Medical tourism is no longer in start-up mode. About 500,000 Americans traveled outside of the US for health care in 2005. For most medical tourists, the decision to leave one’s country for heatlh care is a financial one.

That drive has built a $40-60 billion market today, projected to rise as high as $100 billion in 2012.

The National Center for Policy Analysis (NCPA) just published a comprehensive look at medical tourism titled, Medical Tourism: Global Competition in Health Care. The report points out that in the earliest phase of medical tourism, Americans tended to travel to Mexico and Latin America for care, but increasingly are traveling further afield to Singapore and India (where English is widely spoken), and Thailand.

The “tourism” aspect of medical tourism is often enabled through the services of travel intermediaries who specialize in health care. PlanetHospital is one such entity in this growing space.

What factors make health care cheaper overseas? NCPA points to labor costs, price transparency, less regulation, and lower incidence of malpractice litigation. These would be reasons one would expect to hear from the NCPA, as their stated objectives on their website are, “to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.”

Nonetheless, health care overseas can often be less costly than in the US — even with the current weak dollar position vis-à-vis other currencies.

When we’re talking health care, lower cost must be coupled with quality. The Joint Commission has been involved in accreditation in these emerging health meccas (having already accredited more than 120 hospitals), and a large number of physicians overseas have trained in the US. Furthermore, some branding by recognized American institutions has been done; the Cleveland Clinic (with outposts in Canada, Austria, and Abu Dhabi), Harvard (in India), and Johns Hopkins (in Panama and Singapore) have given their stamp to overseas medical programs.

Quality is the real caveat here: if you think American hospitals and physicians aren’t stellar at measuring quality, then their overseas counterparts are still in kindergarten. Still, a few overseas facilities are taking quality measurement seriously. Bumrungrad in Bangkok, Thailand (pictured on the right), reports more than 500 measures of quality and patient safety. Nearly 60,000 Americans were treated there in 2005 (among about 430,000 medical tourists a year from 190 different countries).

Nonetheless, money is a real driver for Americans in going overseas for care. In their essay called, “Will the surgical world become flat?” Arnold Milstein and Mark Smith found that about one-quarter of uninsured people, but only 10% of those with health insurance, would travel abroad for care if the savings amounted to $1,000 to $2,400. However, when savings was greater than $10,000, 38% of the uninsured and 25% of those with insurance would travel abroad for health care.

And money has also begun to drive health plans to accessing overseas care for enrollees. My fellow health blogger and friend Bob Coffield noted back in February 2006 that globalization has surely hit American health care: West Virginia’s legislature held hearings on the possibility of including foreign hospitals covered by the state employees’ health plan.

Health Populi’s Hot Points: Medical tourism is no longer a concept at the margins of health care. We’ve past the early adoption stage. As in all aspects of health care, consumers must assess risks in choosing where to access their care — whether locally or globally. Some people will be motivated to go overseas for services that are not yet approved by the FDA. The question will remain, though: what happens if post-surgical complications arise? Malpractice laws in other countries are different than those in the fifty states of America. Cost, quality and risks are all part of this complex equation. And for now, it seems that the cost driver is primary in the minds of patients and payers.