Can Medical Tourism Create a Global Health System?

October 7, 2011

In this globalization era, almost all types of work have been sent to cheaper offshore locations where offshore workers perform the tasks for American companies. Take manufacturing- everything from cheap toys to to innovative products like the iPhone or the Kindle are all assembled in offshore locations and sold to American consumers.

global health system Can Medical Tourism Create a Global Health System?

1. Problems with Medical Tourism

Americans have been traveling to cheaper offshore locations like Mexico, Thailand, or India for their treatment which is popularly known as medical tourism. In traditional outsourcing, either finished goods from offshore locations are sent to America or offshore workers provide services for Americans through the Internet. In both the cases Americans do not leave their country, as goods and services are provided from offshore locations. But in medical tourism Americans have to physically travel to offshore locations for their medical treatment and that brings all the issues to health insurance providers and care givers.

As Americans leave to other countries for their medical treatment following questions need to be addressed by the by American policy makers:
1. Who is going to guarantee the reputation of hospitals in offshore locations?
2. Does American health insurance covers patients’ treatment in other countries?
3. How  will medical records be shared to caregivers in other countries and how will it be protected from unauthorized use?
4. How will the medical malpractice laws in different countries can affect patient treatment?
5. After the treatment, when the patients come back to America, who is going to provide after post-procedural care to the patients?

The main problem with medical tourism is it has not been widely discussed in American media.

2. Importance of Medical Tourism
In the coming years medical tourism will increase drastically for the following reasons:
1. American healthcare cost has been steadily increasing ever year ($2.7 trillion in 2011) and it is expected to hit $4.6 trillion in 2020. With the current rate of increase, it is going to make medical tourism more attractive to more Americans in the coming years.
2. An American’s life expectancy will increase over the next twenty years. More seniors need various services from caregivers and that will impact the currently overworked doctors and nurses.
3.  The Patient Protection and Affordable Care Act (PPACA) includes 30 million more Americans into the American healthcare system and all these new people need to be served by the current healthcare providers.
4. Already America is facing a shortage of doctors- in the next 15 years America will need 150,000 more doctors to take care of the American population.
5. Even with the current American economy, nursing jobs have been increasing on a yearly basis, exceeding the supply of registered nurses. By the year 2020 American hospitals will have  800,000 fewer nurses.

It is estimated that in 2017 close to 15 million Americans citizens will be traveling to foreign destinations for their medical treatments.

3. Globalized Health System

For American companies, globalization created a business value chain that spans all over the world. For example, the iPhone’s software is developed in California, the parts are designed in Taiwan, assembled in China, sold to customers in across the world, and the support is provided through callcenters in India. Any time a failure happens in any one country it affects the entire business value chain for Apple.

Now, consider the medical tourism in which the patients move from America to other cheaper countries. Hospitals and insurance companies in America must be integrated with hospitals in other countries to provide the seamless movement of patients and their medical records from America to other countries. This is easier said than done for following reasons:
1. How do you create international standards for hospitals in developing countries so that American patients can be given proper medical care that can be tracked by American insurance companies?
2. How do you measure the medical care given by the foreign provider, which is cheaper compared to the American provider?  The simple dollar value does not give all the details-what if the cost is less but the patient is not happy with the treatment?
3. When American patients leave to other countries for their treatment, several intermediaries need to work with the patients, insurance companies, travel agents, and hospitals. These intermediaries play a key role in ensuring the patients get proper medical treatment. How will these intermediaries get paid?

These are all some of the questions that needs to be considered for creating a globalized health care system.

4. Conclusion

In America, medical tourism is a consumer initiated business that was created out of necessity. Current trends in globalization accelerated the growth of medical tourism and it is poised to grow at faster rate due to the reasons mentioned above.

Medical tourism changed the business value chain of the American healthcare industry. Both the American policy makers and the insurance companies must consider medical tourism into their debates and work together in creating a global health system to integrate international preventive and curative services into the American healthcare systems.


2 Responses to “Can Medical Tourism Create a Global Health System?”

  1. Medical Tourism on October 22nd, 2011 7:34 am

    There are lot of people from US visiting to Mexico and other countries near to US. Very soon more and more Americans will travel to countries like India, China, etc for their medical treatment. I do not think Insurance companies will agree to cover it due to various issues like Medical malpractice, governance that can’t be manged in countries like India.

  2. No change in US Healthcare on October 22nd, 2011 8:01 am

    I do not think there will be any significant changes in US healthcare policy. There are several states in US filed law suites against President Obama’s healthcare policy. So it will be difficult to change the policies. May be the Medical Tourism may grow independently due to cost advantage compared to hospitals in US.

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