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Photo Gallery: Germany's Troubling Medical Tourism Trade

Foto: Dmitrij Leltschuk/ DER SPIEGEL

Dubious Middlemen and Greedy Doctors Inside Germany's Medical Tourism Business

German hospitals are earning a billion euros a year with foreign patients. Sarkis Sargsyan is one, and like so many others, the Russian cancer patient fell into the clutches of a questionable middleman and greedy doctors.

The metastases are scattered around his body like pieces of shrapnel. The German doctors have shown them to him on shaded computer images, which reveal lighter formations in his liver, lungs and brain.

It's a Friday in July 2013. Sarkis Sargsyan, a 46-year-old Russian citizen, is lying on a treatment table in the Klinikum rechts der Isar, a university hospital in Munich. A sign on the door reads "Linear Accelerator III." A mask made of hard blue plastic encloses his hairless skull and face. Two women in white gowns are adjusting Sargsyan's head so that the intersecting red laser beams from the irradiation unit line up precisely with the markings on the mask.

Sargsyan, wearing a black tracksuit, is lying peacefully on the table. His hands are folded across his stomach, his eyes closed. The women turn on the machine, which begins to emit a low humming noise. The radiation is now being targeted at the enemy inside his head.

The story of Sarkis Sargsyan is one of adversity, despair and hope. It's also a tale of allegedly false promises, lavish profits and a brutal lack of scruples. It began in September 2012, when Sargsyan discovered blood in his stool. He went to a hospital in Moscow, where a colonoscopy was performed. "You have a tumor in your intestine, and it doesn't look good," the doctor reportedly said, looking serious. "If you have money," he added, "you should go to Germany. They'll help you there."

The doctor's words reassured Sargsyan because they sounded like an insurance policy. His family owns a small hotel and restaurant in Moscow, and he was convinced he could afford the treatment.

'Treatment in Germany'

He researched German clinics and doctors online with the help of his wife, Nelly, 38, and his brother Derenik, 49.

If you type the words "treatment in Germany" into a search engine on the Russian-language Internet, you get some 3 million hits, including the websites of those who have identified a potential market in people like Sargsyan. An army of "patient facilitators" appears on the screen, offering services to patients that include overcoming language barriers, procuring visas, scheduling flights and, most importantly, setting up appointments at top hospitals and clinics. "You have to be careful with them," the doctor in Moscow had warned Sargsyan.

An acquaintance suggested to Sargsyan that he try IMZ GmbH, a Munich-based agency. IMZ stands for Innovation Medizin Zentrum (Innovation Medicine Center), which sounds impressive enough. When Sargsyan's brother Derenik called IMZ, he described the suspected cancer diagnosis to a doctor named Arsen B., who had attended medical school in Armenia, where the Sargsyans were born. "Come to Munich," the doctor allegedly said. "Then your brother's illness will soon be nothing but a memory."

A few days later, Sarkis, Nelly and Derenik boarded a flight to Munich. But they had no idea how long the trip would last -- and that they were about to begin the worst period of their life.

A Global Market Worth Billions

Even medicine has now succumbed to globalization. Like the Sargsyans, hundreds of thousands of people receive treatment in a foreign country every year. This medical tourism earns German hospitals and doctors roughly €1 billion ($1.35 billion) in annual revenues. In 2011, 82,854 foreign patients were treated in Germany on an inpatient basis and about 123,000 on an outpatient basis. Russians make up the largest group of non-European Union patients in Germany, with about 6,000 receiving inpatient treatment each year. Their share of the total foreign patient population has increased six-fold since 2003. "And the interest keeps growing and growing," says Vladimir Pyatin, Russia's deputy consul general in Bonn, the western city that was once Germany's capital.

Receiving medical treatment in Germany has always been seen as a privilege in Russia. Famed novelist Fyodor Dostoyevsky went to the spa in Baden-Baden, writer Nikolai Gogol searched for a cure for his melancholy in the Baltic seaside resort of Travemünde, former President Boris Yeltsin, who had had five bypass surgeries, had regular checkups at the German Heart Institute in Berlin, and former first lady Raisa Gorbachev was treated for leukemia at the Münster University Hospital.

