Plan Participant Redirection: The Way Forward for US Employer-driven Cost Containment

U.S. self-funded and self-insured employers, unions and association health plans aren't interested in paying for medical "tourism". So if that's what you are marketing, expect to be ignored.

Patient movement, from local hometown care options are often aligned with BUCAH in-network options for care. Some, albeit discounted are way higher priced than what is necessary to make profit.

When a hospital discounts an outpatient surgery procedure for a BUCAH (Blues, United, Cigna, Aetna, Humana, et al) contracted plan and still makes 80% net profit on the surgery -- without including the cost of an overnight stay, the surgeons' fees, anesthesia fees, or implant costs... that's just plan greed. But it is what you can choose if you use your local in-network ("INET") options in your member handbooks. But why???? Why pay more and get less??? Why tolerate these price gouging tactics? There is another way to skin this cat and everybody gets what they need, without sacrificing quality, safety or paying more.

The patient redirection option

What we in the industry have come to colloquially refer to as "medical tourism" or "health travel" in reference to individual consumers traveling away from where they reside in order to obtain care, consultation, diagnostic testing, second opinions, or travel where the technology they need is available is not "tourism".

Most people, after anesthesia feel awful for a few days. They are also likely to be on some medications -- not only pain medications, but it could be antibiotics that may make one photosensitive (meaning they may sunburn easily) feel dizzy, and in some pain. They don't want to eat "non-comfort" foods and strange times of the day that are not aligned with their personal biorhythms. They don't want to go on tours. They want to hole up in a hotel if necessary and binge watch Netflix movies or read a book and recover.

Employers, unions and associations or other third-party payors don't want to be asked by the IRS why they paid for "tourism" with 501C9 trust dollars.

Why was "Tourism" ever paired with the word "medical" or "dental" anyway?

For that, you must ask the guy who purchased media coverage on the popular news magazine program "60 Minutes" for Bumrungrad Hospital in 2007.

The neologism (new term) stuck with the media and the press. It was also the focus of the then unfledged, opportunistic Medical Tourism Association in Florida. The Medical Tourism Association (since rebranded, it seems) who bombarded the world with use of the term and promises of riches beyond any hospital administrator's, surgeon's or dentist's wildest imaginations started offering certifications, hosting conferences and conventions and attempting to own the market. Substantiated by reports that Bumrungrad (prounounced "bam-ung-rát") allegedly generated 13,000 leads from the airing, everyone called the guy who was at Bumrungrad for a few more months, Mr Ruben Toral, to make their hospital "like Bumrungrad". Quite humorous actually, if you aren't in Bangkok off Soi Na Na in the Sukhumvit District, you aren't going to be "like Bumrungrad". Sorry.

But even though imitation is the greatest form of flattery, one need not "be like Bumrungrad" to succeed in the business of "health tourism" or "medical tourism" or "health travel". One must offer something compelling, unique to the brand, that actually appeals to a consumer or insurer persona or a TPA or employer or other sponsor of a health benefit plan.

One must convince the insurance or health plan underwriters, actuaries and other involved parties that health travel to a foreign country is safe, accepted by plan participants, and won't cause more problems and costs upon return in order to save a few bucks.

And there's so much more to the expense than simply the price of the surgery, as you can see in the diagram below. I use this diagram to teach employers, unions, municipalities and TPAs about how medical tourism works:

Also, not everyone gets 13,000 calls after an advertising or advertorial campaign. If you believe they do, you are certifiably gullible.

But all that was pre-COVID. As the functionality designer of the world's leading medical travel coordination software, I can tell you with all reasonable certainty that cross border medical travel isn't progressing right now. With more than 1000 registered users of the system, utilization of the software to coordinate quotes, pricing, securely transfer medical records and images, collect deposits, process payments, arrange hotels, travel and follow up appointments is not happening as it did prior to COVID. People simply aren't traveling cross border to medical and dental appointments at the rates they once did, which were really not all that great.

If one publishes a "click baity" story and pays for syndicated appearances through a public relations firm, that one story appears to pop up all over the internet. It gives the unsophisticated reader an impression that this little anecdote of savings is happening worldwide. Culturally, some people simply want to believe what they hear and read in the media. They don't stop to critically analyze inferences, half truths, and "asterisked" pricing advertisements for surgery prices without mentioning all the other costs in the chart above.

Actuaries, underwriters and insurers are by nature, far more critical thinking oriented. For one thing, they write the checks. For another thing, they know the prices - the ones without the asterisks. They know who the "Mulligan" docs are that operate and then the patient ends up with complications or "do overs" in expensive joint replacement and other surgeries. They pay those claims too.

