The Directionality of Flows in Healthcare - Research Paper Example

? The Directionality of Flows in Healthcare - Final Paper Introduction The trend in medical tourism or health tourism is on the verge of entering itsboom period. It can be explained as the phenomenon of travelling to countries abroad for the purpose of attaining healthcare services as well as facilities. People visit countries abroad in search of quality healthcare at reasonable costs. Furthermore, the healthcare workers as well as the managerial practices are known to have a role to play in determining the directionality of flow in the healthcare organisations (European Commission, 2006). The fundamental intention of this paper is to identify the major determinants of directionality of flow in the healthcare organizations. It will further attempt at comprehending the five segments of the patients wanting to travel abroad for availing healthcare services. The study will further progress by comprehending the reasons behind high rivalry for inbound international patients in terms of healthcare services. It will also endeavour to comprehend the circumstances under which the hospitals must invest in plants and equipments in order to lure patients from other countries. The determinants of global price differentials among the hospitals will also be determined in the discussion below. Directionality of Flows in Healthcare: Patients, Health Workers, Managerial Practices Everyone in the community has the right to make use of preventive healthcare systems along with the right to gain from medical treatments not only from the moral perspective but also following the mandatory socio-legal amendments. There are numerous hurdles that tend to impose challenges in utilizing healthcare services within the countries such as proportion of population covered with the health insurances, cost sharing arrangements, geographical barriers, organisational hurdles and utilisation of accessible services among others. In order to combat the problems related to the accessibility of domestic healthcare facilities, cross border arrangements in terms of international partnerships between healthcare service providers are often instigated. Cross border arrangement in the context of healthcare organisation refers to accessibility of the services rendered by the doctors and nurses. However, it does not imply that the only solution to the accessibility problem is cross border arrangements. In fact, there are several other arrangements that can assist in alleviating the stated problem. Although the healthcare organizations or the hospitals may possess universal coverage, there may be hurdles witnessed by the patients in order to avail the healthcare services. The various problems in relation to availing the services might comprise the fact that either a few of the services lack inclusion in the benefit package or they may be encompassed but might not be accessible. Geological delivery with regard to the healthcare services implies that individuals often have to encounter complexities in accessing the services in comparison to others (European Commission, 2006). It needs to be mentioned in this respect that cross border arrangement is one of the techniques that can be utilized in order to identify the issues relating to the accessibility of healthcare facilities in the home country of the patient. In such case it can be mentioned that cross border arrangements should not be viewed as the only solution to the problem related to availing healthcare services in the country of residence (European Commission, 2006). From a generalised point of view, six major hurdles can be identified to exist that are encountered while availing the healthcare services by the common people. One of the main subjects of debate has been the proper meaning of the term access. In this regards, there is a general concern prevailing within the international arena that healthcare needs to be distributed in accordance with the requirements. Therefore, World Health Organisation defines the term ‘accessibility’ as a degree of the fraction of overall population with their reachability to avail adequate health services (European Commission, 2006). The below given model assists in identifying six potential barriers: Source: (European Commission, 2006) The initial obstacle relates to whether healthcare exposure is extended to the entire population equally. In this respect, prime coverage is generally conducted via the public system. However, it may be by means of substitutive charitable health insurance also. The other difficulty can be related to the advantages that the system of primary coverage tends to entail. Consequently, it can be observed that these two hurdles are significant and thus have a priority concern. The remaining four hurdles do not follow any sort of strict order of priority amid them but are presented in a descending order. These are mostly related to geographical limits, supply-side organizational operations and behaviours along with personal as well as cultural preferences (European Commission, 2006). The healthcare organizations may not always be capable of obtaining information regarding the number of patients who are involved in the cross border arrangements. The flow of patients of the cross border arrangements is generally differentiated in relation to the type of service, contractual collaborator and country and in each case to the direction of the patient flow. A few of the countries that attempt to motivate an increasing number of patients to travel abroad rather than consuming the healthcare service of that particular nation can be identified as Ireland, Austria, Italy and Netherlands (European Commission, 2006). It can be explained that in the healthcare setting, patients, health workers as well as managerial practices determine the directionality of flows. One of the emerging actualities in relation to the