The reasons for the current boom are simple: The state health care system in Russia has been bled dry. The number of hospitals has declined by almost half since 2000. Many underpaid doctors have left the country. There is a shortage of equipment, and hygiene in hospitals is disastrous. Only 35 percent of Russians are satisfied with medical care in their country.

In comparison, Germany looks like a paradise, with well-trained doctors working with state-of-the-art technology in spotless hospital wards. German hospitals also cater to Russian patients, who, as self-payers, present a lucrative source of income.

This seemingly presents a win-win situation. And that's what it would be if weren't for several factors: the brokers who shamelessly exploit their customers, padding their invoices, urging them to have unnecessary tests done and, in the worst case, sending them home after they have received subpar treatment; the hospitals that turn a blind eye to all of this merely to make a profit; and the politicians who are aware of the legal gray area in which medical tourism lies, yet behave as if they were blind, deaf and dumb.

A Knight in Shining Armor

Sargsyan, his wife and brother landed in Munich on Sept. 16, 2012. They had already paid €3,500 to the IMZ agency as an advance for the treatment and visas, the Sargsyans say.

According to their account, soon after their arrival, they went to the IMZ broker's office at the Sheraton München Arabellapark Hotel.

There, they allege they were greeted by a man in a suit, Arsen B., whose business card listed an exotic combination of titles: "Prof. Dr. med. Dr. h. c. med., neurosurgeon - orthopedics, Director - Senior Physician." B. allegedly promised to make the necessary arrangements for Sargsyan with a network of private clinics and doctors' offices. The family felt like they had met their knight in shining armor.

However, IMZ disputes this account, saying that Arsen B. was abroad on this date and that it does not have an office at this location.

Sargsyan is sitting in a furnished, two-room apartment in northern Munich as he describes his first few days in Germany. He has just returned from radiation treatment, and the blue mask is lying in his lap.

He was a karate fighter and strong as lightning, says his wife, Nelly, a petite, friendly woman. The couple has been married for 21 years. Nelly's description of her husband is a far cry from the person sitting on the sofa. He has dark bags under his eyes, and he looks depressed and exhausted. It's hard to imagine that this man has ever laughed.

Sargsyan talks about how the first appointment took him to the Arabella Clinic, where another colonoscopy was performed. The diagnosis described "a coarse tumor that is not passable." A tissue sample revealed that the tumor was malignant. Doctors also found metastases in Sargsyan's liver and lungs. An interpreter with the agency translated for the patient. "The news was bad," says Sargsyan, "but I trusted the doctors." He also trusted Arsen B., who seemed to have a plan for everything.

To prevent intestinal obstruction, Sargsyan was given a colostomy. Local doctors performed the first cycle of chemotherapy, followed by radiation therapy. The brother handled financial matters, paying €10,000 to the IMZ office for the initial treatment. Because he paid with a credit card, he was also charged a 5 percent surcharge. "Thank you for your confidence," the customer receipts read.

According to the initial estimate, the €10,000 was supposed to cover the chemo and radiation therapy. But soon the brother was asked to pay another €20,000 because the doctors had supposedly forgotten to include the medications in their first bill. No payment, no treatment, Arsen B. reportedly told the brother. That is how Derenik Sargsyan tells the story. However, Arsen B. claims that the additional payment became due because the treatment turned out to be much more complex and costly than originally predicted.

"From the very beginning, patients are told that, generally speaking, the actual doctors' costs are higher than the preliminary cost estimate," Arsen B. says.

During a break in treatment at the beginning of the year, the family returned home to Moscow. After two weeks, Sargsyan suddenly collapsed at home. He was making strange sounds and garbling his words. "Gasoline, I need gasoline," he said, pointing to a water glass.

Doctors in Moscow suspected that there were metastases in his head. His brother Derenik called the IMZ agency in Germany and was told to "come back immediately."

The agency has had a Facebook page since December 2011. The name IMZ is a clever choice because, when it's entered into a search engine, one of the first hits is the home page of the Isar Medizin Zentrum, a well-known private clinic in Munich. The logos of the two organizations -- three curved, parallel arches -- are also strikingly similar. But the agency and the clinic are completely unrelated, and a lawsuit is in the works. The clinic feels that its trademark has been "massively infringed upon."

On the Russian website, the agency advertised until recently its services with flowery slogans, such as: "Life goes on, and we make sure that illnesses don't prevent you from enjoying it to its fullest" and "You will still be able to enjoy the world in all of its colors."

