This series of articles focuses on cluster development for medical, health and wellness tourism.
When a self-funded employer contracts with a healthcare provider without layering in profit margins of big insurers and traditional PPO networks, they suddenly realize that a few providers in the area are competitive while others directly across the street cost upwards of 240% or more for the same identical service. If big ticket elective procedures are steered to other markets, local providers will be motivated to bring their rates into a reasonable price range or face loss of market share.
In severe cases where the value doesn’t exist because providers don’t feel pressure to lower local prices, employers might only encourage the use of local market providers for emergencies and urgently needed care, or when the procedure or treatment is required by a patient that cannot safely travel to a nearby or distant medical hub of health tourism cluster offering price or value arbitrage.
Via Maria Todd