Medical Tourism in Developing Countries

154 ● Medical Tourism in Developing Countriesif they participate with insurance matters. This aggregate three-way benefitrests on the assumption that increased insurance portability would result ingreater global demand for medical tourism.That destination countries would gain from such an expansion is obvious.They could reach the middle-class market that is growing everywhereacross the world; the middle class generally cannot pay its own healthexpenses, but insurance portability opens new avenues for treatment.Overall, international patients would achieve gains from trade if portableinsurance enabled the consumption of greater quantity and quality of medicalservices. When insurance prevents treatment abroad, it distorts consumerchoice, just like any impediment to trade. However, there is likelyto be a difference between income groups in source countries as to just howmuch they stand to gain. 60 Some may see employer involvement in medicaltourism as a dangerous cost-cutting measure that seeks to decrease theirhard earned workers benefits. Such sentiments underlie the vociferousobjections of the United Steelworkers union when a worker at the BlueRidge Paper Products volunteered to be treated in India in exchange for ashare in the company’s savings. 61 Should insurance portability becomewidespread, such objections from organized groups are likely to rise.While it is easy to understand the gains from trade that accrue todestination countries and health-care consumers, it is less clear how routineinsurance portability would affect source countries. While much researchstill remains to be done on this topic, there are some clear arguments infavor of extending insurance benefits internationally in view of the healthcarecosts of large companies. General Motors pays out more in health care(some $5 billion annually) than any other company in the United States,adding $1,500 to the price of every automobile. 62 Starbucks spends moreon health care than on coffee beans. 63 Clearly U.S. companies such asStarbucks and GM are competing in the global markets against foreigncompanies that do not have the same health-care burden.UNCTAD supports insurance portability in source countries: “The effortto keep health care costs under control may prompt HMOs in developedcountries to include in their network developing country health institutionswhich can provide medical treatment at competitive prices. The reductionof public health coverage is leading to the expansion of private insurances,which may include treatment abroad.” 64 Moreover, Mattoo and Rathindrancalculated the gains from trade that would accrue to both Western patientsand insurance companies if medical care were purchased abroad. Withhypothetical examples, they show that the savings to the consumer wouldbe positive, since the percent deductible of a smaller fee is a smaller amount.Similarly, the amount paid out by the insurer is smaller since the percent of