In Social Science, Methodological Nationalism is a term used to describe an intellectual orientation and pattern in scholarly research and many commercially prepared advertorial and promotional pieces that conceives of the nation-state as the sole unit of analysis or as a container for social processes. So for example, rather than compare Chicago with New York, and Miami and Minneapolis as the container for price comparisons of a back surgery, medical tourism suppliers who believe they compete with the USA tend to compare the USA as a whole nation state to paint what they sell in a more favorable light. They amplify flawed comparison by presenting data in categories of surgeries which are themselves unalike and incomparable.
This doesn’t only happen in medical tourism and health travel, though. I’ve repeatedly encountered the practice in the USA in commercial, Medicare Advantage and Managed Medicaid payer contracting for bundled case rates and volume comparisons since the mid 1990s.
The Geographic Practice Cost Index (GPCI) is one way that these geographic differences is taken into consideration in the USA and is built into fee schedules to refine relative value unit conversion factors by Medicare to determine allowable payment amounts for medical procedures. There are multiple GPCIs: Cost of Living, Malpractice, and Practice Cost/Expense for each procedure. So when authors, report writers and the media start putting all procedures into a generic USA price “bucket” or market basket to use for comparison with other medical tourism destinations, I know straight away that they haven’t a clue about the subject matter at an advanced level, nor have they done the adequate research to develop their report. They are just writing to package and sell it to anyone who will buy the report. Then they create attractive graphics to make it look presentable.
It is insane to believe anything you read about price comparisons in medical tourism – especially when you read the comparisons in the context of prices in the USA.
This is because each bundled surgical or diagnostic package is different from the one before it. This is especially true in medical tourism.
If instead, you gave me a side-by-side comparison of a case rate that includes a defined EPISODE OF CARE from first encounter until discharge and outcomes measurement and then a price, I might better accept that.
Complications associated with broad-based comparisons to US healthcare prices
What many report authors and researchers fail to consider, is that in the USA, because of our national public health system (Medicare) and its privilege of most favored status (the Medicare, “most favored nation” clause prohibits providers from offering discounts to non-Medicare payors that were not offered to Medicare, being that by law, on its face, Medicare should never pay more than any other payor.) hospitals, clinicians and other suppliers in the USA have one “price” that they quote for a service. Hardly anyone, insured or uninsured pays the raw, undiscounted price quoted, not even Medicare. It is artificially set at the arbitrary number quoted so that a number exists, from which all acceptable offers are then manipulated by negotiation.
What drives the variables in discount negotiations in American healthcare pricing for services rendered are the “book of business” and market share opportunities for the supplier. When insurers and other third-party payors “steer” volume to contracted providers, the contracted providers don’t have to spend as much on proprietary marketing efforts and advertising. The trade off is materialized in the discount calculation. Another trade off is timely payment terms. Rather than attract cash paying patients and uninsured patients who may pay slowly or never, but cost the provider $20-$60 per repeat invoice mailing and dunning and collection efforts, the providers make the assumption (right or wrong) that they will have an easier time to collect an assured, negotiated amount when rendering services to a participant in a contracted insurance or health plan. As a result, hospitals, clinicians and other suppliers discount the price to a confidentially negotiated contracted “allowable” rate whereby the allowance may be as much as 45-55% of the raw, pre-discounted “price” quote that was supplied.
It is these raw, artificially inflated rates that the many uninformed or misinformed researchers and commercial authors and marketers use in their flawed but often syndicated methodological nationalism comparisons making the analysis even more inaccurate. But, in their defense, these discount arrangements are confidential (or are supposed to be). So how could they possibly assimilate all the moving parts of American healthcare pricing and reimbursement to support their published research in the first place? Where would they begin to learn this system in their country?
Taxonomy flaws in US price comparisons
To be honest and accurate in comparing a medical tourism destination outside the USA, the episode of care must be defined line-by-line, by the surgical approach in the operating theater, not a categorical grouping such as “shoulder surgery” or even “shoulder arthroscopy”.
The comparison must detail the inclusions and exclusions, implant details, if any, how many days inpatient, and match identically line-by-line the cost outliers, etc. In the comparison, there can be no “carve outs” or exceptions unless all suppliers quote for the same identical carve outs and exceptions side-by-side, in the same time frame, and in the same surgical setting (e.g., acute care inpatient hospital vs ambulatory surgery center vs academic medical center, etc.).
A few other criteria for comparisons must be taken into consideration before broad brush assertions about price or quality or safety or other comparisons with the USA must also be taken into consideration by the researchers. These include, but are not limited to:
- inclusions and exclusions (unplanned cancellations, changes in acuity, stay extensions, add on services or days, etc.)
- disqualification criteria (e.g., hemophilia or other cases that add significant complexity beyond the standard inherent risks of the patient in average good health undergoing surgery.)
- triggers to begin and end an episode of care (e.g., malignant hyperthermia surprises, etc.)
- payment and markups for high cost drugs technologies, implants and supplies
- site of service differentials of the inpatient and outpatient setting
- perioperative (pre- and post-) care, consultation, diagnostic testing, telehealth consultations for a specific increment of time
- overnight stays for outpatient services
- overnight stays for travel companions, if any,
- medical records translations by certified medical records translation experts
- follow up windows and ancillary testing charges to measure progress and outcomes
- physical or occupational therapies
- durable medical equipment appliances and devices for home use for a defined length of time
- patient self-administered medications dispensed at discharge for take home purposes
- contract provisions iterated and agreed to for never events, late realized complications, therapeutic failures (e.g., non-union of a fracture; post operative infections, etc.) or device malfunctions and recalls (e.g. pacemaker, implants, etc.)
- provisions to address charges for anesthesia services, assistant surgeons, intraoperative xray, imaging, lab testing and pathology specimen examination and reporting, etc.
- malpractice insurance cover in the USA which includes amounts set aside for payment of both for economic and non-economic damages and litigation defense costs – compared to mandatory arbitration in many nations that settle disputes and allegations of misfeasance, malfeasance or professional negligence allegations and offer final, conclusive and binding resolution without any provision to pay for for non-economic damages such as pain and suffering, loss of consortium, etc.