The August 16th Economist had an interesting article (and commentary) about patients traveling to other countries for medical treatments, a.k.a. “medical tourism.” The article focused on the US healthcare system, and mentioned other parts of healthcare that are being exported, (such as transcription of medical records, reading of imaging studies), and imported, (such as physicians and nurses). But there are two aspects of this issue that the article didn’t touch upon – chronic care and pharmaceuticals:
Medical Tourism Doesn’t Work for Chronic Care
Patients are traveling from the US to other countries for expensive procedures like heart surgery and joint replacements. While savings from this medical tourism can be significant on a per procedure basis, it may only make a small dent in overall healthcare spending – and only produce a dip in cost while not significantly changing the growth rate in health care costs. But more importantly, such medical tourism doesn’t address the expanding problems of providing care for patients’ chronic conditions – which is a major driver of increasing healthcare costs.
Importing Medicines – Safety
Importing medicines from other countries into the US has been a controversy for more than 10 years. The US Congress has repeatedly authorized the importation of medicines from other countries provided the Department of Health and Human Services certified their safety. But the HHS (under both Democratic and Republican administrations) has not made such certification – and that was before the deaths earlier this year from contaminated heparin manufactured in China.
Importing Medicines – Politics
While the Obama and McCain campaigns have very different positions on health care reform, their statements on importing medicines are very similar in that both include provisions for importing medicines only if they are safe:
- “Obama will allow Americans to buy their medicines from other developed countries if the drugs are safe and prices are lower outside the U.S.”
- “John McCain will look to bring greater competition to our drug markets through safe re-importation of drugs”
Healthcare Jobs and Economic Growth
The world is clearly becoming flatter for healthcare goods and services, and this could be a worrisome trend for the US economy since healthcare products, delivery and research are significant drivers of US economic growth. After all, healthcare jobs – in both delivery and biomedical R&D – are high skilled, high wage jobs that depend upon an educated workforce and an economical comfortable society that can devote a significant portion of its income to healthcare. If the US starts shipping more and more healthcare jobs (and money) overseas, this could result in a downward spiral as the loss of those jobs undermines the strength of the US healthcare system and the country’s economic growth. However, it is uncertain how much the loss of that part of economy could be offset by potentially lower healthcare spending – a cost that some economists believe is inhibiting economic growth in the US and our global competitiveness
Like in industries before it, it is likely that some portion of the health care industry will be exported. The Economist article described (and I’ve have the opportunity to see) Asian hospitals provide medical procedures with high quality outcomes at a fraction of the price U.S. hospitals charge.
Healthcare procedures requiring chronic care do pose more of a challenge – if one is unwilling to relocate. The cost of living in Thailand, for example, is substantially lower than in the U.S. Coupled with lower cost, high quality medical care, this can be a big draw for folks to relocate near affordable medical care, even if that means an international relocation. And an increasing number of countries are developing strategies to draw retirees.
There are certainly challenges to the growth of medical tourism industry, but the fundumentals seem in place to support its growth. It will likely start with elective and routine procedures before moving to chronic procedures.