Health Care’s Future: Mexican Medical Tourism for Californians?

Health Care’s Future: Mexican Medical Tourism for Californians?

Immigrants continue to show up in California, where many become part of our 18.5 percent uninsured population. A more neglected story is traffic the other way, California residents crossing the border for treatment in Mexico, outlined in new research by Steven P. Wallace of UCLA.

Professor Wallace and colleagues conclude that almost a million Californian residents crossed the border into Mexico for treatment in 2004, of which half were Mexican immigrants – both legal and illegal. The rest were Americans shopping for cheap prescription drugs or who needed treatment when they were in Mexico for business or vacation.

Many Mexicans go home for treatment because of cost or cultural and linguistic issues. However, the striking trend is the growth in “binational plans,” which cover U.S. businesses near the Mexican border. These plans started in 2000, and now cover 150,000 workers. Certainly, most of these are Mexican immigrants, but I anticipate that more employers will seek such benefits for their American employees in California, and investors will capitalize Mexican clinics and hospitals to serve their needs.

The primary reason will be to escape California’s expensive regulatory burden on health facilities. California hospitals shift the costs of treating Medicare and Medicaid patients (for whom government reimbursement does not cover costs) to private insurers. Professor Daniel Kessler of Stanford University figures that premiums for private health insurance would be about 11 percent lower without this cost shift – a hidden tax that private insurers can avoid by leaving the state.

California hospitals also suffer under laws that drive up their costs: for example, seismic retrofitting and nurse-patient ratios, which Mexican hospitals do not. California hospitals also have to deal with a militant union, the California Nurses Association. Their members parade in front of the Capitol by the hundreds in support of more government interference in health care, in the quest for “universal” coverage.

California does have more uninsured than the United States overall: 18.5 percent versus 15.3 percent, according to the latest data from the U.S. Census Bureau’s Current Population Survey. Even when reconciled with more accurate but less timely figures, California continues to show a disturbingly higher proportion of uninsured than the country as a whole.

A study by Janet Lundy and colleagues associated with the Henry J. Kaiser Family Foundation examined national and California data on the uninsured from 2002, drilling down into residency and ethnic status in an attempt to diagnose the cause of the extra three percent uninsured. Regardless of race or ethnicity, Californians were less likely to be classified as uninsured than non-Californians.

For the United States as a whole, about 8 percent of the population is non-citizens. For other states with high numbers of non-citizens, such as Texas, Florida, or New York, the share is about 12 percent. For California, it is 18 percent. More than 80 percent of U.S. citizens who are residents of California had health insurance. By contrast, only about half of non-citizen residents who have been in the United States for less than five years had health insurance.

The health-insurance surveys do not enquire about whether the non-citizens are legal or illegal immigrants. However, the Immigration and Naturalization Service has estimated that 26 percent of foreign-born residents of California in 2003 resided in the state illegally. So how do all these uninsured, illegal immigrants get their health care?

Some avail themselves of medical services (now shut down due to financial woes) provided by California counties, such as Sacramento and Contra Costa. Some pay cash and some show up at hospital emergency rooms, where they are treated for free and become political fodder in the debate over the extent of the welfare state.

The political momentum in California, and the nation, will make our hospitals more accountable to government but less accountable to all patients. That will give Californians more reason to head south. In years to come, be prepared to have a margarita with your medical procedure.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.