They also face the frustrations by the patient who self directs to a foreign, out of network, unvetted provider. When many of these patients return home, they encounter resistance from "INET" local community docs who refuse to accept them as patients for follow up care for fear of the risk of being blamed for any complications or clinical misadventures. These things matter. They frustrate case managers who must then find them appropriate care continuity to solve a problem that was created by the plan participant "gone rogue".

The case managers also come upon foreign providers who unlike US healthcare providers who must release medical records, won't release medical records of the care they provided. Why? In this business you learn quickly that many surgeons and hospitals abroad separate these cash pay cases and don't create a medical record or destroy it after the patient leaves. Unlike US laws, the facility or provider owns that record and is at liberty to dispose of it any way they like, restrict access, or disavow that the case ever happened. Why? Gray market for one... no record, no tax liability on the profits. If the "medical tourism facilitator" often trained (or worse, certified) by individuals and firms who are not themselves, experts, they don't know to contract for the medical records as part of the price of the procedure. So this critical item of responsibility is ignored or worse, mishandled.

So with all this complexity and moving parts, and the word "tourism" being used, third-party payers (employers, association plans, unions, and other group health buyers) are loathe to accept and implement a health travel benefit within their plan.

Enter "Patient Redirection" as a neologism of 2020

No, Maria Todd is not attempting to start a new term of art. This term is already in use.

It is a far more acceptable controlled, coordinated, optional choice that plan participants in a group health plan have. Lately, this option has been more frequently offered by or requested from TPAs that coordinate care, payment, and network participation options to self-funded employers, unions, associations, and other group health purchasers.

• Yes, it often involves out of area care - which in some benefit plans is not routinely covered or easily authorized. Sometimes there's reciprocity to a standard of vetting credentials, training, privileges, safety, quality, site visits, and more.

In one of the "Johnny Come Lately" networks based out of Phoenix that charges group health customers for PEPM network access to its tiny network of providers and then adds an additional 15% per case without disclosing the adulteration to the negotiated price set by the provider to its customers, inspections and verifications are not carried out. It says so in the contract.

So of what value is that network, really? Contract direct with the providers and save the PEPM and the 15% mark up!

• Yes, it involves travel by car or by air to a place that one does not usually reside for at least one overnight and less than one year. (The WTO's definition of the word "tourism"). Who will coordinate the travel for you? (The provider of the surgery at the destination where the patient is redirected has the best possibility of negotiating hotel rates for consistent utilization of the hotel for stays of 5-9 business days several times in a month.)
• Yes, it involves coordinating care, consultation, lab tests, images, prehab, rehab, and medical records transfers to make sure that the surgeon (and anesthesia team) has what they need to perform surgery with a reasonable expectation of patient safety and acceptable medical risks. (Do the case managers of the TPA or insurer or group health plan know the care and accommodation resources outside their usual local network? Are they trained in the altitude physiology issues to mitigate risks? Do they know which side of the aircraft to choose seats? Do they know the hotels available and their site plans, stairs, use of organic plants in rooms, carpets, trip hazards, etc.?)
• Yes, it involves coordinating aftercare and physical rehab or follow up progress visits via in-person or telehealth visits between patient and surgeon or dentist, with INET providers in the patients' home town, carved out of the surgical case rate that usually covers the day of surgery plus 89 days beyond without additional costs. (How will the overcome reticent physicians who won't care for returning patients?)
• Yes, it involves additional risk associated with altitude physiology and other travel risks that would not be present in INET local care to the same extent. (And if they arise, they are paid by the third-party payer or insurer.)
• Yes, it involves inspecting and vetting hotels, shuttles, and other component providers of the episode of care. (Who does this and by what checklist? Where are inspection data held and how frequently are they re-assessed?)
• Yes, it involves coordinating the care and travel and covering the costs of same through a per diem or an advance or by a limited expense, reimbursement only HRA program, or some other arrangement. But in most cases, the savings under a redirection program are so significant that payers are often supportive of waiving copayments and deductibles, paying in full, in advance, to save $20K or more on a surgery at the expense of air travel, gas and oil and tolls reimbursement, hotel stays and a per diem allowance for two people for meals at a total cost of around $1500-1800, all in; and
• Yes, it involves predictable, shoppable, transparent, bundled case prices from hand-picked surgeons and dentists who can succeed with a patient redirection program that couples telehealth introductory consultations, face-to-face consultations at the redirection destination, and shared risk for minor changes to the cost of care without being nickle and dime-y.

