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 Table of Contents  
REVIEW ARTICLE
Year : 2014  |  Volume : 2  |  Issue : 2  |  Page : 73-77

Trade in health services and mode 4 in Asian Countries: Challenges and opportunities


1 Health Management and Economics Research Center, Isfahan University of Medical Sciences, Isfahan, Iran
2 Research Center for Health Services Management, Institute for Futures Studies in Health, Kerman University of Medical Sciences, Kerman, Iran

Date of Web Publication18-Aug-2014

Correspondence Address:
Raja Mardani
Research Center for Health Services Management, Institute for Futures Studies in Health, Kerman University of Medical Sciences, Kerman
Iran
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Source of Support: None, Conflict of Interest: None


DOI: 10.4103/2347-9019.138929

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  Abstract 

Trade in health services is becoming a rapidly growing trend due to the ease of using information and communication technology. Health services are traded under the General Agreement on Trade in Services (GATS) through four modes. Migration of health professionals, the 4 th mode, showed a growing trend due to increasing demand factors, such as demographic changes, aging population, and rising healthcare costs in high-income countries, and encouraging supply factors, such as export development, increasing foreign exchange earnings, and increasing employee knowledge and skills. Countries must obtain the benefit from migration of healthcare professionals also as it can be a challenge. This paper reviews the opportunities and challenges resulting from migration of healthcare professionals in Asian countries. Studies showed that countries importing and exporting health services do not face identical opportunities and challenges. Migration to higher-income countries provides better working and living conditions for healthcare professionals and acts as a revenue source for exporter countries. However, the lack of explicit policies in this area will lead to depletion of professionals in the home country and loss of national wealth that was spent on educating these migrating professionals.

Keywords: Asia, challenges, export of health services, general agreement on trade in services, migration of health opportunities, professionals, trade in health services


How to cite this article:
Jabbari A, Mardani R. Trade in health services and mode 4 in Asian Countries: Challenges and opportunities. Int J Health Syst Disaster Manage 2014;2:73-7

How to cite this URL:
Jabbari A, Mardani R. Trade in health services and mode 4 in Asian Countries: Challenges and opportunities. Int J Health Syst Disaster Manage [serial online] 2014 [cited 2024 Mar 29];2:73-7. Available from: https://www.ijhsdm.org/text.asp?2014/2/2/73/138929


  Introduction Top


The service sector, which accounts for two-third of production, one-third of employment, and about one-fifth of world trade, has become the largest sector in many countries. [1] Health services have been increasing globally, and they are traded through all four modes of the General Agreement on Trade in Service. [2]

Growing healthcare market has significant economic gains but it may also intensify challenges for equitable access to health services. On the other hand, trade may increase the amount of healthcare system reforms that will create new opportunities for improving access to services. [3] Trade in health services increased healthcare sector's economic contribution to the national economy. Developed and developing countries are looking for various options, including health services exportation strategies and liberalization of ownership business, in order to maximize their resources and competitive advantages. [4]

Developing countries have the potential to become exporters of services, and several developing countries in Asia are already active in this field due to lower production costs and provision of unique services. [5] Migration of healthcare professionals is the fourth mode of GATS that can reduce the gap between demand and supply of healthcare workforce in destination countries and contribute to the economy by transfer of knowledge and remittances source. [6] This trade has a growing trend going by the growth of trained healthcare professionals in exporting countries and the lack of healthcare personnel in high income countries. Most likely in the future, demographic pressures and the rapid rise in healthcare costs in developed countries would increase demand for healthcare professionals in lower income countries. [3]

In recent years, liberalization of trade in health services has witnessed sudden rise in migration of healthcare professionals. This process is expanding with further intensity. For example, Organization for Economic Co-Operation and Development (OECD) Countries, such as the USA and England, that are facing shortage of healthcare professionals have appealed hiring them from developing countries such as the Philippines and India. [7] Short-term migration of healthcare professionals is done based on conscious strategy and distinctive contract because of expanding exports and increase foreign currency earnings. Most of them leave the country because of difference in wages and better life and working conditions. [8] Since most professionals and experienced individuals migrate, their migration could create some challenges such as shortage of skilled manpower in home conditions. [9] If this type of migration increased without an appropriate regulatory framework, the equity, quality and effectiveness of healthcare system will suffer. [10] This research reviewed the search conducted in trade in health services in Asia and identified opportunities and challenges resulting from the migration of healthcare professionals.