An Unregulated Business

The public prosecutor's office in Munich has investigated Arsen B. for suspected fraud several times. In 2011, he was accused of having scammed consulting fees of about €25,000 for the treatment of a 12-year-old Armenian boy with bone cancer. The boy has since died. His father claims that B. had assured him that he would not be charged for his brokering services.

According to prosecutors, Arsen B. argued that it was clear that his fees were to be billed under the Fee Schedule for Non-Medical Practitioners. B. had assessed a fee for over one-third of the days during the treatment period, from June 2010 to January 2011. The proceedings were closed in July of this year, but the family's attorney has filed a complaint against the decision. B. refuses to comment on the case, citing a non-disclosure obligation.

Taking Advantage of People in Need

There are only rough estimates available on the number of agencies in Germany that provide these facilitation services for foreign patients. "I know of a few hundred," says Jens Juszczak, a lecturer in health marketing at the Bonn-Rhein-Sieg University of Applied Sciences who is considered Germany's foremost expert on medical tourism. According to Juszczak, very few of these agencies are genuinely reputable.

Most of the companies are not registered, and many consist of only one person, a mobile phone and a website -- often with soft music in the background or images of butterflies fluttering across the screen. One company, Baden-Tour, advertises its ties to 256 partner hospitals on its Russian website, but most of these hospitals are completely unaware of their good fortune.

Some agencies offer organ transplants, even though people who live in Russia are generally not eligible for them in Germany. Others advertise such procedures as gallstone eradication or gallbladder removal, although they refrain from mentioning that gallstones can recur.

Everything from basic care to all-inclusive services can be booked through agencies. The services are bundled into packages. But the websites neglect to detail the costs of treatment and how much the agencies collect as their fee. It is an unscrupulous business that takes advantage of people in need, and one that no one regulates or monitors.

It is also a business in which German hospitals like to offer their services as partners. "Hospitals newly entering this market are often in gold-digger mode," says expert Juszczak.

The profit-seeking side of the business was on full display in early September, when politicians, doctors and patient brokers convened in lecture halls at the Bonn-Rhein-Sieg University for the largest German conference on medical tourism. The presentations and discussions revolved primarily around Russian patients, or rather Russian self-paying customers who happen to also be patients. The 150 attendees talked about marketing and market shares, customer acquisition, sales revenues and process management.

The medical director and chairman of the board of the University Hospital of Bonn told the audience how difficult it is today to run a hospital in a country where half of them are on the verge of financial ruin. He also noted that the roughly €6 million paid by foreign patients this year was critical to the hospital's survival.

Padding Budgets through Medical Tourism

Medical tourism was discovered as a revenue source in the late 1990s. For hospital managers, the profits derived from self-paying foreign patients represent one of the few ways to earn income to supplement the payment deals negotiated with health plans. "It enables them to pay for new medical devices, for example, which normally wouldn't be in the budget," Juszczak explains.

Public authorities also foster the extra business. The government of the southern state of Bavaria, for example, invested €5 million in a project called "Bavaria - a better state of health." It targets sick foreigners interested in receiving treatment in Bavaria -- the home of Europe's "Medical Valley," as the initiators write.

The German government is also involved in attracting foreign patients. The German National Tourist Board (DZT), for example, advertises the country's health care system in a glossy brochure called "Medical Journeys." The brochure, with a circulation of 50,000, is published in German, English, Russian and Arabic.

The City of Hamburg's tourism authority even published a 60-page supplement to the Moskauer Deutsche Zeitung, a German-language newspaper in the Russian capital, in which it advertised the metropolis as an "ideal health care city." Both the federal government and the German parliament gave their seal of approval to the PR document.

Large hospitals have set up their own "international offices," which arrange for interpreters, visas and accommodations for foreign patients and their families. Smaller hospitals and private clinics, on the other hand, try to forge ties with agencies, so that they can begin pitching their services to customers when they arrive at the airport.

Flights from Russia and Ukraine land at Terminal 1 in Munich's airport. A billboard in Hall C advertises, in Cyrillic letters: "Express check 5 hours, cardio check 8 hours, cancer check 2 days." Twelve hospitals and clinics that cooperate with the Doktor Mjunchen agency are listed under an image of two smiling doctors. They include the Atos private clinic and the St. Marien Children's Hospital in Landshut.

