Below is an article by Dean Baker and Jagdish Bhagwati, as appeared on CNNMoney.
The notion of international trade in health care may seem strange. The issue may also seem far removed from the current policy preoccupations in Washington.
However, we believe it is finally time trade played a central role in the current debt debate.
One of the basic facts that the congressional super committee must confront is that the debt problem is not excessive current deficits, but rather a problem with the longer term budget.
And the main reason for the large projected deficits well into the future is the growth in health care costs. Public sector programs like Medicare and Medicaid will be increasingly unaffordable.
The health care system must be reformed — no easy task. President Obama and Congress sought to do it last year. But it remains to be seen how much the Affordable Care Act will accomplish, if Congress even allows it to take effect.
With the future uncertain, anything that we can do to contain costs significantly in other ways must be exploited.
National debt: What you need to know
We have a partial solution: medical trade, or allowing Americans to take advantage of different forms of international transactions in medical services.
The fact that medical care of comparable quality is available at much lower prices elsewhere in the world can be used to rein in costs in the United States.
The idea holds remarkable promise. Here’s how it could work.
Patients go overseas for major medical procedures: Modern medical facilities in Thailand, India and other countries would allow patients to have procedures like heart bypass surgery for tens of thousands or even hundreds of thousands of dollars less than in U.S. facilities.
Medicare and Medicaid could allow patients to use such facilities. The savings to these programs could be split between the patient and the government. This might mean tens of thousands of dollars for both, even after covering travel costs.
Buy into other countries’ health care systems: Many retirees have family or emotional ties to other countries. They can be given the option to use their Medicare to buy into the health care systems of Canada, Germany or whatever country they choose.
In effect, the money that the U.S. government would have spent on the beneficiary’s Medicare would instead be paid to another country’s government so that it would provide medical care. The difference in the cost of care, which could run into tens of thousands of dollars a year, would be split between the U.S. government and the beneficiary.
Import doctors: The United States could benefit by making it easier for foreign physicians to practice in the United States. This could be done with greater standardization and transparency in testing procedures.
Foreign doctors would still have to meet U.S. standards, but they could train and test for a license in their home countries.
A greater supply of doctors would reduce physicians’ compensation in the United States — and bring it closer to the levels in other wealthy countries.
This would also ease the other problem with last year’s health reform law: While it brings almost all people into insurance coverage, it doesn’t do enough to ensure that those people will find medical personnel who will treat them!
Medical trade where we “export” patients and “import” doctors — just two ways of exploiting medical trade — may seem a strange way to fix the U.S. health care system.
But it is clearly an important avenue that has so far not been taken seriously.
We are used to the notion that competition generated by trade helps consumers and disciplines producers. For example, Japanese competition led to lower car prices and better quality, although people can differ on how they view its impact in lowering wages for domestic auto workers.
International competition can have the same effect on the health care industry. It offers a route around the political power of the health care industry that may succeed in making health care in the United States affordable.
Dean Baker is co-director of the Center for Economic and Policy Research. Jagdish Bhagwati is University Professor of Economics and Law at Columbia University.
Great suggestion from economists par excellence.
Wonderful thoughts some of which has been going on for ages so nothing new.
It is well known by all what they are saying but how to and why and no mention about how to about safety and well fare of the public we love.
My thoughts—–
No doctor is willing to see patients who had surgery by some one else even in this country so why hospitals and doctors will accept those who had surgery in oth countries by unknown entities although may be well known.
Inviting foreign doctors as my self —is good idea but standards and safety who and cost?
Now there are unlike my time many international for profit schools and some of these may have different standards than what any citizens deserve but competition certainly will bring down acess issue and cost???
Inviting foreign doctors is not going to reduce the cost but will be good access for the hurt.
InetrnationL medical schools now has become thriving buisnesss
How about having more schools here— expensive education.
The increasing numbers of nurse practioners and other healthcare providers are taking the acess
Role
Further observations—-
No mention about cost reductions
No mention about liability reforms
No mention about preventions
No mention about universal healthcare single payer systems
No mentions about eliminating the monopoly of academic and CEOs of hospitals centers in terms of who can deliver care and who not– universal credentials
No mentions about insurance reforms and CEO pay uniform Credentialling as vendors
Two wonderful economists perhaps they thought everything else is known and just focus on things which they felt unique but is it?? Yes provided the rest fall in place or work with other possibilites
Expect from them mathematical academic economic models —would be good to have this and specifically in terms of dollars value
Simple ideas —-explore or brain storm—examples being
Institue single uniform license and not state mandated different –any value?,
Single license like euro where doctors can go any place. Interstate
Single malpractice insurance
Malpractise reforms
Single payer system
Elliminate paper work EHR but no duplications
Elliminate accreditations from many places state, Medicare ,joint , ahrq and many many more
Reduce medical technical errors by establishing training centers for procedures as well as mandates for improvements and pay for performance????
