Delayed Arrival The Domestic Hc Traveler Final 091108
1. WHITE PAPER
DelayeD arrival:
the Domestic
healthcare traveler
Cheryl Kassed, Phd
david lewandowsKi, MBa
linda MaCCraCKen, MBa
Gary PiCKens, Phd
Gene ray, Ms
leah ray, MBa
sePteMBer 2008
2. Domestic travel
for healthcare:
stanDby for takeoff?
the phenomenon of patients bypassing local healthcare
providers to receive medical services outside of their local
markets is gaining attention in professional literature.
TRAvElIng gREATER DIsTAncEs foR HEAlTHcARE—DomEsTIc TREnDs AnD IssuEs
HEAlTH TouRIsm
some trend-spotters forecast that american consumers will soon increase their globetrotting to find the best
prices for medical procedures. other industry-watchers remain uncertain about the transformative effects Use of medical
of growth in the consumer-driven healthcare market. a recent study by the healthcare business of thomson services abroad: the
reuters found that more than 71 percent of surveyed adults were aware of the concept of medical tourism, practice of visiting
and nearly a third of those who would consider medical tourism had annual incomes of $150,000 or more. other countries
Medical tourism is an increasingly common term and is predominantly associated with lower-cost healthcare specifically to benefit
overseas. But what about domestic travel for medical care? from the medical
services available
Medical travel within the U.s. may have important implications for hospital revenue and quality of care. in there, often because
they are cheaper
some cases, residents will travel to hospitals farther away from home because the services they require are
than at home.
not available locally. other consumers travel for healthcare based on “survivability-related services;” that is,
specialized services impacting life-threatening illness, recovery, and longevity. hospital quality indicators, source: encarta® world
including ratings and rankings, play an additional role. Consumers’ out-of-pocket costs, driven by payer english dictionary
coverage, are important factors, but their influence on patients’ willingness to travel for care is still evolving.
some hospitals are demonstrating their commitment to transparency by posting costs for procedures on
their web sites, which also offers a value proposition to consumers. this underscores specialization, location,
and affordability as key factors in domestic healthcare travel, and likely all aspects of medical tourism.
• Which consumers are likely to travel domestically for healthcare, and why?
• How much hospital business is attributable to travelers?
• What procedures and services are provided to traveling healthcare consumers?
• Has domestic medical travel landed, or has its arrival been delayed?
in many healthcare market dimensions, consumers are empowered by a growing availability of resources
for comparing physician and hospital ratings. these include postings of key metrics by quality-rating
organizations, hospitals, and the federal government, with the notable addition of patient satisfaction in
hospital Consumer assessment of healthcare Providers and systems (hCahPs).
delayed arrival: the domestic healthcare traveler 3
3. Patient-satisfaction ratings support consumer empowerment in healthcare selection, joined by payer
recognition through incentives for high satisfaction scores. on a growth basis, this also supports improved
word-of-mouth promotion of providers and hospitals by satisfied patients. the effects of physician referrals
and medical triage to critical care and specialty hospitals can work to drive healthcare delivery out of market
when insured patients are referred due to medical necessity. Patients needing specialty services, such as
organ transplants, are most often referred to hospitals where there are certified programs that have the
requisite volumes and experience to provide that care.
Book your service
Medical travel service selection is motivated by expertise, location, and price considerations as more payers
encourage the use of lower-cost services. although the domestic healthcare traveler has not substantially
impacted the hospital economy, quality, payer restrictions, and other factors—including medical tourism road
shows—are converging to make patient travel for medical care a trend for hospitals to watch.
thomson reuters experts explored this issue by examining national hospital data and consumer information
to understand the profile of the healthcare consumer who deliberately plans healthcare travel within the
U.s. the analysis excluded emergency department visits as well as persons who live in northern locales in
the summer and travel to southern climates in winter (“snowbirds”). sources included a national inpatient
database and consumer research from the annual healthview Plus®/PUlse healthcare survey.
KEy fInDIngs
• N
ine out of 10 adult healthcare consumers are willing to travel for life-threatening care, while fewer than
one out of 10 (4 percent) are willing to travel for routine care—a trend that has remained constant for the
last four years.
• Nationally, 2 percent of average inpatient discharges originate from 100+ miles away.