Lost in the 'Shark Tank'

Sarkis Sargsyan returned to Munich in February. Arsen B. had sent the family to the Bogenhausen Hospital, says Derenik. They were given a new estimate, which quoted €31,700 for the treatment, a €1,000 administrative fee and a €10,000 risk surcharge, though it is unclear exactly what this entails.

The list of tests included CT scans, MRIs and X-rays. The entire apparatus was started up once again. This time the doctors found a metastasis in the cerebellum and one in the left temporal lobe. The chief physician performed two surgeries on Sargsyan within a week. Shortly after the procedures, he was completely lucid once again. "I kissed the doctor's hands," his brother Derenik says quietly. "Sarkis was immediately much better."

He had 12 stitches above his left ear and 12 stitches on the right side of the back of his head. As he sits in a Munich apartment, which is not his home, he frequently runs his fingers across the scars on his shaved skull. Then he stares blankly into the room.

The next cycle of chemotherapy was administered after the operations. "At that point, someone should have told the patient long ago that he was terminally ill," says an independent doctor who later met Sargsyan in a different hospital. Another doctor notes: "There is a lot of competition in Munich, and everyone is running after foreign patients. I tried to maneuver the family safely through this shark tank, but unfortunately I wasn't always successful."

Arsen B. clearly didn't want to lose his customers. According to the Sargsyan family, the broker continued to hold out hope of improvement, and he also advised the family to have the intestinal tumor removed surgically. Arsen B. denies this and claims that the decision for the removal was taken after intense consultation with a number of specialized physicians.

The calamity continued in a sleek new clinic on the banks of the Isar River. Arsen B. had scheduled surgery for Sargsyan at the Dr. Rinecker Surgical Clinic. The agency estimated the costs at €34,292.

Screaming in Pain

This time, the family's knight in shining armor was a surgeon named Edward Shang, who allegedly assured Sargsyan that he could be released after a week. But the family wasn't told that Shang was working at the private clinic because he had been stripped of his teaching privileges at the University of Heidelberg after allegedly falsifying study data. When questioned about the matter, Shang said that he had voluntarily withdrawn the published articles. He declined to comment on the Sargsyan case, citing doctor-patient confidentiality.

Shang operated on April 26 to remove the intestinal tumor. After three days, Sargsyan was in such severe pain that even high doses of painkillers were ineffective. Nevertheless, the surgeon assured him that everything was as it should be. Arsen B., for his part, is still singing Shang's praises.

When Sargsyan was discharged on May 15, a day after his birthday, he was in so much pain that he could barely walk. His discharge papers read: "Patient circulation is stable, but he still exhibits significant pain symptoms, although they are receding." Back in the apartment, however, Sargsyan was screaming in pain.

His wife, Nelly, recalls the day with tears in her eyes: "He had a high fever, and he kept saying: I'm dying, I'm dying. We didn't know what to do."

They took a taxi back to the Dr. Rinecker Surgical Clinic, where they were assured that everything was OK -- even though the doctors could see that purulent, foul-smelling fluid was leaking from a suture and accumulating in Sargsyan's drainage bag. The brother, Derenik, called Arsen B. in a panic, saying that he was worried about Sarkis. B. reportedly advised the family to go to the Klinikum rechts der Isar.

Once they were there, the doctor on duty noted: "It was not possible to obtain an extensive medical history from the patient because he spoke neither German nor English, and there was no interpreter present." He was facing three members of a completely distraught Russian family in need of help, who had lost all confidence in the attractive, clean world of German hospitals.

A CT scan showed the opening through which the intestinal contents were leaking. With some effort, the doctors came to grips with the complication. But they also discovered new metastases in Sargsyan's head.

For the first time, so the Sargsyans tell the story, doctors approached the terminally ill patient's bedside with the truth, using a taxi driver as an interpreter. They told Sargsyan that there was nothing they could do for him anymore, and they left no room for doubt. They could only hold out the hope of giving him a little more time with chemotherapy and radiation. According to Arsen B., Sargsyan had already been confronted with this dire fact after the first diagnosis. In any case, Sargsyan was completely beside himself and given a sedative.

