Episode 006 - Smart Healthcare

Mexico Medical tourism pays off in this episode of the Unconstrained Podcast. Learn about my major surgery experience in Guadalajara, Mexico and how you can break free of the US healthcare system and regain your freedom.

On this episode we delve into the dysfunction and constraints of the US healthcare system and how I recently got better outcomes for 1/10th of the cost, by having major surgery in a foreign country.

Click on the player above to listen to the episode or download it.  You can subscribe to the RSS Feed here.

Show Notes

I was originally going to delay this episode until we had further dug into the details on income and expense strategies, but with some recent medical experiences I have had, I wanted to share those and talk to the general state of healthcare in the USA. To put this in perspective - having all the money & independence in the world won’t help you if you are sick, chronically illl or dead. The current US healthcare system is a trap to constrain you.

• Healthcare in the USA is probably the most expensive service in the world
• One must remember that although the majority of consumer purchases you make in the USA are based on a “free market” where competition typically drives prices down and quality up, healthcare is pretty much exempt from that.
• The problem with healthcare is that once you are lying on a stretcher, you don’t have any choices as to where to go, what to get, pricing, options, etc. Healthcare is assumed to be provided by professionals that operate as ethical, responsible & caring
• Third parties step in to pay for the healthcare (supposedly as our advocates), knowing the pricing challenges, pre-negotiating pricing, etc. They include:
• Government programs like Medicare & Medicaid
• Veteran’s Affairs
• Private Insurance companies
• Without a third party payor, you have no real power to negotiate pricing - in this market, Cash is NOT king
• Although in most industries one would assume that if you pay cash for something, it is often sold to you at a discount. The polar opposite is true in most cases with healthcare.
• Eligibility to use Medicare is based on age - 65 yrs and over only
• Eligibility to use Medicaid varies on a state by state basis, but is typically provided for those that live under or close to the poverty line
• Eligibility to use VA services is based on your military service
• Otherwise you need an insurance company
• To give you an idea of why you need a 3^rd party payor, consider the price comparison for a hip replacement operation:
• In USA, the average price with hospital and surgical services is typically about $50K
• In Mexico, the same service with the same hospital & surgical services is about $5K
• Imagine if the procedure was more complex, such as heart surgery, cancer, etc.
• Why is the USA so expensive?
• Providers are forced by law to provide service to everyone, and cannot turn away a patient from an Emergency room
• This typically means that those that can pay, are actually funding those that cannot
• Although most people would consider that basically a socialized medical system, it isn’t because once services are rendered the medical provider has the right to sue and collect on the debt to the patient if they are unable to cover their medical expenses. This leads to the situation where the leading form of bankruptcy in the USA is medical debt.
• There is too much human labor in administration - a simple pharma claim is touched on average by 6 humans
• Insurance companies, by nature, do not want to pay claims
• Pricing looks more like the “wild west” than anything remotely resembling capitalism. This clip from National Lampoon’s Vacation movie pretty much sums up the state of the healthcare market today....
• Price discovery is non-existent hence prices are set based on greed motivation
• Also surprisingly it is not the physicians or surgeons who are receiving the lion’s share of the revenue. Hospitals and administrative services require high levels of funding resulting in a hospital room stay around $10K per night, not including any medical services, surgeries, etc.
• Employers offer health care insurance as an incentive to maintain employment to their workforce
• This is a form of indentured servitude because often the insurance covers the worker but also family members, meaning that if they leave employment, their families will no longer be able to afford healthcare
• The average cost of about $1600 per month for a family if paid for by the company
• Health insurance is a major component of a salary package
• But if you lose your job, you lose your health care. Taking this over individually can be unaffordable, particularly when grouped with the loss of income from losing the job.
• The very definition of “constrained”
• So how can you avoid being constrained?
• It is not easy, but you have to start to take ownership of your healthcare first
• Let’s first break healthcare into 3 categories:
• Preventative
• Elective
• Adverse/Chronic
• The individual controls their spend of money & time in preventative & elective
• Fate controls the spend of money & time in adverse
• Yet all forms of health insurance assumes ALL healthcare is adverse
• Any engineer will tell you that problems are better solved proactively than reactively, hence investing your time & money in preventiative healthcare has the greatest efficacy for the least cost
• If you can address adverse with insurance, but preventative & elective with cash, it is likely to be far cheaper with better results
