Tags

, , , , ,


Barron’s had a fascinating article this weekend about something called medical tourism. The basic idea as put forth in the article is that US insurance companies are slowly starting to encourage policy holders to go abroad for medical procedures. The costs are shockingly cheaper than the US. Barron’s said that the costs, including flying there with a companion, having a short stay and getting the procedure, could be half or even less than half the cost of the same procedure in the US.

The concept is a new one on me and I find it fascinating. The typical context along these lines in past blog posts has been, if you move to a foreign country what would you do for medical care? While I have no plans to move anywhere, there is something intellectually intriguing about living in New Zealand or Uruguay or the like. So the idea of medical service in another country is fascinating (repeated from above for emphasis).

The countries mentioned in the article were India, Thailand, Singapore and Panama, but really far more attention was given to India and Thailand. Without repeating the entire table of examples, a heart bypass procedure that Barron’s estimates at $70,000-$133,000 in the US would cost $7,000 in India, $22,000 in Thailand, $16,300 in Singapore and $10,500 in Panama.

The article did not really address quality of care in great detail and I do not know about this (anyone who does please comment on it) but in terms of financial consequence this is truly game changing. The motivation of the insurance companies for this is obvious, but if this sort of thing could generally put some sort of downward pressure on medical costs or slow down the rate of price inflation, then it could be a positive for the insured as well.

It also raises a question about what type of health insurance coverage to have. If you need a hip replacement, your insurance covers it and somehow the insurance company convinces you to go somewhere else, then fine; but if your insurance wouldn’t cover a hip replacement for whatever reason or you do not have insurance at all, then going to Singapore and paying $12,000 for the procedure, $2000 for airfare (the low end of the range for two people leaving from Phoenix) and maybe another $5000 for who knows what else adds up to less than $20,000 and becomes very doable even if you have to borrow every single nickel for the trip.

Flying to Panama looks to be close to $700 per person. Barron’s says a new hip would be $5500 there so the whole thing might not even be $10,000.

Obviously no one would prefer to go into debt for $19,000, or $10,000, but these are not ruinous amounts for anyone who needs to.

If the care is comparable, then living in New Zealand becomes a little easier (15 hour travel time to Singapore) assuming you can find and do not have to wait to see a primary care physician. Ditto Uruguay to Panama (coincidentally, also about 15 hours travel time).

This is an investable theme. Barron’s mentioned five stocks, four of which I was able to find US five letter designators for, but it you have any interest you need to verify that the symbols are accurate. From Thailand: Bumrungrad Hospital (I found two symbols, I don’t know which is correct: BUGGF and BUHPF), Dusit Medical Services (again, I found two symbols and don’t know which one is correct: BDULF and BDUUF). From Singapore: Parkway Holdings (PKWHF and PKWXY, I don’t know if the ADR symbol is active) and Raffles Medical (RAFLF).

This was the first I’ve heard of this theme and it is interesting on some level. If this a viable investment theme then it becomes a way to access certain countries via the healthcare sector and there might even be more stocks and countries than the ones listed. Parkway Holdings has a 0.42% weight in the SPDR International Healthcare ETF (IRY) with none of the other stocks included. The WisdomTree International Health (DBR) doesn’t own any of them and neither does the iShares Global Healthcare ETF (IXJ).

If the quality of the healthcare does not stand up, then there is diminished utility from a personal finance standpoint but the article implied the motivation in these places for this to work is very strong. More learning is required, but for now, how about exercising more and drinking less soda?