As medical tourism takes off in Israel, experts are divided about the impact the industry will have on local health care
By NETTY C. GROSS13medmud(photo credit: Ariel Jerozolimski)Cover story in Issue 13, October 13, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Reportclick here.
When Anna Sherevenko, an angelic-looking blonde, blue-eyed, one-and-a-half-year-old was diagnosed with a rare form of cancer, her physicians in St. Petersburg, Russia, recommended a bone marrow transplant. But the procedure is not widely available there and her parents, Katerina and Alexi, were told that the best places to go were in the United States, Germany or Israel. They chose Israel because it was the least expensive of the three, explains Alexi, a tall, strapping, 31-year-old architectural restorer.
He sits at the foot of his daughter's bed in a germ-free isolation room in the pediatric hematology unit at Jerusalem's Hadassah Medical Center, surgical masks covering his face and those of the visitors. The family has been in Israel for over a year now, he tells The Report, and doctors have still not determined when Anna, who has already had the transplant and is now undergoing chemotherapy, will be able to go home. Alexi says the couple shares duties taking care of their new baby and older children, who are studying in a special school program within the hospital complex.
All told, Anna's hospital bill will total between $202,062 and $288,660, including the family's living expenses in a rented apartment. A Russian private charity helped pay part of the fees; the couple raised the rest of the money themselves from private donors and loans.
Little Anna Sherevenko is one of many who come to Israel to receive medical treatment. The money that these "medical tourists" spend is a valuable contribution to the economy and, in particular, to the country's cash-strapped hospitals and thus helps to promote medical excellence here.
But some warn that growth of medical tourism in Israel will eventually compromise the public health system. To prevent this, critics caution, the government must carefully coordinate and regulate medical tourism. But to date, the government has taken no action to promote or to curb the phenomenon and has allowed the industry to develop undeterred and unregulated.
Worldwide, there are
hundreds of thousands of "medical tourists" who travel abroad for treatment, whether because it is not available or affordable in their own countries or because the care and the treatment are better elsewhere. According to Joseph Woodman, author of "Patients Without Borders," a popular guide to medical tourism, some 180,000 Americans now travel abroad annually to such places as the American-accredited Bumrungrad Hospital in Thailand and Johns Hopkins International Hospital in Singapore, which treated over 400,000 medical tourists from around the world in 2006.
The 2008 Survey of Health Care Consumers by the Deloitte Center for Health Solutions, part of Deloitte LLP, an international tax, auditing and financial planning firm, says that in 2007, 750,000 Americans traveled overseas for medical treatment. It claims that as health care costs grow in the U.S. (at a rate that is 8 percent ahead of the Consumer Price Index), Americans are increasingly undergoing procedures abroad, where the cost can be as little as 10 percent of the cost at home.
India, which has made medical tourism a national priority, hopes that the industry will bring in $1.2 billion a year by 2012. Other leading countries in the field include Malaysia, Singapore, Panama, Brazil and Costa Rica (which specializes in cosmetic surgery), Hungary, Mexico, the Gulf States and South Korea. Thailand specializes in sex-change procedures. All of these countries advertise widely, especially on the Internet and in trade journals, highlighting their sleek, new medical centers, where non-nationals can benefit from high-level medical care for substantially lower fees. They also advertise that the doctors and nurses staffing these hospitals are well-trained and accredited by Western medical institutions.
Though not singled out in the Deloitte survey or mentioned by Woodman, Israel has joined the industry. According to government spokespeople, in 2006, 15,000 foreigners came to Israel's hospitals for treatment, generating some $40 million in revenue; in 2007 the number of patients grew to 20,000 and hospitals more than tripled their intake to $150 million because more complex, and therefore, costlier, procedures were performed. The sum includes money spent by family members who stay at hotels and might do some sightseeing and shopping on the side.
"It's a win-win situation for Israel and Israeli medicine," says Amitai Rotem, marketing director at the Hadassah Medical Organization, which actively seeks patients abroad for its two hospitals in Jerusalem. Prof. Avinoam Reches, professor of neurology at Hadassah and chairman of the Israel Medical Association's ethics committee, is also an enthusiastic supporter of the trend and concurs that "Israel has everything to gain" from selling its medical expertise to the ill of this world. Just five years ago, says Rotem, Hadassah started the medical tourism program in earnest and it generated some $500,000 in its first year. Today the hospital has more than tripled its business from tourists, and revenue has topped $10 million, with 200 to 300 admissions each month. (Hadassah has some 64,000 admissions annually.)
