Globalization and American Health Care

Globalization and American Health Care

What explains the directionality of flows in health care? Patients, health workers, managerial practices?

Globalization has brought in the information revolution and this has again brought changes in the medical profession and the way health care is being administered. It has also brought in unforeseen problems and expansion of the health care issues and running debates on health care is still strong. The flows of healthcare primarily have to deal with the patient -- how the patient is induced to seek treatment and the process of the treatment and the final discharge and post treatment care. This also involves lot of information exchange, and abiding by insurance contracts, payment options and quality care for the patients. (Phillips, 2005)

The second set is the personnel who include doctors, paramedics and all staff. The flow of work of these sections follows the patient and there are changes in the way the paramedics and doctors work today. The hospitals have to be highly technically competent. Hence there are more and more qualification and technical competence required from the personnel. The third is the fiduciary concern that deals with the cost of operations and patient care. One of the attractive factors that can be good for a health care unit is efficiency. Thus if the hospital is known to be efficient it adds to the reputation. The concept of efficiency thus is all inclusive including the maximization of benefits to the whole society and interrelationship between the economic forces. There has to be thus technical efficiency, operational efficiency, and the best choice in operation to achieve the mission envisaged. Thus output has to be maximized with the lowering or keeping the cost as it is. (Phillips, 2005)

Thus we have to seek such an intervention wherein costs of producing a better service or situation are minimized. While this theory applies to the whole system, we can pick out the intervention where it will be effective and the personnel who can be trained. Thus training and orienting the personnel to the global changes is required. Developing nations like India and Malaysia are catching up in creating trained and well qualified personnel suited to international standards. The flow pattern thus takes into account the fact that the personnel are highly trained and motivated. To this end where the development of better personnel is to be made there ought to be periodic training and this involves cost. (Duncan; Swayne; Peter, 1998)

To offset the cost some other economic activity that involves gaining a much larger area in terms of customers and services demand is necessary. There must be the target market which can be called the segmentation of the market. This is based primarily on the results that can be produced for various customers, and the selection of proper policies that would help both the hospital and client. The second consideration would be the operating strategy and the organization controls and finally the way the service is delivered. (Duncan; Swayne; Peter, 1998)

These processes involve planning with a visionary zeal, innovation, and creating a better organizational design, and the important personnel management feature that is to be considered is motivation. For all these the improvement of service delivery is the critical parameter and intervention thus primarily is sought to be achieved in the area of training. The financial implications of high end technology and training and retaining staff, as well as the increased operational costs have created a serious problem in terms of quality of health care in the U.S. And this is the cause of poor access to health care especially to the marginal groups of society. There were capital constraints all through the evolution of the present hospital structure and there is thus a need to cut costs, and one of the methods by which costs would be cut is by increasing efficiency. Some problems are caused by shortage of personnel for example the nursing problem arises because the nurses do not adapt to the technology. (Bloche, 2003)

It can have a negative impact on nurses if they are not trained in information systems, and this research by Firth et al. (2008) has highlighted the want in proper organizational strategy in hospitals and this unfortunately is evident in many hospitals. The public hospitals especially provide greater community service. The modern market-driven strategy which will have to be adopted suggest that in increasing efficiency and profitability, the information systems strategy must be infused to all the personnel involved in the health care sector. This must be more so with the nurses. The insistence on the nurses as an important point of the flow is because the nurses anywhere could be that the nurses' stations are where true interaction takes place at the first instance.

There is a need to provide information system to the nurse and train them to use it with optimum efficiency which is the first topic of intervention. This will help nurses, by enabling them to focus on their clinical duties, but also provide for the decision making capability at their level for a direct patient interaction. While insisting on the computer system, the researchers Mason et al. (2009) say that "with the growing aging population, hospital social workers will undoubtedly be required to make an increased number of assessments and discharge plans related to patients." (Mason; Auerbach; Laporte, 2009) Thus globalization has somehow helped other countries to develop their medical services but has left the U.S. system in doldrums. The cost for health care is also rising on account of these issues.

