Trade in health services
Trade in health services
Lessons from the multileral context of trade in health services
Authors:
R. Chanda
Publisher:
Commission on Macroeconomics and Health, WHO, 2001
The objective of this study is to provide an overview of the nature of international trade in health services and the lessons that can be learnt from the national, regional, and multilateral experience in this context.
Paper discusses the various ways in which health services can be traded, the main global players in this trade, and the positive as well as negative implications of this trade for equity, efficiency, quality, and access to health services. It also outlines some of the main barriers constraining trade in health services. The study also highlights the experiences of various countries as well as regional trading blocs with regard to trade in health services and the progress made thus far in liberalising trade in health services under the WTO’s General Agreement on Trade in Services. Based on the national, regional, and multilateral experience with trade in health services, the study draws broad conclusions about the main issues and concerns which characterise this trade and recommends policy measures to ensure that gains from trade in health services are realised while mitigating the potential adverse consequences of such trade.
Conclusions: This paper has indicated that trade in health services is globally widespread. A wide variety of developing and developed countries are engaged in this trade, as exporters and as importers. The nature of trade flows in this sector are dictated by sectoral needs and specificities in the exporting and importing countries and by a host of regulatory and infrastructural constraints. Comparative advantage in trade in health services is based on costs, natural endowments, availability of human, financial, and physical capital, presence of niche areas within the sector, and the supporting policy environment and infrastructure.
Trade in health services takes many forms, including movement of health professionals, movement of consumers, foreign direct investment in health services, and electronic delivery. Each mode of trade has associated with it positive as well as negative implications. The main positive implications of trade in health services include upgrading of infrastructure, increased exposure for health service providers, foreign exchange earnings and remittances, greater availability of quality health services and thus reduced pressure on public resources and domestic capacity. The main negative implications of trade in health services include brain drain of quality service providers to overseas markets, creation of a two-tier structure within a country, internal brain drain from the public health system to the private health care sector, crowding out of nationals, overinvestment in specialized and capital-intensive segments at the expense of investments in core health care services, and adverse effects on equity in the public health sector.
Overall, the study makes clear that trade in health services raises a variety of difficult questions. However, one of the main points highlighted by this study is that it is possible to enhance the gains from trade in health services and to mitigate the associated negative consequences through well-conceived policies and initiatives at the national, regional, and multilateral levels.
