## Summary The supervision of a domestic health system in the context of the trade environment in the 21st century needs a sophisticated understanding of how trade in health services affects, and will affect, a country’s health system and policy. This notion places a premium on people engaged in the health sector understanding the importance of a comprehensive outlook on trade in health services. However, establishment of systematic comparative data for amounts of trade in health services is difficult to achieve, and most trade negotiations occur in isolation from health professionals. These difficulties compromise the ability of a health system to not just minimise the risks presented by trade in health services, but also to maximise the opportunities. We consider these issues by presenting the latest trends and developments in the worldwide delivery of health-care services, using the classification provided by the [[World Trade Organization (WTO)]] for the [[General Agreement on Trade in Services (GATS)]]. This classification covers four modes of service delivery: cross-border supply of services; consumption of services abroad; foreign direct investment, typically to establish a new hospital, clinic, or diagnostic facility; and the movement of health professionals. For every delivery mode we discuss the present magnitude and pattern of trade, main contributors to this trade, and key issues arising. [[Question]] By [[General Agreement on Trade in Services (GATS)]] classification, what are the four modes of service delivery? 1. Cross-border supply of services 2. Consumption of services abroad 3. [[Foreign Direct Investment (FDI)]] 4. Movement of health professionals ## Introduction [[Increased trade in health service might be viewed as the final step in deconstruction of national social-health systems]] Health services have become increasingly traded because of the development of ICT, international mobility of service providers and patients, and growing private sector participation. The services trade is formalized through WTO's [[General Agreement on Trade in Services (GATS)]]has generated additional impetus for countries to consider their trading position with respect to health services. Some view this development as the final step in deconstruction of national social-health systems, and others as the means to develop and expand the range and quality of health services offered to their populations. ## [[General Agreement on Trade in Services (GATS)]] four modes of service delivery ### Mode 1: cross-border supply of health services e-health, such as teleradiology has enabled nation-wide access. Once the national system is in place, countries can start expanding beyond national boundaries. From 2000-2005 data, most information is anecdotal, and the leaders in exportation are India, Philippines, and Cuba. India strode through, particularly Apollo Group (private health provider) who was able to export telemedicine services (consultation, diagnostic, telepathology, teleradiology) from its Gleneagles Hospital in Kolkata to patients in Bangladesh, Nepal, Bhutan, and Burma. However, the implementation and use of e-health, even within national health systems, raises issues about the recognition of credentials and licensure; legal liability and malpractice considerations, including provider insurance coverage; provider remuneration; patient privacy and confidentiality; the existence of enabling infrastructure and compatibility of standards in areas such as data, images, and medical records; infrastructure and future operating costs; and the quality and appropriateness of care.21 The quality and appropriateness of care is particularly of potential concern for holistic and integrated clinical care, which could become more fragmented and disintegrated and thus, although perhaps cheaper or quicker, could result in poorer care from the patient and provider perspectives. **International trade in e-health increases the complexity of such issues, making their resolution more difficult.** [[Telehealth]] [[Medical education]] Solutions do exist. For instance, Nighthawk Radiology Services—the largest supplier of diagnostic imaging to the USA—is based in Idaho but has US-trained radiologists in Sydney (Australia) and Geneva (Switzerland).22 Similarly, Teleradiology Solutions provides services to 35 hospitals in the USA from its headquarters in Bangalore. In both cases, an initial interpretation is made and final interpretations signed off by US-licensed doctors. Nonetheless, that there is fairly little trade in e-health compared with other methods of delivery is perhaps not surprising. ### Mode 2: consumption of health services abroad [[Medical tourism]] Singapore launched a multiagency initiative through trade exhibitions, investments, and development of new areas—such as stem-cell treatment and transplant—to carve a niche area, with international patient centres and patients selecting a preferred hospital and even specialist. Similarly, Thai consuls provide price guidelines for selected treatments available at Thai hospitals. [[Medical tourism]] The main constraint on trade is the scarcity of insurance portability. Most insurance schemes restrict patients seeking foreign service providers when that service is available domestically. Then, because of international standardization or accreditation, such as by Joint Commission International, help ensure consumer and insurance payers' confidence over quality of care in accredited hospitals in developing countries. ### Mode 3: commercial presence abroad / foreign direct investment (FDI) [[Foreign Direct Investment (FDI)]] Developing countries are increasingly looking towards FDI as a source of capital investment in their health sector, as well as the potential for general infrastructure development, and investment in and transfer of technology and skills.35,36 Nonetheless, cautious restrictions have been generated because of concerns about foreign control of health-care provision; increased privatisation of health (in mainly public systems), especially to service trade under mode 2; and associated concerns about the diversion of resources to curative and