Before she worked with the school district, Dr. Julie Boyd would travel to Los Algodones, a small town in Baja California, just west of the US-Mexico border. But Boyd wasn’t on vacation. Lacking medical and dental insurance had pushed Boyd to travel to Mexico for medicine and dental care.
Despite risks like unsafe procedures and disease transmission, according to the CDC, millions of Americans travel to Mexico, Canada, the Caribbean, and South America to seek more affordable healthcare, creating a multibillion-dollar industry known as “medical tourism.”
The factors that drive healthcare to be expensive in America are complex; however, middlemen between insurers, manufacturers, and pharmacies play a large part in the issue.
According to Harvard Medical School, “Pharmacy benefit managers (PBMs) handle drug benefits for large employers, Medicare, and health insurance companies. PBMs negotiate prices with health insurers and pharmacies. They help decide which drugs to cover and how much patients pay. Their fees and incentives — often a share of total spending on medicines, which might encourage approval of higher-priced drugs — contribute to the costs health consumers wind up paying.”
A lack of competition in pharmacy benefit management exacerbates these issues, further driving costs up for consumers and insurance companies alike.
According to the Brookings Institute, “The market for PBM services is highly concentrated, with three firms controlling 79% of the market, which almost certainly gives PBMs market power they can use to earn excessive profits.”
Susan Bright, a doctor at River Valley Health Center in Delta, said, “They say that they save patients money, but what they really want is to set the price of a medicine really high. They’ll set a price at 500 dollars, a made-up price, but then say with our insurance, you only pay 50 and save so much money, even though nobody will ever pay 500. It’s just one more thing making healthcare more complicated and a bad system worse.”
Despite cost savings, there are risks to travelling abroad for drugs and medical procedures.
According to Bright, “The biggest risk of travelling abroad is that there is no follow-up care. If you have a problem like an infection after surgery, you won’t be able to contact the doctor. It’s also harder to have reliable accounts of the doctor’s reputation and know the infection rates at the hospital you’re going to.”
Medical tourism also impacts the hosting country’s economy. According to a study by Hamid Beladi, Chi-Chur Chao, Mong Shan Ee, and Daniel Hollas for the University of Texas at San Antonio, “Due to the competition between public healthcare provision and medical tourism, the development of medical tourism might reduce labor productivity and thus widen wage inequality via the increased wage rates of healthcare workers and decreased wage rates of production workers.”
“Most times it’s people from rich countries travelling to poor countries, which affects the ability of poor countries to care for their people,” said Bright.
The Colorado State Legislature has recently passed SB25-45, which was signed by Governor Jared Polis. When it takes effect, the bill will initiate a study on the effectiveness of a single-payer healthcare system in Colorado, a system seen by many as more affordable than the hybrid healthcare system that America currently relies on.
Colorado State Senator Janice Marchman, a sponsor of the bill, said, “While SB25-045 does not establish a single-payer system outright, it represents a critical step toward understanding how we can ensure all Coloradans have access to affordable, high-quality healthcare. The study’s outcomes could inform future legislation aimed at achieving universal coverage.”