Herve Deknuydt, administrative director of medical tourism at Sheba Hospital, near Tel Aviv, tells The Jerusalem Report that his institution treated several hundred patients in 2008. Most, he says, came from Mediterranean countries, such as Cyprus, Greece and Turkey, or from the former Soviet Union, particularly the eastern states, such as Azerbaijan, Georgia and Kazakhstan. He says patients at Sheba have come for general surgery, cancer treatments, rehabilitative procedures and cardiology exams. In all cases, the patients paid the hospital directly and, when eligible, were reimbursed by health insurance firms or even their governments' health or foreign ministries. Sheba assigns international patient special nurses who shepherd them through the hospital process and act as translators when necessary. According to Sheba's website, 150 "Primary Total Knee Replacements" are performed each year on Israeli and tourist patients.
Ina Bergman, Russian-speaking head of the International Medicine Department at Rambam Hospital in Haifa, which serves the two million residents of northern Israel, says the hospital, which began treating foreign patients in 2007, treated approximately one thousand tourist patients in 2007. She says patients came for cancer treatments, cardiac and brain surgery but the majority came for orthopedic treatment because, she says, Israeli orthopedics is highly advanced due to the experience doctors have developed in treating trauma patients and terrorist victims with orthopedic problems. She also says that Palestinians from nearby Jenin come to Rambam for health services, and their treatment is financed by the Palestinian Authority, various private foundations, foreign governments and Israel's Ministries of Defense or Foreign Affairs. Hadassah's Rotem says Palestinians are routinely treated at his hospital as well.
Medical tourism, Rotem enthuses, enhances Israel's reputation across the world as a provider of medicine of the highest standard; keeps the level of local care high; keeps top physicians in the country and in the public system by providing them with additional income from the tourists' payments; and promotes peace, especially when patients come from Muslim lands - citizens of Iran, Jordan, Iraq, Dubai, Kuwait and Saudi Arabia have received treatment in Israel over the past few years.
Advocates of developing medical tourism in Israel claim that the pool of potential patients from around the world who might select Israel as a place to have treatment is huge. For the burgeoning middle and upper classes from the FSU, hungry for the up-to-date medical and dental care that is rare in their own countries, another advantage to Israel is that one million Russian-speakers live here, and many work in hospitals, making communication easy.
Another potential source of medical tourists is the United States, where some 47 million citizens do not have health insurance. According to the 2008 Deloitte survey, in cases where a particular procedure is not (or is only partially) covered by insurance, an overseas medical package is particularly attractive. Some 50 percent of respondents to the survey indicated they would consider travel for medical treatment.
Private American insurers generally cover procedures at accredited hospitals abroad (although Medicare, part of the U.S. social security package for people aged 65 and over, who also meet additional criteria, will cover surgical procedures only if they are done in the United States).
Even though Israeli hospitals charge foreigners more than they charge locals, treatment in Israel is still considerably cheaper than in the United States or Western Europe, chorus Rotem and Hanah Tidhar, Hadassah's International Patient Director. For example, bypass heart surgery which might cost $120,000 in the United States costs "only" $35,000 at Hadassah, inclusive of room and board for a companion in the hotel on the hospital grounds. The same surgery might cost $10,000 in India. In vitro fertilization (IVF) costs $3,000-$3,500 here, compared to $16,000-$20,000 in the United States.
But Prof. Yonatan Halevy, director general of Jerusalem's Shaare Zedek Medical Center, says that reports of Israel's potential popularity as a medical tourism center are highly exaggerated and states that reliable figures are hard to come by. Furthermore, he notes, most medical tourists will ultimately prefer to receive attention in Europe because it is closer and more secure.
And Prof. Dov Chernichovsky, professor of Heath Economics and Policy at Ben-Gurion University (BGU), argues that medical tourism won't really take off in Israel because patients generally do not like to be far from home when undergoing complex procedures - although he acknowledges that this may have changed in this era of globalization. Furthermore, he notes, even though treatment is cheaper in Israel than in some countries, it is still too expensive for masses of tourists, who, if they have reconciled themselves with flying off to some exotic destination, would be more likely to go to India.
A spokeswoman for the Finance Ministry, who spoke with The Report on condition of anonymity, says that the majority of tourists currently coming to Israel for treatment are from the former Soviet Union. "The phenomenon is becoming too big for the government to ignore," she says, but she also acknowledges that it was only in early September that officials convened a special meeting of representatives of the Tourism, Health, and Finance ministries to study the trend and decide how to proceed.
