We Need Free Trade in Health Care

Health-care reform is a major election issue. Yet while Democrats Hillary Clinton and Barack Obama offer comprehensive plans, important gaps remain. Neither plan addresses the need for more doctors, a problem that Gov. Mitt Romney ran into when he introduced comprehensive medical coverage in Massachusetts in 2006. The other problem is the cost, an issue that earlier this year killed Gov. Arnold Schwarzenegger's ambitious attempt at reform in California.

No presidential candidate can afford to ignore the potential of international trade in medical services to address these issues. Consider the four modes of service transactions distinguished by the WTO's 1995 General Agreement on Trade in Services.

Mode 1 refers to "arm's length" services that are typically found online: The provider and the user of services do not have to be in physical proximity. Mode 2 relates to patients going to doctors elsewhere. Mode 3 refers mainly to creating and staffing hospitals in other countries. Mode 4 encompasses doctors and other medical personnel going to where the patients are. All modes promise varying, and substantial, cost savings. Arm's-length transactions can save a significant fraction of administrative expenditures (estimated by experts at $500 billion annually) by shifting claims processing and customer service offshore. Nearly half of such savings are already in hand. Foreign doctors providing telemedicine offer yet unrealized savings. We estimate that the savings in health-care costs could easily reach $70 billion-$75 billion.

Mode 2, where U.S. patients go to foreign medical facilities, was considered an exotic idea 15 years ago. Now this is a reality known as "medical tourism." Today, many foreign hospitals and physicians are offering world-class services at a fraction of the U.S. prices. Costly procedures with short convalescence periods, which today include heart and joint replacement surgeries, are candidates for such treatment abroad. By our estimates, 30 such procedures, costing about $220 billion in 2005, could have been "exported."

Mode 3, with hospitals established abroad, will primarily offer our doctors and hospitals considerable opportunity to earn abroad. Of course, the establishment of foreign-owned medical facilities in the U.S. is also possible, and could lead to price reductions by offering competition to the U.S. medical industry.

Mode 4 concerns doctors and other medical providers going where the patients are. It offers substantial cost savings, since the earnings of foreign doctors are typically lower than those of comparable suppliers in the U.S. But the importation of doctors is even more critical in meeting supply needs than in providing lower costs. According to the 2005 Census, the U.S. had an estimated availability of 2.4 doctors per 1,000 population (the number was 3.3 in leading developed countries tracked by the OECD).

Comprehensive coverage of the over 45 million uninsured today will require that they can access doctors and related medical personnel. An IOU that cannot be cashed in is worthless. Massachusetts ran into this problem: Few doctors wanted (or were able, given widespread shortages in many specialties) to treat many of the patients qualifying under the program. The solution lies in allowing imports of medical personnel tied into tending to the newly insured. This is what the Great Society program did in the 1960s, with imports of doctors whose visas tied them, for specific periods, to serving remote, rural areas. U.S.-trained physicians practicing for a specified period in an "underserved" area were not required to return home.

It is time to expand such programs – for instance, by making physicians trained at accredited foreign institutions eligible for such entry into the U.S. But in order to do this, both Democratic candidates will first need to abandon their party's antipathy to foreign trade.

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Australia: Cancer patients kept waiting for life-saving treatment

CANCER patients are waiting up to almost three times longer for life-saving treatment than they should be at some of the state's biggest hospitals. A leaked Queensland Health memo shows patients are being put at risk from radiation oncology unit delays at the Royal Brisbane and Women's, Princess Alexandra, Mater and Townsville hospitals. The patients are expected to wait an average of 27 days despite the "maximum acceptable limit" of 10 days. "Patients for whom delay in starting will have a significant adverse affect on outcome," the QH Radiation Therapy Services memo warns radiation oncologists.

Health Minister Stephen Robertson was unavailable Monday, May 26, but his department admitted treatment facilities were under pressure. The figures have prompted the Opposition to refer Mr Robertson for allegedly misleading State Parliament after he claimed last month there was no centrally collected data for waiting times.

Liberal health spokesman John-Paul Langbroek said the memo was further evidence the Minister was failing to contain waiting list blow-outs. "It is simply not good enough because this is important treatment for very sick people and lives are being put at risk," Mr Langbroek said. "People are dying in our system because of these poor services."

Townsville Hospital was expecting the worst delays with next appointments 28 days away for category two patients, followed by RBWH and the PAH on 25 days. Category three patients were waiting as long as 55 days in Townsville despite a maximum recommended wait of 20 days. The department said all category one patients were cleared immediately.

Queensland Health cancer control chair Euan Walpole said the memo was used to help clinicians plan appointments, adding some patients may be treated sooner. "The Government has provided an extra linear accelerator both at Townsville Hospital and the PA Hospital, and staffing has been increased to extend the operating hours of the available machines, providing additional treatment shifts," Dr Walpole said.

The Courier-Mail has recently highlighted problems with waiting lists for other treatments such as breast cancer due to a shortage of radiographers. Australian Medical Association Queensland president Ross Cartmill said the figures again illustrated the poor planning and chronic underfunding of health. "If these people are being treated for malignancies with radiation, they are suffering very serious problems and must be treated quicker," Dr Cartmill said.

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