Introduction
This research paper tries to explore how globalization is having an impact on healthcare. Traditionally, the health care sector has often been touted as one of the most homegrown businesses in the United States. However, more and more Americans are now turning global, by accessing healthcare in such far-flung countries in Asia as India and China. It has been projected that in the coming decades, a lot more patients are likely to look across its borders for healthcare provision (Ellis & Shanley, 2008).
Additionally, offshore investment and the movements of staff shall also be witnessed. This will not only lead to increased access to Medicare but also enhanced economic benefits. Based on these observations, does it then mean that the issue of globalization has eventually caught up with the health care sector?
Rationale
The healthcare system of the United States is in need of radical surgery. This was clearly brought to light in the just concluded presidential polls in the United States. In fact, the health care policies that the two individual candidates exposed might have had a great impact on the voting patterns of the Americans (Messerli, 2008). There also arises a need to create awareness among the Americans of the need of having an accessible and efficient health care plan.
Furthermore, a health care scheme tends to impact people of all ages, not just the old. For the old, this group is more vulnerable to chronic diseases. It is therefore necessary that they get insurance cover for their medical expenses. On the other hand, such a scheme will relieve the young from spending their own savings to foot medical bills for their parents, or grandparents.
An analysis of the US health care system
The healthcare system in the United States has been noted to be amongst the most expensive in the developed world. First, the cost of health insurance is very high, meaning that are the majority of Americans are not able to afford these (Messerli 2008). Additionally, the health care expenses are also dear, and a majority of the employers are not willing to cater for this service on behalf of their employees since it is not mandatory.
Without a doubt, the medical health care scheme is a complex affair that needs to be run in an efficient manner if at all the beneficiaries are to get the much-needed services adequately (Messerli 2008). Given the efficiency with which the private sector is able to handle its activities, it would only be fair and prudent then, to privatize the health care scheme.
Moreover, what is usually regarded as ‘free’ health care is not exactly so, seeing that it is usually catered for in the form of taxes. In order to facilitate it, therefore, it would mean either a raise of taxes or having budget cuts in other areas, like in the education sector or defense (Messerli, 2008). Furthermore, government health care workers receive fewer incentives. This tends to demoralize them, leading to increased efficiency in the system.
Additionally, the presence of a health care plan that is under the control of the government would often see reduced flexibility on the part of the patients. To the uninitiated, the idea of a universal health care plan would be seen as an improvement in flexibility in the sector. Would it then mean that under such a plan, one could easily attend to any doctor anywhere?
For the maintenance of the medical costs, there have to be set in place certain controls. In fact, a universal system has been known to lead to delays in medical delivery, like in the case of Canada, whereby the scheme sees patients having to wait for more than 6 months just to undergo a regular pap smear (Messerli 2008). With free health care, there is a likelihood that medical costs shall raise several folds, seeing that patients may capitalize on the visits they make to the doctors, as well as their drug costs.
The fact that a majority of Americans do not enjoy health insurance does not translate into a lack of health care. In any case, government-operated hospitals and nonprofit care providers give services even to those without health insurance. In any case, it would be illegal to deny a patient medical service on grounds that they lack health insurance.
With universal health care, it means that all Americans shall have to bear the costs, their health care needs and status notwithstanding. Besides, the government stands being exposed to legal liability, in the form of lawsuits over malpractices. Personal freedom could also be jeopardized, such as increased taxes on fast foods and cigarettes (Messerli, 2008).
Healthcare system v. economic theory
Among all the major industrialized countries, the United States is the only one that lacks a national health plan. The health care system of the United States is market-based, whose primary reliance is on HMOs (Health Maintenance Organizations) and some health insurers in the private sector (Payro, 2007).
For access to the services provided by the HMOs’, individuals have to pay for these, either in person or through their employers. However, employers are not obliged to foot medical insurance bills for their employees. The escalation in the cost of living has also seen a majority of Americans failing to remit funds to the HMOs. The loss of jobs has also led to a majority of Americans losing their medical health insurance cover (Payro, 2007).
In addition, a rise in the cost of both the insurance premiums and health care costs not only impedes the creation of jobs; they also hinder economic growth and the financial security of individuals (Payro, 2007). As such, businesses are no longer able to recruit more workers and increase the earnings of existing employees, or even invest in equipment and research.
At the household level, families are forced to survive on the basic minimum in terms of utilities and food. The public sectors are also faced with serious problems, such as being unable to cater for the health and pension funds of the retirees, and the current workers.
