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Globalization, National Identity, and Health System Impacts Bruce Fried, PhD Department of Health Policy & Administration University of North Carolina.

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Presentation on theme: "Globalization, National Identity, and Health System Impacts Bruce Fried, PhD Department of Health Policy & Administration University of North Carolina."— Presentation transcript:

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

2 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

3 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

4 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: –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

5 How might globalization affect health, health systems, and decision-making? Three Pathways Impact on general economic performance Reduced barriers to trade Increase in risk factors for disease

6 Pathway 1: Impact on General Economic Performance Does globalization lead to economic improvements and subsequent improvements in population health? (the evidence is weak) The impact of globalization on health

7 Evidence: Globalizing is good for economies: GDP Increased among “Globalizers”

8 Evidence: Globalizing is good: Per capita GDP growth increased among globalizers

9 This might suggest that at least in some cases, the poor are not “left out” of a country’s economic growth. Change in per capita income seems to be related to change in the income of the poorest.

10 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.

11 Increased trade not associated with greater inequality Gini Coefficient is not related to increased trade.

12 Case Study: Vietnam

13 But do data tell the whole story? The Contradictions of Globalization

14 Is China a Globalization winner? Shanghai, China

15 Or a loser?

16 Is India a Globalization Winner? Bangalore, India – Night Life Bangalore call center

17 Or a loser? Washing clothes by a road in Mumbai, India Photo Antônio Milena/ABr Calcutta

18 Another view of winners and losers

19 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

20 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

21 ... and environmental impacts Looser environmental regulation Unmanaged economic growth Forest depletion Invasive species Collapse of ocean fisheries Environmental refugees

22 .. and social impacts Increased disparities Collapse of traditional social systems Loss of highly-trained people (the brain drain)

23 Pathway 2: Reduced Barriers to Trade and Health Two possible scenarios The Impact of globalization on health

24 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 government- subsidized industries in developed countries?

25 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

26 Reduced Barriers to Trade and Health: Story Line 1

27 But there is another possible scenario to consider

28 Free Trade and Health: Story Line 2

29 Pathway 3: Globalization and Increased Risk Factors (see Frenk & Gómez-Dántes, 2002) The Impact of globalization on health

30 Increased Transfer of Risk 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”

31 But the transfer of risk is more than microbial Source: NATO

32 Misuse of antibiotics in the U.S.

33 Globalization and the National Identity of Health Systems Globalization makes national boundaries less relevant. Will globalization also make national values less relevant?

34 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?

35 “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.

36 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

37 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

38 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

39 Hasmat Hospital Bangalore, India

40 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?

41 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

42 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

43 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

44 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.

45 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

46 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

47 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

48 The Global Health Workforce Picture

49 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

50 The relationship between the density of health workers and health outcomes

51 Global Health Workforce Density The issue is one of massive global inequities.

52 Evidence of flows: doctors and nurses trained abroad working in OECD countries In the United States, 27% of doctors were trained abroad.

53 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)

54 Why do Nurses Emigrate? Lack of jobs in their own country Poor wages Economic instability Poorly funded health systems Burden and risk of AIDS Safety concerns

55 Why do health workers leave developing countries? Evidence from four African countries Top five reasons: better remuneration, safer environment, living conditions, lack of facilities

56 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

57 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)

58 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.

59 Physician Emigration Higher emigration factors indicate higher levels of physician emigration Sub-Saharan emigration factor = 13.9

60 Preserving National Identity Major Cautions about Trade in Health Services

61 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

62 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

63 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

64 Globalization: Thinking beyond trade and economic growth The Need for Global Health Governance

65 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 co- existing with autonomous health systems?

66 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.

67 Obrigado I welcome questions and discussion.

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