The insurance plan for Utah government employees decided two years ago it had to do something to curb prescription drug costs. Its solution? Pay for workers to travel to Canada or Mexico to buy the same medications they’d been getting in the United States, just at much lower prices.

Today, the Utah insurer is saving hundreds of thousands of dollars a year on drugs for a handful of patients who need expensive medicines and make the trip abroad to get them. It’s not as much as they were originally hoping for, but enough that paying airfare plus a $500 bonus is still a worthwhile deal for the state to make.

Medical tourism is hardly a new phenomenon. Eight percent of Americans said in a 2016 Kaiser Family Foundation poll that they had purchased prescription drugs outside of the United States. US government surveys have estimated between 150,000 and 320,000 Americans annually name health care as their reason for traveling abroad. Lower costs are usually their motivation.

But to see it so deliberately deployed by a major health insurer as a cost-saving measure is unusual.

”While we have long heard stories of individuals or informal groups of patients crossing the border to buy cheaper drugs, it has not typically been a sanctioned part of the American health insurance system,” Caroline Pearson, senior fellow at NORC at the University of Chicago, told me. “The Utah ... example is the only case that I am aware of.”

Employers and health insurance plans are always looking for ways to cut costs, of course. That’s why they create provider networks in the first place.

Some employers will also send patients outside of their geographic area to high-quality health centers in the interest of lowering costs — according to the Kaiser Family Foundation, 16 percent of employers have utilized these so-called “centers of excellence” and of those firms, about one in five will pay for travel and lodging expenses.

”This is just the natural extension, I suppose,” Walid Gellad, director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, said. “It is really something that they’re paying people to do this — not just paying for it, but paying people to do it.”

In brief, here is how the Utah government employee program works:

Patients taking one or more of 13 specialty drugs are eligible to participate

They can travel to Vancouver, Canada, or Tijuana, Mexico, to buy their prescriptions

They still make their usual copayments only

The state health insurance plan covers the cost of their airfare, transportation to and from the airport, and lodging if necessary

The state will also pay the patients $500 cash for making the trip

The health insurer works with a Mexico-based pharmacy to arrange the purchases and coordinate travel. From a great Salt Lake Tribune story on the program:

Flying from Salt Lake City to San Diego International Airport takes about two hours. At the base of the baggage claim escalator in San Diego, Javier Ojeda greets first-time patients with a name placard and a driver. “We never leave [patients’] side,” said Ojeda, general manager of Provide Rx, the pharmacy that works with Hospital Angeles to obtain and dispense specialty drugs for U.S. patients. Provide Rx also makes all travel arrangements, including a motor service staffed by bilingual drivers, who escort patients out of the airport and into a van for the short drive south.

Of course, the only reason it’s worth going through all this trouble for the patients and their insurer is drug prices in the United States are so much higher than anywhere else, including Mexico and Canada.

Here are the international price comparisons for the arthritis medication Humira, one of the 13 drugs that qualify for the Utah program, via a report from House Democrats:

So you can see why Utah’s insurance plan is eager to find cheaper prices for these drugs. But it turns out they really needed the $500 cash incentive to get people to take advantage of it.

According to the Tribune, the state insurance plan actually already had a longstanding policy to cover travel costs for patients who journeyed to Tijuana to have certain procedures done (to the same hospital where they now go to get prescriptions filled), but nobody took them up on it. It was the $500 in cash that seemed to make the difference.

It’s important to maintain some context here: Only 10 patients have actually made the trip to Mexico to buy cheaper drugs (though, remember, these are specialty drugs for expensive conditions — they are by definition pretty rare). So it’s not as if Utah is suddenly sending people in droves across the border.

The relatively low uptake means the state has saved “only” $225,000 through the program, not the $1 million they were hoping for, per the Tribune. Still, whatever savings there are can be used to lower premiums for everybody.

This is not a sustainable model for curbing health care costs. There are concerns, like making sure the medications bought in Mexico are safe to use. Gellad pointed out to me that one of the eligible drugs, Enbrel, can increase the risk of infection, so putting those patients on a plane to travel abroad is a risk to be wary of.

But this might be the best of a bunch of bad options until the US gets its house in order.

Throughout the Tribune’s story, consultants who advise employers on international medical tourism are quoted. There aren’t many specifics, but there is clearly a whole cottage industry out there to help US patients find cheaper health care abroad. It is a subtle, or not so subtle, indictment of our current health system.

This story appears in VoxCare, a newsletter from Vox on the latest twists and turns in America’s health care debate. Sign up to get VoxCare in your inbox along with more health care stats and news.

vox-mark Sign up for the newsletter VoxCare Get our newsletter in your inbox once a week. Email (required) By signing up, you agree to our Privacy Notice and European users agree to the data transfer policy. For more newsletters, check out our newsletters page Subscribe

Join the conversation

Are you interested in more discussions around health care policy? Join our Facebook community for conversation and updates.