Globalization of Trade in Health Services and Workforce

International Trade in Health Services

There are 4 illustrations that I would like to highlight on the trade in health services internationally, which are:

1. Cross-border trade

2. Consumption abroad

3. Commercial presence

4. Natural presence

Cross border trade is a worldwide phenomenon where services such as customer-interaction centre, medical transcription and medical consultation as well as many more are being done in countries where the payment of labour is cheap. One of the countries that have this affiliation is India where radiographic X-rays are being sent to be consulted there and the result of the findings is sent back to the party that pays them. From this scenario, we can see that cross border trade can increase the revenue for the healthcare provider as well as offer extra income for those who provide the services.

Consumption abroad is where local patients travel abroad to benefit healthcare services of the country of their choice. An example is depicted here by a pie chart below:

From a statistic data, Indonesians spend more than 1 billion US dollars annually for medical expenses overseas. The reason is because medical services such as heart by-pass graft surgery, liver transplant, neurosurgery and many other are being provided by expertise of better quality than the local experts plus the price of the surgery done in overseas is relatively cheaper after calculating the expenses of air travel as well as the expenditure used in travelling on another country. So why not have a surgery done in overseas and you can also have a travelling experience of that country. It is like killing two birds with one stone. ^^

From this scenario, we can see that neighbouring countries of the South East Asia regions are trying their best to promote and upgrade their healthcare facilities and medical services so that revenues from outside the country will flow in when citizens from other countries come in to purchase their healthcare services. This is a phenomenon known as health tourism.

Commercial presence touched on the aspects of foreign investment as well as foreign hospitals providing healthcare services to local population. Their presence causes internal brain drain from public/government hospitals to private hospitals. This in turn causes shortages of health workforce in rural areas as they would prefer to work in a private sector for better remunerations as well as working conditions. In Indonesia, foreign hospitals are estimated to account for 1% of total hospital beds. In Philippines: two of 19 Health Maintenance Organizations (HMOs) are foreign-owned. As in Thailand: foreign investment is estimated to account for 3% of total investment in private hospitals in Thailand.

Lastly is natural presence, where health workers are being exported out of the country to develop countries. This form of trade is driven by shortages of healthcare workers in countries which are developed and has richer economies. The ASEAN (Association of South East Asian Nations) region hosts 2 of the world’s largest exporters of healthcare workers. Philippines and Indonesia send large numbers of nurses and midwives to countries around the world. Many countries around the world has shortages of doctors, midwives and nurses and from a survey done, three main reasons why health workforce choose to migrate to developed countries are the following:

· Better remunerations

· Safer environment

· Better living conditions

In the end, to solve these problems, a few policies can be made to improve the conditions.

References:

Block 4.2 lecture notes titled Globalization of Trade in Health Services and Workforce.