Why is free trade in healthcare so resisted?
Fredrik Erixon | Saturday, 21 June 2008
Global trade and investment has surged in the past 50 years. Almost all countries and all sectors today participate in a global division of labour. Yet one sector remains conspicuously unglobalised: healthcare.
European governments in particular have ringfenced healthcare provision and rejected virtually all attempts to open this sector for cross-border exchange. Resistance has been so fierce that the European Commission (EC) now hesitates to table a new directive that would simply codify a ruling from the European Court of Justice: to ensure free movement for patients and the right to get reimbursed for treatments abroad if the national health system cannot provide the treatment within a reasonable period of time.
This proposal has been due since last December and there is a new deadline later this month. But the directive seems far away as new versions constantly appear with ever more diluted free trade credentials.
Why is free trade in healthcare so resisted? Outdated notions of how to organise healthcare systems lie behind the core ideological opposition. False concerns for healthcare in developing countries have also become expedient handmaidens for healthcare protectionism in the developed part of the world.
The truth, however, is that many developing countries want to liberalise trade in healthcare. In the World Trade Organisation (WTO), it is developing countries that have made the strongest commitments. Countries as diverse as India, Cuba, China, Thailand, Jordan, South Africa and the Philippines have all developed export strategies to supply health services to foreign markets. They are knocking on the doors of Europe and the US to sell their healthcare services. Similarly, patients from the developed world increasingly buy treatments in developing countries. In 2006, Singapore treated half a million patients from abroad. India claimed 600,000 foreign patients and Thailand as many as 1.2m healthcare "tourists".
According to a study by McKinsey, the consultancy firm, medical tourism by 2012 could bring an annual $2.2bn (euro1.4bn,
European governments in particular have ringfenced healthcare provision and rejected virtually all attempts to open this sector for cross-border exchange. Resistance has been so fierce that the European Commission (EC) now hesitates to table a new directive that would simply codify a ruling from the European Court of Justice: to ensure free movement for patients and the right to get reimbursed for treatments abroad if the national health system cannot provide the treatment within a reasonable period of time.
This proposal has been due since last December and there is a new deadline later this month. But the directive seems far away as new versions constantly appear with ever more diluted free trade credentials.
Why is free trade in healthcare so resisted? Outdated notions of how to organise healthcare systems lie behind the core ideological opposition. False concerns for healthcare in developing countries have also become expedient handmaidens for healthcare protectionism in the developed part of the world.
The truth, however, is that many developing countries want to liberalise trade in healthcare. In the World Trade Organisation (WTO), it is developing countries that have made the strongest commitments. Countries as diverse as India, Cuba, China, Thailand, Jordan, South Africa and the Philippines have all developed export strategies to supply health services to foreign markets. They are knocking on the doors of Europe and the US to sell their healthcare services. Similarly, patients from the developed world increasingly buy treatments in developing countries. In 2006, Singapore treated half a million patients from abroad. India claimed 600,000 foreign patients and Thailand as many as 1.2m healthcare "tourists".
According to a study by McKinsey, the consultancy firm, medical tourism by 2012 could bring an annual $2.2bn (euro1.4bn,