  Materials and Methods Top


This article is a narrative review. Search was conducted on January 2011 and the keywords trade in health services, health services exports, the General Agreement on Trade in Services, migration of healthcare professionals, and medical tourism was used. In total, 160 documents were retrieved. Only 90 documents had full text. For this article, 22 documents were used.


  Description Top


Trade in health services

Healthcare systems are always evolving and should respond to new challenges. Globalization and trade in health services is one of the most important and most complex challenges. This trade raises new challenges as well as new opportunities for efficient, equitable, and sustainable healthcare provision especially for low- and middle-income countries. [11] The healthcare sector is considered in bilateral and regional cooperation agreements and health services are traded through four modes under GATS. [2] GATS is a multilateral agreement that World Trade Organization (WTO) member countries have been committed upon to liberalize trade in services, including health services. [12] This agreement designed to reduce or eliminate the government discrimination in services provision against foreign providers in domestic healthcare markets. GATS is a legal framework for dealing with barriers of trade in services and foreign investment, including specific negotiated commitment agreements. [13]

According to GATS, trading includes four modes:

Cross-border supply of services

Cross-border supply of services (CB) refers to services provided by clinics, hospitals, medical laboratories, doctors, and medical technicians located in a country to patients in another country. Telemedicine is a new and rapidly expanding field of medicine. Progress in telemedicine makes it possible to provide medical services including consultation, pathology, radiology, and other diagnostic and laboratory services as well as medical records and administrative data processing operations outside the scope of a location. CB through laboratory samples transport, diagnosis, and clinical consulting, which are accomplished through traditional and electronic post channels, are examples in this case. [8] In this form of transaction services, consumers are receiving services through various means of transmission including post and electronic instruments without the movement of producer and consumer. [14]

Consumption abroad

This is known as health tourism (medical tourism). [15] Medical tourism is rapidly becoming a multibillion global industry. [16] Jabbari [17] defines medical tourism as "Volunteer travel outside of permanent residence in order to receive health care services including diagnosis, treatment and rehabilitation, as a tourist. In this conditions, tourists travel for various reasons except absence existing those services in permanent residence, differences between medical tourism and medical travel. On the other hand, this travel has not been presented by formal entities whose responsible for providing health care services, differences between medical tourism and outsourcing of services."

However, the definition of medical tourism is not uniform. On the other hand, medical tourists have various reasons for getting health services. [18]

Commercial presence

Commercial Presence includes the establishment of hospitals, clinics, diagnostic and treatment centers, and nursing homes by foreign investors in a country. [11] It may be a legal entity or an individual investor. Major patterns of foreign participation in hospitals and specialty clinics are investment in existing facilities or joint ventures with local partners. Non-corporate stakeholders often invest in activities related to medical tourism such as financial management, medical services for developing networks healthcare. The role of CP in host countries indicates that CP is an important source of capital, and it complements domestic private investment, thereby contributing to economic development and technology transfer. Access to private capital can reduce the burden of CP on government resources. [19]

Natural movement of healthcare professionals

Natural Movement of Healthcare Professionals (NP) refers to the migration of healthcare professionals (physicians, nurses, pharmacists, and the other professionals) and support staff (paramedics, technicians, and the other staff) under the agreement GATS. This migration is temporary and not permanent. [15] Temporary and permanent immigration has economic, social, and legal consequences for home and destination countries. Short-term migration takes place in order to promote export of health services, increase foreign exchange earnings, and expand cooperation between governments.

