Trade in health services - who.int

1 Trade in health services *Rupa Chanda1 AbstractIn light of the increasing globalization of the health sector, this article examines ways in which health services can be traded,using the mode-wise characterization of Trade defined in the General Agreement on Trade in services . The Trade modes include cross-border delivery of health services via physical and electronic means, and cross-border movement of consumers, professionals, andcapital. An examination of the positive and negative implications of Trade in health services for equity, efficiency, quality, and access tohealth care indicates that health services Trade has brought mixed benefits and that there is a clear role for policy measures to mitigatethe adverse consequences and facilitate the gains.

2 Some policy measures and priority areas for action are outlined, including steps toaddress the brain drain ; increasing investment in the health sector and prioritizing this investment better; and promoting linkagesbetween private and public health care services to ensure equity. Data collection, measures, and studies on health services Trade all needto be improved, to assess better the magnitude and potential implications of this Trade . In this context, the potential costs and benefits oftrade in health services are shaped by the underlying structural conditions and existing regulatory, policy, and infrastructure in the healthsector. Thus, appropriate policies and safeguard measures are required to take advantage of globalization in health services /utilization; Commerce; Investments; Delivery of health care/methods; health services accessibility; Healthmanpower; Emigration and immigration; International cooperation; health priorities (source: MeSH, NLM).

3 Mots cle sServices sante /utilisation; Commerce; Investissement; De livrance soins/me thodes; Accessibilite service sante ; Personnelsante ; Emigration et immigration; Coope ration internationale; Priorite s en sante (source: MeSH, INSERM).Palabras claveServicios de salud/utilizacio n; Comercio; Inversiones; Prestacio n de atencio n de salud/me todos; Accesibilidad a losservicios de salud; Recursos humanos en salud; Migracio n internacional; Cooperacio n internacional; Prioridades en salud (fuente:DeCS, BIREME).Bulletin of the World health Organization 2001;80:158-163 Voir page 162 le re sume en franc ais. En la pa gina 162 figura un resumen en espan of global Trade in health servicesThe health care sector is among the most rapidly growing in theworld economy.

4 It is estimated to generate US$ 3 trillion peryear in countries in the Organisation for Economic Co-operation and Development alone and is expected to rise toUS$ 4 trillion by 2005 (1, 2). The globalization of health servicesis reflected in the growing cross-border delivery of healthservices, through movement of personnel and consumers (byelectronic and other means), and in an increasing number ofjoint ventures and collaborative arrangements. Using theGeneral Agreement on Trade in services (GATS) definitions, Trade in health services occurs via four modes of delivery of Trade (mode 1)Cross-border delivery includes shipment of laboratory sam-ples, diagnosis, and clinical consultation via traditional mailchannels, as well as electronic delivery of health services , suchas diagnosis, second opinions, and consultations.

5 Countries usea variety of telehealth services , including telepathology,teleradiology and telepsychiatry. Many cross-border telemedi-cine initiatives have also emerged. For example, telediagnostic,surveillance and consultation services are provided by hospitalsin the USA to hospitals in Central America and the EasternMediterranean, and Indian physicians provide telepathologyservices to hospitals in Bangladesh and Nepal. Telediagnosisservices are also provided by hospitals in China s coastalprovinces to patients in Macao Special Administrative Regionof China, China (Province of Taiwan), and some south-eastAsian of health services abroad (mode 2)Consumption abroad refers to the movement of consumers tothe country providing the service for diagnosis and this mode, affluent patients in developing countries seekspecialized high-quality treatment overseas in hospitals inindustrialized countries or in neighbouring developing countrieswith superior health care standards.

6 Patients from industrializedcountries seek affordable, high-quality treatment or alternativemedicines and treatments in developing developing countries export health services viaconsumption abroad. Cuba, for example, has made a consciouseffort to attract foreign patients from Latin America, theCaribbean, Europe, and Russia to specialized hospitals whichprovide high-quality care at competitive prices. It has alsodifferentiated itself by focusing on treatment of certain skindiseases which are incurable in other countries, and on thedevelopment of new procedures and drugs, such as forpigmentary retinopathy or vitiligo. In 1995 96, more than25 000 foreign patients went to Cuba for treatment, generatingan estimated US$ 25 million in sales of health services toforeigners (2).

7 *Based on: Chanda in health services .(CMH Working Paper Series, Paper No. WG4: 5. Available at: URL: ).1 Associate Professor, Indian Institute of Management, Bannerghatta Road, Bangalore-560076, India (email: Theme Commission on Macroeconomics and Health158#World health Organization 2002 Bulletin of the World health Organization 2002, 80 (2)India also exports health services through consumptionabroad. Patients come from industrialized and developingcountries (including Bangladesh, the Eastern Mediterranean,Nepal, Sri Lanka, the United Kingdom, and the USA) forsurgery and specialized services in areas such as neurology,cardiology, endocrinology, nephrology, and urology.)

8 They areattracted by India s pool of highly qualified health careprofessionals and by the country s ability to provide goodquality, affordable treatment. In India, a coronary bypassoperation costs Rs 70 000 100 000, compared to Rs million in Western countries. A liver transplant in Indiacosts one-tenth of that in the USA (1). Specialty hospitals, suchas those in the Apollo group in India, get surgery cases from theUSA, foreign tourists, non-resident Indians, and foreignresidents for such treatments. Each year, an estimated50 000 patients come to India from Bangladesh and spendover US$ 1 million per year on the treatment of specializeddiseases (3).Several developing countries have also diversified intoareas such as medical and paramedical education, healthtourism, and alternative medicines and treatments.

9 India andThailand, for example, reserve places in medical colleges forstudents from other developing countries, and Cuba providestraining for specialists, paramedics and students from selectedcountries under bilateral agreements. Cuba and Thailand havealso combined health care with tourism and recreationalservices. India is exploiting its niche in traditional medicinessuch as Unani, Ayurveda and homeopathic forms of treatmentand has developed holistic health care centres, such as theAyurvedic school in Kottakkal, Kerala, where it attractspatients from the Eastern Mediterranean, Germany, Malaysia,the United Kingdom, and the presence (mode 3)Commercial presence involves the establishment of hospitals,clinics, diagnostic and treatment centres, and nursing such as India, Indonesia, Nepal, Sri Lanka, andThailand have become increasingly open to foreign directinvestment.

10 For example, approval has been given to a Germancompany to have 90% foreign equity ownership for setting upa 200-bed hospital in Delhi. Several specialty corporatehospitals are being built in collaboration between Indian andforeign companies, including a US$ 40 million cardiac centre,set up under a consortium between Australia, Canada, andIndia. Corporate hospitals in developing countries are alsoestablishing commercial presence overseas. For example, theApollo group of hospitals in India has established a hospitaloutside the country and plans to invest roughly US$ 4 billion tobuild 15 new hospitals in Malaysia, Nepal, and Sri care companies in industrialized and somedeveloping countries are increasingly engaging in joint venturesand alliances, resulting in several regional health care networksand chains.