Redirection and plan administrator liability

The plan administrator of a group health benefit plan has three key fiduciary responsibilities, among others that are implicated in patient redirection. These include:

1. Saving trust dollars wherever possible.
2. Deciding in favor of the plan participant's best interests in the event of a conflict with the plan's best interests.
3. Choosing the best possible providers; not the cheapest providers.

How would one know that the providers are the best possible options if the network doesn't even inspect of verify anything and only focuses on price like the folks selling medical travel in Phoenix, Denver, and other cities? That would require the plan administrator or its contracted representative or designee to do that and also verify credentialing, privileging, accreditation, etc. Otherwise, the tort lawyers can come after the plan administrator for dereliction of duty, and ask for damages. Underwriters and actuaries think that through as well.

Then there's the "managed care" liability. What's that?

Ben Simons of Custom Assurance in South Carolina describes managed care liability this way:

“Managed care service” as “any services or activities performed in the administration or management of health care, consumer directed health care, behavioral health, prescription drug, dental, vision long or short term disability, automobile medical payment or workers compensation plans, whether provided on paper, in person, electronically, or in any other form and whether performed on behalf of the insured or by the insured for itself or on behalf of any other party for a fee.”

Professional liability insurance, also known as errors and omissions or E&O insurance covers negligence as it pertains to your professional services provided. Generally, although not always, it is a financial claim versus a physical claim of liability against the business.

With regard to medical travel, the E&O policy will cover the professional liability exposures you have directly in the performance of your services when you direct/assist clients to make healthcare decisions. There is a vicarious liability exposure associated with this as well.

Vicarious liability refers to a situation where someone is held responsible for the actions or omissions of another person. The managed care liability policy includes vicarious liability associated with medical malpractice of the providers. It can be expanded to pick up the vicarious liability you have when you use other third parties for services you provide. However, you would have to have these services specifically named in the definition of “managed care service” to broaden the current scope of coverage.

In health administration coursework, one learns about key case decisions and precedents that hold plan administrators or insurers liability for the "managed care" utilization management and network "steerage" (another word for redirection) that requires plan participants to avail of the services of some providers over others. There are several key legal constructs associated with this, namely:

• Ostensible liability
• Vicarious liability
• Restricted access to certain providers or facilities
• Negligent referral (which again brings me back to these new networks that don't take on the responsibility or cost to verify providers and just take their words for what they claim sans inspections or any credentials verification.

These plan design elements require patients and plan participants to follow administrative rules of the plans to get their best benefit levels in INET settings -- even if they cost more than going out of network ("ONET").

So, if the redirection is coordinated by the TPA or Plan administrator or its designee, the patients, now so institutionally beaten into compliance about remaining "in network" seem confused, reluctant to leave familiar providers, and go someplace that they are recommended by the company and afraid that the quality is at issue because the price is cheaper. And then, what if the redirection provider is not a full service hospital?

Redirection in the era of COVID19

In the age of COVID-19 patients are in pain, waiting patiently for their local hospitals to resume elective cases. Yet at the same time, the patients are TERRIFIED to have to go into a hospital, let alone stay overnight there. Many can't go in and have a significant other by their side, either.

I know what that feels like. I was alone in a Korean hospital for 9 days with an extremely contagious eye infection (epidemic kerato conjunctivitis, - hospital acquired, I might add). Alone, hardly anyone spoke English, the food was foreign, the coffee was "brown", the doctors smoked in the hospital, signs were in Hangul, and the hospital was JCI -accredited.

In Spain, I was admitted to a Spanish public university teaching hospital for 9 days at risk of a deadly case of pulmonary saddle embolism after traveling so much for my work in medical tourism developmental consulting.

Back then, I had a medical tourism network (a "globally integrated health delivery system?" for which I registered a new term of art with the USPTO in 2010). I also operated a limited scope TPA that consisted of 6000 hospitals, more than 850,000 surgeons and physicians, that spanned 106 countries, performed the credentialing and site inspections to US managed care standards, and performed international care coordination and case management for group health clients.

The complexity of patient redirection in the face of COVID - it's detailed and complex but not impossible.

There's a lot more coordination, testing, travel restrictions, distancing and quarantine to contend with in the redirection construct. One simply doesn't drive from Canada to Mexico and have surgery, or from Michigan or Florida or Texas or Los Angeles to some little town in rural America for surgery and drive back. Nor do they fly through several busy hub airports like ORD, LAX, SFO, DEN, IAH, DFW, LGA, EWR, DCA, SEA, CVG, ATL, MIA, MCO, or LAS and other hubs without risk of catching an asymptomatic pathogen.