Migration of healthcare professionals occurs mainly from developing countries to developed countries due to differences in wages, better living and working conditions, and imbalance in supply and demand of health staff in home and destination countries. Permanent migration may result in adverse consequences for equity, quality, and access to health services to home countries. [8] [Figure 1] depicts various modes of trade in services. [10]
Figure 1: Various modes of trading services

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The immigration status of healthcare professionals in Asia

Migration of healthcare professionals from developing countries to developed countries has been discussed for more than three decades, but the magnitude of this problem and its implications has changed in regard to the rapid pace of globalization. [20] The Philippines and Indonesia are the largest exporters of healthcare professionals in Asia. These countries are sending nurses and midwives to countries all over the world. This trade has been a growing trend duo to growing trained professional supply in these countries and the shortage of healthcare workers in high income countries. [3] In the Philippines, the sharp increase in number of nursing schools, many of which have been established in response to foreign markets needs, has decreased concerns about domestic shortage of nurses created due to exports of these trained professionals. [11] China signed short-term contracts with several African countries to send healthcare professionals by government supervision. [8] Japan's immigration policies also allowed skilled workers entrance (according to the list of job classification). Although these jobs are not totally segregated, the entrance of healthcare professionals, especially nurses and caregivers, will be done upon mutually agreement. It has had negotiations with the Philippine officials to design a bilateral agreement for the benefit of Filipino healthcare professionals. [21]

Malaysia is also an importer and exporter of healthcare professionals. While most Malaysian hospitals hiring nurses are Hindu or Filipino, Malaysian nurses prefer working in Saudi Arabia and Singapore due to differences in revenue. [3] Turani [22] quoting Davis, stated that "Thailand and Singapore are most importers and have not been very active in export of health professionals. Singapore is only country in ASEAN (Association of South East Asian Nation) region that active in all 4 context trade in health services". The Philippines and India were investigated in training of healthcare workers for exporting. The minimum standard recommended by WHO was 20 physicians and 100 nurses per 100,000 population. India passed this standard for physicians but that seemed out of reach in regards to nurses. India had 62 nurses and 51 physicians per 100,000 population in 2004. [7]

In South Asia, immigration of medical practitioners began in 1950 after the end of colonial rule of India, Sri Lanka, and Pakistan by Great Britain and later expanded to Bangladesh and Nepal. Initially, these countries nurses were mainly migrating to the Middle East. However, now their destinations are Great Britain, United States of America, and Australia. South Asian people are very interested in foreign and domestic migration- migration from rural and backward areas to urban areas. Physicians' immigration in these areas is often due to external pull of globalization, free-market economy, and international flow of physicians from relatively poor countries to more developed countries. This could justify the international migration of physicians from United Kingdom and Canada to the United States of America, and also from Bangladesh, India, and Pakistan, to the Persian Gulf countries, the United Kingdom, and the United States of America. India is the largest exporter of physicians in Asia. Hindu physicians prefer emigration to the United States of America, United Kingdom, Canada, Australia, and Persian Gulf littoral states. [20] Eastern Mediterranean region countries are major hosts for physicians, nurses, radiology, laboratory, and dental hygiene technicians, and physical therapists from many developing countries. [8] In some Eastern Mediterranean countries including Jordan, Oman, Syria, Lebanon, and Yemen, medical tourism and migration of healthcare professionals is the most important trade in health services. Many of these countries signed free trade agreement with its Arab neighbors and bilateral trade agreements with the United States of America. Some of these countries heavily rely on medical tourism and migration of healthcare professionals. The most common mode of trade in health services is the fourth mode or migration of healthcare professionals. Oman is net importer and other low and middle income countries, especially Pakistan and Jordan, are only exporters of healthcare professionals. Despite the Omani government policy related to provision of healthcare professionals, this country is desperately dependent to import doctors, dentists, pharmacists, and nurses to deliver health services. [11]

Challenges and opportunities of migration of healthcare professionals

Most likely demographic changes and rising healthcare costs in developed countries has led to increased demand for healthcare professionals from countries with low and middle incomes. Migration of healthcare professionals from low income countries to high income countries could improve economic efficiency. Usually, the destination country will benefit by eliminating deficiency of healthcare sector's manpower, which is a growing problem among many high and middle income countries while the benefits to the exporting countries would depend on where migrant workers spend their income. If the migrant workers send a significant share of their income to their home country, the exporting country will benefit; otherwise, the exporting country's economy will suffer losses. For example, the Filipino nurses who work abroad have contributed to their country's profitability with a substantial share of their income. [3]

