Transcript Slide 1

Globalization, National Identity,
and Health System Impacts
Bruce Fried, PhD
Department of Health Policy & Administration
University of North Carolina at Chapel Hil
May 28, 2008
What is Globalization?
(some explanations)
• A phenomenon by which economic agents in
any given part of the world are much more
affected by events elsewhere in the world than
before (Anne Kreuger, IMF, 2000)
• Increasing integration of markets across political
boundaries
• Falling government-imposed barriers to
international flow of goods, services, and capital
• Global spread of market-oriented policies in both
the domestic and international spheres
Globalization
• A major force with broad impacts on
health, health systems, and (potentially)
national identity
• A great deal of writing on globalization, but
little on the relationships among
globalization and:
– Population health
– Health systems
– National identity
• Population health: broad outcome measures including
the distribution and burden of disease
• Health system: the formal infrastructure established to
deliver and sustain health services including:
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Financing mechanisms
Payment for services
Services delivery
Regulation
Health resources and infrastructure
• National identify: because the values of a society are
embedded in the health system, we refer to the
autonomy of nations to make health policy decisions
How might globalization affect health, health
systems, and decision-making?
Three Pathways
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Impact on general economic
performance
Reduced barriers to trade
Increase in risk factors for disease
The impact of globalization on health
Pathway 1:
Impact on General Economic
Performance
Does globalization lead to economic
improvements and subsequent
improvements in population health?
(the evidence is weak)
Evidence: Globalizing is good for economies:
GDP Increased among “Globalizers”
Evidence: Globalizing is good: Per capita GDP
growth increased among globalizers
Change in per capita
income seems to be
related to change in
the income of the
poorest.
This might suggest
that at least in some
cases, the poor are
not “left out” of a
country’s economic
growth.
Globalization and Inequality:
The Gini Coefficient
• The Gini coefficient is a measure of
inequality of income or inequality of wealth
distribution.
• It is defined as a ratio with values between
0 and 1.
Increased trade
not associated
with greater
inequality
Gini Coefficient is not related to increased trade.
Case Study:
Vietnam
But do data tell the whole
story?
The Contradictions of
Globalization
Is China a Globalization winner?
Shanghai, China
Or a
loser?
Is India a Globalization
Winner?
Bangalore, India – Night Life
Bangalore call center
Or a loser?
Calcutta
Washing clothes by a road in Mumbai,
India Photo Antônio Milena/ABr
Another view of
winners and losers
In some cases, globalization has . . .
• Led to increased spread
of knowledge
• Fostered international
environmental
movements
• Improved GDP and
brought millions out of
poverty
• Improved the plight of
women
• Increased communication
about treatment of
disease
In other cases, globalization has led to . . .
• Unemployment and political
and social instability
• Decreased government
revenues because trade
agreements discourage tariffs
• Deterioration of public
programs and safety nets
because of conditionality
requirements
• Countries spending significant
portions of GDP on debt
servicing
• The alarming spread of
disease
Bogota Workers Union
. . . and environmental impacts
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Looser environmental regulation
Unmanaged economic growth
Forest depletion
Invasive species
Collapse of ocean fisheries
Environmental refugees
. . and social impacts
• Increased disparities
• Collapse of traditional social systems
• Loss of highly-trained people (the brain
drain)
The Impact of globalization on health
Pathway 2:
Reduced Barriers to Trade and
Health
Two possible scenarios
Reduced Trade Barriers: Positive
Outcomes
• Trade in health-related goods and, allowing
greater access to needed resources
• Flow of people – patients and professionals
• Flow of capital and ideas (intellectual capital),
telemedicine
• Greater opportunity to export products
– but can exports can compete with governmentsubsidized industries in developed countries?
