Medical Tourism in Developing Countries

122 ● Medical Tourism in Developing CountriesWhile legal issues are discussed in chapter 6, suffice it to say here thatincreasing evidence of international trade in body parts has elicited the riseof transplant law (India and the Philippines have illegal trade in humanorgans; an elaborate black market in human body parts recently caught theattention of authorities in South Africa, where transplants were performedusing donors from Brazilian slums 94 ).Although transplant law captures the media’s attention, it is mainstreamlaw that regulates the daily nitty-gritty of medical tourism. Business law, forexample, is crucial for the emergence and functioning of medical tourism.Given that the principal suppliers are large corporate hospitals, multinationalhospitality providers, and small-scale private entities, there must bea clear definition of the rights and obligations of the private sector. At thesame time, the legal system also delineates the role of the government. Lawsprotect people’s freedom to engage in economic activity and give them theright to choose their profession. The legal system also enables people tomake contracts and have the law enforce those contracts. The lack of a legalframework is an obstacle for the development and the functioning of themarket economy, underscoring the tight relationship between economicsand law (it was argued by David Kennett that a well-developed legal structureis conducive to economic efficiency insofar as the law that has evolvedwith the market system enables the minimization of both information aswell as transactions costs 95 ).Given the importance of the private sector, well-defined property rightsare fundamental to the development of medical tourism. Ownership rightsinclude the following: the right to use property in any way the owner wants,the right to enjoy income from property, and the right to sell or exchangeproperty. 96 Each of these is crucial for investment in physical capital associatedwith the medical and hospitality industries. Property rights are alsorelevant for research and development. Given that globalization has madetechnology transfer easy and imitation even easier (as, for example, inmusic, software, and pharmaceuticals), law pertaining to intellectualproperty and patents is needed to protect against piracy. Table 5.7 showsthat, with the exception of Argentina, and to a lesser extent the Philippines,all countries under study fall in the upper-half of world states with respectto laws that protect property rights and intellectual property.Given the predominance of corporate hospitals in countries promotingmedical tourism, it is useful to have highly developed corporate laws toprotect against liability. Such laws enabled the raising of large sums of capitalsince no investor was personally liable. Consistency and fairness is crucialin these laws. If some companies get subsidies, it must be clear to everyonewhy they are getting them. If some companies have to fund those subsidies,