The hospital costs of the American medical system are so high that it made financial sense for both a highly trained orthopedist from Milwaukee and Donna Ferguson, a patient from Mississippi, to leave the country and meet at an upscale private Mexican hospital for the surgery. Ferguson gets her health coverage through her husband’s employer, Ashley Furniture Industries.

According to the report in Kaiser Health News, Ferguson is one of hundreds of thousands of Americans who seek lower-cost care outside the United States each year, with many going to Caribbean and Central American countries. A key consideration for them is whether the facility offers quality care.

In a new twist on medical tourism, North American Specialty Hospital, known as NASH and based in Denver, has organized treatment for a couple of dozen American patients since 2017.

Its website proclaims: “The North American Specialty Hospital is committed to providing an exceptional level of quality in healthcare, with pricing that is bundled, transparent, and competitive. NASH accomplishes its mission by tapping into the finest in cross-border resources – from renowned physicians on either side of the border to state-of-the-art facilities. Headquartered in Denver, Colorado, NASH is designed to provide pre-operative and post-operative services throughout the United States, while providing clinical care in Cancun – a city connected by daily, non-stop, and year-round air service from airports located throughout the United States and the entire Western Hemisphere.

Donna Ferguson awoke in the resort city of Cancun before sunrise on a sweltering Saturday in July. She wasn’t headed to the beach. Instead, she walked down a short hallway from her Sheraton hotel and into Galenia Hospital.

A little later that morning, a surgeon, Dr. Thomas Parisi, who had flown in from Wisconsin the day before, stood by Ferguson’s hospital bed and used a black marker to note which knee needed repair. “I’m ready,” Ferguson, 56, told him just before being taken to the operating room for her total knee replacement. For this surgery, she would not only receive free care but would receive a check when she got home.

The cost to her employer, Ashley Furniture Industries, was less than half of what a knee replacement in the United States would have been. That’s why its employees and dependents who use this option have no out-of-pocket copayments or deductibles for the procedure; in fact, they receive a $5,000 payment from the company, and all their travel costs are covered.

Parisi, who spent less than 24 hours in Cancun, was paid $2,700, or three times what he would get from Medicare, the largest single payer of hospital costs in the United States. Private health plans and hospitals often negotiate payment schedules using the Medicare reimbursement rate as a floor.

Parisi, a graduate of the Mayo Clinic, is one of about 40 orthopedic surgeons in the United States who have signed up with NASH to travel to Cancun on their days off to treat American patients. NASH is betting that having an American surgeon will alleviate concerns some people have about going outside the country, and persuade self-insured American employers to offer this option to their workers to save money and still provide high-quality care.

NASH, a for-profit company that charges a fixed amount for each case, is paid by the employer or an intermediary that arranged the treatment.

The American surgeons work closely with a Mexican counterpart and local nurses. NASH buys additional malpractice coverage for the American physicians, who could be sued in the United States by patients unhappy with their results.

Medical tourism has been around for decades but has become more common in the past 20 years as more countries and hospitals around the world market themselves to foreigners.

The high prices charged at American hospitals make it relatively easy to offer surgical bargains in Mexico: In the United States, knee replacement surgery costs an average of about $30,000 – sometimes double or triple that – but at Galenia, it is only $12,000, said Dr. Gabriela Flores Teón, medical director of the facility.

The standard charge for a night in the hospital is $300 at Galenia, Flores said, compared with $2,000 on average at hospitals in the United States.

The other big savings is the cost of the medical device – made by a subsidiary of the New Jersey-based Johnson & Johnson – used in Ferguson’s knee replacement surgery. The very same implant she would have received at home costs $3,500 at Galenia, compared with nearly $8,000 in the United States.

Galenia is accredited by the international affiliation of the Joint Commission, which sets hospital standards in the U.S. But to help doctors and patients feel comfortable with surgery here, NASH and Galenia worked to go beyond those standards.