The spokeswoman admits that the government is ambivalent about the entire process. "You don't see France, England and Switzerland actively marketing their countries" as meccas for medical tourists, she sniffs, suggesting that medical tourism is hawked by less developed lands. But, then, she adds that Israel does want the revenue.
Next to the image of a
smiling, well-groomed physician, the medical tourism section of the website of the Tel Aviv Sourasky Medical Center (Ichilov) declares: "Every year, thousands of patients from dozens of countries around the world seek world-class medical care" there. It also bears a legend with a quote from Newsweek magazine identifying the hospital as "one of the world's top 10 medical tourism destinations."
But Israel has a strong socialist medical ethic that provides universal medical coverage for all citizens. According to the 1995 National Health Insurance Law, medical care is provided via four non-profit sick funds, which resemble American-style health management organizations (HMOs) and are supported by a compulsory health tax. Each sick fund offers members a uniform basket of services that is determined by the Health Ministry, which also owns several hospitals, totaling nearly half of the acute-care beds in Israel. The Ministry determines how many beds each Israeli hospital, public or private, will be allotted; the Finance Ministry allocates funding on a per-bed basis, taking into account the full cost of such a "bed," including salaries for personnel and other patient care, food, medication, and so forth. Some 8 percent of the annual national budget, considered a modest figure by Western standards, is earmarked for health. (In the United States, for example, the figure is 16 percent.)
In recent years, as the system becomes increasingly strapped due to government cutbacks and as patients with means demand better services, private "options" have eaten away at equality. Many Israelis currently pay extra premiums for additional private health insurance or out-of-pocket expenses. This buys them immediate appointments with specialists; no waiting in line; private laboratory services; costly medical tests otherwise subject to cumbersome bureaucratic approval; and medications that are not covered by the basic health plans. Private hospitals such as Hadassah offer a service known as SHARAP (an acronym for Sherut Refeui Prati or private medical service). Government hospitals such as Ichilov and Sheba do not officially maintain private services, but do have similar schemes. In these hospitals, payment remains, at best, a gray area. In some cases, additional patient fees are constructed as "contributions" to hospital research funds and then converted into salary supplements; others have taken advantage of loopholes, offering extras, such as private maternity wings and hotel-like services, which are legal.
Cash-starved Israeli hospitals and sick funds argue that the private payments, whether from Israelis or foreigners, are necessary to staunch the exodus of good doctors to private hospitals or to other countries because of low pay.
Indeed, the doctor drain in Israel is severe. According to the annual report by the Health Ministry, released in late September, by the end of 2007 there were 3.49 doctors for every 1,000 people under the age of 65. In 2000, that figure was 3.7. Furthermore, the report also shows that the number of physicians under the age of 45 is dropping sharply. Approximately 29 percent of Israeli physicians in Israel are under that age; compared with 37 percent in 2000 and 43 percent in the mid-1990s. Dr. Yoram Belcher, head of the Israel Medical Association, called the situation "very grave."
Rotem adds that international patients pay by cash or credit card immediately (and are reimbursed by health insurance when relevant) whereas Israeli sick funds can take up to one year to reimburse the hospital for services rendered.
But the question of the effect of medical tourism on the quality of services provided to the general population is a matter of deep public concern. Most experts agree that as long as the number of medical tourists to Israel remains relatively small, their impact on the publicly funded system remains negligible. And Halevy points out that long waits for elective surgery for Israeli patients belong to "a bygone era of Israeli medicine." Tidhar says that at Hadassah, foreigners are routinely operated on during the afternoon hours and locals in the morning, so that there is no clash in scheduling.
However, Chernichovsky says that any attempt to significantly develop medical tourism must be "entirely separate and detached" from Israel's public health system and composed of hospitals that cater solely to private patients, foreign and Israeli, and depend on them for their budgets. A handful of such institutions do exist in Israel, such as the Herzliya Medical Center and the Assuta Medical Center in Tel Aviv; to date, they are used primarily by Israelis with private insurance. Otherwise, he says, "there are real risks" that Israeli taxpayers will unwittingly be subsidizing foreign nationals, while, at the same time, they will be "crowded out" of the system, which is already fragile.
Reches contends that overall, it is a patient's health needs - and "not his or her wallet size" - that determine matters, such as priority for surgery, although there have been "some glitches" in the system. While he acknowledges that a handful of physicians have been arrested for taking bribes and giving preferential treatment to private patients, he insists that "these cases are not the norm."
