Medical tourism: managing the money flow

When targeting international patients, a healthcare organisation should ask: Will we get paid? How will we get paid? And by when?  At the recent LaingBuisson webinar, European medical tourism: managing the money flow, speakers from a medical travel intermediary in Germany, a leading hospital provider in Spain, and an international payment facilitator discussed the money flow and payment challenges facing medical travel destinations.

While attracting international patients to hospitals and clinics is a major task, getting paid for treating these patients can be an even bigger challenge.

This is particularly difficult when patients are being treated for complex conditions. While all stakeholders want the patient to get well as quickly as possible, how the payment process is managed is a vital part of the patient experience.

International payment challenges

MESC International Patient Service in Germany is a long-standing medical travel facilitator which has helped 52,000 patients, particularly from the CIS and GCC countries, to be treated, since it was founded in 1978.  It charges the patient a fee for their services, rather than receive commission from hospitals, which is an illegal practice in Germany.

Christian Fadi El-Khouri, Head of Consulting, sees many opaque business practices in medical tourism. With multiple parties often involved in medical travel, including the patient, one or several facilitators, the cost-bearer or financial sponsor, and treatment provider, the challenges to clear communication are great. Added to that are the points where requests for payment are made, from initial assessment through to payment in advance for treatment and recovery.

Large sums are at play for complex diagnostics and treatment, and patients are not used to managing such payments. Bank transfers often involve complicated processes, with significant processing fees, sometimes as high as 5-10%.  There may be multiple accounts involving different hospital departments, or intermediaries, requiring separate payment.  International payments are also frequently not instantaneous, which delays visa applications and ultimately the start of treatment.

Christian is also seeing his customers, particularly outbound GCC patients, becoming much more informed about treatments, who is treating them, and what they are paying.

As an unwanted consequence, Christian has found that patients are either opting to pay an intermediary, often a facilitator, or providing a cash payment on arrival.  Both approaches carry risk.  Most hospitals do not want large cash payments, due to compliance and regulation issues, including the handling of overpayments.  While using an intermediary is simpler for the patient and involves lower fees, the hospital has to trust that this third party is not taking advantage of their customer.  The provider could be held accountable for malfeasance.

Payment solutions

SJB Barcelona Children’s Hospital, Spain, is one of the top five paediatric centres in Europe, specialising in rare diseases, including children’s cancer, heart diseases and neurology. Approximately a third of their international patients come from the CIS countries, 22% from Latin America, and a further 11% each from Europe and the GCC. 55% of patients pay for treatment out of pocket; the remainder are payments from third party payers. The latter includes funds, charities and governments, and this has been growing in the last few years.

Dr Antoni Arias Enrich, Director of Private and International Care has identified two main challenges regarding payment:

• Risk of complications
  While the hospital requires advance payment from private payers, it is dedicated to the full treatment of the child. So, if complications arise and further treatment is needed, it faces a financial risk of non-payment of higher than expected fees.
• Payment processing
  This includes issues with anti-money laundering regulations, limitation on payment transfer amounts between countries, currency fluctuations, cultural influences on payment preferences, and limited ability to pay through different platforms (e.g. WeChat). Overseas governments remain notoriously late payers, demand strict adherence to payment procedures and ask for fee guarantees. The hospital finds it hardest to collect debts from patients from the Latin American region.

The average treatment bill at SJB Children’s Hospital is between €150,000-€300,000, however in Spain it is illegal to make a cash payment greater than €3,000, so patients must pay by bank transfer, in Euros. It is a challenge to communicate this to international patients, particularly when no other, more flexible payment options are available.

Payment solutions

Christian recommends finding direct payment pathways, without the intermediaries, which are trackable and transparent.  Organisations must also recognise that payment is an integral part of the patient experience.

Andrew Brown, Senior Key Account Manager, Medical & NGO Partnerships, Western Union Business Solutions, agrees that matching payments to patients is hugely time consuming. Given the large amounts involved, patients are anxious about the payment process and, in Andrew’s experience, always suspect financial fraud and abuse. He recommends organisations spend time investigating the most appropriate cross-border payment solutions for international patients.

Advice for medical travel destinations

Christian issues a warning for destinations considering moving into the medical travel sector. He has seen places with one hospital, offering an English-speaking doctor, thinking they can become a major destination. The reality requires a major investment in the patient experience (including international payment processes), safety, and effective communications; combined with a unique healthcare offer that is attractive to patients in nearby regions.

While it is too early to predict where and when medical travel demand will re-emerge, Andrew recommends destinations become centres of healthcare excellence, to compete against those found in the USA.  With pent up demand in complex treatments like oncology and cardiology, but also for cosmetic surgery and fertility treatments, there are opportunities for destinations who can demonstrate high success rates, with low morbidity outcomes, to regional patients not wanting to travel too far.  A great patient experience, including ease of payments, needs to be part of this offer.