2. What are the five segments of patients who are willing to travel across borders to obtain health care?

The question is why would a person go out of his or her familiar surrounding and leave for a destination outside unless there are compelling reasons for persons to do so? The fact that there are millions of patients from the U.S. who visit the other nations for simple dental surgery to costly hip replacements show that there are compelling reasons for the persons to undertake such a journey for the sake of health. The types of Americans who go abroad for treatment fall into many categories and the facts point out to a basic five types of travelers. It is also attracting insured and uninsured travelers alike. The basic question is if an American gets a treatment at a designated cost at the U.S. hospital and is able to avail the same facilities abroad, then would such a person go abroad? Going abroad involves travel costs, and has to be far from home. The average American may not find much savings in cost by going abroad. Thus the travel abroad could be a myth, and it is so argued by Jonathan Edelheit. (Edelheit, 2007)

However one reason as it is argued by Jonathan Edelheit is that where an insured has a deductible or a Health Savings Account in the United States, but no such deductible overseas, if all his or her travel expenses are paid, and the person also gets a cash incentive of several thousands of dollars may be the travel would be justified. But today the argument goes; no health insurance gives cash incentives "for an insured to go overseas. Many health insurers are still focusing on the evaluation of liability and determination of risk involved in sending patients overseas, and especially the risk involved in providing incentives to do so." (Edelheit, 2007) So it is not the cost alone that can make the patient opt to go over seas.

Contrary to this contention, Josef Woodman lists the possible causes of the travel as under. Primarily cost is a consideration. Contrary to what was argued by Edelheit (2007), there is substantial cost savings. There is an opportunity to save money and this is the single most reason. The insured and uninsured patients both can gain anything from 15% to even 85% of cost of treatment compared to the United States. One group of people who benefit is the retired people for whom the healthcare and prescriptions cost 30% of the retirement benefits and income. With the cost of stay and airfare the savings on a hip replacement for example would exceed $15,000 or more. (Woodman, 2008)

The second reason is that there is better quality and care provided abroad. India and Thailand have better deluxe hospital suites, and discounted hotels are affiliated with the hospital. The surgeons are accessible anytime from anywhere in the world. The third type is patients who seek relief from abroad in cases where the insurance companies have excluded the sickness they got. Insurance plans exclude a variety of treatments including cosmetic surgeries, dental care, vision treatments, orthopedic surgeries, and so on. Some general tabs like weight loss rehabilitation, and even prosthetics are omitted. So the average American in need of this service opts to go to India, Dubai, Singapore, Costa Rica, or Thailand. (Woodman, 2008)

The fourth category is those seeking specialty treatments. The procedures and prescriptions banned in the U.S. But available elsewhere also prompts people to seek treatment abroad. One such treatment is the orthopedic procedure known as hip resurfacing, that is an alternative to the traditional hip replacement as done in the United States. Thus those suffering chronic pain, are treated in India, "where hip resurfacing techniques, materials, and instrumentation have been perfected, and the procedure is routine." (Edelheit, 2007)

There are lesser waiting periods abroad and those who are subscribers of free health care have to wait for very prolonged periods to be treated and such persons like those covered by the 'Veterans Administration Act' chose to pay out of pocket to beat the uncertainty of waiting. These are the types of patients who seek relief outside the U.S. But the story of the patients seeking the outside treatment may not be limited to these types of patients and there are more willing people who would go abroad.

