Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
Trade Policy Note Final-rev08 - Development
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Annex 5F: Health services<br />
The provision of health services to the poor is central to the achievement of MDGs<br />
4,5 and 6. The pressures for foreign participation in health sectors have arisen at a<br />
moment when the impact of the WTO and other trade agreements on health is a<br />
subject of major concern to the international community. Commitments on health in<br />
GATS and other trade agreements can impact the provision of basic health services to<br />
the poor. 155 . As already noted, the 2001 WTO Ministerial Declaration on the <strong>Trade</strong>-<br />
Related Aspects of Intellectual Property Rights (TRIPS) Agreement and Public Health<br />
was deemed necessary to protect developing countries against bilateral pressures from<br />
powerful trading partners who were undermining their rights to generic access to<br />
medicines. International health experts have strongly and continually cautioned<br />
prudence to developing countries in committing themselves to allowing foreign<br />
providers of health services, including health insurance, companies from entering<br />
their markets.<br />
While the role of the private sector in providing health services varies from country to<br />
country, most WTO members have declined to make commitments in this sector.<br />
Many countries desire the latest medical technology and high-tech hospitals and<br />
training facilities. The existence of such facilities is also seen as an inducement to<br />
foreign investment. However, there is a concern that the foreign private sector will<br />
drain human and financial resources from the national sectors, both public and<br />
private, and lead to a two tier health system, one for the rich and one for the poor. As<br />
the greatest challenge facing developing countries in the health sector is to provide<br />
affordable access to quality services for the rural poor, the presence of foreign private<br />
suppliers could make little contribution to, and more likely frustrate these efforts.<br />
Foreign participation in the health services sector can also take place through the<br />
provision of health insurance. International health experts consider that while, in<br />
theory, greater access for health insurance companies could stimulate competition and<br />
reduce costs, in actual practice, evidence shows that greater competition among health<br />
insurers segments and destabilizes the market in addition to undermining the ability to<br />
build larger, more equitable risk pools that spread costs between rich and poor,<br />
healthy and sick. In particular, it is crucial to prevent wealthier population groups<br />
from opting out of national health insurance schemes. Foreign health insurance should<br />
not operate in a manner that undermines universal compulsory health insurance<br />
systems. The experience of some developing countries with Health Maintenance<br />
Organizations (HMOs), which create a captive supply of medical staff, has been<br />
particularly discouraging 156 International health experts advise that the entry of<br />
foreign suppliers makes it more urgent for countries to create an effective regulatory<br />
framework for the health insurance sector, and that until such a system is in place it<br />
could be harmful for developing countries to make full commitments in the health<br />
insurance sub-sector under GATS financial service schedules. 157<br />
155 For links to the international debate on trade in health services see Choike , Health and Health<br />
Services, Goods for Sale (www.choike.org/nuevo_eng/informes/1007.html).<br />
156 See, for example, “Consensus Paper on Managed Care Organizations”, developed by Association of<br />
Private Hospitals of Malaysia, 10 April 2001 (www.hospitals -malaysia.org).<br />
157 See Lipson, Debra, GATS and Health Insurance Services, Background <strong>Note</strong> for WHO Commission<br />
on Macroeconomics and Health, CMH Working Paper 4:7, June 2001<br />
(http://www.cmhealth.org/docs/wg4_paper7.pdf).<br />
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