• The key is to seek out free market solutions for Preventative & Elective
• Find third party payor solutions ONLY for adverse
• Remember.... Always look for free market solutions unless there is no alternative
• Preventative solutions are forced into the free market for the most part
• Gyms, Nutrition, diagnostics, etc.
• You can find the best priced options in these areas
• Never treat elective procedures as adverse
• This is the #1 problem right here
• People just use their insurance for elective procedures, removing choices and any free market price/quality
• The assumption is that if a third party is paying for my health insurance, then I will just use that for EVERYTHING
• Wrong! Now you are 100% reliant on the third party for your body
• Remember - Health care is NOT Health Insurance
• You don’t go to your insurance company to get medical care - you go to your health care provider
• If you can’t find a free market option, you are not looking hard enough
• Human biology is shared by all humans on planet earth
• Healthcare is needed by all humans on planet earth
• Doctors embrace the concept of “Doctors without borders”
• Where is your doctor from? 29% of all physicians in USA were born in other countries
• https://www.reuters.com/article/us-health-professions-us-noncitizens/u-s-relies-heavily-on-foreign-born-healthcare-workers-idUSKBN1O32FR
• Patients should embrace the concept of “Patients without borders” too
• If you have some healthcare need that is elective, and you are ignoring it, it will turn into an adverse situation and you will lose all choices and free market pricing controls
• You just need to find a free marketplace that you can get your elective needs addressed
• Unfortunately this is probably not the USA
• My story
• 1996 car accident
• Australian socialized medicine meets legal & insurance
• “No healthcare for you!”
• Move to USA and it is all about pre-existing conditions
• Ignoring this for 22 years eventually is met with realization it needs to be fixed
• Research, research, research
• Mexico to the rescue
• Spending time visiting facilities, physicians, etc
• It is scary, but doing nothing is worse
• The process
• Picking the surgeon
• Hospital choice
• Post-surgery recovery
• Physical therapy
• Followup consultations
• The results - the 1,000 foot view of what I went through
• In USA I could not get a fixed price quote for total shoulder replacement
• My situation was complicated by the need to undo the poor quality repair done initially
• In conversations with physician friends who would give me their estimates, it seems that negotiated insurance rates would have been about $35K cost, but without contract rates, it would more likely be $125K for cash
• Compare that to the $10K total out of pocket costs for having it done in Mexico
• FUD vs. reality
• They say that 90% of the reason for positive outcomes in healthcare is your mental state - if you believe you are doomed, you probably are. If you are optimistic, you probably will get a positive outcome
• I would say that most people believe that traveling to a foreign country where they may not speak your native language is scary and to put your health in the hands of a native of that country is a bridge too far
• However in my case, it was the polar opposite outcome
• Cultural inclination towards caring for others was higher
• Lower stress levels on the medical systems meant better attention
• Education systems promoted higher grade of care
• Willingness to embrace techniques from all over the world provided more creative solutions than SKU based healthcare options
• There is a lot of money in US healthcare and the risk of having it compete with free market solutions that drive prices down leads many to apply FUD to scare patients away from alternatives
• Consider the health & fitness of those living outside the USA
• Lower obesity levels
• More available healthcare means better proactive addressing of elective procedures
• Less money in medicine returns providers back to why they became doctors in the first place
• There seems to be less of a “herd-like” approach to prescribing drugs to bandaid problems rather than addressing the actual problem - this may be driven by the high profit pharma business models of the USA
• If any of this interests you, start small and build up
• For my family, it started with simple dental care in Los Aldogones
• We then scaled it up to major surgical procedures
• For the rest of my life, I won’t be dealing with my deformed shoulder
• I expect to get 20+ years of increased life quality from this
• What is that worth to me financially?
• A better question is what is it worth to anyone to have a higher quality of life in the finite resource of time that we all have
• Time & quality is priceless
• Summary
• Seek out free market solutions in healthcare
• When you can’t solve a problem in one country, try another
• Many countries let free market healthcare thrive and the result can be up to 10x less in cost than USA
• Medical tourism will likely be the #1 growth industry in the next 5 years
• If you are stuck in a job because of healthcare, the first realization you should make is that only you are responsible for your health
• By splitting this into preverntative, elective & adverse/chronic you can avoid the one size fits all insurance model and stay in the free market
• The best solution is to live a fit & healthy life and you don’t need insurance for that
• More information
• I have a series of articles on beunconstrained.com on this, including all the contact details for my doctor, hospital, etc.