Medical Tourism in Developing Countries

162 ● Medical Tourism in Developing Countriesoverburdened. As a result, authorities are seeking ways to relieve the pressure.To date, those ways are limited to choices within national borders.It is just a matter of time before authorities will have to think out-of-the-boxand consider options outside the country.If Western health-care consumers are freed of constraints over theirspending and can exercise their choice to purchase health care where theyplease, they are likely to exercise their rights by seeking out low-cost substitutes.88 Medical tourism is certainly a substitute for health care at homeand medical tourism offers Western patients greater health-care options.Increased choices will alter both individual and aggregate demand for LDChealth care. Individual demand is already on the increase, but it remains ahaphazard, unorganized phenomenon led by enterprising individuals. Thereal takeoff will occur when aggregate demand is brought to bear, as whencorporate employers and commercial insurance companies hop on themedical tourism bandwagon. This is not too far off. As Time magazinenoted in 2006, “Medical tourism is booming and US companies trying tocontain health-care costs are starting to take notice [italics mine].” 89 It is theleast cost alternatives that will be most appealing to employers and insurersalike. LDC providers are astute students of international trends, and in theirpromotion of medical tourism they are sure to offer Western buyers tantalizinghealth-care solutions.Bottom line: Western health authorities must consider carefully the implicationsof increasing choices for patients, as the changes under discussionare more likely to increase the appeal of medical tourism rather thandecrease it.Prices of Medical ServicesThe prices of medical services, both in source and destination countries, areaffected by the expansion of medical tourism. In the former, as increasingnumbers of patients seek treatment abroad, the lowered demand at homewill pull prices down. There is no doubt that pressure from large-scale andsustained competition in developing countries will lower prices of medicalcare in Western states. However, there is also the possibility that domesticprices stay high. This would happen if prices are artificially supported inorder to cover existing medical costs. With fewer remaining patients to bearthe burden of costs, each will have to pay higher prices.With respect to prices of medical care in destination countries, the lawof demand indicates that, with increasing demand from foreigners, therewill be an upward pressure on prices. Indeed, incorporating the concept ofshifting location of production, one could imagine that the ten countries