Medical tourism

by Ted Frank on September 26, 2006

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 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.

Thai courts will adjudicate malpractice claims, but the largest award ever issued was about $100,000 and the law there doesn’t permit damages for pain and suffering.

(Mark Roth, “Surgery abroad an option for those with minimal health coverage,” Pittsburgh Post-Gazette, Sep. 10). Apparently the Thais haven’t heard the propaganda from the American trial bar that caps on non-economic damages don’t lower malpractice insurance premiums or medical expenses. And apparently, thousands of Americans prefer cheaper healthcare to the opportunity to recover pain-and-suffering damages: unfortunately, plaintiffs’ organizations fight very hard to ensure that American consumers don’t actually get that choice. (Via, of all places, Bizarro-Overlawyered, where one can almost see the smoke coming out of the ears of the posting blogger because of the “Does-Not-Compute” cognitive dissonance.)


Update: Justinian Lane continues his blog’s consistent dishonesty. My post makes two points:

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.

In response, Lane has a lengthy diatribe pointing out that Thailand has lower expenses for many other things, which is pointed out in this very post at the beginning of the block quote! Lane then proceeds to attack me for a claim I never made, while ignoring the claims I did make. Readers can judge for themselves why Lane and Dugger’s blog only debates against 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 insurance for our woefully inefficient and inaccurate game-show of a medical malpractice litigation system goes to lawyers, rather than patients.

{ 12 comments }

1 Todd Rogers 09.26.06 at 8:28 pm

For those interested, 60 Minutes did a fantastic piece on this facility and one like it in India about a year ago. I’m sure some handy google-work will pull up the MPEG.

2 Joe in Australia 09.27.06 at 6:33 am

I’ve been there. I caught a lung infection in Nepal and by the time I was in relatively-civilised Thailand I was bringing up a constant stream of phlegm.

I turned up, was seen by an admissions nurse in about twenty minutes or so. I think the whole experience (including standard medical checks, Xray and so forth) took about two hours. I can’t recall the cost – $20? $40? It was low enough that I didn’t bother claiming it on my insurance.

The hospital itself is nice, clean, modern and big. It’s compares very favorably to most US and Australian hospitals. I think I should point out that the lower cost of malpractice insurance is probably negligeable compared to the hugely lower cost of all the support staff, the lower building costs, cheaper pharmaceuticals and so forth.

3 William Nuesslein 09.27.06 at 7:37 am

In a recent discussion between Ted Frank and Peter Norberg on Point of Law, Ted Frank pointed out that New Zealand’s substantial reforms of its malptactice litigation system had no decernable effect on medical safety. Peter Nordberg cautioned us that other factors may be in play in New Zealand. Now we have two other sources of data: Thailand and India.

I would bet that Medical Tourism is more than a rational choice of lower cost over greater safty. These foreign hospitals are probably safer that their American counterparts.

4 Eve 09.27.06 at 1:52 pm

You’re the people suffering delusions.

A “journalist” spewing Republican talking points and paraphrasing a hospital spokesperson made the assertion–blamed lawyers for medical tourism. How boring, how facile.

Blaming lawyers and the legal system is a bogus straw man.

In fact, the cause of medical tourism as we all know, is because healthcare is the U.S. is an unaffordable luxury.

Why is healthcare unaffordable–not because of lawyers, dear friends. But because of the staggering profits of the insurance and pharmaceutical industries.

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. All this needless administration consumes one-third (31 percent) of Americans’ health dollars.

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.

Get real.

5 dweeb 09.27.06 at 2:08 pm

Eve, did you happen to notice people here who paid CASH for healthcare in Thailand? That’s not possible under your socialized scheme. In other words, Thailand has free market medical care – much further from your Marxist medical utopia than our system.

However, it’s not all malpractice that’s responsible for the difference. The entire ancillary staff of that hospital in Thailand are probably making less than our minimum wage. There’s very little third party payment, so demand there is elastic. Heck, prostitutes there go for the price of a single beer here; is that because our hookers are getting sued for malpractice?

6 Ted 09.27.06 at 2:14 pm

No one, but no one, said that malpractice was the sole reason for the difference in price. Tens of thousands of dollars of savings per doctor per year, however, is not immaterial.

The reporter for the Pittsburgh Post-Courier accurately quoted a hospital spokesman that one element of the lower costs was the 95% decrease in malpractice insurance expenses. Consumers have demonstrated with their wallets that they are willing to make that tradeoff.

That’s only a “Republican talking point” to the extent that the Democrats seek to be shills for the trial bar or ignorant of the facts. Democrats who care about consumers and medical care, rather than the leading funders of the party, would support real reform, as many in the House do.

That magical $350 billion in savings Eve discusses is utterly illusory, unfortunately: as anyone who has had to deal with HCFA (or any other government bureaucracy) can tell you, they’re no slouches for paperwork. Statistics to the contrary simply fail to account for the private sector’s shouldering of Medicare administrative expenses. Ross Perot is one of the wealthiest men in America because of his contracts providing Medicare and Medicaid administrative services.