healthcare industry is the increasing level of global competition. The affluent patients belonging to the developing nations move to developed countries for availing high value medical care. It is in this context that most of the medical tourists might not be wealthy enough but they may look for best quality services pertaining to healthcare sector, available at reasonable price. By making use of advanced technologies as well, most of the entrepreneurs are building healthcare organizations for meeting the demand of the individuals in the local as well as international societies. These entrepreneurs ensure the employment of physicians, technicians as well as nurses who have been trained according to the specified requirements. In circumstances when qualified personnel are not available in the local market, healthcare organisations tend to recruit expatriates. For instance, it has often been noticed that American medical tourists search for lower prices enabling them to undergo those treatments which are not covered by their insurance policies. Most of the American medical tourists visit Mexico as well as Latin American countries as it is believed that it might not be quite logical for the American patients to move to distant places for the purpose of healing. However, Mexico and Latin America are known to offer the patients with numerous types of medical services at comparatively lesser costs which can be regarded as another major reason for attracting the American medical tourists (Herrick, 2007). There are generally three types of medical tourism which takes place all year round namely, outbound, inbound and intra-bound. In case of outbound tourism, the patients make a tour to overseas countries for the purpose of treatment. In case of inbound tourism, the patients from other countries move to the US for treatment. On the other hand, through intra-bound tourism, the patients tend to move within the country to gain healing services offered by healthcare units in varying regions. They are found to travel outside their local or native regions, especially to those regions which are known for its centre of excellence in concerning the healthcare facilities. Furthermore, healthcare workers also tend to travel from one country to another with the purpose of getting better employment opportunities. Managerial practices further determine the directionality of flow, since increasing number of patients are likely to visit the healthcare organizations serving with proper management which in turn ensures the arrangement of safe and quality care (Deloitte, 2008). Five Segments of Customers Wanting To Travel Abroad The five main categories of individual wanting to travel overseas to avail healthcare facilities can be categorised as ‘temporary visitors abroad’, ‘people retiring to other countries’, ‘people in border regions’, ‘people sent abroad by the healthcare organisations in their homeland’ and ‘people going abroad being motivated by their personal preferences’ (Lowson, Mahon, Wright, Lowson, Tatlock & Duffy, 2010). Temporary Visitors Abroad The temporary visitors abroad are those individuals who may be staying in overseas countries for few days due to various reasons, such as professional or personal. Such visitors might prefer to have his/ her treatment in those countries because of the facilities offered or even due to emergency requirements. It has been noted that the General Practitioners (GPs) may use his/ her prudence in case of treating patients from overseas countries. GPs can record overseas visitors as provisional visitors or if they are found to stay in the US for more than three months, they may even accept them in their lists. The individuals visiting overseas states might further have to obtain any required treatment owing to their state of health during the period of their residence. In the recent years, there has been a rapid increase witnessed in the total volume of tourism in and around the US as well as Europe. Some of the aspects, such as rise in the real income, decrease in the cost of travelling along with huge number of retired people have all led to overseas migration throughout the year. In this respect, several schemes are created so that the individuals can obtain healthcare services abroad in case of emergencies. However, it is to be remembered that such methods do not tend to solve the problems related to the mobility of the patient (European Observatory on Health Systems and Policies, 2010). Long Term Residents Retiring To Other Countries The other segment of the individuals who might be in need of care in overseas countries can be termed as those individuals who tend to retire to another country with the purpose of relocating. Even though, this is one of the occurrences that have prevailed since numerous years, it can be observed that the numbers involved along with the destinations chosen have altered greatly. For instance, individuals from most regions of the world retire to America which gives rise to innumerable issues including the rise of the ageing population. Conventionally, social care for the affected elderly individuals was based upon family endorsements. However, it should be mentioned in this regards that the individuals looking for healthcare services in their country of origin might need authorizations for availing healthcare facilities abroad. The reason behind this fact is that their healthcare entitlements would require to be shifted to their new residence essentializing a long procedure for legal formalities (European Observatory on Health Systems and Policies, 2010). Hospitals Serving Borders Abroad Most of the hospitals tend to share facilities for the population who reside on border regions abroad. The individuals serving the borders might seek for healthcare facilities in countries abroad. However, one of the major difficulties has often been identified to arise in terms of nationality of