Medical Tourism in Developing Countries

Inequalities in Health Care ● 175fewer diseases and lower child mortality. They have a longer working lifeand so contribute to the economy over a longer period. If they are healthy,they miss fewer days of work. They also work more intensively, and theirlabor productivity is higher. Good health thus increases their personalincome, enabling them to consume and contribute to aggregate demand.Their longevity induces them to save for the future and thereby promoteinvestment. With higher incomes, they participate in the fiscal economy bypaying taxes on their income. Healthy parents have fewer children becausemore of them will survive. Lower child mortality means there are fewerpregnancies so women will not leave the labor force as often. Healthy childrenare more likely to go to school and study, improving their futureproductivity.Medical Tourism and Public Health:Crowding Out and Crowding InImprovements in health care are related to economic development both exante and ex post. In other words, causality does not occur in one directionor the other, but rather in both simultaneously. There is, in fact, a selfreinforcingcycle, one in which development leads to improved health care,which in turn leads to enhanced development, and so on. It is not clear,though, how to achieve the initial stimulus in either improvements inhealth care or expansion of the economy to set the cycle in motion.Medical tourism might provide the stimulus that will set the cycle inmotion.However, such a stimulus is not straightforward as medical tourism canhave both a negative and a positive effect on public health. Indeed, it cancrowd out public health or it can have a crowding-in effect. While the neteffects vary from country to country, the key elements of both argumentsare discussed below.Crowding Out of Public HealthIt is easy to understand why medical tourism in LDCs receives attention.It has buzz and it is lucrative. It brings in foreign currency, it is housed invisibly imposing buildings, and it uses modern technology that counts inthe global development race. Medical tourism is in the limelight, in thenews, and in the government conference halls. It provides great photo ops.Compare that to the dismal picture of public health. Indeed, considerablyless flashy is regular deworming in remote villages. Public health issues donot receive the attention that they deserve. In other words, medical tourism