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Will U.S. law hurt tourism?

From the print edition

When the U.S. Supreme Court upheld the country’s health care reform law last week, Costa Rica’s private medical sector paid close attention. 

The Affordable Care Act, known colloquially as “Obamacare,” will extend health insurance to approximately 40 million uninsured U.S. citizens.

The Supreme Court decision could hamper the growing global medical tourism industry, a key tourist market in Costa Rica. According to the Council for International Promotion of Costa Rica Medicine (PROMED), in 2010, the country counted 36,000 medical tourists, who generated $288 million in revenue. 

Numbers have not yet been announced for 2011. But PROMED estimates 12 percent growth, putting the number at 40,000 tourists. At a medical tourism conference in April, organizers predicated the industry could begin attracting 100,000 medical tourists by 2013.

Health officials acknowledged those estimates might need to be tempered with U.S. health care reform a reality. Barring a repeal of the law by Republican lawmakers, the full extent of the reforms will go into effect on Jan. 1, 2014.

The medical tourism industry’s philosophy centers on providing quality care that’s more cost-efficient because it’s received outside the United States. But with more citizens obtaining insurance, health care in the U.S. becomes more affordable.

However, the law will not cover certain popular medical tourism procedures, including elective surgeries and dental care. Dental treatments represent almost 40 percent of medical tourism, while plastic surgery represents another large percentage. 

At the same time, medical tourism promoters have been researching ways to provide care for procedures often covered by insurance.

One initiative that is gaining traction is corporate tourism. The program negotiates with health insurance companies working with other private companies to create deals where employees travel abroad for treatment. 

“If we see health care reform possibly reducing the individual market for medical travel, we could have a huge opportunity for corporate buyers for health care,” PROMED Executive Director Massimo Manzi said.

While “Obamacare” might cause individual tourist numbers to stagnate, businesses still have the potential to bring planeloads of tourists down for treatments. The key to convince companies and their employees to receive treatment in Costa Rica is to provide incentives, said Bob Repke, president of Global Medical Conexions, a corporate medical tourism facilitator. 

Repke has spoken on the law at medical tourism conferences in Costa Rica. The June 28 Supreme Court ruling is fresh, and he and the rest of the industry haven’t had time yet to digest the law, which has more than 2,000 pages. However, he insists medical tourism promoters should see many positives in the outcome.

“We’ve been seeing an increase in medical travel in the last five years, and we still haven’t penetrated the market fully,” Repke said, adding that opportunities also include markets in the Caribbean and the rest of Latin America.

Besides corporate tourism, another boost could come from those who are impatient with the new system. In Canada, a country with universal health care, patients can wait up to two years to receive non-life-threatening procedures, such as knee or hip replacements. Patients could choose to receive surgery faster in Costa Rica. 

Repke said those same long lines will form in the U.S., except in larger numbers. Plus, medical tourism’s reputation has strengthened over the years, and Repke believes in the future more foreigners will take interest in the idea.

Doctors are realistic that certain sectors of medical tourism will see drops in patients due to the reform. 

Dr. Luis Wachong, director of the private medical facility Clínica UNIBE, in northeastern San José, said 90 percent of tourists who come to the hospital are there for cosmetic surgeries. The other 10 percent come for general surgeries, neurological procedures and orthopedics. The latter treatments likely would be covered by health insurance plans under the new law, resulting in a slump in business in that area. 

Cosmetic surgery could face challenges in the future, too. As other medical tourism destinations rush to promote procedures not covered by insurance policies, Costa Rica will need to stay ahead of other Latin American rivals. 

“In plastic surgery, there’s no insurance to cover that, so probably this market will continue to grow,” Wachong said. “And our competition is not in any way ‘Obamacare’; it would be the other countries.” 

But Wachong and other medical officials believe, at the moment, Costa Rica has the edge against its competitors. Costa Rica has long been the go-to destination for medical tourism in the region, unlike emerging markets in Colombia and Panama. Mexico, another medical tourism leader, must keep on combating a negative image brought on by the drug war.

Furthermore, proximity to the U.S. gives Costa Rica a natural advantage. Few U.S. patients will choose to fly all day to medical tourism hotbeds Thailand and Singapore when most uninsured procedures – such as dental treatment – are short and simple and can be carried out after a quick flight to Central America.

PROMED’s Manzi also is relieved that in the last few years, medical tourism has received positive attention in the mainstream. More foreigners are aware medical tourism exists, even if less patients might consider the option after the reform. 

He pointed to a recent New Yorker article called “Affordable Health Care in Thailand and Costa Rica.” The item mentioned the possibility of receiving a hip replacement at Costa Rica’s well-regarded CIMA Hospital for a sixth of the cost than what the operation costs in the U.S. 

That same story related an anecdote – and perhaps a warning – about the sudden vanguard of medical tourism: corporate tourism. In addition to logistics and making sure procedures go well, the greatest obstacle appears to be convincing patients they want to travel abroad in the first place.

 For example, in 2008, U.S. supermarket chain Hannaford set up a program for its workers to receive treatment at a renowned – and cheaper – hospital in Singapore. Hannaford’s employees chose not to try out the enticement, the New Yorker wrote.

Manzi trusts that it will be easier to sway corporate employees to visit Costa Rica instead of Southeast Asia, but to make the endeavor a success he hopes to receive help from the Costa Rican government. 

PROMED is working to create a centralized database on medical tourism patients by surveying facilities throughout the Central Valley and the northwestern province of Guanacaste. Manzi wants the government to assist in turning the hard data into a medical tourism advertising campaign designed for the U.S. market. 

The Costa Rican government announced at a recent business conference that medical tourism is one of its top priorities. Since the Affordable Care Act passed the U.S. Congress, Costa Rican medical tourism officials have done the legwork. They’ve been talking to insurance companies, working with facilitators and negotiating with major employers. But without a strong tourism campaign, Costa Rica might lose its eminence as perhaps the most favored destinations for U.S. medical tourists.

“Even if you convince the company, you still always have to convince the patients,” Manzi said. “And that is possibly the missing piece.”

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