Former Bend hospital administrator launches medical tourism company

Kyle Johnson always wanted to be an entrepreneur and even won a local startup contest with a dental appointments app. He didn’t follow through on the idea, though, because striking out on his own was too scary.

It was scarier than raising three children or doing three combat tours as a U.S. Marine, Johnson said. The former St. Charles Health System administrator finally mustered the courage last summer and in January will launch a medical tourism website, MedicalBnB. Johnson said the goal is to make traveling to a foreign country to save money on surgery or dentistry easier for consumers.

“You start to create the global health network,” Johnson said. “Maybe that will put some downward pressure on the pricing in the U.S. I don’t know, but that’s what my hope is.”

Medical tourism is not new, but Johnson thinks the market for it would be much bigger if consumers had information about the quality of foreign doctors and hospitals. He discovered the information gap after he left St. Charles in June and was planning a six-week stay at a wellness resort in Costa Rica with his wife and kids. Johnson wanted to make sure his young children had access to a pediatrician during the trip, but it was hard to find anyone through online research. “We eventually got connected by word of mouth. When we got down there, we found there were some great doctors.”

Medical tourism still works as pre-Internet travel did in some cases. Patients can book their trips through facilitators, who are certified by the Medical Tourism Association. They can also use websites such as Dental Departures, which offer price quotes and customer reviews.

Johnson said MedicalBnB aims to raise the bar on transparency by recruiting a network of providers who are willing to provide verified data on standard measures of health care quality. He and his two partners, both software programmers, also want to create a user-friendly online experience, sort of like the Airbnb of medical tourism.

Central Oregon residents who’ve traveled to Mexico for bariatric surgery saw mixed results, said Dr. Stephen Archer, a bariatric surgeon with Bend Memorial Clinic who has provided follow-up care for several local medical tourists. Archer is skeptical a startup website could obtain the same kind of data on foreign providers that’s still coveted by U.S. patient-safety advocates. “Quality data’s so hard to get, even here,” he said. “More power to them.”

Johnson said foreign doctors and hospitals are motivated to be more forthcoming. “Because they want U.S. patients to come there, it’s easier for us to get them to display their data,” he said.

The most common procedures for which Americans go abroad are dental, orthopedic and cosmetic, as well as weight-loss surgeries, according to the Medical Tourism Association.

According to examples provided by the MTA, a knee replacement in the United States could cost $35,000 but in Costa Rica would cost $12,500. Gastric bypass surgery might cost $25,000 in the United States but $11,500 in Mexico.

Some of Archer’s patients have told him upfront they can’t afford the surgery in the United States, and he agrees to provide follow-up care. “Many times they’ve simply met a surgeon, had an operation and told to be on your way and find follow-up.”

The trend is concerning to Archer because weight-loss surgery patients require so much attention. Patients can develop vitamin deficiencies, and many of them trade carbohydrate addiction for a new addiction, he said.

One of the elements MedicalBnB is still developing is virtual follow-up care, Johnson said.

Fledgling firm

When MedicalBnB launches, it will be limited to dental care in Los Algodones, Mexico, a town across the border from Yuma, Arizona. Los Algodones is a well-established hotbed of dental care that caters to American snowbirds looking to save money.

MedicalBnB is working with an Oregon dentist who will conduct chart audits at the participating clinics, and the startup initially will focus its marketing on Phoenix, Las Vegas and San Diego residents, Johnson said. He plans to expand gradually and incorporate customer and provider feedback along the way. “We’ll go at the speed that we can,” he said. “We don’t want to put a bunch of garbage out online like everyone else is doing.”

MedicalBnB might never gain enough traction to become a household name like Airbnb, where people list rooms for rent, but it has a prestigious start. In late November Johnson and his co-founders, Jaime Bueza and Chris Tan, were accepted to the Y Combinator startup accelerator program in Silicon Valley. Y Combinator, which has backed Airbnb, Dropbox, and a host of other startups, provided a $120,000 investment in return for a 7 percent equity stake in the fledgling company. Johnson and his partners will spend three months at Y Combinator refining MedicalBnB.

They still aren’t sure how MedicalBnB will become profitable.

Initially, Johnson envisioned MedicalBnB making money by taking an upfront fee for each procedure that was booked online. Then he realized it’s difficult to price many procedures in advance because, for example, in dentistry, a different course of treatment might be decided after the patient has an examination. Then he and his partners began to think about taking a portion of proceeds after the treatment is complete, but he realized that would be cumbersome to the provider. “We start to become an unnecessary bureaucratic hurdle, which is what I hate about health care,” Johnson said.

At this point, Johnson said he’s focused on creating the best customer experience in medical tourism. “If we have something valuable, we’ll eventually figure out how to make money off of it later on,” he said. “I know it goes against everything we grew up learning about, but in the tech world that’s not completely crazy.”

Johnson, 35, began his career in health care after going to college and serving in the U.S. Marine Corps. He started out as a human resources coordinator at St. Charles, earned a master’s degree in business and health care administration and began climbing the ranks. When he left he was director of ancillary services for the Prineville and Madras hospitals, overseeing radiology, lab, pharmacy and other departments at each location.

Johnson said he’s always had an entrepreneurial bent, and in 2013 he won Bend’s Startup Weekend contest with Easyhealth, an application that let users book and pay for dental appointments online. Having just been promoted at St. Charles, he said, he didn’t have the guts to follow through on starting the business. Once he decided to leave health care administration, Johnson said, he and his wife prepared for the change by eliminating all of their debt. They sold their house in Bend and are living off savings and a portion of investment proceeds in MedicalBnB. Johnson moved his family to Seattle in order to work closely with his co-founders, whom he met at the Vancouver Startup Week. “We all quit our jobs,” Johnson said. “It’s kind of a scary thing.”

Consumer advocates are lacking

Currently, there are few independent sources of information about foreign medical providers.

The Medical Tourism Association points out there are 458 hospitals around the world that are accredited by the Joint Commission International, the same not-for-profit organization that sets standards for U.S. hospitals. To dive deeper, customers simply have to do their homework, MTA spokesman Joseph Harkins. Potential medical tourists can find help through facilitators, who are paid a percentage of the procedure cost by the foreign provider, or by the medical-tourism departments of foreign hospitals.

Harkin said medical tourism facilitators are trustworthy if they’re certified by the MTA. “You know that it’s somebody who’s committed, is respected by different providers around the world. Our mission is to provide education and industry awareness. We don’t have a financial stake in where patients go.”

Johnson is staking MedicalBnB’s future on the quality of information it provides consumers. “This is one thing I’ll never negotiate on,” he said. “To even be in our network, you have to be at a certain level of care already and you’ve got to be willing to share a certain level of data. It’s not about the providers. It’s about the patient.”

— Reporter: 541-617-7860 kmclaughlin@bendbulletin.com