3. Are there other patient segments beside these five?

There are problems caused by insurance companies and the way the patients are shifted from care to the outpatient that causes discomfort and a feeling of inadequacy. Therefore patients who may not find traveling abroad lucrative still do so because of the care factor. The problem is with the U.S. health insurance companies who want to have patients 'processed' fast. And this has made the outpatient procedures attractive and thus the inpatients are sent out of those costly beds as soon as possible. Thus the care and treatment given to genuine ailing patients abroad is attractive. This can then include the patients who look for better and concerned care and comfort who wish to go abroad rather than be treated as 'outpatients'. (Edelheit, 2007)

Other types of patients who go abroad may be those who are adventurous, and seek the 'new' and thus find relief from the local facilities which to them are dull. They may be also intrigued by the new culture which can mollify their conditions in the stressful time. There are experiences that also add to the treatment. American patients going abroad thus ranged from 500,000 to 750,000 by 2007. The survey of the McKinsey and Company showed that more than 40% of went abroad to seek alternate and advanced technology, and more than 32% went because of the better healthcare provided. There was also the consideration of the speed with which the care is given and only in nine percent of cases are costs an important fact. (Health Tourism, 2011)

Thus the major cause of the medical travel is the non-availability of health insurance which has made 1.2 million patients to go to Thailand. Seniors visit the nearby Mexico where the retired receive both nursing home and health care. There is a gain of over 25% to 75% in savings and the major groups choose to go abroad for dental, orthopedic, cardiovascular and cosmetic treatment. Of these Mexico and Costa Rica are famous for dental services and cosmetic surgeries while India is for the orthopedic and cardiovascular cases. (Health Tourism, 2011) These types of patients are in addition to the original five types who wish either to overcome the cost or go in for a change of scene and also afford better care at least cost. These are some of the major drawbacks of the American system that the health care sector has to address to overcome the outflow.

4. Why is there growing rivalry for inbound international patients?

The inbound health care patients are becoming rare. There is cheaper and quality health care available in other countries and more and more of people go overseas. There is inflow of patients for treatment in the U.S. For ailments which are very complicated and require sophisticated technology that is not found elsewhere. Such patients have also to be very affluent. These inbound patients are few and far and this prompts competition between hospitals to corner the patients. Further interstate rivalry -- attracting patients from other states in the U.S. is also an option that companies are now into. However the market is slow and less prone to increase in demand. (The Economist, 2008)

Cost factors therefore make hospitals vie with each other in specializations. Yet the patients do not come to these hospitals. One example is that of the American health tourist, Robin Steele. Mr. Steele who was operated at India's Wockhardt hospital after his treatment also enjoyed a holiday with a savings of several thousand dollars. This alien competition has now created a competition to private health care in America. While it began with the outsourcing of record-keeping and medical transcription, most American hospitals are cutting costs by outsourcing the customer service and claims-processing and major American hospitals like the Mayo Clinic and Johns Hopkins have overseas interests in the back office functions. (The Economist, 2008)

The problem is that while these functions make the overseas personnel efficient they also spawn heath care facilities to which the American is attracted owing to the low cost. This makes American hospitals go for product differentiation to attract the overseas and local clients to American hospitals. (The Economist, 2008) But the strategy has to work with barriers like costs of stay and other services, availability of suitable personnel at hospitals and so on. This makes the work difficult because the strategy must be effective two fold. First it must make the hospital attractive to the local user and Americans from other states. This creates internal competition and results in the rivalry to gain patients to maintain the internal clientele. (The Economist, 2008)

The second strategy involves the prevention of the would-be health tourist visiting a foreign country. Thus each hospital is trying to provide low cost and highly efficient service and compete with one another. It is predicted that in the future the mass transit of patients will begin from the U.S. If the health care industry is not revamped so as to make the health care a very affordable and socially possible system. This means that there will have to be restructuring of a lot of systems including health care delivery and also insurance. This is not in the domain of the hospitals alone. (The Economist, 2008)

It is predicted that somewhere in the near future the explosion of mass medical tourism will occur with the middle-class Americans now figured at 750,000 to increase to six million by 2010. This will make the American hospitals lose out because the European medical system is stable and is funded by the state while U.S. medical treatment is very costly prompting people to seek cheaper and easier locations abroad. (The Economist, 2008)

