Oct. 18, 2006 -- Dismayed by high surgical costs in the U.S., increasing numbers of American patients are packing their bags to have necessary surgery performed in countries such as India, Thailand, and Singapore.

"This is not what is sometimes snootily referred to as 'medical tourism,' in which people go abroad for elective plastic surgery," says Mark D. Smith, MD, MBA, president and chief executive officer of the California HealthCare Foundation in Oakland.

Today's "medical refugees," the term Smith uses in an article published in the Oct. 19 issue of The New England Journal of Medicine, are going to foreign countries for lifesaving procedures such as coronary bypass surgery and heart valve replacement, and also life-enhancing procedures such as hip and knee replacement knee replacement.

"People are desperate," Smith tells WebMD. "This illustrates the growing unaffordability of the U.S. health care system, even to people who are by no means indigent."

The report by Smith and his colleague, Arnold Milstein, MD, MPH, documents the case of a self-employed carpenter who couldn't afford private health insurance and would have faced financial ruin if he had surgery in the U.S. It also shows how some insured workers are being steered toward receiving less-expensive procedures outside the U.S.

Indian Hospitals Booming

Vishal Bali, chief executive officer of the Wockhardt Hospitals Group in Mumbai, India, says there has been a 45% increase in the number of American patients seeking care at his 10 Indian hospitals during the past two years.

"Cost is a major factor," Bali tells WebMD. Some examples: Wockhardt Hospitals usually charge $6,000-$8,000 for coronary bypass surgery, $6,500 for a joint replacement, and $6,500 for a hip resurfacing, which represent a small fraction of the typical costs at U.S. hospitals.

"Another major factor is what we call 'the Indian advantage,'" Bali says. "At some point, most American patients have been treated by an Indian physician in the United States and they have tremendous faith in Indian clinicians."

Partly because of the influx of foreign patients, not all of them American, Bali plans to open 10 new hospitals in India during the next two to three years.

Safety Concerns May Be Overblown

"Our American patients don't just pack their bags and fly to India," Bali says. "They have multiple conversations with patient coordinators and clinicians, many of whom have been trained in the U.S. and have American board certifications."

All Wockhardt Hospitals are accredited by the international affiliate of the Joint Commission on Accreditation of Healthcare Organizations, the group which accredits U.S. hospitals, Bali says. More than 80 hospitals in India, Thailand, Singapore, China, Saudi Arabia, and other countries have received this accreditation, according to the new report.

"These institutions are reporting gross mortality rates of less than 1%," Smith says. "I'm unaware of any evidence that surgery at these institutions is less safe or of lower quality than that in the average American institution, and there's some reason to believe it may be better."

"The downside, however, is that if you are harmed in an Indian hospital, you have less legal recourse than if you harmed at an American hospital," Smith says.

To compete with less-expensive offshore hospitals, the U.S. hospitals should do more to reduce costs, improve efficiency, and increase quality, Smith says. "Regrettably, I fear that some people's response to the offshore trend may be to moan and groan and try to shut it down or engage in scaremongering about quality."

A Sign of Globalization

"This trend shows that the world is flattening," Smith says. "We're no longer just outsourcing back-office functions such as the reading of X-rays, medical transcription, and billing. Now it's the actual clinical care that can be outsourced."

The report concludes that the trend is a "symptom of, not a solution to" America's affordability crisis. "I'm not suggesting it'll ever be the main way people get surgery," Smith says. "But it certainly is a wake-up call. If the cost of surgery continues to go up, particularly in settings where there's no relationship between cost and quality, this trend will continue."

Bali believes the trend represents a sea change in global health care economics. "This is only the beginning," he says. "This trend is not going to reverse. It's as strong a trend as the outsourcing of information technology because it is advantageous for patients."

Although most of Wockhardt Hospitals' American patients are uninsured, Bali predicts that will change. "Insurance companies are looking at this trend, their own viability, and the need to save money," he says. "They're telling patients that there are international destinations where they can be treated, which may mean paying much lower premiums than they're paying to receive treatment in the U.S."

A Call for Reform

"The need for American citizens to go abroad for care -- and their willingness to do so - represents a crushing indictment of numerous myths about the U.S. health care system that have gained popular currency in recent years," says Peter Budetti, MD, JD, chairman of the department of health administration and policy at the University of Oklahoma Health Sciences Center. Budetti was not involved in the report.

Budetti says the report dispels the myths that "foreign systems of universal coverage are so flawed that people in those countries who can afford to do so flock to the U.S. for care; that our health care is the best in the world; that everyone in the U.S. will get the care they need whether they can afford to pay for it or not; and, most telling, that increased consumer cost-sharing will reduce cosmetic or other nonessential care, not medically necessary care.

"The profound irony of these myths is a sad commentary on the state of our health care coverage and delivery system," Budetti tells WebMD. "The understandable focus in the past decade or so on improving quality and promoting patient safety may have played a role in distracting us from paying sufficient attention to growing problems with access and equity. Perhaps the emerging sight of Middle America traveling thousands of miles for medical care will spur new attention to the need for universal coverage with adequate benefits in this country."