• A
few hospitals providing specialized or expert services receive, on average, twice the revenue per
traveling patient than per local patient.
• D
omestic travelers tend to be married, younger, affluent, and influenced by national hospital ratings,
underscoring the importance of family support and means to afford higher costs associated with
complex care.
• M
edical care with specialized services related to survivability drives the highest inpatient volumes for
domestic healthcare travelers.
Destinations: life-threatening illness broadens the
healthcare map
research shows that most consumers would not seek routine medical care beyond their local communities.
however, life-threatening illness—or even the perception of it, is a strong motivator for domestic healthcare
travel. Consumers consistently have expressed a strong willingness to travel for vital treatment compared to
routine medical services (see Figure 1). the percentage of healthcare consumers willing to travel to a different
community or state for these reasons has remained relatively unchanged throughout the study period.
fIguRE 1: consistent Healthcare consumer Attitudes About mobility
survey year Routine care (%) life-threatening Illness (%)
2004 3.7 88.3
2005 4.1 87.4
2006 4.2 87.6
2007 4.1 87.8
source: PUlse healthcare survey/healthview Plus®
4 delayed arrival: the domestic healthcare traveler
4. according to the thomson reuters national database, 98 percent of a hospitals’ (nonemergent inpatient)
discharges come from people who live within 100 miles of the hospital.1 Figure 2 shows the concentration of
hospitals per state, while the percent of nonemergent traveler discharges by county is illustrated in Figure 3.
fIguRE 2: number of Hospitals Per state
WASH.
ME.
MONT.
N. DAK.
MINN.
ORE.
WISC. N.Y.
IDAHO S. DAK.
MICH.
WYO.
PA.
IOWA
N.J.
NEBR.
OHIO
MONT. IND.
UTAH ILL. W. VA.
COLO. VA.
KAN. MO.
CALI. KY.
N.C.
TENN.
ARIZ. OKLA.
S.C.
N.M. ARK. HOSPITALS BY STATE
MISS. ALA. GA. 10 TO 43
LOU.
TEX. 44 TO 69
source: Medicare Cost reports 70 TO 119
FLA.
120 TO 159
160 TO 540
mARKET vARIAbIlITy AcRoss HosPITAl InPATIEnT busInEss lInEs
across the country, the impact of domestic healthcare travelers varies from market to market. elements of
consumer selection and medical referrals drive this phenomenon. rural markets clearly depict more travel
due to their lack of proximity to specialty healthcare services.
fIguRE 3: Traveler Discharges
TRAVELER SHARE OF
NON-EMERGENT ADMISSIONS
>4% (513)
3% – 4% (270)
2% – 3% (469)
1% – 2% (793)
source: thomson reuters inpatient database
0% – 1% (1096)
delayed arrival: the domestic healthcare traveler 5
5. consumers travel Greater Distances for vital medical care
the most-used hospital inpatient services by people who live more than 100 miles from the hospital are
those related to survival. this is in contrast to local users, who will typically travel up to 15 miles for
“bread and butter” hospital services. Figures 4 and 5 show the top hospital services provided to domestic
travelers (who live more than 100 miles from the hospitals) and local patients (who live within 15 miles
of hospitals), respectively. the clinical reporting groups2 with the most usage by domestic travelers are
highly-specialized medical or surgical services. transplants and significant surgeries lead the list, followed
by procedures for which provider experience and specialty are particularly critical. the propensity score is a
measure of service use, where 1 is average and scores greater than 1 indicate a greater than average use
of service.
fIguRE 4: Top 10 clinical services Received by Patients Who Travel over 100 miles
other organ transplant
Bone marrow transplant
Craniotomy (<17)
Craniotomy (age 17+) except UST
Pancreas, liver & shunt procedures
other cardiothoracic procedures
spinal procedures
Periph & cranial nerve & other nervous system procedures
Chemo w/ ac leuk as sdX or high dose chemo agent
ECMO/TRACH w/ UV96+ or PDX X fac/mouth/nck w/ maj OR
discharges
Charges
0.0 2.0 4.0 6.0 8.0 10.0 12.0
Propensity score
source: thomson reuters Projected inpatient database 2007
the top-volume clinical services for local service use (within 15 miles of residence) are shown in Figure 5.
again, the propensity score is a measure of service use, where 1 is average and scores greater than 1 indicate
a greater than average use of service. the majority are routine procedures or medical care.
