IEEE Spectrum: An eBay for offshoring healthcare

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An eBay for offshoring healthcare

POSTED BY: Tekla Perry // Fri, June 13, 2008

Yesterday, I blogged about some of the great ideas presented at this weekâ¿¿s Launch Silicon Valley. But one idea pitched gave me the shudders. Not that it wouldn't necessarily work as a business, but itâ¿¿s got problems, and it says something about the nature of our countryâ¿¿s health care system that itâ¿¿s even being talked about.

The company, a Silicon Valley startup tagged PreviMed, is offering what company founder Atul Salgaonkar characterized as a sort of eBay for offshoring of health care. The company has picked a market segmentâ¿¿necessary, but not urgent, medical procedures. It has started identifying internationally certified hospitals around the world that do such procedures. And it is looking to make deals with insurance companies and employers. The idea, as I understood it, is that a patient that needs a procedure, say, a knee operation, releases information about his case to Previmed, which posts it on a secure web site. Overseas medical institutions bid for the job, submitting treatment plans and prices. Someone (it wasnâ¿¿t clear if that someone is the patient or the insurance company) selects a winning bid.

Previmed, like eBay, gets a percentage of the total fees paid. The insurance company saves a lot of money. The patient, potentially saves some money, I guess, perhaps having to make a lower copay, or paying lower insurance rates by agreeing to the system.

But then, what, the patient is sitting on a plane, traveling alone to a foreign hospital? Iâ¿¿m assuming the package covers the patientâ¿¿s travel expenses, but what about the family and friends that would normally support someone undergoing a medical procedure? Somehow, I think those travel expenses arenâ¿¿t covered.

The customer for this service, Salgaonkar made clear, is the insurance companies. And I guess thatâ¿¿s why it creeps me out. I remember at one point struggling to find an in-network OB that I felt comfortable with, annoyed with my insurance companies for limiting my choices. But this boggles the mind. I sat listening to the presentation, imagining my insurance company saying, no problem, go ahead and have that surgery, hereâ¿¿s your plane ticket.

I donâ¿¿t think so.

Photo credit: picsfrmbkk

TAGS: Silicon Valley // entrepreneurs // healthcare

Atul Salgaonkar 07.13.2008
As the founder of PreviMed, I am really surprised with this post as some key facts are left out and gives the reader an unfair portrayal. Tekla, I wish you, or someone else from your team, had connected with us before posting, just so we could share with you what we are doing and how it is soooo different from what your post conveys. Health related international travel (aka medical tourism) is not a fad but a strong, growing trend - especially for US patients getting treated overseas. We all would like to get major medical treatment in our home town, surrounded by friends and family. For many people, this is just not possible, primarily because of the costs involved and these folks have to travel overseas if they want to get better. Their only other choice, as we clearly showed, is not to get any treatment at all and just to live with the diagnosed discomfort/pain. Currently, these patients are subject to - not always but many times - slick misleading presentations from slimy sales agents. Patients, wanting to resolve the pain, frequently accept the contract without many other characterizing facts and with price as the only factor. PreviMed changes this in favor of the patient by giving multiple (and multi-dimensional) options; For instance, a patient in US may get a lower priced bid from a hospital in Asia or Eastern Europe but may choose a higher priced bid from a qualified Latin American hospital because of shorter flights or comfort with the Spanish language etc. Of course, patient makes this decision and with specific details so that their home physician can be consulted before the choice is made. An important differentiator for PreviMed is that we work only with internationally accredited hospitals (painstakingly reseached and certified to be world-class). Also, we focus only on non-cosmetic, medically required procedures. PreviMed's business-to-business focus is also based on our patient-centric values; Our research has confirmed that this will provide better continuity-of-care and post-surgery follow thru. For these reasons, PreviMed engages only through self-insured businesses and insurance companies. PreviMed's vision has been appreciated by many patient advocates and we have been credited for bringing the transparency to this overall process. We have also received kudos from many because PreviMed's business model is straightforward and unconflicted (not paid by the overseas hospitals). By the way, while our focus is NOT on costs alone, for almost all patients the cost savings are so enormous that the typical offer will typically accomodate a travelling family member and door-to-door conceirge and other patient-centered services - the facilties overseas are also wanting to build a great reputation. For years now, we, as members, have read IEEE Spectrum cover-to-cover at the first chance and have always appreciated its broad range. I hope that I have contributed to the value of your post. .

Marv Gozum, IEEE Member 06.25.2008
Healthcare is highly skill driven, as well as technology. While a majority of issues can be script driven by a book and patients preselected for best out-of-country outcome potential, a minority of unpredictable 'complicating' issues may occur, and only high technology and experience to use it can insure survival or good outcome. Eventually, such complications can appear in these offshore hospitals, and even if the numbers are well within established risk for any procedure, just a few body bags returning after such an adventure in a foreign land will open eyes. One should ponder if saving the insurance company a buck is worth your one life or a limb, but heck, you at least have [usually] 2 limbs, and 20 digits to risk. The US version of such a system are 'surgicenters', lower overhead cost units that allow low risk procedures to be done in settings were high-cost facilities: ICU and its associated machinery, are absent. However, their fall back is in misdaventure, these surgicenters can always ambulance the unlucky to the nearest medical center, and worst still, to further fall back on tertiary or quaternary institutions, all within minutes of a heli-vac ride away, versus a 12 hr + airplane ride back to the USA. The driving force to offshore procedures is that many hospitals in the developing world, the off shore surgeons may be highly skilled due to the volume of cases they do paralleled by their overpopulations, and may have better or equal outcome to those in the developed world. Sure, cataract surgery is like pulling teeth, until your retina detaches, sure knee replacement surgery is like getting dental implants, until you get osteomyelitis or an uncontrolled deep vein thrombosis. Caveat emptor..

Tom 06.13.2008
The UK health care system now sends patients abroad for operations, I think mainly to India. The system is strapped for money, so this enables more people to have needed but not urgent surgeries -- like knee surgeries -- more quickly. That is under national health insurance. I've also read that some S California health care providers, who serve largely Hispanic health care users, offer cheaper insurance for those willing to be treated for certain conditions in Mexico. Costs have to be reduced somehow. This is coming. And outsourced Indian health care, so far, is pretty good. Let's see if someone does a study on trends to offshoring health care. Tom.