Free Trade and Low (or no) Tariffs may
also mean:
• Greater availability (and lower prices) for
harmful substances (e.g., tobacco,
handguns)
• Open borders may mean that industries
lose out to foreign exports
Liberal (or free) Trade
Reduced Barriers to
Trade and Health:
Story Line 1
Economic
Development
Poverty Reduction
Personal choices
and public policies
that promote
population-wide
health and well-being
Increase in Personal
Wealth
But there is another possible
scenario to consider
Free Trade and
Health:
Story Line 2
Economic Development
Liberal (or free) Trade
Decreased Tariffs Lead to
Lower Government
Revenues
Domestic Industry
Destroyed by Competition
Higher Prices for Imports
Economic Benefits for the
Elite
Increased Poverty
Increased Unemployment
Unsafe Working Conditions
Social and Political Unrest
Decimated Industries and
Reduced Investment in
Health
Decrease in Government
Regulatory Authority
Regulations to Protect
Public Health are Relaxed
or Eliminated
Poor Population Health
Outcomes
The Impact of globalization on health
Pathway 3:
Globalization and Increased Risk
Factors
(see Frenk & Gómez-Dántes, 2002)
Increased Transfer of Risk
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Transmission of communicable diseases
HIV/AIDS
Influenza pandemic of 1918
Peruvian outbreak of cholera in early 1990s
Drug-Resistant Tuberculosis
SARS
This is not new: what is new is the scale and
speed of “microbial traffic”
But the transfer of risk is more than
microbial
Source: NATO
Misuse of antibiotics in the U.S.
Globalization and the National
Identity of Health Systems
Globalization makes national boundaries less relevant.
Will globalization also make national values less
relevant?
Major Issues
• Are international agencies encouraging a
breakdown of healthcare systems through
structural adjustment programs and privatization
schemes?
• Are countries being encouraged to downsize
their public sector inappropriately?
• Will GATS enable foreign investors to open up
healthcare facilities in other countries?
• What are the implications of open borders for
health systems and the healthcare workforce?
“The potential for trade in health services
has expanded rapidly over recent
decades. The technological and economic
forces workings towards global market
integration are unlikely to leave the health
sector unaffected.”
R. Adlung & A. Carzaniga. “Health services under the General
Agreement on Trade in Services.” Bulletin of the World Health
Organization 79, no. 4 (2001): 352-364.
How GATS categorizes “Trading” in
Health Services
• Mode1: Cross-border delivery of trade goods
• Mode 2: Consumption of health services abroad
• Mode 3: Commercial presence
• Mode 4: Movement of health personnel
See Blouin, Drager, & Smith. International Trade in Health Services and the GATS. The
World Bank, 2006
Mode 1: Cross-border delivery of
trade goods
• Telemedicine and e-health
• Health services over the Internet including
education and training of health workers
• E-commerce and e-business practices for
health management and health systems
Mode 2: Consumption of health
services abroad
• Consumers traveling abroad seeking care
(medical tourism)
• Tourists who need medical care abroad
• Retirees abroad
• Temporary or migrant workers
• Cross-border commuters with multinational
coverage options
Hasmat Hospital
Bangalore, India
Workforce Concerns with Medical
Tourism
• Will the most talented healthcare providers
gravitate to facilities that serve the wealthy
from abroad?
• Will this lead to an internal brain drain?
Incentives for US Hospitals to
Recruit Patients from Abroad
• Potentially easy money: the wealthiest patients
pay the bill, or the host government pays the bill
• International patients represent a higher
percentage of total revenue than they do total
patient volume
• International patients pay at least 80 percent of
full charges, often in advance, resulting in
margins of 20 percent or more
• No pre-authorization or utilization management
issues
Mode 3: Commercial presence
• Foreign investment in health services
enterprises
• Establishment or acquisition of firms
offering insurance
India’s Apollo group of hospitals, opening
facilities in Sri Lanka, Nepal, Malaysia
Chindex International, US company providing
medical equipment and supplies and clinical
care in China
Advantages to the Host Country (1)
• Generate additional resources for
investment in and upgrading health care
infrastructure and technologies
• Create employment; reduce
unemployment of health personnel
• Provide expensive and specialized
medical services
Advantages to Host Country (2)
• Availability of private capital can reduce total
burden on government resources, helping to
reallocate government expenditures towards the
public health sector
• Affiliations and partnerships with health service
institutions can help to improve service facilities
in developing countries and introduce superior
management techniques and information
systems.
