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Why Medical Costs Are Lower in Mexico

Nurse checking a patient's pulse
Credit: Purestock | Thinkstock

I would like to share a story with you that helps illustrate why medical costs are lower in Mexico.

A 20-year-old young man recently posted his $55,000 hospital bill for an appendectomy at a hospital in Sacramento, California on Reddit with this comment: “I never truly understood how much healthcare in the U.S. costs until I got appendicitis in October. I’m a 20-year-old guy. Thought other people should see this to get a real idea of how much an unpreventable illness costs in the U.S.”

What followed was a firestorm of response with over 10,000 comments posted. Even with coverage through his father’s insurance policy, this young man was saddled with over $11,000 in debt that will take him years to repay.

I think we can all agree that emergency procedures like appendectomies are not only essential, they must be handled quickly and near home. But why is it so expensive to have what is a routine surgical procedure in the U.S.? Many would argue it is because of the quality of the care provided. The implication is essentially “you get what you pay for.” But is that true? For example, in Mexico medical care costs a fraction of what it does in the United States. Does that imply that the quality of care is lower? Exactly why is care less expensive in Mexico?

While it is a complex issue, and some of the reasons simply have to do with the overall economic differences, here are a few reasons that simply pertain to the medical culture of Mexico:

Lower Salaries

Physicians in Mexico do not typically earn six-figure salaries. According to the New York Times, the average physician in Mexico earns US$25,000 per year. Earnings in Mexico are lower across the entire spectrum of jobs and this is just as true for doctors and other medical professionals. For example, according to World Salaries, professional nurses in Mexico earn just under US$550 per month. But there’s more to it than that.

No Student Debt

Most doctors in Mexico do not start their professional careers needing to pay off student debt. Bloomberg reports that the median student debt for a medical student in the U.S. in 2012 was $170,000, but for some institutions it will be much higher. This does not include the student debt from undergraduate school, nor interest. Patients in the United States, their employers and insurance companies, ultimately pay these student loans. In Mexico, many medical students study at free public universities or in private universities with much lower tuition.

No Malpractice Insurance

Unlike medical practice in the U.S., for example, physicians do not typically order additional, frequently expensive and questionably unnecessary medical tests to proactively defend themselves against anticipated lawsuits. Doctors in Mexico do not purchase malpractice insurance (so there is no incentive for patients to sue for malpractice), thus saving the $4,000-$20,000 in annual malpractice insurance that doctors in the U.S. typically pay.

Doctors in Mexico are not driven to generate high-volume, over-booked medical practices by the economic demands of having the latest equipment, expensive malpractice insurance and the need for additional staffing to bill insurance companies, manage complex scheduling, the flow of patients into and out of examining rooms and to provide ‘witnesses’ during exams with female patients.

No Third Parties

Furthermore, in Mexico, a physician more typically owns his or her medical practice. There are few HMOs, PPOs or other corporate entities (and their shareholders) expecting and extracting a share of profits.

The attention of physicians in Mexico is more typically fully on the patient with fewer distractions by pharmaceutical representatives and phone calls from pharmacists in the background—and the need to hire people to manage those intrusions. And since the physician has lower expenses and all the money goes directly to the physician, you, the patient, have lower medical costs.

While the examples cited above are just part of the whole picture, it should be clear that it is entirely possible to offer world-class medical care at affordable prices because well-trained physicians are paid less and there are no complex layers of corporate interests grabbing profits. And, while you have no choice where to get help when you need an appendix removed in a hurry, in many cases you do have a choice of where to go for healthcare–and more people than ever are considering medical travel to Mexico as an option.

This story is just one of many in my book “The English Speaker’s Guide to Medical Care in Mexico.”