Some experts, including a former director general of the Health ministry, as well as officials of the non-profit Adva Information Center for equality and justice, a social policy think tank which has published reports on eroding public health in Israel, have told The Report that too little is known about medical tourism to Israel to make definitive assessments and that the matter requires additional research.
Dr. Yaniv Poria of BGU's School of Tourism and Hospital Management also thinks medical tourism to Israel must be "carefully controlled" and "promoted skillfully and sensitively," but believes patients from overseas can be accommodated by Israel's public health system and should not be lodged in a separate hospital. Poria says that while medical tourism can be a boon to Israel but, if the Israeli public feels that care for tourists is coming at their own expense, "there will be resentment."
Leaving home to get treat-ment is by no means a new phenomenon. Patients in ancient Greece flocked to temples constructed near mineral springs in honor of Asclepius, the Greek god of medicine. In the early 20th century, England's Prince of Wales, later King Edward VII, and Mark Twain traveled to Marienbad in what was then called Bohemia [today Czechoslovakia], to take mineral baths and other cures in stately sanatoriums, which remain popular to this day.
In Israel, the trend began in the 1960s, when patients from Germany suffering from psoriasis began coming to the Dead Sea for treatment, subsidized by German government HMOs as part of diplomatic and trade agreements between Israel and Germany. The industry has grown rapidly; in the first half of 2008, some 80,000 German medical and non-medical tourists flocked to the Dead Sea area and provided "significant income" for the hotels there, according to Shaul Tzemach, director general of the Ministry of Tourism. In mid-September, a delegation from the government of Finland came for an exploratory visit. The Ein Gedi spa, which is located on the shores of the Dead Sea, also maintains a special program for Norwegian skin patients.
BGU's Dr. Poria says Israel's Dead Sea skin treatment program is a model of "smart handling" and good business. The area has been developed to treat ill tourists but, at the same time, remains a "national asset and vacation spot that Israelis enjoy visiting."
During the days of the Shah of Iran, who was deposed in February 1979, high-placed Iranians received treatment at Hadassah in Jerusalem, but Israel has been attracting medical tourists on a large scale only since about 1990. Tourism Ministry spokesman Eliezer Hod says that today most Israeli hospitals - government and private - earn extra income by providing medical services to foreign nationals. The hospitals employ specialist marketing teams and Internet sites and some have contracts with independent brokers who find foreign patients.
Rotem says tourists choose Israel for medical treatment for a variety of reasons. Countries with reasonably good medical systems, such as Cyprus, he says, are limited when it comes to more complex procedures, such as bone marrow transplants. In other countries, such as Great Britain, medical care and coverage are top-notch but patients often have to wait for long periods of time for elective surgeries, such as hip-joint replacements. In Israel, tourists are automatically considered private patients and are operated on within days. Ethical considerations may also play a role; for example, he notes, egg harvesting for the purpose of fertility treatments is not legal in all countries, but is legal in Israel.
Today, Rotem says, most tourists come to Hadassah, which is a private hospital but also overwhelmingly treats Israelis, for hip-joint replacement surgery, oncology treatment and in vitro fertilization (IVF), in which Israel is considered a world leader, with high success rates. Rotem emphasizes, however, that Israeli medical protocol is strictly adhered to for all patients and a woman will not receive fertility treatments in Israel if she is over the age of 45.
Bone marrow transplants like Anna Sherevenko's are also in demand. Tidhar says that in the 18-bed unit for adult bone marrow transplant patients (which caters to both tourists and Israelis), seven beds were recently occupied by tourists. Hadassah also offers a unique treatment for Parkinson's disease and Rotem says that information released by the hospital earlier this year about research on a new treatment for multiple sclerosis triggered several hundred queries from abroad. Tidhar enthusiastically refers to press releases by Hadassah doctors telling of revolutionary treatment for the removal of gall bladder stones and novel approaches to treating carcinomas in the lower part of the body, such as the bowel, rectum and pancreas.
Patients who don't require medical evacuation arrive in Israel on regularly scheduled flights; acutely ill tourists sometimes arrive via special "air ambulances" (small aircraft used for emergency medical assistance, equipped with medical instruments and staffed by trained personnel). Rotem says medical evacuation by air can add $5,000 to $10,000 to fees. In case of death, Rotem says, Hadassah oversees embalming procedures and arranges for the body to be shipped back to its country of origin, also costing between $5,000 to $10,000.
