Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Chapter 15 Globalization and Health: The World is Flattening

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Objectives After completing this chapter, you will be able to: –Explain how this increasing interconnectedness is playing out in the world of health and health care –Understand how flows across national borders have changed –Define medical tourism

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Objectives (cont’d.) –Describe the evolution and effect of patient flows on comparative advantage –Describe the effect of health worker mobility on Health Systems –Describe the flow of policy instruments and managerial practices across borders –Appreciate the managerial and policy implications of health care globalization

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Purpose Introduce idea that world of health care is globalizing (or becoming flatter): –Explore variables that affect number of patients travelling out of local region –Explore extent of misdistribution of health professionals, financial implications, and impact on middle/low-income health systems –Examine spread of patient classification systems in general

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Introduction Today, we are increasingly aware of what is going on in other parts of world: –Aware of importance of understanding both scope and implications of global interconnectedness –Examine how this increasing interconnectedness is playing out in world of health and health care

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. How Flat Is the World of Health Care? World is flat: variety of forces level playing field of commerce around globe How have flows of various kinds across national borders changed? World of health care is globalizing (or becoming flatter): –We are at very early stages of this process –Process is likely only to accelerate

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow of Patients Across International Borders Medical tourism is flow of patients around globe seeking value in following ways: –More comprehensive care –More advanced care –More specialized care –Less costly care –Improved quality –Better access and patient experiences

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow of Patients Across International Borders (cont’d.) Size of global market: inbound and outbound patient flows –No accurate estimates of size of global market for medical travelers Growing rivalry for inbound international patients: –Health care playing field is leveling, allowing both high and low GDP countries to compete for each other’s patients

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Understanding the Outbound Patient Flows Wealthy patients from high GDP countries that lack comprehensive health services Patients from countries with large disparities between rich and poor Patients from high GDP countries with relatively expensive health care services

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Understanding the Outbound Patient Flows (cont’d.) Patients from countries with long waits Patients seeking better outcomes, highly focused care, or extraordinary service experiences

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Managerial Implications of Patient Flows When health care organizations depend on patients from abroad, environment can become more problem-filled –Unstable incidents and events, alarming trends, and lots of ambiguous information –Many factors are out of control of hospital managers

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Managerial Challenges to Outbound Patient Flows Medical tourism raises ethical issues and can even involve false advertising or fraud To attract international patients requires substantial investments in buildings, equipment, service processes, and people who can “delight” patients

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow of Health Workers Across Borders Labor market is more globalized and health professionals more mobile –Thus, countries look beyond national boundaries to recruit skills and expertise to meet healthcare delivery needs There has always been an imbalance in the distribution of health workers –Akin to broad imbalance in resource availability

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow of Health Workers Across Borders (cont’d.) Health worker mobility –High-income countries recruit health labor force from middle and low-income countries Scale of flow –No comprehensive database of international flows of people for countries exists Impact on African health systems –Africa’s health systems are struggling to meet population health needs of their citizens

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow of Health Workers Across Borders (cont’d.) Financial implications –Exodus of health workers from low/middle- income countries increases dependence of those countries on more developed nations International response –“Managed migration“ Regulates flow of health workers in way that is beneficial to both source and destination countries

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. National Level Responses Critical issues: –Improving workforce planning –Assessing incentive packages –Improving human resources –Better planning –New flexible pay systems –More accessible and shorter specialist training

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Implications for Healthcare Managers Many ways in which high-income countries can help strengthen low-income country health systems: –Monetary (recruitment tax paid to source country) –Capacity building (contributing to source country training, exchange of staff and expertise etc.) methods

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow of Policy Instruments and Management Practices Across Borders 1983: First patient classification system (PCS) used for paying hospitals for services provided adopted by congress: –Diagnosis related groups (DRGs) –Logic underlying development truly revolutionary at time –Forced hospitals to adopt management practices allowing them to understand costs

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow Across Borders (cont’d.) The drivers of cross-border flow: –Diagnosis related group (DRG)-based patient classification systems has spread widely around globe –At macro level DRGs have potential to help countries contain cost of health care

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. The Flow Across Borders (cont’d.) Barriers to cross-border flow: –Host of possible barriers exists: including regulatory, political, economic and cultural barriers The situation today: –Flow of DRG-based systems has been substantial –Search for improved instruments, tools, and practices helping to contain costs continues

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Additional Considerations Directionality of flow is important We should be mindful of how technological innovation can change landscape of health care across national borders Not all cross border flow in health care are positive

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Conclusion Health care is still primarily a “local” business, however: –Local practice patterns and health-seeking behavior vary considerably, both within and across national borders Challenge: –Encourage spread of those technologies and practices that are welfare-enhancing and to discourage spread of those that are not