Medical Tourism in Developing Countries

Promoting Medical Tourism ● 99DiscussionDeveloping countries that are able to contain costs and offer low prices forquality services will draw more foreign patients than countries that cannot.Brazil is an example of a destination that has high-quality medicine and adeveloped infrastructure yet, because of high prices, it fails to attract theinternational patients that flock to neighboring Chile and Argentina.In fact, some hospitals in Sao Paulo charge higher fees than those chargedin the United States and some health insurance companies are offering theirBrazilian patients the option of receiving care in the United States asthe price of treatment together with transportation is lower there than athome. 13Thus, keeping costs of medical services low is crucial for sustainingoneself as a competitive supplier. Singapore has priced itself out of themarket and is currently offering medical tourism at rates comparable tothose in the West. Thailand has overtaken Singapore as the leading healthdestination in Asia, but its supremacy is not guaranteed as India, althougha relative latecomer to the industry, is quickly catching up with both lowprices and high variety. As long as countries can maintain low costs ofproduction and/or weak currencies, they have a window of opportunity forthe development of medical tourism.Advantage II: Human CapitalIt has been said that many Western jobs are going overseas to countriessuch as India and China not because labor is cheap, but because it is highlyeducated. According to Prestowitz, “The virtually endless supply of labor,much of it skilled, in China and India, combined with the negation of timeand distance by the Internet and global air delivery, will create a new andchallenging competitive environment for countries, companies and individuals[italics mine].” 14 According to this view, education and skills arecrucial determinants of productivity since the marginal product of machinesis higher when used with highly skilled human capital. Therefore, thosecountries that have more human capital, especially human capital appropriatefor the medical tourism industry, are at an advantage over those thatdo not. 15Furthermore, those destination LDCs that train their own highly skilledworkers have a domestic source of human capital that is crucial in themedical tourism industry. In addition, if they also have an abundance ofunskilled workers to perform the vast array of unskilled tasks that are part