There are so Many things one can do here in USA to reduce the cost ,improve quality and access
Improve health safety and well fare of the citizens we love
International trade is happening —-
Let us first start interstate, inter HMO, interinsurnace company trade in health care
Let there be competition between one state and other
Let there be competions between one insurance company and other before embarking overseas
One more thought—–
Just like military bases who is trying to protect the USA interests perhaps USA should build va type of hospitals over seas and try the experiment with veterans as they are going thru the same for medical help???
One doctor to the other
One nurse to the other
One hospital to others
Va hospitals are also draining lots of federal funds to look after our loved dearest veterans who gave life for us
Do not have to go too far
Mexico bahama etc
Fascinating topic
Thanks for sending me
Jagdishbhai Bhagwati is brilliant so hopefully this blog will stimulate Obama and other health care experts
ThNkz
Dinesh
Dinesh Patel MD
Lexington mass 02420
Foreign Medical Graduates (FMGs) are required to take U.S. medical boards in America and, to be eligible, each foreign candidate MUST participate in an American residency program for 3 or 4 CONSECUTIVE years. This rule is good because it protects the American physician, who pays premium money for medical education (unlike in other countries)and has to dedicate a few golden years to become competent in a given specialty or subspecialty. FMGs will work for less pay because they typically come from poor developing countries, like India, where any low 6-figure salary sounds like paradise, compared with the few rupees that could be made in India, where government corruption reigns supreme and cronyism is the ultimate currency. However, beyond my own selfish reasons, the second thing it does is that it ensures that FMGs get the same American residency training without the short cuts that could hurt the American physician, or worse, the patient.
Bottom line, a foreign physician, who completes medical school and residency in his/her home country, must complete a full residency in the US in order to be board eligible and take the American Medical licensing exams. This will not change, period.
US physicians could develop very competitive rate structure for the low end of the market it it weren’t for the trial bar, ie, malpractice lawyers. As it is we have to provide the same quality to the poorest patients that we provide to the richest patients or we will be convicted by a jury of the poorest patients’ peers.
One time I googled the rates for surgery in Thailand. The search was filled with laments about poor surgical results and the complaint that there was no satisfaction in Thai courts. What a surprise!
If Medicare or Medicaid is willing to fund foreign surgery, the foreign surgeons should be required to post a bond that they will pay whatever judgement is made by American courts tried by the US trial bar. I wonder how many would choose to comply and whether the final rates would look a lot like ours.
Americans are allergic to death, and the leaders running our health systems are only too happy to take full advantage! Half of Medicare dollars are spent to keep terminally ill patients or very old patients with multiple chronic conditions are kept alive for a few days or weeks, with the Medicare meter running into six figures – what a colossal waste!
Our health system in any case suffers from a culture of indifference to costs! Many ER patients can be treated by nurse practioners or PAs in a store front setting a fraction of the ER costs! While most health professionals are highly skilled and work hard to earn their high wages, enough of them game the system to maximize their profits, as well documented in numerous articles by Dr. Gawande (www.gawande.com)
“No doctor is willing to see patients who had surgery by some one else even in this country.”
That’s absolutely false.
More than 500,000 Americans go abroad for treatment a year. It would be a shame to tie them up in government red tape and extend government tentacles internationally. There must be a ban on government participation in health care because the facts show its regulation increases suffering and even the death rate. In no way does government insure safety or affordability. We favor medical free zones in the USA, such as those planned on Native American lands.
A flawed analysis. Outsourcing medical care will only lead to loss of jobs in the US and worsen the trade deficit.
Paying the patient a bonus for getting cheaper treatment abroad will lead to patients getting expensive treatments they don’t really need, unless very strict guidelines are enforced.Get a coronary bypass and make $5000-what do you think will happen?
Importing more foreign doctors will drive costs up, not down. Doctors are exempt from rules of competition and create more demand for their services by having patients come back more often and increasing unnecessary procedures. Many foreign doctors come from societies where gaming the system is the rule, and will outsmart any bureaucrats who try to police them.
The answer is to totally revise reimbursement policies, put doctors on salary in large capitated practices, and take malpractice out of the jury system or defensive medicine will continue to bankrupt the country.