fIguRE 5: Top 10 clinical services Received by Patients Within 15 miles of Residence
Propensity to travel for inpatient Care—top 10 Clinical services
travel Up to 15 Miles
normal newborn
Bronchitis & asthma (age 17+)
inpatient service
Kidney infections & UTIs (age 17+)
vaginal delivery w/o sterilization or o.r. procedure
neonate w/ other significant problems
Chronic obstructive pulmonary disease
Cellulitis ( age 17+)
Diabetes (age35+)
ectopic pregnancy
discharges
Cesarean section Charges
1.0 1.05 1.1 1.15 1.2 1.25 1.3
Propensity score
source: thomson reuters Projected inpatient database 2007
6 delayed arrival: the domestic healthcare traveler
6. nationally, data show that most healthcare is still local: 98 percent of inpatient hospital discharges are
patients who have traveled fewer than 100 miles to their treatment destination (see Figure 6). Patients most
often seek treatment for common medical conditions closer to home.
fIguRE 6: Average Distances Traveled for non-Emergent Healthcare
Cumulative % of inpatient admissions By distance traveled for Care
100.0%
90.0%
80.0%
70.0%
% of inpatient admissions
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2.5 7.5 15 30 50 70 90 125 175 225 275 325 375 425 475 525 575
distance traveled
source: thomson reuters Projected inpatient database 2007
more revenue from Domestic healthcare traveler Discharges
although only 2 percent of hospital discharges originate from patients traveling more than 100 miles from
their residence, they contribute 4 percent of hospital charges.
For the top 20 hospitals treating domestic healthcare travelers, 21 percent of discharges (on average) are
attributable to these patients, with a range of 15 to 36 percent of the inpatient base. however, domestic
healthcare travelers drive greater revenue percentage, with average revenue of 28 percent. the range of
revenue contributed by domestic healthcare travelers varies widely (see Figure 7).
fIguRE 7: Percent of Discharges, charges, and change Attributable to Domestic Healthcare Travelers
Hospital Discharges (%) charges (%) Difference (%)
Grace hospital 35.7 37.1 3.9
regional Medical Center 30.5 33.5 9.8
City Medical Center 27.7 31.3 13.0
Community hospital 27.4 40.3 47.1
shady Pines Memorial 17.4 33.9 94.8
General hospital 15.6 27.4 75.6
Clinic hospital 15.3 19.1 24.8
Average 21.0 28.0 33.3
hospital names are fictitious; any resemblance to actual hospital names is coincidental. data has been blinded.
source: thomson reuters Projected inpatient database
delayed arrival: the domestic healthcare traveler 7
7. Who is the Domestic healthcare traveler?
a healthcare-specific household segmentation system provides insights about relevant drivers of consumers in
terms of clinical service needs, financial profiles, and likely behavioral responses. thomson reuters consumer
market research examines the attitudes, behaviors, and utilization habits of consumer segments that are
most and least likely to travel domestically for healthcare. this provides the ability to target and engage these
groups. the top three consumer segments most willing to travel more than 100 miles for healthcare are
Balancing act, settling down, and enjoying life (see Figure 8).
fIguRE 8: most likely to Travel for life-saving care: most-Penetrated Household segments
acute Conditions
HoW To READ
RADAR cHARTs non-traditional Media Chronic Conditions
these charts show the
relative influence of
traveler characteristics
traditional Media Use alternative Care
and values on the
decision to travel for
life-saving medical Balancing act
care. items plotted settling down
enjoying life
farther from the center Use internet for healthcare Use Preventive Care
of the chart indicate
higher importance research healthcare
to the household
source: healthview Plus®
segment. details on
the healthview Plus® segment attributes include marital status, age, gender, income, and presence or absence of children.
consumer research
(see Figure 8)
tool are available from
thomson reuters.
highlights:
• ost are upper-income households, indicating financial means to travel and bear related costs.
M
• Most are under age 54, suggesting a younger population is more likely to seek specialized care.
• he majority are married, indicating financial and/or emotional support to travel and bear related costs.
T
• arketing approaches to best target the most highly penetrated segments should consider their distinct
M
profiles for service needs, information use, and media response.
