"What’s The Matter With Medical Tourism?"
It looks like President Barack Obama got a question about the idea of traveling abroad for cheaper health care services at an event in Virginia yesterday and offered the disappointingly dismissive answer that “My preference would be that you don’t have to travel to Mexico or India to get cheap health care. I’d like you to be able to get it right here in the United States of America that’s high quality.”
That’s my preference, too. But the fact of the matter is that wage levels in Mexico and India are substantially lower than in the United States, so it’s possible to reap large gains in human welfare when American consumers pay Mexicans and Indians to perform labor-intensive work.
Neither increased medical tourism nor increased immigration by foreign-trained health care professionals is a silver bullet for the American health care system but they’re both perfectly reasonable elements of improved policy. What we ought to be doing is looking at the practical problems here and trying to find ways to resolve them by developing cross-border standards. As Dean Baker is fond of pointing out, what people in poor countries really need in this regard is some kind of guarantee do this, that, and the other thing and you’ll be eligible to work in the US or meet these standards, and Americans will be approved to travel to your clinic. This is no different from trade in manufactured goods, and considering the large and growing role health care services plays in the American economy barriers to exchange in this field are extremely costly.