To a majority of Americans, the inefficiency of the health care plan is well exhibited by an increase in the number of Americans without health care insurance (Messerli, 2008). For instance, demand comes about as a result of supply, meaning that the overall spending of health care will depend on growth in its demand. Also, the demand for health care tends to be more than the need for it.
For this reason, a lot of Americans will only visit a hospital in the absence of a physician. Moreover, the health expenditure of one individual becomes the income of another. If at all costs are to be reduced then, the income of another has also to come down. Although a majority of Americans are in favor of the containment of healthcare costs, a very small number of them will campaign for a reduction in income.
The health care system in the United States exists in two folds. On the one hand, there are various HMOs (Health Maintenance Organizations). On the other hand, a number of hospitals endowed with surplus capacity are to be found in the bigger Metro areas (Payro, 2007). This creates room for perfect competition, making it possible for patients to negotiate fairly for the levels of services and medical fees.
Effects of globalization on the health care system
The issue of globalization is not a new thing to the field of medicine. It is now quite common to outsource the maintenance of hospital records, the analysis of X-rays, as well as the act of transcribing notes of the doctors. Already, the healthcare sector in the United States is in crisis, and now with the issue of globalization has come in, then havoc may result in this sector (Ellis & Shanley, 2008). As such, globalization in the health care sector in the United States could be seen as both a blessing and a curse.
On the negative side, globalization could lead to reduced revenues for a hospital through outsourcing. Conversely, the act of outsourcing is a measure towards the cutting down of the expenses of an organization. Globalization is also capable of leading to an increase in the revenues of a hospital. An example of how a hospital can cut costs through globalization could best be explained by a 2007 article that appeared in The New York Times, on the 5th of August. In the article, the paper revealed how the Hospitals and Health Corporation of the city of New York reached an agreement with a medical school based in Grenada (The Economist, 2008).
According to the signed deal, some 11 public hospitals in Grenada were to provide either clerk positions or training to the students in the medical school in their third year of study. On its part, the school was expected to award each of the hospital’s students some $ 400 per student on a weekly basis. This meant that the hospital did not have to award the students any allowances while on internship.
Instead, their respective schools were to do so. As such, the hospitals ended up saving on the money meant for students’ allowances. This greatly infuriated other medical schools located in the city of New York, which had hitherto not paid these students anything (The Economist, 2008). Up until a few years ago, a very limited number of Americans used to go abroad to access medical treatment.
The past decade has however seen a major transformation in this trend. There are now more Americans who are going abroad for such medical treatments as shoulder angioplasties, heart and knee surgery, and hysterectomies. The issue of saving money has been viewed as one of the main reasons for Americans to turn to countries abroad for medical attention (National center for policy analysis, 2004).
Over the last couple of years, inflation in the American health sector seems to have outstripped the growth in the economy, the result of which is that American health care remains the most expensive the world over. On average, a good health care facility abroad does not even exceed 15 percent of the overall cost of healthcare for a patient in the United States.
Nevertheless, health costs have over the last decade proved to be much higher in comparison to those of the less economically endowed countries (Konski, 2008). For this reason, this could not be the sole reason behind the massive exodus of patients. One other factor that has been hypothesized is that in the Latin American countries, as is the case in Asia, the quality of healthcare has tremendously improved, to equal that which can be found in developed countries.
There seems to be a conflict in the safety net of the insurance industry in the United States. More than 45 million Americans do not have insurance cover. There are those individuals who find flying abroad for medical attention being cheaper as opposed to having to endure deductions towards their healthcare scheme year in, year out. This is the group that Arnold Milstein, a consultant with Mercer, has referred to as ‘medical refugees’. Based on this, more and more employers are poised to encourage their employees to undertake medical travel (Ellis & Shanley, 2008).
According to Becker, Epstein, and Green, a law firm in the United States, a lot of employees seem to be really struggling to deal with elevated costs in healthcare. Consequently, there is bound to be a drastic reduction as far as medical expenses are concerned. Currently, the medical aspects of outsourcing and medical tourism seem to be the major results of a globalized health care sector (National center for policy analysis, 2004).
Uwe Reinhardt, a health economist with the University of Princeton opines that the impact that global competition has had on healthcare in the United States may pose a challenge to the competition that the American automakers have received recently in their home turf in the hands of the Japanese carmakers. Perhaps American healthcare could borrow a leaf from this case scenario, to avoid being overwhelmed by health care providers from other countries venturing into the US market (National center for policy analysis, 2004).
