This document discusses the potential for using medical tourism to lower costs for workers' compensation cases in the United States. It notes that medical costs make up a large portion of workers' compensation claims and can be significantly lower when procedures are obtained overseas. While some legal barriers around state licensing laws and regulations exist, the document reviews case law that suggests courts have allowed limited medical tourism for workers' compensation claims when it provides cost savings. The author concludes there is reason to further implement medical tourism for workers' compensation given evidence of quality care and lower prices abroad.

1. Implementing Medical Tourism
for
Workers’ Compensation
What are the Legal Barriers?
Richard Krasner
HSA 6425
Health Law
April 14, 2011

2. Medical Tourism
 A rapidly emerging segment of global healthcare
industry
 Motivated by desire to seek lower cost health care, avoid
long wait times, or provide services not available in one’s
own country
 Many foreign hospitals affiliated with U.S. medical
schools such as Harvard Medical School
 Estimated 500,000 Americans traveled abroad for
treatment in 2005

3. Medical Tourism and Health Care
 Trade-off for consumers, allows them to opt-out of increased
regulation in favor of looser restrictions and greater cost
savings
 Cardiac surgery
India = $4,000; U.S. = $30,000
 Partial hip replacement
Argentina, Singapore or Thailand = $8,000 - $12,000;
U.S. = $16,000 – $24,000
 Knee replacement
Singapore and India = $18,000 and $12,000; U.S. = $30,000

4. Medical Tourism and Health Care,
continued
 Cost savings more likely benefit those with inadequate
health coverage
 Lower-middle-class will benefit from medical tourism
 Disproportionately benefits uninsured or under-insured
 Self-insured & private insurance companies have
integrated medical tourism
 Large HMO’s and health insurance companies
established plans

5. Workers’ Compensation and the
legal barriers to Medical Tourism
 Average WC medical cost per lost time claim was
$260,000 in 2008 (6% increase from 2007)
 Medical costs in 2008 were 58% of all total claims
 40% of WC costs are associated with medical and
rehabilitative treatment
 In 1980’s & 1990’s, medical costs fluctuated, rose in
2000’s, and totaled $41.7 billion annually (as of 2002)

6. Comparison of Costs for Common
Workers’ Compensation Procedures
U.S. U.S.
Procedure Retail Price* Insurers’ Cost* India** Thailand** Singapore**
Hip Replacement $75,000 $31,485 $9,000 $12,000 $12,000
Knee Replacement $69,000 $30,358 $8,500 $10,000 $13,000
Spinal fusion $108,127 $43,576 $5,500 $7,000 $9,000
*Retail and insurer costs are mid-point between high and low ranges.
**U.S. rates include one day hospitalization; international rates include airfare, hospital and
hotel.
Source: (Herrick, 2007)

7. Legal Barriers
State WC laws – CA, FL, NY, TX – Medical providers
must be licensed in state to practice medicine
Federal & State laws intended to protect consumers,
instead increase costs and reduce convenience
Federal & State regulations restrict public providers
from outsourcing certain medical procedures
Federal STARK laws inhibit collaboration
State licensing laws prevent certain medical tasks
being performed by providers in other countries

8. Workers’ Compensation Case Law
& Medical Tourism
State Compensation Insurance Fund v. Workers’ Comp. Appeals
Bd. (1977)
 Mexican worker fell from ladder; treated in Tijuana; WCAB
ordered reimbursement.
 SCIF petitioned – MD’s not licensed under CA law.
CT of Appeals affirmed award of WCAB; CA Lab Code does
not exclude physicians licensed to practice in another
country.

9. Workers’ Compensation Case Law
& Medical Tourism
Braewood Convalescence Hospital et al. v. Workers’ Comp.
Appeals Bd. (1983)
 Domestic Medical Tourism; cook slipped and fell; told to
lose weight; went to obesity clinic 3000 mi from home.
WCJ awarded temp disability prior to going to clinic
WCAB granted reconsideration, affirmed WCJ’s award
Employer appealed
Sup. Ct., CA affirmed award of WCJ for reimbursement for
all costs and future costs.

10. Workers’ Compensation Case Law
& Medical Tourism
 AMS Staff Leasing, Inc. v. Arreola (2008)
 Undocumented Mexican worker in FL struck in rt. leg; had 12
surgeries
 Seen by Dallas orthopedist, recommended add’l surgery
 Returned to Mexico, no documents to return to US
 Had surgery in hometown of Jalisco
 Employer claimed “no known orthopedic doctors in Mexico
qualified … according to FL WC statutes”
 FL Ct of Appeal ruled state law did not preclude medical care in
Mexico, FL WC law contemplates coverage for non-citizens,
worker not prohibited from receiving treatment outside of state

11. Conclusion
 Nothing of real substance to prevent WC cases from
benefitting from medical tourism.
 Several legal barriers remain, but can be overcome.
 Cost savings, quality of care matches and surpasses
that found in US is reason to implement medical
tourism.
 Courts willing to allow limited medical tourism; how
future courts will rule is unclear; some precedent
exists for ruling in favor of medical tourism in WC.

12. QUESTIONS?