An article in The Asia Times titled “US reforms may boost medical tourism” analyzes the affect of the recently passed healthcare reform bill are analyzed from the perspective of the medical tourism industry. From that analysis it looks as though the short-term affects may be a bane, as Americans begin to line up for healthcare paid for by tax dollars. From the march 30th article Muhammad Cohen writes:
HONG KONG – The long-awaited United States healthcare reform package became law last week. Asian hospitals treating American medical travelers will have to wait longer to see whether the bill will have a significant impact on their businesses, but US insurers will feel the reforms’ impact more quickly, and that could lead them to look more closely at international options.
“Greater coverage for more Americans presumably would mean fewer Americans would need to travel abroad for care,” Bangkok Hospital international marketing manager, Judy Mitchell, said.
The only problem with this is that real benefits don’t kick in until 2014. So those with medical needs that aren’t able to take advantage of the sweeping legislation will still seek the care they need. With top-quality, low-cost care available around the world, the industry may be just fine for a while.
The medical tourism industry should be looking at the long-term. If a former Congressional Budget Office Director Douglas Holtz-Eakin is correct, the new legislation increases the US federal budget deficit by half a trillion. From the New York Times on March 20th, 2010, Holtz-Eakin writes:
“In reality, if you strip out all the gimmicks and budgetary games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion.”
If this is true, then they are going to have to lower the amount of payout to service providers and increase taxes on business and individuals to make up for the shortfall. With those decreases in payouts will come shortages of healthcare workers. The only option left to those in need of actual doctors will be medical tourism.
Let’s say Holtz-Eakin is wrong and the legislation actually saves money over the next decade. That $138 billion pales in comparison to the deficits that the CBO is projecting today for each of the next 10 years totaling $9.7 Trillion.
From a common sense economics point of view this will be a long-term boon for the medical tourism industry around the world.
Yes it will be a long-term boon for medical tourism. In fact, I’d say a big-time catalyst for the industry’s development. The shortage of providers will result in waiting periods, as will the potential rationing of care that will come with exploding demand (if it’s “free”), all of which will lead those who can to seek care abroad on their timetable.