HEALTH SERVICES TRADE MAKES POOR COUNTRIES VULNERABLE

10:43 AM Jun 17, 1997

HEALTH SERVICES TRADE MAKES POOR COUNTRIES VULNERABLE
Geneva, 16 June (Chakravarthi Raghavan) -- Trade in health services sector, while holding out some promise of benefits to developing countries, is also demonstrating the extremely vulnerable position of poorer countries, and the poor in all countries.

In a report for an experts group meeting, the secretariat of UNCTAD, outlines the scope for developing countries to take advantage of the new and emerging situation, the problems faced by them in developing the capacity for and exporting the health services, and the dilemmas for policy-makers in ensuring equity.

New policies are tending to reduce government spending on social sector programmes, and if not counter-balanced, these could lead to detrimental effects on health status of populations, the UNCTAD document said, adding, "considerable concern has been expressed in recent years about the impact of economic development, and in particular the structural adjustment process, on both the environment and social progress in general, especially in terms of education and health."

The changing balance between public and private sector in health services, UNCTAD notes, raises concerns about equity and access to services, especially for the most needy populations.

The key issues facing a number of developing countries include shortage of resources (financial, material and human), aggravated by adverse economic conditions and loss of trained personnel to other countries, shortage of technology in many countries and a concentration of high technology, serving only a small part of the population.

With the search for opportunities to get foreign capital and strengthen their ability to meet needs of populations, countries are examining opportunities for trade within the health sector and their ability to find areas of comparative advantage for development of services for export. But the benefits that may accrue from development of trade opportunities (in the health services), UNCTAD said, "must be weighed against potential negative effects."

For e.g. development of a private facility (in a country) with state of the art technology to provide services for the wealthy or for the foreigner will increase the technology available in the health system, but "it is unlikely to contribute to the improvement of access to health services for the general population, unless arrangements are made requiring a portion of beds and services to be made available to the public sector."

In terms of the WTO's General Agreement on Trade in Services, health services include medical and dental services; services provided by midwives, nurses, physiotherapists and para-medical personnel; hospital services and other human health services.

For developing countries, and their efforts to "export" health services (and benefit from it), temporary movement of personnel to provide services abroad is relatively more significant.

But commitments of countries on allowing movement of natural persons, is not sector-specific, but across service sectors as a mode of delivery, it is not easy to see the extent of commitments by countries in GATS schedules in the health sector, Murray Gibbs in charge of the services division of Trade Programs told the meeting.

According to the UNCTAd document, developing countries supply about 56% of all migrating physicians and receive less than 11%. While in the 1960s, doctors working abroad were mostly from developed countries, they now come predominantly from developing countries, particularly from Asia. While the export countries may gain through receipt of remittances, the permanent emigration of skilled personnel causes brain drain.

But many countries both export and import.

The UK exports junior nurses to the USA and imports nurses from Ireland and India to meet domestic shortage; Jamaica exports nurses to the US and imports them from Nigeria and Myanmar.

Thus it is the lowest-income countries that are most affected by the brain-drain.

Often, health professionals from developing countries provide a great deal of unskilled labour in the health sector in the developed world, despite the qualifications they may have.

Among the actual or potential trade barriers are the application of an economic needs test in regulating the temporary entry conditions of personnel to deliver services.

Licensing provisions for personnel in services, often by state authorities and the professional associations, are another limiting factor.

Although professional associations are crucial for maintaining standards and quality of service, UNCTAD comments, they have often attempted to dampen price competition and restrict new entrants.

The report also points out that some of the trade barriers to delivery of health services through movement of natural persons are found from the market access and national treatment limitations in GATS commitments. Generally these are not covered by specific GATS commitments. The specific commitments on mode of supply show that few countries have bound their existing immigration laws and regulations, though there is some margin for improving concessions without modifying the relevant laws.

As for movement of consumers for health services, an element inhibiting is that insurance coverage, whether public or private sector, do not provide for portability across frontiers, except for travellers in emergencies.

But the global trend of increasing medical costs and decreasing public health care budgets,and thus reduction of health care coverage, may encourage a larger number of patients to look for health treatment in countries with advantageous price/quality ratio.

The export of health services, via commercial presence and investment, is now beginning to come into play.

But in most countries, foreign investment in the health sector is subject to considerable restrictions, if not altogether prohibited. But many countries have started to open their markets to foreign presence in various forms and favouring competition to achieve better health services, reducing price escalation and taking pressure off the public sector.

In terms of export strategies in this sector, Cuba's government is seeking to convert the country into a "world medical power", and since the 1980s has implemented a multifaceted export strategy.

One of the main elements of this strategy has been to send teams of medical personnel abroad, especially to countries facing a serious shortage of health workers.

Cuba is also seeking to attract foreign patients to specialised health clinics providing high quality health care at competitive prices. Most of these clinics also function as training centres for national and foreign students.

In the UK, an enterprise, 'National Health System Overseas Enterprise' (NHSOE) was created in 1988 as the marketing arm of public health companies and institutions to facilitate export of health services by the public sector. By exporting medical services, the financial capacity of public health institutions is sought to be maintained and increased, while development and care opportunities are also provided to British health professionals through participation in overseas projects.

The impact of this strategy, UNCTAD, has been positive, since public health services have been able to sell services overseas, and obtain fresh financial resources.

Jordan, in the Arab world -- with a massive investment programme to upgrade and modernize its public hospitals and medical schools -- has taken great strides to make it the medical centre of the Arab world. As a result it has 11 new private hospitals, with most of them benefiting from state-of-the-art technology, including computerized links with prestigious centres in Europe and North America.

In terms of private company strategies, the report mentions the activities of the Singapore based Parkway Group and the Raffles Medical Group.

The Parkway Group is the biggest investment group in the field of health care in Singapore and it has created the Gleneagles International (as an international brand name) and is in the process of setting up joint ventures in Malaysia, Indonesia, Sri Lanka, the UK and India. It is also setting up a specialized heart hospital in London. The group is trying to develop a highly integrated network of health companies in the region, aiming to offer its patients a wide range of high quality and cost-effective health services across Asia.

Some private clinics in Canada are similarly trying to exploit the American market, relying on the high quality of their services and their comparatively lower prices.