Some of the recent developments concerned are with the economic depression into which the economy has fallen and the problem of unemployment and unaffordablity that comes as a result especially for aging populations. As a rule, Americans do not choose going abroad for medical treatment. This is a result of the cost inflation and slowing economic growth, and it has already become the most expensive health market in the world. The quality of the hospitals abroad is quite equal to the ones in the U.S. And the insurance systems are better abroad. The trend has caught on with the companies in America feeling that it is a great idea to send employees overseas for treatment. (The Economist, 2008)

Today many companies are prepared to create packages for the employees that provide for insurance benefits and other cost benefits for taking treatments in other places as a perk. There are many companies today that have taken to this and this is also causing a fall in demand for American health services. The examples of companies sponsoring their employees for medical travel can be seen in the case of "Hannaford, a grocery chain based in New England, now offers its 27,000 employees the option of getting a number of medical procedures done in Singapore rather than America -- at a saving to the employee of $2,500-3,000 in co-payments and deductibles." (The Economist, 2008) When that is the case, American hospitals have to contend and fight each other to retain market share of inbound patients who may become extinct in a few years.

5. Under what conditions should a hospital invest in plant and equipment to attract international patients?

In the present scenario looking at overseas patients is the wrong approach. Hospitals must first fight the inadequacies and provide for cost effectiveness for the local clients such that they are not tempted to go abroad. One major problem that hospitals have to address is the issues that hamper the proper delivery of health care. Take for instance the Medicare. On one side we have the emerging skill and adaptation of technology by the medical fraternity and on the other hand is the competitive rise of insurance and other health benefits that are in the realm of finance and profit motive. Thus there is a great dependence between the care physicians and health plans which arise from pure networks. (Gillies; Chenok; Shortell; Pawlson; Wimbush, 2006)

Thus while the market forces determine the nature of health care delivery in the U.S., the social needs and government regulations ensure that through the national health policy there is an equitable distribution of health care to all the citizens regardless of their affluence and affordability of health care. The issues that plague the American Medicare system is thus absent in UK but other issues that relate to the quality of the health care do come up. The Medicare is not extended to some class of persons who are disadvantaged. Thus people above the age of sixty five and those who are unemployed, dependants like mentally unstable persons and others who depend on prescription drugs, and the poor and those discriminated against because of their ethnic origins have caused problems. (Briesacher; et al., 2003) For example the Hispanic and the Medicare beneficiaries and chronically-ill black and Hispanic beneficiaries, who require constant medication but have no resources and have very meager drug coverage. The three common diseases that cause the depravity foremost are heart ailments, diabetes and HIV / AIDS.

Hospitals must negotiate a way to find a common solution to these problems and there are initiatives by the government that have corrected some of the Medicare problems by legislation like the 'Medicare Catastrophic Coverage Act', and the later addition of the outpatient prescription drug benefit to Medicare for persons with low incomes. In the U.S. today the health insurance is part of the health care system, and managed health care is a concept that has gained popularity and the growth of health maintenance organizations, and insurance companies deliver health plans and care to the consumer. It is to be remembered that the type of delivery system used by health plans is connected with clinical performance measures. It is not related to the patient thoughts on care. Thus the delivery system is closely associated with the organizational structure and performance. (Gillies; Chenok; Shortell; Pawlson; Wimbush, 2006)

Globalization has impacted the health care industry. The developing countries provide high quality health care at a lower cost because of the changes in the quality of health care, education and accreditation, both in health care and medical education. This creates an outbound population who chose to go as tourists for health reasons. There is also the globalization of many allied industries like the pharmaceutics industry that has resulted in these hosts having the same infrastructure as the U.S. In quality and quantity. Thus the developing countries have learned to adopt standards, processes, and language of developed countries and the professionals in health care are also found in these countries. However there is also brain drain or movement of the professionals like doctors and nurses from developing countries to developed countries. (Segouin; Hodges; Brechat, 2005)