His brother and his wife held back their tears until they had left the hospital room, determined not to allow Sargsyan to see their despair. An impression of his head was taken the next day for the radiation mask. "What was done with this man is a crime," one doctor says in hindsight.

For eight months, the Sargsyans were buoyed by the belief that everything would turn out well. Now they increasingly felt that they had been cheated.

Derenik began going to all the hospitals to collect the original billing statements so that they could be checked. But he claims that he was already turned away at the Rinecker Clinic, where he was told that the clinic's contract was with the IMZ agency rather than the patient.

Bloated Invoices

Maksims Slosbergs and Evgenij Steinberg, two attorneys based in the western city of Dortmund, are familiar with this disconcerting objection. They are involved in several cases in which Russian patients were obviously conned in Germany. Many reports on such victims of medical tourism have been aired on Russian television, says Slosbergs, and patients have also complained online about the business practices of dodgy agencies. The only problem, he adds, is that no one in Germany cares about the issue, even though the estimated number of unreported cases is "unbelievably high."

Slosbergs pulls out the file on Maria V. from a stack of documents on his desk. The 37-year-old had had a hip operation in the Ruhr region of western Germany. The surgery was unsuccessful, and the woman will need a second procedure. But despite his poor performance, the surgeon had no qualms when it came to issuing his invoice, charging more than €6,000 in surcharges for surgery performed by a chief physician.

Germany's Medical Fee Schedule is supposed to regulate how much a surgeon can charge. According to the regulation, surgeons can apply a factor of no more than 3.5 times a base rate for the procedure they perform. In the case of Maria V., however, the doctor used a factor of 13.

This doesn't surprise Slosbergs. Many doctors and hospitals use the same approach to cash in, he says. But, he adds, "no other case was filled with such bold-faced lies as that of Ruslana Fadeyeva."

The 8-year-old girl from Yoshkar-Ola, a city in central Russia, had Burkitt's lymphoma, a rapidly progressing cancer of the lymphatic system. Like the Sargsyans, her parents had no faith in the Russian health care system. When they searched online, they found an agency called Medical Travel in the western German city of Lüdenscheid. It gained notoriety in connection with an organ transplant scandal, after it had allegedly helped an alcoholic Russian obtain a liver transplant at the Göttingen University Hospital in return for a six-figure payment.

In Fadeyeva's case, the agency recommended treatment in the nearby city of Münster. But the family couldn't come up with the down payment of €183,600. The girl's father, Roman, owns a few clothing stores, but the family had only saved €20,000, and they had borrowed another €80,000 from a bank.

Among the agencies, obtaining treatment appears to be primarily a matter of negotiation. After a few days, Roman Fadeyev received a new estimate from Medical Travel "for examination and treatment at the Center for Pediatric Oncology of the University of Düsseldorf Hospital." This time the price matched the family's budget: €100,000.

A Family Sues

Ruslana arrived in Düsseldorf with her parents in July 2008. By September, she was cured. The Fadeyevs were overjoyed, and yet the treatment costs still seemed unusually high to them. After all, they conjectured, the doctors hadn't even had to operate. Ruslana's father demanded a detailed statement. The university hospital claimed that it no longer had the information, and that it had sent the statement of costs to Medical Travel. The agency, for its part, was unwilling to produce the statement.

Slosbergs filed an action seeking disclosure of records in the Hagen Regional Court, and after two years, the court ruled in his client's favor. The Fadeyevs were shocked when they finally received the statement. Ruslana's treatment had cost only €39,715, including the services of a chief physician. The agency had pocketed the rest.

The agency now claimed that the €100,000 had been a lump-sum fee. But there was no mention of a lump sum in the Fadeyev's contract; instead, it defined the sum as a "deposit." So Slosbergs sued the agency to recover the difference.

The court ruled in the Fadeyevs' favor in October, ordering the agency to repay the money, together with about €10,000 in interest. The court also ruled that the agency could only charge a fee amounting to 15 percent of the cost of treatment. The agency can still appeal the decision.

'Highly Conspicuous'

Sargsyan and his brother are sitting at the dining table of the Munich apartment. "We're no longer interested in trust, but in finding out the truth," says Derenik. There are two piles of documents on the table. The few original invoices he painstakingly managed to obtain are in one pile, while the agency's estimates and invoices are in the other.

