Expensive US Healthcare For Seamen

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Maritime Labour Convention Highlights Expensive U.S. Health Care

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The MLC came into force internationally in August 2013.  It ensures that seafarer’s health is taken care of by the shipowners.  The Japan P&I Club recently issued a notice to shipowners giving an analysis of the reasons for the high cost of U.S. healthcare.  The Maritime Labour Convention (MLC), in its third year, makes it more pertinent than ever before because of the “maximum medical improvement” clause.

In the past, seafarers working for less vigilant owners might find themselves treated on board but then replaced at the next port and subsequently left to manage their problems without support.  The Japan P&I Club cites an information paper from U.S. medical services coordinator, Sphere MD.

Medical care in the U.S. is more expensive than in any other country in the world because hospitals and doctors in the U.S. are allowed to charge ANY amount they wish for their services.  Because the private hospitals and doctors set their own pricing, hospital charges for identical medical services, the port-to-port cost variation can be as much as ten times or more.  An appendectomy may cost $300,000 in New York, while the same surgery may cost $30,000 in Washington State.

Medical services coordinators around the world offer services to help shipowners minimize costs, particularly in the U.S. Medical bill review along with pre-certifying care and cost at the time of admission to a hospital is the only way to ensure that the crew members receive quality care in the right timeframe for the right cost.  Future Care’s bill review services have found that 90 percent of all hospital bills contain overcharges.

Savings from bill review can be enormously effective, saving the shipowner about 50-70 percent of medical charges when a nurse case manager and a medical bill review specialist work together prospectively during the actual course of the crew member’s care.  There are insurance companies that offer services globally for insurance, claims administration, case management and cost containment.  The land-based industries have built up many different strategies for mitigating these costs.  Now shipowners are assuming additional responsibilities similar to those land-based industries.  A lack of experience in fiscal management and medical care management could make shipowners and P&I Clubs pay more.

Shipowners, as employers, need a sound strategy.  The shipowners need to have sound processes and documentation in their dealings with sick or injured crew members.  Documentation is not the end-all but, in its absence litigation risks increase.  Unfortunately,  no clear guidance is available for steps to be taken by vessel owners.

U.S. law is unique for both domestic and foreign crew members when it comes to medical care.  In many cases, liability for medical care is unlimited and vessel owners have to pay 100 percent of medical invoices.  Therefore, even in the event of over-treatment shipowners may be required to pay the full invoice amount.

Source: The Japan P&I Club

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