“..the global trade in health services is offering opportunities both for exporting developing countries and importing developed nations.”
Globalization is transforming not only trade, finance, science, the environment, crime, and terrorism, it is also influencing health and medical care. In 1997, a report by the US Institute of Medicine stated, “Distinctions between domestic and international health problems are losing their usefulness and are often misleading.” Broad international contacts are not a novelty. What is new is the pace and range of integration.

We cannot underestimate the effects of these changes on the health of populations and medical care. In addition to domestic problems, all national health systems must now deal with the international transfer of health risks and opportunities.

The best example of the blurring of health frontiers is the dissemination of communicable diseases. In the 14th century, the Black Death killed one-third of the European population. The global spread of influenza in 1918 accounted for far more casualties than World War I. The most recent additions to the list of global epidemics include HIV/AIDS, SARS, and H1N1 or swine flu.

As we can see, infectious diseases have an old record of cosmopolitan presence. What is new is the scale of what has been called “microbial traffic,” which has expanded as a result of an explosive increase of trade and travel.

The global spread of infectious diseases is related to major changes in our environment and lifestyles. Indeed, to make matters more complex, it is not only people and plagues that travel from one country to another; unhealthy lifestyles are also being exported. Smoking and obesity are the exemplars of emerging health risks linked to globalization.

Furthermore, the globalization of health goes beyond diseases and risk factors to also include health products. Careful regulations on access to prescription antibiotic drugs in one country, for example, may be subverted when its neighbors allow the unrestricted purchase of antibiotics. Such practices are at least in part responsible for the emergence of new forms of resistance to many antibiotics. The most dramatic case is tuberculosis (TB). The latest World Health Organization (WHO) global survey indicates that 5 percent of the 9 million new cases of TB are resistant to first-line antibiotics.

Another recent development, with potential implications for imprudent prescription practices and the ensuing spread of antibiotic resistance, is the growing commerce of drugs through the internet.

International trade in health services is also expanding. The traditional classification of these services recognizes four basic forms of exchange: 1) service exportation; 2) commercial presence; 3) transnational movement of providers; and 4) transnational movement of consumers.

The exportation of health services implies the transborder movement of diagnostic or therapeutic procedures. WorldCare Limited, for example, based in Bermuda and with access to physicians from the Massachusetts General Hospital, Cleveland Clinic and Brigham and Women’s Hospital in Boston, is offering telemedicine services and second opinion consultations in several parts of the world.

Commercial presence—the establishment of health care units or services in other countries—is also growing as a result both of trade liberalization and the saturation of the American managed care market. Given that most of these organizations are for-profit, their growth has forced them to look for new markets in Latin America and Eastern Europe.

The international movement of physicians and nurses, mostly to the US and Europe, is expanding as well. In the US, foreign physicians are brought into the health system largely through clinical residency programs. The movement of nurses is more dependent on direct demand from the labor market. A large proportion of foreign nurses in the US come from Jamaica and the UK, but given the shortage of this kind of personnel and the growth of the Hispanic population in the US, the exportation of nurses from Central and South America is increasing.

Finally, the movement of health care consumers is also growing. Foreign patients regularly use the services of internationally renowned hospitals in the United States. Residents of American border cities, in turn, search for culturally acceptable services in Mexico, in the case of persons of Hispanic origin, or cheaper medical services, mostly dental and ophthalmological, which are not covered by regular insurance plans. American citizens from all over the country also travel to Mexico to access treatments that for regulatory reasons are not available in the United States.

A limitation to this type of exchange is the lack of portability of most public and private insurance plans in North America. However, NAFTA and other free trade agreements offer the opportunity of discussing the possibility of covering the costs of medical services offered in Mexico and other countries by providers willing to submit themselves to international certification procedures. These services tend to have a much lower cost than in the US. It is estimated that, in the countries offering this kind of service to American consumers, the cost of an average surgical procedure, such as hip replacement, hysterectomy, hernia repair, and cataract removal, amounts to 15 percent of the cost in the United States.

A particularly attractive possibility is that Medicare could cover the medical expenses of American retirees living in Mexico, who represent 15 percent of total American retirees living abroad. This is not only a potential source of foreign currency for Mexico but also a niche of enormous potential savings for Medicare. According to Professor David C. Warner, an expert in economics and health finance at the University of Texas at Austin, the cost to Medicare of an average beneficiary of this public insurance in the US is $7,500 a year. In Mexico, the medical care of an average beneficiary would cost $4,000 a year.

But this is not the only potential market for health care providers in low- and middle-income nations. In the US there are still roughly 40 million uninsured individuals. Many others are under-insured. This population is increasingly looking for value in health care through affordable quality services. According to the Deloitte Center for Health Solutions, in 2007, approximately 750,000 Americans traveled abroad to receive medical care. It is estimated that this figure will grow to 1.6 million by 2012. We are talking about a market worth several billion dollars annually. These resources will flow to those countries willing to offer accredited medical services at reasonable prices.

The exportation of health services by developing countries is also helping to solve the drain of local qualified health workers. The World Bank has recently documented how the establishment of private clinics and hospitals in Trinidad and Tobago catering to foreign consumers has stimulated the repatriation of a considerable number of physicians and nurses. A similar situation is taking place in India.

In conclusion, the global trade in health services is offering opportunities both for exporting developing countries and importing developed nations. The former can benefit from an increasing amount of foreign currency, an improvement in the standards of local medical care, and the repatriation of qualified health workers. High-income countries, in turn, can benefit from a reliable supply of services that are being offered at a lower price and with similar standards of quality.

Dr. Julio Frenk became Dean of the Faculty and T&G Angelopoulos Professor of Public Health and International Development at the Harvard School of Public Health on January 1, 2009. Dr. Frenk is an eminent authority on global health who served as the Minister of Health of Mexico from 2000 to 2006.



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