A comparison of the two sets of documents reveals that the agency was both meticulous and imaginative in inflating its services. It had charged nebulous administrative fees and risk premiums, or it had simply slapped up to a 100 percent surcharge onto original hospital bills. For instance, the agency had assessed €12,000 for the first course of chemotherapy, even though the oncology department had issued original invoices for only about €5,400. The IMZ agency, however, claims that fees were charged only for services actually rendered.

One of the IMZ documents contains an item called "consultation services," for €2,500. Derenik writes a large question mark below the item. "Consultation? What is that? It's B.'s favorite word," says Derenik.

"Consultation services were provided when it was advisable and requested by the patient," says B. Exactly what this means follows from neither B.'s statement nor the Sargsyans' documents. It is clear, however, that Arsen B. is not a licensed physician in Germany, which means that he is not authorized to provide consultation in the usual sense.

Slosbergs and Steinberg have reviewed all of the Sargsyans' documents. In a four-page statement, they write: "There are problems with practically all the statements. On the whole, we conclude that this was the first time we set eyes on such a large-scale case of billing fraud. This also appears to be a case of substantial tax evasion. Again and again, value-added tax was not charged for services provided." B., however, insists: "Value-added tax was accounted for and paid where it was due."

Billing experts with a private insurance carrier have also reviewed the Sargsyans' documents. "In some cases, the fees stated by the doctors are not passed on to the patient, but rather higher amounts," they concluded after examining the IMZ billing statements.

They, too, describe the physicians' bills as "highly conspicuous when it comes to fee regulations." For instance, billing codes are apparently missing in many places. In addition, doctors apparently applied an inexplicably inflated rate to Sargsyan's treatment.

German Hospitals Are Obligated to Apply Flat Rates

The legal situation seems clear. Under German law, there are no provisions that would make it possible to charge foreign patients higher fees. If fact, in a 2008 memorandum, the Federal Health Ministry stressed that German hospitals are obligated to apply flat rates to "compensation for the treatment of foreign patients," which means that payment for each service must correspond to a specific fixed amount. According to the memorandum, differentiating among statements "based on the nationality of the patient" is not permitted.

Many hospitals ignore this directive. According to a survey by the Bonn-Rhein-Sieg University, close to two-thirds of hospitals polled admitted to charging foreign patients higher flat rates. About 14 percent also admitted to issuing separate invoices so as to be compensated for their higher costs.

Professor Juszczak claims that hospitals sometimes pay the agencies "trafficker commissions" to bring them patients, even though the Kiel Regional Court, in northern Germany, described such agreements as unethical in 2011. The judges argued that this commercialization is objectionable given the relationship of trust between doctor and patient. At the same time, Juszczak does not find it objectionable to charge "for services that are actually provided, such as transportation and interpreting services."

Juszczak wants to see the market become much more transparent and, through clear guidelines, more attractive for hospitals. This could include pricing guidelines as well as certification of the patient brokers and the international offices within the hospitals. It could also include a fundamental increase in the base rate for foreign patients, enabling hospitals to openly account for the additional costs they incur to treat such patients. But so far these proposals, says Juszczak, "have fallen on deaf ears in the relevant ministries."

Grand Total: €191,784.45

It is August, and Sargsyan, still in Munich, is thinking about the last 10 months of his life. "If someone had told me that I had a 50-50 chance of survival, I wouldn't have come," he says. "But they promised to make me well again."

His brother adds: "The money is one thing. What kills me is when I think about all the things they did to Sarkis." When Sarkis leaves the room, his brother whispers that doctors are now giving him a year to live.

Soon afterwards, the family receives a 41-page "liquidation statement" from the IMZ agency. The grand total: €191,784.45.

According to Arsen B., the patient still owes €4,177.92. He believes that the Sargsyan's treatment was by and large successfully completed. He is unwilling to discuss details. Once again, he cites his non-disclosure obligation. B. calls the accusations an attempt to put him under pressure. The agency, he adds, views the possibility of a lawsuit "with great composure."

The Sargsyans are now back in Moscow. They have sent Sarkis' records to a hospital in Los Angeles that is testing a new treatment method. The doctors there say that they will have to examine Sargsyan in person before they can provide a conclusive opinion.

Translated from the German by Christopher Sultan
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