RosenCare® Revolutionary Employee Healthcare Approach Could Boost Medical Travel to the USA
January 31, 2019 2:35pm
By Frederick J. DeMicco, Ph.D. and Abe Pizam, Ph.D.
High medical costs and an ineffective healthcare system in the USA have encouraged outbound medical travel and dissuaded many foreign patients from considering it as a medical travel destination. An innovative, self-insured employee healthcare model developed by Harris Rosen, the founder of Rosen Hotels & Resorts in Florida, has the potential to revolutionize medical care. Professors Frederick J. DeMicco, Ph.D. and Abe Pizam, Ph.D. look at what RosenCare® offers.
Harris Rosen, Central Florida’s largest independent hotelier, is widely recognized as an entrepreneur and passionate philanthropist. He also founded RosenCare®, a self-insured healthcare model that has already saved the company US$340 million. These savings have been channeled into employee education, improvements in the dedicated medical center, and various philanthropic projects which have had a significant beneficial ripple effect far beyond the Rosen hotel sites.
The RosenCare® success has attracted the attention of members of US Congress, the US Army and business executives, and several large companies including Disney have created similar programs.
Professors Fred DeMicco and Abe Pizam have recently produced a research paper assessing the RosenCare® model. They conclude that it is a viable model that could be adopted by similar businesses. If the entire U.S. public and private sector took up this approach, they suggest there could be an annual savings of approximately US$935 billion, simply by preventing unnecessary illnesses and diseases and by emphasizing the importance of a healthy lifestyle.
Wider adoption of the model has the potential, they believe, to drive down medical services prices in the US, so making the country’s healthcare industry more competitive with competing medical tourism destinations like Brazil, Malaysia and Turkey. We look at some of the paper’s key findings.
What is forcing innovation in US healthcare?
There are a multitude of problems and challenges with the US healthcare system. Commonly used words to describe it include ‘dysfunctional’, ‘inequitable’, ‘controlled by myopic traditional business practices and values’, ‘full of inbred greed’, and ‘fiscally and financially out of control’.
The US spends US$3.4 trillion per annum (17.5% of GDP) on its healthcare system (Chase, 2017). These healthcare costs nearly doubled in the ten years between 1999 and 2009. Families’ spending on healthcare has increased 25% since 2007, while at the same time other spending on basic needs such as clothing, housing, transportation, and food at home and away has decreased (Wall Street Journal, 2016).
The research paper identifies various reasons for this inefficiency including:
Set against this backdrop, the paper says it is estimated that at present 900,000 Americans travel each year outside their own country for medical treatments (Patients Beyond Borders, 2018). Those who travel abroad for medical treatments do so for two reasons. The first and by far the most important is price differentials. The second is alternative treatments that are not available in the US.
And out of concern for their employee wellbeing, some American entrepreneurs have looked to build alternative cost-saving healthcare systems, born out of evidence, quality outcomes, transparency, compassion, and accountability.
The RosenCare® Story
Rosen Hotels & Resorts is the largest independent hotel operator in Central Florida. In 1991, it started operating its own primary care health facility and service (RosenCare®) for their associates and dependents. It is, according to the company, "a patient-centered onsite medical home model" based on five tenets: access, quality, service, cost and innovation.
Key features of the company’s health offering include:
On a per capita basis Rosen’s healthcare costs are about 40% less than the national average. In 2018, RosenCare®’s cost per covered life was approximately US$5,500 for its 5,700 employees. In the same year, the national average per covered life was over US$11,000. In the hotel industry, annual employee turnover is approximately 60%, but at Rosen Hotels & Resorts it is in the low teens.
Based on its success, Harris Rosen has recently started a consulting company that will advise private and public sector organizations how to set up programs similar to RosenCare®. He also wants to develop alternative approaches to other aspects of healthcare, including providing a fixed cost price in hospitals for all medical services associated with a particular diagnosis (e.g. bariatric surgery).
Relevance of the RosenCare® Model to US medical tourism flows
The authors of this research paper state that if the RosenCare® model and the Rosen method of hospital billing spreads throughout not only the US hospitality and tourism industries but also other industries, inbound medical tourism to the US will increase and outbound medical tourism will decrease. They provide the following reasons:
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medical tourism demand
Professor Frederick J. DeMicco, PhD, RD is a Visiting Professor at the University of South Florida Sarasota – Manatee; Visiting Scholar, Department of Human Dimensions of Natural Resources, Colorado State University, Fort Collins, CO; Aramark Chair Emeritus, the University of Delaware and Visiting Professor, the Rosen College of Hospitality Management, the University of Central Florida, Orlando, Florida, USA. Further information: FDeMicco@sar.usf.edu
Abe Pizam, PhD is Professor and former Dean of the Rosen College of Hospitality Management, the University of Central Florida, Orlando, Florida, USA.
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