Healthcare: A Globalizing Industry
by Vivek Trivedi
The globalization of medical care, whether for better or worse, is a very palpable reality. It consists of the movement of patients, healthcare professionals,and even medical technology across international borders. But like all transformative phenomena, there have been mixed feelings about the globalization of medical care that have divided the opinions of both experts and the general public alike. On one hand, globalization of medical care has driven the cost of healthcare down for patients significantly. Difficult medical procedures are performed all around the world at a fraction of the cost of said procedures in the United States (Frenk). Increased free trade in the medical industry would make medical bills not only cheaper in other countries, but in the United States as well. However, Americans are still hesitant to go overseas for medical treatment even when experts have shown that the procedural risk is nearly identical to that of treatment in the United States (Frenk). Additionally, politicians face moral dilemmas about allowing Americans to receive treatment in countries where most citizens cannot afford healthcare themselves. This ongoing debate between proponents and critics is by no means a pedestrian one, but rather a stimulating dialogue about the implications of a more united global health system. Here, the flaws and merits of each will be put into conversation.
Economists have perhaps one of the most objective voices in this debate, as they are truly judging the issue as outsiders without promoting an agenda. Basic economic theory dictates that an American patient in need of care that travels to another country can be considered an import: there is a price that Americans have to pay to receive the other nation’s service. When patients in other countries seek medical treatment in the United States, they are exports of the U.S because it is American healthcare that provides the service. Because each country is able to specialize in the procedures that it does most efficiently, the healthcare industries of both nations are performingat optimum levels. In economics, this is known as the law of comparative advantage (Koncz-Bruner¬). Thus, from an economic standpoint, globalization presents itself as beneficial for both nations and for the world economy as a whole.
This theory was studied in a paper written by Johnson and Garman. It was found that the United States treated about 10,000 fewer patients than it sent to other countries to be treated; yet this still resulted in a trade surplus of nearly $1 billion for the U.S (Joseph and Garman). The implication of this finding is that foreigners travel to the United States for more specialized care, while Americans tend to go abroad for cheaper care. For Americans, this means that waiting times would decrease in their hospitals while healthcare revenues from foreign patients would increase. The reason for such a large surplus is that the United States is considered a much more reliable country to have risky surgeries done in than other nations (Joseph and Garman). This results in foreign patients exhibiting more of a demand for American healthcare and substantial revenue for the United States. In an ideal setting, this revenue would in turn be allocated towards healthcare policyholders to reduce their premiums. How much of this additional revenue is used to help patients is still nebulous, as healthcare companies are not required to make this information public. Skeptics argue that while healthcare companies are making additional revenue, these companies distribute their additional earnings among shareholders rather than reducing premiums for patients.
Nevertheless, it is clear that healthcare companies are realizing the benefits from a more interconnected global healthcare network. Certain companies have already taken steps to save money through this new trade. A major health insurance provider by the name of Blue Cross and Blue Shield (BCBS) has given its policy holders the option of flying to other countries, most notably Singapore and Japan, for treatment (Surowiecki). Hospitals there are equipped with the same instruments that are available to physicians in the United States, allowing, in theory, identical quality of care. This gives little reason for patients to turn down an offer to seek treatment overseas. In fact, BCBS argues that doing so would only lower their insurance premiums and make everyone better off.
But if there are many benefits to medical tourism, why hasn’t this practice become
a household phenomenon? For one, it is difficult to set up international standards of proper healthcare across different languages and customs. The standard of care that is provided in the United States may be very similar to the care provided in hospitals where medical tourism takes place, but patients may not be satisfied with explanations that are given by staff. A very important part of medical care is patient involvement, and if patients are not on the same page with the physicians who are treating them, most likely stemming from language/cultural barriers, then patient care and patient satisfaction will invariably suffer. Such is the case with many clinics in Mexico, as patients have complained that doctors have refused to look at their past medical history for reasons that are “administrative” (Crooks). Without being given detailed explanations, patients can be left confused, or even worse, at risk.
To make matters more complicated,physicians in certain areas of the world will be more adept in treating certain illnesses than others (Anderson). For example, physicians in Africa will most likely be much more experienced in handling cases of malaria or hepatitis resulting from malnutrition than they would at treating heart disease, the leading cause of death for both men and women in the United States. Such an observation would imply that physicians in developing countries would have to be trained specifically to deal with the diseases that are prevalent in developed countries. Developing countries would have to expend their limited resources to educate and train specialized professionals who will not be serving citizens of that nation. Realistically, this is not an arrangement that most countries would be willing to agree to.
Another issue that critics claim arises out of medical tourism is the ethical dilemmas that surface. For example, some Mexican clinics are in areas where a large percentage of the child population does not attend school (Crooks). Many would argue that it would be completely unethical to have foreigners flying in from different countries to have procedures done, some of which may only be cosmetic, while the residents of the nation do not have access to basic rights that people in developing nations do. These tough questions play a role in how medical tourism is perceived by the public and ultimately whether action will be taken to hinder it.
An important factor to consider as healthcare becomes more globalized is how this very globalization affects countries in different stages of development. As it is becoming easier for health professionals to find work in other countries, a vast majority of the flow of health care workers occurs from those moving from second and third world countries to first world countries (Benavid). The decision is a very straightforward one for professionals taking into account the substantially higher pay they will receive and also the better lifestyle they will have after immigrating. This “brain drain” of physicians from developing countries has detrimental effects on the nation they are leaving behind; the country has wasted valuable resources educating and training medical professionals for over two decades only to have them serve the needs of another, more prosperous nation. Critics point to these facts to make the argument that a more global healthcare system has detrimental effects on the development of second and third world nations.
While the world is becoming increasingly interconnected, making it effortless to travel across the world to a country that speaks a different language, has a different culture and bears a different economic status, medical tourism is still a controversial solution to the never ending goal of improving healthcare. The main proponents of medical tourism remain to be health insurance companies, and for good reason. With the cost of training physicians at a record high, many young physicians are compensating for this investment by transferring the economic burden on patients, and ultimately health insurance companies. This fact, coupled with the ethical dilemmas that stand out when discussing medical tourism, summarize why a vast majority Americans have generally not shown an inclination to travel to other nations to seek treatment. Perhaps other factors in the world, such as differences in culture, will need to change before more Americans would travel overseas for treatment. As of now, globalization remains mostly a one-way street consisting of physicians in developing countries seeking jobs in the United States and Europe. It will be fascinating to see where this debate leaves the world and the healthcare industry in the years to come.