Globalization's impact on patient flows and healthcare efficiency

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.

6. What explains the global price differential among hospitals?

The primary cost factor is the availability of cheap infrastructure and lesser costs in terms of labor in the emerging nations which have grown in capacity with the U.S. Secondly within the U.S. there are substantial differences from region to region in costs of services. Basically it is the difference in the costs of service, employees and the personnel that causes the major cost difference. Another is taxes and the different prices of drugs and medicines as in the U.S. And elsewhere. The different rates of exchange of money could also be a factor. For example a service charged at $20,000/- in the U.S. can be charged less in India where one dollar would equal fifty Indian rupees. Thus a charge of Rs. 50,000 Indian rupee would be adequate to provide better services. The American ends up paying very less in terms of Indian rupee. (McCauley, 2009)

This is a boon for the retired and even the indigent American. With the world growing older the elders who depend on treatment for chronic diseases require sophisticated technologies and new medications. This has created a situation where in the United States, health expenditures went from five percent to fifteen percent of the GDP from 1970 to 2010. Projections show that it can rise to twenty percent by 2050. It is notable that a small country like Switzerland has more health infrastructure than the U.S. Likewise the Swiss are healthier than Americans and have in place a very high-quality care with lesser costs and universal coverage while in the U.S. population there are more than forty five million uninsured. (McCauley, 2009)

Currently the Obama administration's battle to reform health care has been hampered with the fact that "there is no perfect system, and decision-makers need to grapple with providing the most effective system with the resources at their disposal." (McCauley, 2009) The second aspect is that generally the U.S. is doing very poorly in the health sector. If the benchmarks are compared this is evident. Health benchmarking relies on the total expenditure on health, and other quantitative indicators like infant mortality, life expectancy, healthy life expectancy and major health infrastructure and prevalent health problems. (McCauley, 2009)

There are also problems with aging population and raising costs. In this context the United States is on the double of the world average and the cost is more than fifty percent of most other most wealthy countries in healthcare. But the outcome in terms of average performance is very low as compared to the European health care systems. In spite of this position U.S. attracts many medical tourists on account of the state of the art medical facilities that is not available anywhere else. (McCauley, 2009) This is because of the cheapness caused by the financial parity and currency exchange rates.

7. Why would countries like the U.S. have 10x the charges for procedures like hip replacements?

The basic problem is that a new technology takes time to be allowed in the U.S.A. while other countries have no such restrictions in adapting the new technology without having to go through the bureaucratic wrangles. "One simple example is that the hip replacement in Bangkok, Thailand, would cost about $18,000, for an estimated savings of at least $15,000 compared with the U.S. price." (Woodman, 2008) Patients choose the alternate therapy available elsewhere while the same technology takes time to be allowed in the U.S. And this is one of the reasons why the procedures like hip replacements are popular in other places. It is known that Malaysia was visited by 360000 foreign patients from the Association of South-east Asian Nations (ASEAN) region back in 2007. (Helble, 2011)

750000 Americans traveled to these countries by 2007 and that would increase to six million by 2012. An estimated U.S.$60 billion flowed out in 2006 from the U.S. To these destinations. (Helble, 2011) Therefore a comprehensive re-evaluation of the drug and other laws and practices is required on an urgent basis. In the U.S. As of now there are three pre-market approval petitions in various stages of FDA review for a hip joint "metal-metal, semi-constrained resurfacing hybrid prosthesis" and the FDA is yet to give a verdict on the issue. (Greenwald; et al., 2006)