Date Posted: 28/05/2013 11:00:00 AM
As seen in the Daily Telegraph, the US health care system continues to catch Australian travellers out. A simple case of appendicitis and a two-night stay in a New York hospital could cost an Australian traveller more than $75,000 according to Cover-More, Australia’s leading provider of travel insurance, and emergency medical assistance.
MEDIA RELEASE 28 May 2013 -US health care system continues to catch Australian travellers out. A simple case of appendicitis and a two-night stay in a New York hospital could cost an Australian traveller more than $75,000 according to Cover-More, Australia’s leading provider of travel insurance, and emergency medical assistance.
Or worse. If you are involved in a car accident in the States and require intensive care, the medical bill could climb to more than $300,000. Plus if you require lengthy hospitalisation, be prepared for a medical bill approaching $1 million—the cost of a one bedroom apartment in some parts of inner Sydney.
Cover-More said two of their US medical cases alone in the past year cost close to or more than $1 million. One involved an Australian diagnosed with a kidney condition who was hospitalised for approximately one month. In the other case, an Australian traveller was hospitalised for a month in the US with a bowel obstruction.
On the other end of the scale, the cost of a visit to an ER department in a New York hospital for a minor cut that may need stitches—be prepared for a bill of $7,000.
Why is the cost of medical care so expensive in the United States? Zac Brookes, Cover-More’s Marketing and Strategy Manager, said there are a variety of factors that contribute to these exorbitant costs and the US health care system is very different to what Australians are used to at home.
"There is no price regulation or limits to how much a medical provider can charge for their services in the United States, unlike here. You will even find major differences between what two hospitals will charge for the same treatment in the same city.
“For example, there could be as much as $40,000 difference in the amount charged for a two night stay in hospital, depending on which New York hospital you are admitted to.
“You’re charged for everything. Your medical bill will usually contain an itemised bill for every single treatment and item of medication you receive, even a simple headache tablet.
“It is a complicated system that ultimately requires a profit motive,” he said, “and one that is frightening to try and navigate alone for Australian travellers.”
Mr Brookes said the US health care system is complex and can be confusing for Australian travellers because it is so very different to our own.
He said in the US, local health insurance carriers manage their costs by accessing networks with HMOs (health maintenance organisations) and PPOs (preferred provider organisations) where providers agree to accept discounted rates for services versus billed charges.
“If you are uninsured and you present at a hospital in the US for treatment, you are usually required to make a pre-payment, secured by a credit card, and each day you stay in hospital you will be under constant pressure to keep your account up to date.
“Uninsured patients may also be able to negotiate a ‘self-pay’ discount however, these also vary from hospital to hospital and are not mandatory.
“If an Australian traveller finds themselves, uninsured, in a US hospital, it could quickly evolve into a terrifying situation where they see their medical bills quickly start running in to the tens of thousands of dollars and their credit card limits and those of their fellow travellers start to be severely tested.”
Mr Brookes said that, in 2012, Cover-More paid more than $16 million in claims to the US alone. “That figure is a combination of the high cost of medical care in the US plus the fact that more Australians are heading there, attracted by competitive air fares and the recent strength of the Aussie dollar.”
Cover-More reported in February that the USA overtook Bali as Australian travellers’ favourite destination in 2012, with the number of Cover-More policyholders travelling to the USA up 18% compared to 2011.
Mr Brookes said that while Australians generally understand the importance of travel insurance there are still too many Australians who have a ‘she’ll-be-right’ approach about their health and the health of their finances when they go overseas on holidays.
“We believe that about 25% of Australian travellers, one in four, head overseas without travel insurance. Our message is pretty clear. Just don't do it.”