Caroline Ardeeser, a 78-
year-old retired Florida resident decided to forgo Medicare and hospitalization in the United States and pursued surgery in Israel. She was visiting Israel earlier this year, she tells The Report, when her knees "gave out." Rather than return home, where she had stopped paying health insurance premiums, she chose to have the reconstructive surgery performed at the Sheba Hospital. The 90-minute surgery and a week's stay in the hospital cost her $16,000, which she had in savings.
Ardeeser says that at her age, she cannot obtain private health insurance in the United States. And even if she could, she estimates that with the co-pay, the surgery and the rehabilitation at home could have cost three times as much. She plans to have surgery on her other knee soon and is recuperating in a rented house in the West Bank city-settlement of Ariel. "I had a most positive experience here," she says.
Much of the medical tourism industry depends on the brokers like Ira Nissel, 45, who handled Ardeeser's case. An immigrant from New York who came to Israel in the late 1970s, Nissel is a business entrepreneur whose last business was developing a system that assisted ambulances in traffic-clogged Turkey to reach accidents. Nissel is CEO of IMS Global, a firm he founded four years ago to promote medical tourism in Israel. His company offers admission-to-rehabilitation services for the tourist and he works closely with several Israeli hospitals. Most clients, he says, learn about his business from his Internet site.
Nissel obtains visas for patients and companions to Israel; handles the transfer of medical information; helps select the hospital that will perform the procedure; finds hotels; arranges for a team of "guardian angels," who may be local nurses or aides who see the patient through a recovery period for a fee; and even finds babysitters and books sightseeing tours. He tells The Report that, while he does not turn down requests for cosmetic surgeries such as breast augmentation and face-lifts, he prefers to promote Israel as a mecca for complex surgery - procedures which are also more costly. He expects payment "up front" but refuses to tell The Report how much he charges, explaining that "pricing is a sensitive issue. The costlier the procedure, the lower my fee," he promises. On his website, however, Nissel lists the cost of IVF at $6,000 - almost double the cost according to Hadassah Hospital.
Nissel is certainly busy. In late August alone, he checked up on Ardeeser after her knee surgery; drove to Ben-Gurion airport to greet a family from Kazakhstan who came for multiple medical and dental treatments; visited a Ukrainian woman here for urological surgery; and was expecting a man from Nigeria for chemotherapy. His Ukrainian-born wife, Hela, who immigrated in the 1990s, assists with translations from Russian.
Tourism Ministry's Hod says the shortage of hospital beds inhibits the growth of medical tourism. The Finance Ministry spokeswoman explains that beds are allocated on the basis of public, not private need, and because their numbers fluctuate and are hard to predict, the ministry is reluctant to allocate additional beds to some hospitals. Furthermore, she says, the shortage of beds is more severe in the country's center (where the top doctors tend to work); beds are available in peripheral areas such as Poriya Hospital in Tiberias, in Israel's far north. Poriya Hospital also caters to international patients, she notes, "but the hospitals are competing with each other for medical tourists so centrally located institutions may not want to refer cases out."
If beds are added but fewer medical tourists come, she says, they will become a drain on the public health system, since beds, which include staff and accompanying expenses, raise operating costs.
The absence of special medical visas for patients who require Israeli visas as well as visas for companions is another problem, says Hod. Often, he explains, the patient has to stay beyond the initial three months specified by the standard tourist visa. Advocates also bemoan the absence of government-sponsored affordable apartments or hotels for the patient-tourist and family.
In early September, the first of a series of exploratory interministerial meetings took place to discuss medical tourism to Israel and included representatives of the Health, Tourism and Finance Ministries, as well as private promoters of the industry. A spokeswoman for the Finance Ministry tells The Report that "we are aware of the importance of the subject and have to think how to go forward on the matter." The Finance Ministry is grappling with "how to balance the resources so that medical tourism, whose aims we generally support, doesn't negatively impact on public needs," she says. "First and foremost, we are committed to our public health system."
Alexi Sherevenko says he has no doubts at all about the wisdom of his and Katerina's decision to come here. "People here are wonderful. They saved Anna's life and, by doing that, saved a whole family," says Alexei as little Anna, an illness-induced black-and-blue mark beneath her eye, sits stoically on her bed, peering curiously at the masked strangers and then curling up against her father's leg. "We feel very much at home in Israel." •
Cover story in Issue 13, October 13, 2008 of The Jerusalem Report. To subscribe to The Jerusalem Reportclick here.
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