Medical Tourism Creates Another Outsourcing Problem for America

As health care costs continue to skyrocket in this nation, an increasing number of Americans are turning to ‘medical tourism,’ where they visit another country for a procedure, in order to save money, which could cost even more American jobs.

According to Deloitte consulting services, 875,000 Americans were medical tourists in 2010, traveling outside U.S. borders to receive health care: dental work, elective hip replacements, even bypass surgery.

Devon Herrick, a policy expert at the National Center for Policy Analysis, a think tank based in Dallas, listed the factors that make foreign hospitals less expensive: lower labor costs certainly, but also fewer third-party payments, price transparency, limited malpractice liability and fewer regulations. These major price differences help explain why the NCPA predicts 30 percent annual growth in the medical tourism industry during the next ten years.

While many operations cannot be outsourced, due to the urgency of treatment required, as well as licensing and federal regulations, routine medical services, such as X-rays, are being outsourced. Ten to 30 percent of medical transcription is sent overseas, according to the American Transcription Association.

There is really no difference between a foreign good and buying a foreign medical procedure. In the end the money goes to supporting a foreign nation, meaning somewhere in the American economy money that could have paid a salary now leads to a lay-off. While the U.S. does run a surplus in service trade, the rise of incidents such a medical tourism proves that things could get worse even in a poorly performing ‘service’ economy.

All of this could, and should, have been avoided if the government had simply adopted a public option system in which it managed coverage of the uninsured in a captive market where it could control costs. Instead, it dropped the popular public option and helped to create a system in which yet another American industry could be outsourced.

Once again, bad federal policy is going to cost America jobs. Not only did bad trade policy cost us millions of manufacturing jobs, but a bad health care approach combined with globalization threatens medical jobs in the form of ‘medical tourism.’

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