Health Serive Delivery is becoming internationally traded

Source: "Globalisation and health care: Operating profit," The Economist, August 14th 2008.

Historically, health services were prototypical of "non-traded goods and services" which had to be produced where they were consumed. With the Internet and global digital communications, a number of health services have been internationally outsourced. This article suggests that with improved global transportation networks the cost of travel for major medical interventions is now less than the cost differential between developed and developing nations even for health services of comparable quality, and people are increasingly traveling abroad for major medical interventions.

During the Carter administration I worked on International Health Policy for the White House, and we published a prediction that this would eventually occur and that the United States should prepare policies for this eventuality. I repeat that warning. Especially, there should be international means to compare health service quality, perhaps produced by the World Health Organization, comparable to the international conventions produced by UNESCO and the European Union to compare educational quality and higher education degrees.

The article also notes:

When Bumrungrad looked for information technology to run its operations a decade ago, it found that vendors were so wrapped up in the arcane and fragmented ways in which rich-country firms do business that they could not manage to design a complete computer system from scratch.

Undaunted, the firm set about the job itself, using best practice from other industries. This was possible, says Mr Schroeder, because his firm’s edge is not only based on cheap labour, though labour costs make up 18% of his total, compared with perhaps 55% at American counterparts. He says, “the bigger difference is the way health care is delivered.”

The firm’s IT proved so much better than that from American or European specialist firms that Microsoft last year took over Bumrungrad’s Global Care Solutions division. Peter Neupert, who heads the American software giant’s efforts in this area, was so impressed that he has decided to put the headquarters of his international health efforts in Bangkok. This leapfrogging is an example, he says, of how “innovation will come from many places as the health-care market goes global and flat very fast.”

Comment: We better get to work modernizing and improving our health care delivery system in order not to miss on the future world market in health services and the world market for the technology supporting health services. JAD
Source: "Global trade and health: key linkages and future challenges," Douglas W. Bettcher, Derek Yach and G. Emmanuel Guindon, Bulletin of the World Health Organization, v.78 n.4 Genebra 2000