7 Eve 09.27.06 at 2:49 pm

Consumers have demonstrated with their wallets that they are willing to make that tradeoff. 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 a great president Bill Clinton would say, “that dog won’t hunt.”

8 Ted 09.27.06 at 3:41 pm

The number of Americans without health insurance coverage has jumped 23 percent since 1987.

The number of Americans has jumped 24% since 1987. Perhaps you can have a more misleading statistic.

One proven way to reduce infant mortality is to reduce litigation against OB/GYN doctors. Another way to reduce the infant mortality rate is to do what the countries with low infant mortality do, and that is to not try to save premature infants, and count them as stillborns rather than in the infant mortality rate. The infant mortality statistics are not measuring the same thing across different countries.

Lawyers aren’t the only problem facing American health care, but, then, no one said that they were. Please address future thread comments to the issue of the legal system; this isn’t the place to debate the failings of single-payer health care.

Those who are interested in common sense on healthcare should read Arnold Kling’s analysis.

9 Deoxy 09.27.06 at 4:27 pm

“As a great president Bill Clinton would say, “that dog won’t hunt.””

As a great Presidnt Bill Clinton would say, “I did not have sex with that woman,” amoung other things he said.

“that dog” in this particular case hunts quit well.

The American healthcare system has many problems, but most of them boil down to the following:

1. Getting more costs more. The healthcare that people get in this country is much btter than it was, even 20 years ago.

2. Probably the single biggest cause of high cost IN COMPARISON to other countries is that we are SUBSIDISING those other countries through our medical research. “Price controls” on pills only works for other countries because we don’t have them. The same can be said of many other medical breakthroughs. If you have a solution for that that doesn’t involve us also going to price controls (at which point there simply won’t be enough mony left to make research of most new medicine’s worth doing), I’m all ears.

3. The legal system. This problem is, quite admittedly, less than the previous 2, but it is still quit significant. It is also a MUCH easier problem to tackle than the previous 2. John Edwards (just for one well-known example) made literally millions suing doctors for something that every bit of research ever produced on the subject says is completely out of their power. Those millions came from somewhere. There is also “dfensive” medicine, which I have seen first hand (having been kept overnight in the hospital, at significant cost, due to the fear of somthing that was INCREDIBLY unlikely, ven according to the doctors wanted me kept there).

4. Yes, there are other problems besides the legal system, as any reasonable person will admit. The current way that insurance has wormed its way into everyday use (thus bringing about more overhead) is certainly one of them! But thinking that government involvement leads to less paperwork and bureaucracy shows nothing short of breathtaking naivete or sheer dishonesty.

(One last point: those profits are so incredibly high that many isurance companies have gone out of business or left sevral statees. Yeah, that sounds like profit to me. Don’t look at profits in dollars, look at profits in % of money expended to bring them in. Compare their profit percentage to your investment portfolio percentage, and if it isn’t higher, then why would anyone bother to do it?)

Consumers HAVE demonstrated with their wallets that they are willing to make that tradeoff, and not just in medicine or this particular case. People, as a rule, REFUSE to buy insurance against pain and suffering they bring on themselves, at any price. People ARE willing to pay less in exchang for specific exemptions from “pain and suffering” damages, even if they could afford to pay the higher rate!

Oh, and Ted’s point about “infant mortality” is spot on, by the way. On who accuses others of “spewing talking points” should avoid doing so themselves.

10 Tom 09.28.06 at 1:59 pm

The following was posted at PointofLaw.com:

Pain and suffering from “lost innovation”

Posted by Walter Olson
Reports Forbes (via Lattman): “Start your calculator, Bill Gates. Iowa plaintiff lawyers want Microsoft to pay pain-and-suffering-like damages to consumers of Microsoft products. Microsoft’s actions, according to the plaintiffs, have denied consumers a better computing experience (remember Netscape?), so they deserve compensation for ‘lost innovation’ in the marketplace.” The class action, one of those still left unresolved from the anti-Microsoft onslaught of the late 1990s, is being headed up by former ATLA president and Iowa lieutenant governor Roxanne Barton Conlin.

Ludicrous, but if plaintiffs are allowed to recover on this theory, and if these products subsequently became “unaffordable” for the common consumer, will we blame lawyers or would we blame it on the “staggering profits” of the computer industry and the “exorbitant executive pay” of Bill Gates?

11 Paul Karl Lukacs 09.29.06 at 5:55 am

I describe my stay in a Thai hospital
here:

http://knifetricks.blogspot.com/2006/09/bad-trip.html

The bottom line is that two nights cost me about $550.

12 tyree 10.02.06 at 12:10 pm

Eve wants us to “get real”
Here is real for you:
I graduated high school in 1974. My father, a doctor practicing in Orange County, California told me he could not help me pay for my college education. The year before his malpractice insurance had gone up $20,000. At the time brand new condominiums were available two blocks south of Disneyland for $19,000. Everything that touches the flow of medical services in the U.S. has been changed by the lawsuit industry, and a significant amount of that change has been bad.

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