high-end procedures, domestic brain drain, and advantageous patient selection.6,37,38 ==In Indonesia, for example, FDI is limited to hospitals with a minimum of 200 beds and at least two full-time family doctors for every area of service provided by the hospital; however, table 5 shows that these limitations do not always apply. ==Since 2000, India has allowed FDI in hospitals up to 100%, and between 2000 and 2006, 90 FDI projects were approved (21 hospitals and the rest diagnostic centres), for a total US$53 million, covering a wide range of countries, such as Australia, Canada, UK, USA, the United Arab Emirates, Malaysia, and Singapore.40 Non-resident Indian people are an important source of this investment, given the importance of diaspora contacts. Finally, [[there is no distinction between FDI through construction (direct entry of foreign firms) or purchase (acquisition of existing domestic firms)]]. This notion is important since construction entails the creation of new productive capacity, whereas purchase simply entails transfer of ownership of existing productive capacity.32 Further, [[no distinction can be made between FDI that is for profit and that not for profit]]. For example, when non-resident nationals wish to improve the situation in their homeland, rather than necessarily seek large profits, substantial differences in the amount, type, and effect of FDI could exist. This tenet is particularly relevant in health services, since there is a large amount of non-resident diaspora FDI. Therefore [[breakdown of FDI into non-resident nationals and foreigners might be useful for countries, since it could provide important policy directions for tapping diaspora networks for getting FDI in health]].11 This distinction between for profit and not for profit will of course also be relevant for other modes of service delivery, although the drive behind these will probably be linked to investment sources (mode 3), such as investment in facilities to treat patients under mode 2, to supply services under mode 1, or employ workers under mode 4. ### Mode 4: movement of health professionals [[WHO Global Code of Practice on the International Recruitment of Health Personnel]] Health-care workers’ desire to migrate is related to the differences in economic and work environment between source and destination countries, including remuneration, job satisfaction, resources and facilities, career opportunities, educational and training opportunities, bureaucracy and corruption, occupational risks, and welfare considerations (eg, social security and retirement benefits). However, the effect of migration on human capital stocks (so-called brain drain) is a cause of concern. The ultimate destination of workers to rich countries, and often the private sector within these countries, has knock-on effects down the chain to public sectors within wealthy nations, private and public sectors in low-income countries, and ultimately the rural areas within poorer countries.59 Additionally, major concerns surround the effect on health status and the achievement of the Millennium Development Goals in many countries, especially sub-Saharan Africa.44 Some countries have therefore introduced measures to prevent emigration of their health workers. These measures include bonding newly-trained graduates to undertake a specified tenure of compulsory service in the home country, economic and other incentives (especially for rural workers), and scholarships and training programmes to promote career advancement. There are also various calls for compensation to be paid to source countries, specific twinning or bilateral arrangements, and ethical codes of conduct.44 However, the complexities of modern migration, corresponding legislative and trade policies, and scarcity of data, make solving these concerns more pressing and difficult to achieve. ## Conclusion Despite severe limitations and difficulties with identification and collation of data, this paper shows an increased amount, profile, and complexity of health-services trade. Perhaps because health care is fundamentally about people—health professionals and patients—that modes 2 and 4 of service delivery are the most prevalent and arguably most important areas of trade in health services is unsurprising. However, although each delivery mode has been discussed separately, the considerable links between modes should be recognised. For example, Cuba has used joint ventures with Canadian, German, and Spanish companies (mode 3) to attract patients from these countries for specialised treatments (mode 2), helping establish Cuba as a hub for teleconsultation and telediagnostic services (mode 1) to the Central American and Caribbean market and the establishment of specialised Cuban clinics in Central and Latin America (mode 3), where Cuban physicians and nurses are employed (mode 4). Thus, health-services trade should be considered as an integrated package to appreciate fully the potential risks and opportunities presented. [[Differentiation should be made between general trade liberalisation and liberalisation specifically under the auspices of the GATS framework]]. GATS is an international trade agreement that contains legal rules, and will thus have an effect on health sovereignty. Policy reversal is perhaps the most important risk, or concern, over liberalisation of health-services trade specifically under GATS in this respect. Making commitments under GATS is very different from undertaking liberalisation unilaterally within a country’s own policy framework. By committing a sector to GATS, the country has to abide by specific GATS rules on market access and national treatment in relation to that sector, as well as the general GATS rules governing all services. Unlike a country’s own unilateral decisions, which can be reversed easily if they are later deemed to be damaging, the GATS commitment is legally binding and effectively irreversible, hence locking in liberalisation commitments and the private and commercial activity within a health system, which might subsequently turn out to be bad policy moves (compensation has to be paid to WTO members affected by any