Rising health care inflation and rising prescription drug prices are primary factors that thousands of Americans consider when traveling for medical care in other countries.
achieve significant cost savings. Treatment travel, also known as medical tourism, is broadly defined as traveling across national borders to access more affordable medical care, including low-cost prescription drugs. The global medical tourism market is projected to grow from $13.98B in 2021 to $53.51B in 2028 at a CAGR of 21.1% during 2021-2028.
According to the Medical Tourism Association, approximately 14 million people travel to other countries for medical treatment each year. McKinsey and Company reports that 40% of people travel to countries to seek medical care for advanced technology coupled with highly trained professionals. This change is also due to the fact that patients require fast medical service without a long waiting period.
This opportunity is quickly becoming highly sought after as an affordable treatment option for self-insured, employer-sponsored health plan participants. Cost challenges, especially for the underinsured, as well as healthcare reform considerations have prompted major US health insurers to jump on the trend of travel for treatment.
US health care spending from a global perspective
Americans are paying higher prices for health services than any other country. In 2021, the United States spent 17.8% of gross domestic product (GDP) on health care, nearly double the average country in the Organization for Economic Co-operation and Development (OECD). This includes spending on subsidized health care programs, such as Medicaid and Medicare, as well as employer-sponsored coverage and self-insured plans.
Prescription drug prices in the United States are more than 2.5 times higher than in similar high-income nations. The health care system spent $603 billion on prescription drugs (before accounting for discounts) in 2021, including $421 billion on retail drugs. Specialty medicines account for 55% of pharmaceutical spending in the United States, which is expected to increase at a compound annual growth rate of 8% through 2025.
According to a RAND study, brand-name drugs are the primary driver of rising prescription drug prices in the United States. The gap between prices in the United States and other countries is even greater for brand-name drugs, with US prices averaging 3.44 times those of comparison nations.
Inflated Prescription Drug Costs: Support employee health coverage as a benefit
Prescription drug costs are a concern among employer groups of all sizes who are seeing an increase in employee utilization of health care services that require additional expense for medications. As a result, employers can expect moderate to significant cost increases in their health care plans.
According to Mercer, growth in health benefit costs will accelerate to 5.6 percent in 2023. This financial burden impacts employers and employees in a variety of ways, including employee premium contributions, deductibles, and co-payments. pay leading to higher out-of-pocket costs. Given the financial strain, many participants resort to deferring treatment, not filling out scripts or rationing, and skipping prescribed doses.
As employer groups prioritize supporting medical coverage as a benefit, many are considering alternative approaches to mitigating costs associated with rising specialty drug prices, including adopting travel plans for treatment . The financial incentive for employees to travel across borders for treatment and prescription drugs is an initiative intended to reduce the cost of insurance and health care services.
Procurement of medicines in Mexico
Mexico is the second most popular medical tourism destination globally, with an estimated 1.4 million to 3 million people entering the country for affordable treatment in 2020, as reported by Patients Beyond Borders.
According to the International Trade Administration, Mexico is the 15th largest pharmaceutical market in the world and the second largest in Latin America after Brazil. The pharmaceutical market in Mexico has divisions for patented drugs, which represent 51% of the market by value, generics with 35%, and OTC products with the remaining 14%.
Mexican pharmacies offer brand-name prescription drugs at lower prices than in the United States. The price difference is significant, as some drugs are up to 80% cheaper when purchased in Mexico.
To legally purchase prescription drugs in Mexico, Americans must abide by the same protocols they would in the United States. This means getting prescriptions from a licensed Mexican doctor and buying them at a registered Mexican pharmacy. When you enter the United States with FDA-regulated products in your personal baggage or send products by mail or courier from overseas, the FDA has guidance regulating personal imports.
Self-funded employers can use this opportunity to achieve better health outcomes for their employees at a fraction of their current health care spending. A self-insured health plan allows an employer to directly fund medical benefits offerings for company employees.
Rather than paying premiums to an insurance company like Blue Cross Blue Shield, Aetna, or Cignato to cover employee benefits, a company will pay out-of-pocket from company assets to cover claims. These plans provide health insurance coverage to more than 100 million Americans.
Travel-for-Treatment as a cost saving strategy
Self-insured sponsors are increasingly looking to endorse this offering for employees that simultaneously enhance their membership experience and reduce the cost of quality care. Even as rising insurance costs have shifted to American workers, US employers are identifying self-financing strategies that align health care offerings with company financial goals, attracting and retaining healthy employees while maintaining profits.
Employers typically cover the costs of the procedure and necessary treatment when a participant chooses to travel for treatment. As a result, a procedure that may have required the patient to pay for deductible, coinsurance, and cost fees during a calendar year, often amounting to $5,000 or more, will cost the patient nothing. The patient not only avoids significant expense but, more importantly, benefits from the most consistent and data-driven quality of healthcare.
Coordination of safe and effective cross-border medical travel
Most U.S. employers who offer their employees a travel treatment option refer their participant to a Center of Excellence. These US-based networks help coordinate and support travel for care to ensure a high level of quality while significantly reducing healthcare-related costs.
As a trusted partner for cross-border healthcare, the Centers of Excellence provide preoperative and postoperative services in the United States and coordinate surgical procedures and clinical care in Mexico. Procedures performed in Mexico are performed by certified physicians at internationally accredited hospitals, by reputable physicians on both sides of the border at state-of-the-art facilities that follow US clinical protocols. Concierge service models maximize the patient experience.
Best practices when using a Mexican pharmacy
The purity, safety and efficacy of the drugs should be primary concerns, as these drugs sometimes infusion therapies cannot be monitored or guaranteed unless administered by a reputable and reputable physician licensed and accredited by the Mexican government. To obtain legal and safe medicines from Mexico, US travelers must comply with these protocols:
1. Get a valid prescription
Get a written prescription from a Mexican doctor licensed by the federal government of Mexico. We recommend that you check their credentials at www.cedulaprofesional.sep.gob.mx.
2. Locate a travel intermediary for treatment or a pharmacy
After consulting with a doctor, purchase the prescription from a reputable pharmacy that can provide proof of a valid license to operate within the Mexican state. Federally approved suppliers are a source of authentic medicines, serving as trusted intermediaries between licensed pharmacies and their retail customers. This process helps ensure product safety and quality.
3. Confirm that the intermediary or pharmacy only dispenses drugs approved by the FDA and registered by COFEPRIS
Sometimes, the drugs have different brand names and trade names in Mexico. Before purchasing, it is essential to verify the correct generic or scientific name of the prescription. Ask your doctor if you buy your medicines from COFEPRIS licensed suppliers. *COFEPRIS (Commission Federal para la Proteccion contra Riesgos Sanitarios), is the Mexican equivalent of the FDA. Illegal “pop-up pharmacies” are NOT licensed by COFEPRIS. Ensure that a licensed Mexican physician administers medications as required by Mexico and as the FDA mandates for export to the United States.
4. Beware of counterfeit drugs, recognize signs of tampering
Consumers should be wary of counterfeit medicines. Sometimes they look like real brands, but these counterfeit drugs can be ineffective, have the wrong strength, or contain harmful ingredients. Always ensure that medications arrive in their original unopened packaging, that tamper-evident seals are intact, and that there are no signs of damage.
About the author
Michael R. Augustine, RPh is CEO of NASH. Mike is a registered pharmacist and experienced entrepreneur with over 30 years of experience in the healthcare industry. Value creation, strategic definition, and building strong industry relationships fuel Mike’s purpose.
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