GATS and the new world order
The global economy is fast changing to take on a new look and create new opportunities for both companies and consumers alike. It is often said that necessity is the mother of invention. The changing paradigm in global trade also emphasizes the dictum. Change in the global economic order was imperative since companies in wealthy countries were finding their home markets very saturated while foreign markets were protected by essential tariffs and barriers that rendered foreign companies effectively less competent to operate in these countries. GATS has today made it possible for companies to transcend borders and barriers and create and exploit new opportunities, thereby contributing to the faster growth of modern-day trade and commerce. This multilateral model of trading system promoted by the WTO has significantly contributed to the economic growth, development, and employment throughout the past fifty years. The very principles embodied in the Marrakesh agreement establishing WTO strongly reaffirm the principles and objectives to assist this goal.
Tariff-led protectionist trading regimes are now going down with a fight. Several developing economies were forced to bring down tariff levels and realign their markets and regulatory environments to the average world models. Stipulated protectionist action can now be taken against foreign entities only for proven instances of dumping and protectionist monopoly and destruction of the sector in the operating country. Countries like China have faced the teeth and fists of European trade agencies from time to time while they faced punitive action for such protectionist behavior in the EU market. On the whole, the internationalization of commerce and industry has brought about many positive changes all over the world. It has created new employment opportunities in the developed world and has found new markets in the developing world. The process has substantially developed the industries in developing countries like India and China. While China discovered new opportunities in the manufacturing sector, India reciprocated with its abilities in the knowledge sector. India is one of the largest producers of software in the world and over a quarter of the world’s original investment in R&D is now made in India. While trade in goods and services is flowing across borders, it gave rise to a new industry that came to be called the ‘outsourcing’ industry. The first jobs to come to countries like India and the Philippines were clerical ones. That could be conducted over the phone from long away. But trans-border commerce had its side effects. People who were doing these jobs in the developed countries were losing them. The issue was put under the scanner in many countries and was later dismissed as a reality that was destined to come.
Outsourcing Health Services
Essentially this exposed much vulnerability to the people in the advanced countries. For many, the cost difference was a new realization. Industries such as healthcare have been riding on this boom. While the manufacture of drugs was the first process to be carried out from cheaper locations in the industry, many others followed. Processing insurance claims, evaluating research reports, and many more – until the main process itself started to be outsourced – healthcare and surgeries. But this boom was broadened many times over by the long interaction between the medical communities in both developed and developing countries. Many surgeons and physicians had crossed the borders between these nations in the beginning. Over twenty-nine percent of the doctors in the US have earned their medical degrees abroad. The case is quite similar in the UK too. With increasing technologies being offered by the host countries at a competitive cost, the balance just tilted in their favor.
What are the factors that drive patients to countries like the Philippines, Thailand, Singapore, and India to get complicated medical procedures done? Just a peep under the skin will give us the real causes. Most reports today focus on the cost aspect. They are all authored by the health service departments in these countries where most of the people are also insured and do not have to bother about the cost of procedures themselves. So the cost cannot simply be the single factor that drives so many of these patients abroad. While cost still plays an increasing facilitator, the most important trigger is the lack of accessibility to advanced medical care in these countries. While in the US, a bypass procedure has a waiting list of up to two months, the situation is grimmer in the UK and many other EU countries. The trend has also increased recently because self-insured corporations in the US and other countries have been relying on health outsourcing to bring down the cost of employee medical fitness and part of the savings is also passed on to the employee so that they do not object to the traveling.
The Positive Factors of Healthcare Outsourcing
While the system is under the scanner in many of the developed countries, everybody agrees that there are no other means to address the problem of on-time availability of complicated medical procedures to those who need it. The skewed demand curve has left the system baffling in advanced countries. A parliamentary study conducted by the US concluded that the practice need not be curbed. The paper went on to claim that the process is providing the much-required competition to the American healthcare industry and will thereby serve to improve the standards followed by them owing to the competition. The system also allows the insurance companies to cut their costs and thereby save a lot of national wealth in the process.
The most important aspect that has to be appreciated is the on-time availability of healthcare to those who need it at a very minimal cost. Hospitals in India charge up to US$ 8000 for a bypass surgery while the same procedure can cost over US$ 54000 in the US. In the UK, healthcare costs have skyrocketed over the last few years – even a dental filling exercise is now unaffordable to a non-insured English man.
The Negative Aspects of Healthcare Outsourcing
What is amazing is the fact that it is the same thing that keeps costs high in the developed world and keeps costs under control in the developing countries – the cost of expensive litigations for medical negligence and the fat compensations that follow. Patients flying into low-cost destinations are often unaware of the yawning legislative gaps between the developed and the developing countries. While medical negligence in the US and the UK if proved can win you millions in wealth to compensate the loss of your capacity to earn anymore in life, it is virtually absent in the nations providing these services.
Law in countries like Thailand and India is often too weak to safeguard the interests of the patients in times of crisis. While there is only a marginal provision laid out in the books, even access to it can become a cumbersome process as people have come to realize. Hence patients should be cautious while approaching these institutions and a good study of the history of previous cases should also be taken into account while selecting your destination and deciding on the team of experts who would put you under the knife.
References
Boulin C, Drager N, Smith R eds. International Trade in Health Services and the GATS – Current Issues and Debates. Washington DC, The World Bank, 2006.
Drager N, McClintock E, Moffit M. Negotiating Health Development: A Guide For Practitioners. Geneva, Conflict Management Group and World Health Organisations, 2000.
Lee K, Buse K, Fustukian S, eds. Health Policy in a Globalising World. Cambridge, Cambridge University Press 2002.