Medical Tourism as Health Policy?

Medical Tourism. Icon of Traveling and Treatment

A clear health policy priority in Singapore is keeping health care costs for patients affordable.  Numerous cost-reduction policies have been proposed and implemented, but there is always room for improvement.

Writing for the Straits Times, Salma Khalik endorses an interesting approach: encourage patients to seek care abroad, in countries like Malaysia and Thailand where care is cheaper.

Medisave can currently be used for emergency and elective treatment, but this scheme is little-used and Khalik advocates for its expansion.  Khalik is not alone – she is reporting on proposals from a panel at the Straits Times Future Economy Roundtable for Healthcare, and the idea has been floated by the Ministry of Health in the past.  Indeed, “medical tourism” is a well-covered phenomenon.  But should governments of high-income nations like Singapore officially promote it as a cost-reduction policy?

Effects at home

In her column, Khalik emphasizes that making it easier for Singaporeans to seek care abroad is a “win-win situation: Local demand is eased, people concerned about cost will get more options, and Singapore doctors get the opportunity to practise cutting-edge medicine.”  The last point is based on the idea that with more basic care shifted abroad, Singaporean health services could focus more on acute and/or highly-specialised medicine where, due to local resources and training, it would be at a competitive advantage compared with low-income countries.  However, lowered demand for basic care may also lead to lowered supply, limiting options for Singaporeans to receive such care at home.

A further barrier that worries Khalik is the potential for sub-optimal care.  This would be addressed with a system of licencing or accreditation: Singapore’s Health Ministry would designate particular foreign healthcare institutions as of sufficient quality to qualify for reimbursement.

This approach would go beyond governments merely tolerating medical tourism, to actually encourage it as a policy.  Instead of aiming to lower costs at home, which may be difficult due to labour costs and institutional factors, cost reduction is outsourced.  Yet some may wonder whether health care is the sort of service that should be outsourced, or whether its status as a basic right would be undermined by a scheme of promoting overseas care delivery.

Effects abroad

Khalik focuses on the costs and benefits to Singapore, but an important further consideration is the effects on the low-income countries that are host to the tourism.

A number of potential negative effects have been well-documented in the literature.  In particular, the mirror of lowering the burden of care in Singapore is to raise it in foreign countries.  There are only so many qualified physicians and available hospital beds; wealthier Singaporeans would take up health resources that would otherwise be devoted to locals.

It may be countered that those resources are paid for, as with anything one might buy from a foreign country.  Two points of response.  One, there can only ever be partial payment.  The human resource of healthcare workers cannot be directly manufactured as with so many scalpels and cots, and it is incredibly difficult to price in the state investment that facilitated the development of the healthcare system to its current state.

Two, the increased payment may have the knock-on effect of raising healthcare costs for the host population.  Healthcare is not an exportable good; it is a service consumed by both locals and medical tourist alike.  As medical tourist demand increases, economic forces will push the price of care up as well.  Hospitals can sustainably demand greater fees for care, given enough medical tourists to pay them, even if it prices out many locals.  In addition, pharmaceutical companies that previously charged less for drugs in countries like Malaysia and Thailand may consider raising their prices, if many of those drugs are going to medical tourists who can afford higher prices.  This is similar to the process of gentrification that causes some residents to be priced out of their own neighbourhoods.

Evaluating a policy of medical tourism

I don’t mean to argue that a policy of promoting medical tourism is inherently misguided.  Not all the potential foreign effects of medical tourism are negative, after all.  Medical tourism can have the general effect of making local health institutions more profitable; in turn, this will lead to greater investment in health resources (including training of more physicians and building more hospitals) that may provide ancillary benefits to locals as well.  In addition, the general economic benefits of tourism would also apply.

Rather, I simply suggest that evaluation of such a policy take seriously the effects in a foreign country.  Health policy traditionally has had a domestic focus, perhaps with good reason.  But if we are to globalise health care, we need a commensurate global health care ethic that governs policy.  This includes a commitment to rigorously investigate the effects of medical tourism abroad, with the aim of minimising exploitation and negative externalities.

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