NCPA - National Center for Policy Analysis


May 22, 2009

Americans could eliminate waste and inefficiency in our health care system if they took advantage of the lower cost systems available elsewhere and improved the quality of our own system , says Dean Baker, co-director of the Center for Economic and Policy Research.

There are several obvious paths through which the United States could gain by freer trade in health care, says Baker.  

First, we could construct trade deals that simplify the process through which foreigners can train to meet U.S. standards for becoming doctors, dentists and other highly paid medical specialists:

  • The point would be to set up procedures through which students in countries like Mexico, China, and India could train to meet our standards, and then would have the same ability to practice in the United States as U.S. trained doctors.
  • This could be easily implemented and offer large gains to both countries, especially if the US paid a fee to compensate for the medical training offered to foreigners, so that two to three doctors could be trained for every one that practiced in the United States.

An even simpler route would be to allow Medicare beneficiaries to buy into the much cheaper health care systems in other countries:

  • The government could split the savings with the beneficiaries, allowing them to pocket thousands of dollars a year, while saving the government the same amount.
  • The receiving country could even get a premium over its costs in order to give it an incentive to take part in the program.

Finally, the government could try to standardize rules around the rapidly growing industry of medical tourism:

  • Every year, tens of thousands of patients travel to Thailand, India and other countries to have major medical procedures performed at prices that are often less than one-tenth as much as those in the United States.
  • The savings can easily offset the cost of travel for the patient and several family members.
  • If facilities were regulated and clear rules established for legal liability, then more patients would be able to take advantage of the potential cost saving.

Source: Dean Baker, "Health Care: Some Protectionism the 'Free Traders' Love,", May 21, 2009.

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