• How does that all play out with COVID testing? When does it occur? Who pays?
• How far in advance does one arrive to have the PCR test at the redirection location?
• What if test results come up positive for the patient or their companion traveler? Do they go back home untreated?

I've had to deal with each of these issues in my current role as Director of Business Development at an ambulatory surgery center in St George Utah, because my role leads the medical tourism business development with consumers and the redirection programs with employers and TPAs. I have an internal team to support me. The cost of their salaries and overheads are built into my pricing. No surcharges. What it costs to deliver care is nobody's business but ours. But who sells robotic-assisted knee replacements in the USA for $14,990? or Anterior hip replacements for $17,990? We do!

Here's the rest of the price list for redirection programs through TPAs

Why should we join networks who add 15% to our website published prices, available to any group health program as long as they agree to our simple and transparent terms, and then have to answer the employers and purchasers why must pay network access fees per employee per month AND 15% more.

It's not my job to explain other business' models and profitability strategies. We. Don't. Care.

We do what we do. We do it well. We do it with honesty and integrity and value. We don't play reference based pricing games.

We price our services in a bundle, with transparency, and without asterisks. And unlike many hospitals and ASCs we invest in marketing and our surgeons give of their time and are willing to be directed - by me - to successfully grow the redirection business with our TPA partners. And to grow the consumer-directed cash pay program as well.

Our "medical tourism" program numbers speak for themselves in terms of:

• Program growth in the face of COVID
• Sustained, significantly lower (0.037% vs 2.6% hospital) infection rates
• TPA satisfaction
• Employer savings and quality satisfaction
• Patient/benefits satisfaction
• Surgeon satisfaction
• Staff satisfaction and pride, and
• ASC shareholder satisfaction.

I have a select group of surgeons in the program that cover 14 specialties and more than 450 transparent, bundled case prices. I must keep them as safe as possible. The surgical and front of the house staff as well. Around here, we work hard, we play hard and we are a family. The patients feel the warmth, the professionalism, and the brand culture we deliver.

To build the portfolio of TPA contracts and employers to what it is now (spanning two 4-inch thick binders) has taken more than 5 years. And I don't allow any network to add hidden upcharges to my fees. So we aren't in Sano, Bridge and others that require the liberty to do so. Why they don't wish to line item their surcharges is beyond my comprehension. Why they won't unequivocally authorize care or require their clients to do so is also curious, but hey. It's their right. It's their business. We just say "no" to those offers. And we require advance payment in full by ACH for the scheduled procedure. Why charge more just to wait for cash and have to deal with authorization problems? Where's the value proposition to the end payer in that?

So when people tell me about Oklahoma City being the first provider in the USA to offer bundled transparent pricing and U.S. medical tourism, I am amused. Been there, done that. I've been coordinating medical travel since 1979, and developing medical travel networks since 2005! Not many people in medical tourism can claim that.

Would you like to explore patient redirection program options?

Give me a call. 435-522-7260. It costs you nothing but your time to learn more. If there's a potential to help you save and not sacrifice quality or safety, we'll invite you here, host you, and show you what we offer, without obligation.

And before you get stuck on how we do it, let me share a tip with you that I share with my team. We don't cut quality or safety. We cannot. We cut waste. We have lower overheads than hospitals.

One of my consulting architects taught me when on a project to build a new hospital in Nigeria that to operate a hospital to today's standards and International Building Codes requires 300 gallons of fresh water/per bed/per day. That's whether the beds are occupied or not.

Hospitals have much richer employee benefits and they are staffed to operate around the clock. They have administrators paid in the millions in salary and bonuses.

They have more footfall traffic of visitors who come to the hospital sick - not just with COVID but with flu and other contagions. There's more to clean. Greater exposure for nosocomial infections.

People confined to hospitals these days miss their loved ones. Every minute in a hospital - inpatient or outpatient - exposes patients and their visitors to higher risks of infections and complications. They are happier out of the institutionalized environment.

Now add to the items I just mentioned above that the hospital is tacking on as much as 80% profit on outpatient surgery cases. To me, that's offensive. Our cost basis in an ASC is smaller. Our demeanor is friendlier, smaller, more intimate. Shorter halls to navigate, overnight stays are possible if medically necessary. We're licensed for it.

You won't pay those 15% upcharges or network access fees. We've negotiated shuttle and hotel discounts. Other businesses in the area include a coupon for savings in town. Our COVID numbers are low. Our redirection program is complete.