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Traveling afar to cut surgery costs

About 150,000 Americans seeking cheaper care joined the millions heading overseas for business or pleasure last year. Instead of an office or beach, they headed to the operating room for hip replacement or heart surgery.

By SmartMoney

When she was diagnosed with a fibroid tumor last year, Kathleen Dodds found herself in a bind. She didn't have health insurance because she couldn't afford it. With no insurance, the surgery she needed was prohibitively expensive.

"They were quoting me $30,000, tentatively, paid out of pocket," says Dodds, 42, a Portland, Ore., horse trainer. "There was no way I could afford it here."

Instead, Dodds found an affordable solution 7,200 miles away in India. Through IndUSHealth, a company in Raleigh, N.C., that arranges medical care in India for U.S. citizens, Dodds flew out to the Apollo hospital in Delhi, where she had a successful hysterectomy that allowed her to return to her horseback-riding students just two and a half weeks later.

The total cost: just under $10,000, including round-trip airfare, transportation to and from the hospital, a one-week hospital stay where she says she was treated with more care and attention than she had ever experienced in the U.S., capped by 10 days at a "gorgeous hotel."

"It was actually a pleasant situation, considering that I was having major surgery," she says. "That, and I don't like Indian food, which was kind of hard for me."

Affordable care overseas

As medical costs soar in the U.S., the number of uninsured has swelled, exceeding 46 million, or nearly 16% of Americans, according to 2006 Census Bureau statistics. As a result, more and more folks are choosing what's known as medical tourism and heading overseas for surgeries and dental treatments they couldn't otherwise afford.

In 2006 alone, an estimated 150,000 Americans traveled abroad for medical care, a number expected to double by next year, according to Josef Woodman, the author of "Patients Beyond Borders: Everybody's Guide to Affordable, World-Class Medical Tourism." Nearly half of those -- around 70,000 -- had medically necessary surgeries such as hip replacements or spinal work, heart surgeries including bypass or valve replacements, and even cancer treatments.

Though plastic surgery and dental procedures aren't to be ignored (an estimated 40,000 Americans journeyed to Mexico in 2006 to get dental treatment, Woodman says) medically necessary surgeries are the procedures saving patients the most money. Depending on the type of procedure and which country you go to, you could expect to save between 15% and 85%, Woodman says. A hip replacement, for example -- one of the most common surgeries sought abroad -- would typically cost $60,000 to $70,000 in the U.S. but just $15,000 in India, all costs included.

It's savings that even state officials and insurance companies are noticing. This year, bills have been introduced in two states, Colorado and West Virginia, that would require the insurance companies for state employees to cover medical procedures in overseas hospitals, including travel expenses and hotel stays for the patient and a travel companion. (It's not exactly a vacation, but a hotel stay for recuperation is almost always necessary.)

What's more, these bills mandate that the insurers give patients an incentive for choosing the less-expensive overseas treatment by passing along 20% of the cost savings to the patient. The remaining 80% savings is to be deposited in an account used to reduce health premiums for all covered employees, says Ray Canterbury, one of 10 sponsors of the bill in the West Virginia House of Delegates.

"The reason we introduced this bill is rising health-care costs," he says. "It's an effort to put pressure on domestic health-care companies, to put more pressure on prices."

The number of foreign hospitals seeking accreditation from the Joint Commission International -- which basically declares a hospital has standards very similar to those in the U.S. -- has increased tremendously since the commission was founded in 1999. Currently, 120 hospitals have JCI accreditation, with the majority having received it in the past three or four years, according to Dr. David Jaimovich, the commission's chief medical officer.

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Meanwhile in the U.S., business is booming for medical travel agencies, which act as middlemen between patients and hospitals, from helping you choose the best hospital and making travel arrangements, to gathering and sending your health records overseas and acting as a health concierge -- picking you up at an airport, visiting you in the hospital and so forth.

At PlanetHospital, a medical travel agency that's been in business since September 2005, sales have doubled every month, says Rudy Rupak, the company's founder. "We get close to 200 phone calls a day," he says. Typically, between 7% and 10% of these turn into sales.

But medical agents aren't just aiming at individual travelers. Rupak, for example, is in talks with two insurance companies about adding policies to their plans that would reimburse patients only up to the cost of the treatment overseas. (He won't disclose the names of the companies but says they are "major insurance providers.") Say, for example, you need knee surgery that costs $10,000 overseas, including travel expenses for you and a companion. Your insurer would tell you that you could either have surgery in India and get fully reimbursed, or have surgery here in the U.S., but get reimbursed only $10,000. You'd have to pay the rest, amounting to thousands of dollars, out of pocket.

Continued: 'Remember, you're not going on vacation'

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