Potential Disadvantages to Host
Country
• Large initial public investments may be required
to attract foreign direct investment
• If specialty corporate hospitals are established
using public funds and subsidies, these funds
may be diverted from the public health system
• Two-tiered health system likely:
– corporate sector specializing in high technology
services, located in large cities
– public sector and rural services underfunded
Disadvantages to host country (2)
• “Internal brain drain” as better-quality
health professionals migrate to corporate
sector
– A particular problem in Thailand, with an
outflow of providers to the private sector in
response to joint ventures between private
hospitals and foreign companies
Mode 4: Movement of health
personnel
• Self-employed or independent service
providers (paid by host country)
• Employees of a foreign company who are
sent to fulfill a contract with a host country
client
• Health services traded through movement
of health professionals to another country
The Global Health Workforce Picture
Health Workforce Scarcity
• About 37 of 47 sub-Saharan countries
have less than 20 doctors per 100,000
people (OECD countries average 222
physicians per 100,000 population)
• Malawi filled only 28 percent of vacancy
nursing positions in 2003
• South Africa had up to 4,000 doctor
vacancies and 32,000 nurse vacancies in
2003
The relationship between the density of health workers and
health outcomes
Global Health Workforce Density
The issue is one of massive global inequities.
Evidence of flows: doctors and nurses trained abroad
working in OECD countries
In the United States, 27% of doctors were trained abroad.
Exit routes from the Health
Workforce
• Migration within the home country from
rural to urban regions or to another
country
• Risk of violence, illness, or death
• Change of occupation or activity (e.g.,
unemployment, part-time employment, or
work outside the health sector
• Retirement (at statutory age or by early
retirement)
Why do Nurses Emigrate?
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Lack of jobs in their own country
Poor wages
Economic instability
Poorly funded health systems
Burden and risk of AIDS
Safety concerns
Why do health workers leave developing
countries? Evidence from four African countries
Top five reasons: better remuneration, safer environment,
living conditions, lack of facilities
Why do Physicians Emigrate?
• Salary
– Monthly physician salaries range from US$50
in Sierra Leone to US$1,242 in South Africa
– Wages in Canada and Australia are about four
times South African wages
• Poor work environment; heavy workload
• Lack of supervision
• Limited organizational capacity
The Mobile Workforce: Importing
Health Professionals
• The US has about 2,202,000 RNs in the
workforce, with a predicted shortfall in 2010 of
275,000
• About 90,000 US nurses are foreign-trained,
representing 4 percent of employed nurses
• Doubling the percentage of foreign-trained
nurses to 8 percent, about 100,000 nurses
would be recruited from the Caribbean and
elsewhere (this would still not close the shortfall)
International Medical Graduates in
the US, Canada, and Australia
In the United States, 25% of physicians are IMGs; 60.2% of
these IMGs are from lower-income countries.
In the UK, over 28% of physicians are IMGs; 75% of these IMGs
are from lower-income countries.
Physician Emigration
Sub-Saharan
emigration factor = 13.9
Higher emigration factors indicate higher levels of
physician emigration
Preserving National Identity
Major Cautions about Trade in
Health Services
Major Issues and Decision Points
• Role of the private sector
– National budget priorities
– Desire to increase available resources
– Ensuring that public policy objectives are met
– What government should provide and how
costs should be shared among groups in the
society
• Private suppliers
– Desire to increase efficiency by exposing
domestic providers to competition
– The use of foreign suppliers to meet
shortages in the short, medium, or long term
– Desire to have access to new technology
– Desire to increase services available to
consumers
• Liberalization is not the same as
deregulation
– Liberalization and open borders requires
increased regulation or re-regulation
– Regulation should be in place prior to opening
markets
– The challenge of regulatory capacity
Globalization:
Thinking beyond trade and
economic growth
The Need for Global Health
Governance
Global Health Governance
• An era of global mutual vulnerability –
globalization of disease
• Global health is a multilateral business;
problems need to be addressed by multiple
countries
• Is it useful to organize health services on a
national level, or should we be thinking more in
terms of global or regional governance and
organization of health systems?
• Can we have global health governance coexisting with autonomous health systems?
Globalization may have positive
and negative impacts on health
and health systems.
But advances in technology create
opportunities for unprecedented levels
of cooperation in addressing global
health problems.
Obrigado
I welcome questions and
discussion.