Countries like India, China, and the Philippines can benefit from trade in health services by producing more healthcare professionals. For these countries, the strategy of healthcare professional's exportation is part of workforce exporting program. Economic gains obtained from the migration of healthcare professionals contracts are significant if they sent their savings to their home country. In case of India, the impact of immigration of healthcare professionals on domestic economics can be measured by the flow of remittances, and people's tendency to lean toward the medical and nursing professions. For example, migration of healthcare professionals has been a beneficial impact on the Indian economy. Overseas remittances sent by Indian healthcare professional migrants were estimated about $ 2 billion per year. These remittances have created a stable source of foreign exchange for the country. The Reserve Bank of India (RBI) has reported that in the fiscal year 2005-2006, India has been the highest remittances recipient in the world. [7].

While the balance of human resources in healthcare sector can be outlined as an opportunity for the imported country in the short term, reduction of national workforce in healthcare sector was threatening it. Exporting countries have also an opportunity to generate revenues by employing surplus manpower and improving service providers' skills after return to home country. Brain drain due to loss of skilled workforce, subsequent loss of financial investments and subsidies used for individuals' education, and permanent loss of workforce are potential problems caused by migration of healthcare professionals. [11] In conjunction with South Asian countries including Pakistan, Bangladesh, Sri Lanka, Nepal, and India, must said while professional training, higher salaries and benefits, and better living conditions abroad act as factors that "pull", i.e., provide opportunity to healthcare workers. Conversely, surplus production of healthcare professionals and their unemployment, poor wages, lack of infrastructure, along with recession act as factors that "push", i.e., encourages young people to emigrate. Since medical education in developing countries is heavily subsidized, the cost of medical graduates in western countries are significantly higher than that their counterparts in developing countries. It encourages western countries to recruit physicians from South Asia. Better salaries and benefits and brighter working conditions and academic future for children are factors influencing medical graduates to migrate to western countries. For example, a specialist in Sri Lanka will get 45000 rupees and his counterpart in Australia 1500000 rupees. [21]

Opportunities resulting from this trade for developing countries are introducing healthcare professionals with new techniques, providing access to qualifications and more professional degrees, and providing additional financial resources that can lead to an improvement on their healthcare system. [5] According to neoclassical theory, the increase in exports of health services, including migration of healthcare professionals, increases the cost of health services in the origin country and can be compensated with the benefit of foreign exchange earnings from the export of health services. However, this does not happen in practice due to the negative impact of prices on the distribution of services in the poorer parts of the population unless there are sources and benefits of export revenue and redistribution to reinforce healthcare systems and sectors that have been affected by rise in prices. Therefore, the government must have an appropriate policy to reduce the impact of price rise on the poorer segments of the population. [8]


  Discussion and Conclusions Top


Trade in health services, particularly migration of healthcare professionals, is growing. Obviously, this form of trade in health services has opportunities and challenges that are not identical in the countries that import and export healthcare professionals. The opportunities and challenges depends on different factors such as the level of salary, the amount of trade, and the supply and demand situation in the national healthcare system and supply of healthcare professionals in the healthcare sector. [Table 1] summarizes the opportunities and challenges resulting from the migration of healthcare professionals divided into exporting and importing countries.
Table 1: Migration of healthcare professionals' opportunities and challenges

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  References Top

1.Kelegama S. Trade in Services in South Asia: Opportunities and Risks of Liberalization. India: SAGE Publication 2009.  Back to cited text no. 1
    
2.Chanda R. India-EU relations in health services: Prospects and challenges. Global Health 2011;7:1.  Back to cited text no. 2
    
3.Arunanondchai J, Fink C. Trade in health services in the ASEAN region. Health Promot Int 2006;21:59-66.  Back to cited text no. 3
    
