May 2012

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The Three S’s of Differentiation That DriveSelf-Insured Employers to

Offshore Their Employees’Surgical Care

2 May 2012 | The Self-Insurer © Self-Insurers’ Publishing Corp. All rights reserved.

by David Boucher, MPH, FACHEPresident & COO, Companion Global Healthcareby David Boucher, MPH, FACHEPresident & COO, Companion Global Healthcare

The Three S’s of Differentiation That DriveSelf-Insured Employers to

Offshore Their Employees’Surgical Care

© Self-Insurers’ Publishing Corp. All rights reserved. The Self-Insurer | May 2012 3

Safety, Service, and Savings have and will continue to compel some American employers to consider amending their

benefitplanstoofferemployeeincentives to direct care abroad. These three S’s will increasingly be considered by more employers and in this order.

ConsiderSafetyfirst.TheInstituteof Medicine (IOM) report of 2000 entitled, “To Err is human”, suggested that 44,000-98,000 patients die in u.S. hospitals each year as result of patient safety. The authors offered that the goal was to cut number in halfinfiveyears.Nineyearslater,itwas reported that the death toll from medical injury approached 200,000 a year – the number of hospital-related deaths actually doubled rather than halved (hearst News, 2009)! This is equivalent to having more than one fully-loaded 747 crash each day of the year! To compare, there are approximately 130,000 deaths annually fromautomobileaccidentsfirearms,poisoning, and falls combined. It has been estimated that every hour, 10 people die nationwide in hospitals due to avoidable errors; another 50 are disabled. The leading cause of death in u.S. hospitals, sepsis, along with pneumonia, killed 48,000 patients and cost $8.1 billion in 2006 (reuters, 2/22/2010). The Agency for healthcare research and Quality (AhrQ) noted in 2008 that preventable medical injuries grow by 1% each year.

Onefinalalarm,theJanuary6,2012New York Times published an article indicating that most errors at American hospitalsgounreported.Specifically,“hospital employees recognize and report only one out of seven errors, accidents, and other events that harm Medicare patients while they are hospitalized, federal investigators say in a new report.” Obviously, this makesitdifficulttomeasurethesafety

inourhospitals.Andifsafetyisdifficulttomeasure,itwillbedifficulttoimprove.The list goes on and on, but you get the picture. I was reminded on much of this information by John Sena, Ph.D., professor at Ohio State university, at a recent American College of healthcare Executives (AChE) seminar. The other attendees at the seminar were hospital executives from about 50 other facilities, so the message for improved safety is being delivered by responsible organizations like the AChE.

To be fair, there are currently several initiatives underway and several others available directed at abating these trends. The united States Department of hhS launched $1 billion safety initiative in 2011- hoping to save 60,000 lives over three years and save $50 million in Medicare costs over next decade. The AhrQ has suggested a host of recommendations such as implementing reliable decision-support tools at point of care like computerized physician order entry (CPOE) in hospitals. The San Francisco Chronicle reported in 2009 that efforts to reduce interruptions for nurses handing out medications resulted in an 88% drop in errors at nine San Francisco Bay area hospitals.

Might we consider implementing several of the recommendations from the decade-old “To Err is human” report?

We may be surprised at what the experts are saying is occurring in the delivery of medical care on the international front. Dr. Arnold Milstein, Professor of Medicine and Director of the Clinical Excellence research Center at Stanford university, is quoted in the October, 2006 New England Journal of Medicine as, “We doubt, however, that the average u.S. hospital can offer better outcomes for common complex operations such as coronary-artery bypass grafting (CABg), for which several JCI-accredited offshore hospitals report gross mortality rates of less than 1%.” harvard Medical School trained and former Administrator of the Centers for

4 May 2012 | The Self-Insurer © Self-Insurers’ Publishing Corp. All rights reserved.

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Medicare & Medicaid Services (CMS), Donald Berwick, MD was highlighted in the January 24, 2011 Business Week magazine for noting that, “It is politically correct, and widely believed, to say American health care is the best in the world. It is not.”

The next “S” is that of Service. Although there are pockets of stellar customer service available in America (i.e., les Schwab tires & ritz Carlton hotels), most of us who have travelled to Asia recently have experienced a level of service barely thinkable since we have become so accustomed to the mediocrity offered by so many domestic service organizations. Most Americans can recall, but try to forget, their most recent domestic air travel experience or hospital engagement.

But,afterflyingonthemajesticThai or Malaysian Airlines imagine being met at the end of the jet ramp

by your personal concierge at the new international airport in Bangkok, Thailand, then transported in an air-conditioned sedan by an English-speaking driver to Bumrungrad International’s 5-star hotel and 7-star Joint Commission accredited hospital. Bumrungrad’s medical staff is comprised of over 200 u.S. board-certifiedphysiciansallofwhomspeakperfect English. Many of the top tier medical centers engaged in medical travel boast nurse to patient ratios nearly double that here in America. It seems like nanoseconds for a pleasant nurse to respond once you have signaled the nurse call systems at Bumrungrad, Sime Darby Medical Center in Malaysia, or Anadolu Medical Center in Istanbul. The Orient Express is another brand that might be included in the list of exemplary service organizations above. Indulge yourself.

Better yet, indulge your employees.

The third “S” in the triumvirate acronym represents the incredible financialSavingsthatcanbeobtained.Imagine that as a self-insured employer you could reduce your medical spend by $80,000 on a single CABg, $40,000 on a single knee or hip replacement, or $15,000 on a hernia repair. And these prices include travel and lodging. So while international medical travel may not be the answer to self-insured employers escalating medical trend, it is quickly becoming part of the answer.

The value proposition of medical and surgical care abroad has become toosignificantoverthepastseveralyears to ignore. That is, the quality and safety of care at a much lower price is a big number…and growing. The actions by self-insured employers such as lowes and Pepsico in directing their members’ care to the Cleveland Clinic and Johns hopkins, respectively is a signaling iterativefirststeptothefuture.WhatifPepsico could purchase the same care at aJohnsHopkinsaffiliated,JCI-accreditedhospital in Istanbul, Kuala lumpur, or Panama City for 70-80% lower cost? They can today! n

David Boucher currently serves as President and Chief Operating Officer of Companion Global Healthcare, Inc. which is a wholly-owned subsidiary of BlueCross BlueShield South Carolina. In this capacity, he is responsible for Companion Global Healthcare as well as complementary and alternative health programs for BlueCross. Since 2006, David has examined first hand the best practices in hospital care in over 20 countries.