Who isn’t likely to travel Domestically for healthcare?
the least-penetrated household segments indicate that they are far less likely to travel domestically for
life-saving care (see Figure 9).
fIguRE 9: less likely to Travel for life-saving care: least-Penetrated Household segments
acute Conditions
non-traditional Media Chronic Conditions
traditional Media Use alternative Care
Penny savers
tee time
Use Preventive Care earlybird specials
Use internet for healthcare
research healthcare
source: healthview Plus®
8 delayed arrival: the domestic healthcare traveler
8. WHo Is mosT lIKEly To TRAvEl foR lIfE-sAvIng cARE?
the medical condition does not seem to have an impact on the willingness of a patient to travel for care.
those most likely to travel have similar utilization of various services, but higher use of certain routine and
preventive care such as routine physicals, and oB/Gyn visits. Consumers in this group also:
• Intensively seek healthcare information when making decisions for parents.
• Are more discriminating consumers of physician services.
• Are likely to switch providers due to service problems.
• Select hospitals based on reputation.
• Research hospital ratings but also value service attributes.
• Value latest technology and will pay more for certain procedures.
• Are more likely to have employer-sponsored and family insurance coverage.
• Are more likely to use the Internet for research on medical conditions.
implications: sunny skies or turbulence ahead?
this research raises several considerations for the future of an increasingly consumer-driven
healthcare market.
healthcare is still local
Most hospitals serve a local market comprised of patients within a 100-mile radius of the hospital. Public
posting of quality and satisfaction may increase consumers’ local comfort with their hospitals, decreasing the
out-of-market hospital search except in certain circumstances. Medical triage and referrals indicate that most
care can be obtained close to residence.
domestic travel happens with specific drivers
survivability-related services matter. only a small segment of the population is traveling domestically for
deliberate inpatient care. this occurs more for survival-related services and originates from rural locations.
while this also occurs in other markets, the mobile healthcare consumer may need more service packaging to
support out of area, given the greater coordination of post-discharge home care, involvement of family/friends
in recovery, and growing travel costs. Most medical care in the country provides local access, but medical triage
does occur for critical specialty care and this is shown in the data. hospitals can potentially engage the mobile
consumer who utilizes services that impact life-threatening conditions.
expert care matters for the key services
specialty services and rural resources are partial drivers for the domestic healthcare traveler. Given these key
elements for payer coverage, this may be expected, and this data review substantiates common assumptions.
specialty/critical care services generate more revenue. it appears that “draw factors” are due to both clinical
program expertise and, in some cases, location.
Consumer segments are more or less ready to go out of market
adults who are more prepared to travel out of their market for healthcare tend to be younger, more affluent,
and heavily influenced by top hospital when making their hospital selection. in addition to the role of referrals
or medical triage, there are consumers who are more prepared and motivated to travel out of their market for
medical care.
delayed arrival: the domestic healthcare traveler 9
9. REfEREncEs
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severity and propensity to travel along the urban-rural continuum,” health Place 13:381-99, 2007
doty Ca: “are Consumers embracing the Convergence of healthcare and Finance?”
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thomson reuters, “Medical tourism: survey finds that well-educated, affluent people are driving the
trend.” June 2008
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major cancer surgery,” JaMa, 280:1747-51, 1998; Birkmeyer Jd et al. “hospital volume and surgical
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php?u_page=1219&u_sid=10293524, March 27, 2008
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hospitalcompare.hhs.gov, 2008
“hospital Charges here and elsewhere,”: http://health.usnews.com/articles/health/special-
reports/2008/05/01/hospital-charges-here-and-elsewhere.html, May 1, 2008
Zey M: “what Medical tourism teaches america,” The Providence Journal http://www.projo.com/opinion/
contributors/content/Ct_zey13_09-13-07_do72M9U.1aff7eb.html, 2007
thomson reuters, “the target Markets for top hospital ratings,” May 2008
EnD noTEs
this is based on straight-line distances from the population-weighted center of the patient’s county of
1
origin to that of the hospital’s county.
2
Clinical reporting groups (CrGs) are groupings of the Centers for Medicare and Medicaid’s diagnosis-
related groups (drGs) that clinically related and have sufficient patient volume to support estimates of
outcomes and resource use. the CrGs were invented and are maintained by thomson reuters clinicians.
10 delayed arrival: the domestic healthcare traveler