Save for the travel of patients, a majority of the medical services are capable of being outsourced to some skilled medical staff located abroad, in a situation whereby a physical presence of say, a physician, may not be necessary. This could be accomplished by way of long-distance partnership, through the assimilation of medical staff from abroad into the daily practices of medical practitioners in the United States (Steinberg, 2008).
Thanks to globalization, it is now possible for competitors on a global scale to establish health facilities nearer to the United States, and also carefully reach an agreement with the insurers of health care in the United States. This means that health care providers in such countries as Canada and Mexico could as well gain a foothold into the US market, and this could help revolutionaries the sector.
The outsourcing of medical services
Thanks to advances in information technology, the provision of a majority of medical services can now be provided remotely. In addition, these could also be outsourced to other nations (Ellis & Shanley, 2008). The use of telemedicine is also rapidly growing, while video feed is also increasingly becoming common in those places that may not be adequately reached by a physician.
Telemedicine is a new innovation in the medical filed whereby physicians make diagnosis and issues their prescription via a telephone conversation, thus reducing distance barriers. As such, it becomes possible for those people residing in rural areas to access healthcare from specialists. There is also a possibility that this may eventually be used as the most preferred way of helping to check on those patients that are suffering from chronic diseases.
Outsourcing leads to improved convenience, lowered costs, and enhanced quality (National center for policy analysis 2004). Already such activities as medical transcription have become outsourced. In addition, there are a growing number of hospitals in the United States are turning to India to use their radiologists for the reading of X-rays. The NHS of Britain for example, is toying with the idea of utilizing Indian-based doctors fro the reading of MRI scans, as well as laboratory tests. It is possible to operate at a profit while performing an MRI scan in a country like India, with one having to pay roughly about $ 500. This is way much below what one would be expected to pay in the United States (Konski, 2008).
Responses of globalization on healthcare
At the moment, not many insurers consider foreign-based health providers in their plans, but this is set to change in the near future (The Economist, 2008). Mercer Health, a consulting firm for employees’ benefits is already contacting a few employers of Fortune 500 companies to embrace medical travel (Konski, 2008). There are also a number of health insurers who are testing the prospect of having an international coverage. According to Milica Bookman, a St. Joseph University professor, a majority of the conventional health insurers shall have included in their plans the foreign-based providers.
Already, the California-based Access BlueShield has instituted a health network meant for those individuals who wishes to access the medical care from Mexico. Almost 40,000 people had by 2005 enrolled for this program. There are also some health care insurers that are also entering into a partnership with foreign-based hospitals. A good example here is that between a South Carolina-based healthcare insurer- Blue-Cross-and an international hospital in Thailand, Bumrungrad. Rather than requiring patients to travel abroad to access reduced medical care, or even using financial incentives to lure the patients to make trips abroad, the scheme acts is a kind of value-addition, accessible to those members that may request for it (The Economist, 2008).
Conclusion
The expenditure of health care in the United States seems to be rising at a higher rate in comparison to the rest of the sectors in the economy. As such, a dire need to reflect on the cause of such a scenario often arises, with a view to exploring possible options. The issue of globalization is not a novel thing in the medical field. Already, such positions as radiology services, and the laboratory readings are being outsourced, as we’ll as the transcription of medical notes. There is also collaboration among some insurance providers in the United States are also collaborating with international hospitals abroad with a view to providing cheaper affordable health care to their patients.
Globalization does not only lead to the reduction of costs in the medical fields, but it is also capable of leading to the rise in labor costs of those medical professions with limited staff. Furthermore, the quality of health care in the developing world are almost at per with those in the United States, and medical insurers are offering subsides to their patients. Nevertheless, the health care providers in the United States are also making an effort to adjust to changes in the sector due to globalization. Though such a change may not be a smooth ride, the providers are nevertheless hoping to eventually reap the ensuing benefits.
Work cited
- Ellis, David & Shanley, Charles. (2008). “The globalization of healthcare”.
- Konski, Andre. “Economic analysis of health care interventions”. Seminars in radiation oncology, 18.3 (2008): 168-174
- Messerli, Joe. (2008). “Should the Government Provide Free Universal Health Care for All Americans?” Web.
- National center for policy analysis (2004). ‘How globalization is changing the U.S. health care system’.
- Payro, Tony. (2007). “Nothing short of a complete overhaul will cure America’s health care system”. Web.
- Pugel, Thomas. International Economics, (13th edition).2007. New York: McGraw-Hill, 2007.
- Steinberg, Michael. “Introduction: health policy and health care economics observed.” Seminars in radiation oncology, 18.3(2008): 152-160.
- The economist (2008). “Globalization and healthcare”. Web.