Heading to Belgium to Save More Than a Few (Healthcare) Bucks

August 6th, 2013
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What does that tell us about consumerism in healthcare?
Reading Sunday’s New York Times article, “For Medical Tourists, A Simple Math,” I was struck both by the reporting of drastic price differences between surgical procedures here and in Europe (Belgium, in this case) and the subsequent interest the article generated. Upon reviewing comments from readers, I noticed that most indicated that they were more than willing to travel overseas to find high quality – but cheaper – health services. And, in general, there was much broader interest in health service costs than in the past. I got the distinct impression that customers are “tuned in.”
 
We’ve discussed the evolving role of patients as consumers, and clearly prices may start to become transparent (or at least comparable) enough for true consumer market power to chip away at healthcare costs. The article profiles an American who compared hip replacement surgery options in Belgium and the United States: Belgium won the contest with a cost of $13,660, versus $78,000 on this side of the Atlantic. At that differential, and with rising co-pays and self-insurance, many among us would be willing to catch a flight across the ocean.
 
Not only is this price difference self evidently enormous, but it reflects a realization among patients and practitioners that more money does not equal better healthcare. As a recent National Research Council report pointed out, the United States may be first in healthcare costs, but it ranks 17th in terms of life expectancy, adverse events in pregnancy, and obesity and heart disease (behind such countries as Japan, Switzerland, the UK, Germany and the Netherlands — Belgium was not part of the report). This mismatch between outcomes and costs is finally forcing — and allowing – patients to act like consumers and ask: “Just what am I paying for?”
 

 
It is asking this question and striving to answer it that will inevitably lead to greater consumer power in the area of healthcare costs and services.
While the specific Belgian model of government price control will probably not be accepted in the U.S., device manufacturers, physicians and surgeons, and hospitals will have to start considering new market forces when determining prices. The Center for Medicare/Medicaid Services recently issued price comparisons for various procedures in U.S. cities, and public pension funds like CalPERS have successfully negotiated to reduce prices and fees of devices and procedures. Even in my home town of Sarasota, Florida, I drive by billboards offering reduced prices for MRIs, mammograms, and other procedures. While healthcare costs are still far from transparent, we are certainly starting to see just how “flexible” prices have become.
 
Consumers always have been interested in knowing what things cost. Armed with a better understanding of the components of  service pricing, they will make their own judgments about value and they will start making trade-offs. I’m personally excited by this; whether this new “deconstruction” of healthcare comes about from destruction of existing and accepted paradigms, or “reconstructing” existing systems, or a series of evolutionary innovations, however, remains a big unknown.
 
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About the Author:

I founded Popper and Company with Ken Walz more than ten years ago to address inefficiencies in health care by helping life science companies develop and commercialize new technology. Today, the members of our growing team leverage their extensive knowledge of the tools and trends shaping all aspects of health care and its participants. Send me an email.

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