4.Benavides DD. Trade policies and export of health services: A development perspective. In: Vieira C, editor. Trade in Health services: Global, Regional and Country Perspectives. Washington DC: Pan American Health Organization, Program on Public Policy and Health, Division of Health and Human Development; 2002. p . 53-69.  Back to cited text no. 4
    
5.Zarrilli S. Identifying a trade-negotiating agenda. In: Vieira C, editor. Trade in Health services: Global, Regional and Country Perspectives. Washington DC: Pan American Health Organization, Program on Public Policy and Health, Division of Health and Human Development; 2002. p . 71-8.  Back to cited text no. 5
    
6.Toward a positive multilateral trade agenda for developing countries: Meeting conclusions and recommendations. In: Vieira C, editor. Trade in Health services: Global, Regional and Country Perspectives. Washington DC: Pan American Health Organization, Program on Public Policy and Health, Division of Health and Human Development; 2002. p. 223-6.  Back to cited text no. 6
    
7.Kumar P, TB S. Barriers to Movement of Healthcare Professionals A Case Study of India. CUTS Centre for International Trade, Economics and Environment In collaboration with WTO Cell, Ministry of Health and Family Welfare, Government of India and WHO India Country office, New Delhi; 2007. p. 1-79.  Back to cited text no. 7
    
8.Chanda R. Trade in health services. Bull World Health Organ 2002;80:158-63.  Back to cited text no. 8
    
9.Timmermans K. Developing countries and trade in health services: Which way is forward? Int J Health Serv 2004;34:453-66.  Back to cited text no. 9
    
10.Wibulpolprasert S, Pachanee CA, Pitayarangsarit S, Hempisut P. International service trade and its implications for human resources for health: A case study of Thailand. Hum Resour Health 2004;2:10.  Back to cited text no. 10
    
11.Siddiqi S, Shennawy A, Mirza Z, Drager N, Sabri B. Assessing trade in health services in countries of the Eastern Mediterranean from a public health perspective. Int J Health Plann Manage 2010;25:231-50.  Back to cited text no. 11
    
12.Adlung R, Carzaniga A. Health services under the general agreement on trade in services. Bull World Health Organ 2001;79:352-64.  Back to cited text no. 12
    
13.Ascher B. The case of the United States of America. In: Vieira C, editor. Trade in Health services: Global, Regional and Country Perspectives. Washington: Pan American Health Organization, Program on Public Policy and Health, Division of Health and Human Development; 2002. p. 185-91.  Back to cited text no. 13
    
14.Tullao TS, Michael Angelo A. De La Salle Development of a private sector framework for ASEAN trade negotiations: Health care sector. 2006.   Back to cited text no. 14
    
15.Smith RD, Chanda R, Tangcharoensathien V. Trade in health-related services. Lancet 2009;373:593-601.  Back to cited text no. 15
    
16.Jabbari A, Delgoshaei B, Mardani R, Tabibi SJ. Medical tourism in Iran: Issues and challenges. J Educ Health Promot 2012;1:39.  Back to cited text no. 16
    
17.Jabbari A. Designing a model for Iran medical tourism. Tehran: Tehran University of Medical Sciences; 2009.  Back to cited text no. 17
    
18.Ferdosi M, Jabbari A, Keyvanara M, Agharahimi Z. A systematic review of publications on medical tourism. Health Inf Manag 2012;8:1169-78.  Back to cited text no. 18
    
19.Outreville JF. Foreign direct investment in the health care sector and most-favoured locations in developing countries. Eur J Health Econ 2007;8:305-12.  Back to cited text no. 19
    
20.Adkoli BV. Migration of Health Workers Perspectives from Bangladesh, India, Nepal, Pakistan and Sri Lanka.pdf. 2006;10.   Back to cited text no. 20
    
21.Tullao TS, Cortez MA. Movement of natural persons between the Philippines and Japan. Issues and prospects. 2003.  Back to cited text no. 21
    
22.Tourani S, Tabibi SJ, Tofighi S, Shaarbafchizadeh N. International trade in health services in the selected countries of ASEAN region; challenges and opportunities. Health Inf Manag 2011;8:453-68.  Back to cited text no. 22
    


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