subsequent change in market access or national treatment).60 This commitment requires there to be a far higher threshold of certainty before countries decide to make any commitments under GATS, especially in crucial service sectors such as health. Elsewhere, we have argued61 that, unless one can show that making a GATS commitment in the health sector offers additional advantage over increasing trade outside the GATS framework (such as obtaining market access in other areas of interest, encouraging investor confidence, and increased foreign investment), a country should not make GATS commitments. Instead countries should consider sampling liberalisation outside GATS. Sampling would allow countries to experiment with such policies in a way that allows them to reverse course on market access or national treatment if the experiment produces unsatisfactory results. With use of a common market adage, countries should sample before committing (ie, “try before buying”).61 Outside GATS, the main opportunities presented by increasing trade in health services include efficiency, specialisation and quality gains, public-sector cost savings, expansion of service provision, export revenues and remittances, transfer of technology and skills, and increased patient choice. Potential risks include distributive consequences for domestic patients through various means, and an internal and external brain drain of health professionals. [[Published work tends to dichotomise the social good of public health and the economic good of health-services trade, but countries need a robust assessment framework to integrate social and economic perspectives]]. For example, FDI can bring world-class hospitals to capital cities but in the process encourage a more explicit two-tier system of health care. How are the relative costs and benefits (of all descriptions, not just pecuniary) to be assessed and evaluated? Countries must note that there is no universal policy recommendation can be made. Every country needs to assemble the relevant information to assess how such trade can affect its key areas of concern. ## [[Insights]] Medical tourism and Thailand The number of foreign patients in Thailand increased from 0·55 million in 2001, to 1·3 million in 2005, which is the highest in Asia.72 More than half of patients—mainly from Japan, the USA, and UK—are treated in three private hospitals that are accredited by the Joint Commission International (Bumrungrad, Bangkok General, and Smithivej),73 which have internationally trained physicians and US management.74 Although Thailand has been actively promoted as a medical hub in Asia, it has not made commitments under GATS on health and social-related services. Instead, Thailand has been negotiating liberalisation in health services under the Association of Southeast Asian Nation framework agreement in services (AFAS).75 AFAS focuses on progressive liberalisation of commercial presence (mode 3) and movement of health professionals (mode 4). Modes 1 and 2 are not a focus of AFAS. The substantial growth in the volume and revenue from medical tourism prompts long-term investment in capacity expansion of outpatient, inpatient, and other specialised service facilities, encourages pronounced private-sector growth for the domestic population, and provides extra revenue for government (30% corporate tax). However, it increases demand for physicians and other health professionals. By 2015, about 7 million outpatients and 0·4 million inpatients from medical tourism are estimated to be expected, requiring 200–303 extra physicians, which is about 20–30% of total private medical doctors or 9–12% of total doctors in Thailand.75 This increased need places the public-health system under pressure, especially teaching hospitals where a large pool of specialists is needed. It is easy to see why. Private physicians can earn some four to ten times their public counterpart, given equivalent qualification.76 Interviews that we undertook suggest three clear patterns of internal brain-drain: (1) from public provincial hospitals to private hospitals; (2) from public hospitals to teaching hospitals; and (3) specialists, such as cardiac surgeons, from teaching hospitals to private hospitals. As table 9 shows, a cardiothoracic surgeon clearly has a heavier workload and lower salary in public hospitals than in teaching or private hospitals.77 (India has a similar experience of the effect of medical tourism on internal brain-drain.)78 To address this inequality, several financial and non-financial incentives have been introduced to retain professionals within the public sector.77 However, faculties of medicine are concerned about increasing the number of medical students with few faculty members to ensure the quality of medical education. The importation of foreign professionals has been resisted by the Medical Council because of concerns for understanding the cultural dimension of health and diseases in Thailand, and since the Medical License examination is done entirely in Thai. Further, **the effectiveness and sustainability of financial incentives to retain staff in the public sector remains unclear. Research is thus urgently needed to explore policy options, such as time sharing through part-time public and private employment, to ensure that the losses from trade do not outweigh the gains**. ## References [[@smithTradeHealthTrade2009]] 1. #to-read Hilary J. The wrong model: GATS, trade liberalisation and children’s rights to health. London: Save the Children UK, 2001. 2. #to-read Blouin C, Drager N, Smith RD, eds. Trade in Health Services, developing countries and the GATS. Washington: World Bank, 2005. 3. #to-read Blouin C, Heymann J, Drager N. Trade and health: seeking common ground. Montreal: McGill-Queens University Press, 2007. 4. #to-read Smith RD. Globalization: the key challenge facing health economics in the 21st century. Health Econ 2008; 17: 1–3. 5. #to-read Chanda R, Smith RD. Trade in health services and GATS: a framework for policy makers. In: Blouin C, Drager N, Smith RD, eds. Trade in health services, developing countries and the GATS. 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