the savings, but so are differences in how the medical system operates.
Doctors in Thailand pay about $5,000 a year for malpractice insurance, compared with more than $100,000 for some specialties in the United States.

Overlawyered didn't make this up: we quoted the hospital's spokesman (who, if anything, understated the magnitude of the savings, since some specialties pay a quarter-million dollars a year).

Once again, Lane misrepresents reformers' positions, and fails to address what reformers actually say:

1) Thailand has lower medical malpractice insurance costs in part because there are caps of zero on non-economic damages in that country, notwithstanding the repeatedly refuted claims of the plaintiffs' bar that insurance costs and caps are unrelated.

2) Americans, when given a choice, prefer cheaper health-care to the opportunity for pain-and-suffering damages, but the plaintiffs' bar fights the opportunity to give consumers so much as the choice; in this debate, as with most debates over liability reform, it's the reformers who are the true consumer advocates.

These were the main points of the Overlawyered post, and Lane ignores them both. Readers can judge for themselves why Lane and Dugger persist in attacking strawmen rather than what reformers actually say.

Lane's post does have an interesting statistic: there are 600 doctors who see 800,000 patients a year at the Bumrungrad hospital. Let's do some back-of-the-envelope calculations: if the average doctor there saves $50,000 to $100,000/year in malpractice insurance costs, that's $30 million to $60 million a year saved by the hospital. If the average Thai family has three to five visits to a hospital clinic doctor a year, that's an average savings of $120-$400/year per family. How many American households would turn down $120-$400 a year because they'd rather have the opportunity for lottery-ticket non-economic damages in a malpractice case? I don't know the answer to that question, but I'm willing to find out by giving American consumers the option. The fact that the plaintiffs' bar fights very hard against giving consumers the option shows that they know that the public isn't getting their money's worth from the civil justice system, perhaps because over half the money spent on our woefully inefficient and inaccurate game-show of a medical malpractice litigation system goes to lawyers, rather than patients.

Should American hospitals adopt the IT innovations of Bumrungrad? Sure: but that's hardly mutually exclusive with the consumer-friendly liability reform I propose. (Lane, however, is mistaken if he thinks American hospitals can cut salaries two thirds.)

Again, you choose to ignore the broad point of my post, which is that the Thailand medical system is so inexpensive because it differs in many respects from our own, and not just in the way it handles malpractice claims.

The average Thai doctor saves over $50k per year on malpractice premiums compared with their U.S. counterparts? Too bad the average malpractice premium is less than $40k in the U.S. In some areas, malpractice premiums are under $10k. When you use real numbers and factor in the salary difference between U.S. and Thai doctors, the cost savings probably drops to under fifty bucks per family. Big deal.

More disturbing than your back-of-the-envelope calculations is your repeated use of the word "option." You say you would give consumers the "option" of having cheaper medical care in exchange for eliminating their right to receive reasonable compensation for their injuries. But that's not true. In fact, you want to take away everyone's right to reasonable compensation by capping or eliminating noneconomic damages. How is uniformly capping damages for everyone giving consumers a choice?

It isn't.

On Overlawyered, Ted wrote in a comment: "Consumers have demonstrated with their wallets that they are willing to make that tradeoff." If I understand him correctly, he believes that uninsured Americans are so outraged by medical malpractice that this is the reason they happily seek care in Third World countries. I responded to this absurd line of reasoning as follows:

This is just a bunch of hooey.

Ted, You are so wrong. Consumers have demonstrated with their wallets that they cannot afford to pay for healthcare in America. Period.

The number of Americans without health insurance coverage has jumped 23 percent since 1987. Many Americans have no alternative but to seek treatment overseas. This is a national disgrace and tragedy.

This is the shameful reality: The U.S. is one-third worse than the best country on mortality from conditions "amenable to health care"—that is, deaths that could have been prevented with timely and effective care. Its infant mortality rate is 7.0 deaths per 1,000 live births, compared with 2.7 in the top three countries.

The American healthcare system is fatally broken.

And you can't get cover from all this by blaming lawyers.

As President Clinton would say, "that dog won't hunt."

How is uniformly capping damages for everyone giving consumers a choice?

Well, actually I've proposed permitting opt-outs, which are currently not allowed under the law.

But even if the default rule is changed to cap damages for everyone, doctors can agree to waive caps, even if patients cannot enforceably agree to be capped.

I respond to Eve in the Overlawyered comments; suffice it to say her statistics are misleading or otherwise wrong.