the children which might be difficult to determine for those born in local facilities with parents residing in the opposite side of the borders (European Observatory on Health Systems and Policies, 2010). Sending Patients Abroad There are few countries practicing policies to send the patients in overseas countries for the purpose of treatment. In order to challenge the domestic monopolies, a few of the modern day hospital initializes short term movements and thus influences transformation in the healthcare system (European Observatory on Health Systems and Policies, 2010). Patients Travelling Independently For Treatment Abroad It has also been identified that a certain population of the patients might travel abroad independently in order to attain medical treatments. However, there are cases affirming that the number of individuals travelling abroad for treatment is quite few currently, but at an increasing pace. The patients tend to be lured by the healthcare systems and the facilities offered such as spa, beauty clinics, dental treatment and cosmetic surgery among others in order to travel overseas. By taking advantage of low cost services, a few of the countries focus on attracting the patients from numerous regions of the world (European Observatory on Health Systems and Policies, 2010). Other Segments of Individuals Other segments can also be identified while grouping individuals who desire to travel abroad for the purpose of attaining medical treatments. For instance, in the case of United States, this group of individuals include migrant workers, sufferers of trafficking and shelter seekers. However, it is worth mentioning that owing to the legal disruptions and social segregation insufficient amount of information is believed to be available regarding the quality of the care that these migrants obtain in the countries where they have settled (European Observatory on Health Systems and Policies, 2010). Growing Rivalry for Inbound International Patients It has been observed that there is a growing rivalry for inbound tourists in quite a few countries of the world. It was also found in this respect that there is a decline in terms of inbound patients. Owing to the fact that there is cheaper and quality healthcare services available in other countries of the world, individuals prefer moving overseas. In relation to the healthcare sector in US, patients visit the nation for curing their illness predicted to be complicated in nature. It calls for the requirement of advanced technology which might be noted as inaccessible to obtain from other parts of the world. Hence, the patients need to be quite affluent in order to avail such services. The inbound patients are measured to be quite few in numbers prompting competition between the hospitals. Interstate competition which implies luring the patients from other parts of the world into the US is also an option which is being largely considered by the healthcare organisations. One of the aspects that motivate the hospitals to compete with each other in terms of specialization can be attributed as the cost factors. However, the patients from overseas do not prefer visiting such hospitals as medical tourists are identified to be highly conscious regarding the value of the services being availed. It is worth mentioning in this regards that the inbound patients who prefer having their treatment in the US account for a huge amount of revenue for the healthcare industry. In lieu of this fact, most of the healthcare organizations of the US are focusing upon offering their services around the globe. For instance, the US confronts competition in the international arena, since both India as well as China along with various other countries are learnt to invest large sums of money in the field of research and development and therefore attempt offering better technology support to the healthcare industry. Thus, it becomes quite vital for the US to continuously develop strategies to attract inbound patients. However, because of the rise in cost of operation of its national healthcare units, the country has been recently identified as less striking for the patients travelling inbound (Squiresanders, 2011). There are global challenges and rising trends in the rivalry in international healthcare industry which are likely to impact the US inbound healthcare programs in the near future. The US is not the sole beneficiary of medical travellers seeking for quality care, affordability and convenience. Nearly 270 hospitals have already been sanctioned by The Joint Commission in various parts of the globe including various regions from Europe, Asia, Africa as well as Latin America. There have been major alterations in the global healthcare industry as well. One of the significant factors in the global medical travel industry has been with the informed patients (Global Healthcare Magazine, 2011). Any informed patient who would be visiting the US or outside the US might expect proper accessibility to the medical procedures which are believed to be unavailable in the country of residence of that patient. The patient might as well expect the availability of medical procedures according to the individual requirements in their country of origin and might expect affordability as well as quality care. From a contemporary perspective, the medical tourists are today known to be well-informed regarding the quality of healthcare offered by such organizations by means of internet as well as social media sites. One of the decision making factor in order to remain competitive and thus retain strategic position in speciality healthcare industry, in and around the US, is with the assistance of the affordability factor (Medical Tourism Magazine, 2011). Investing In Plant and Equipment to Attract International Patients In the present times, most of the hospitals are found to be investing huge amounts of money to attract the inbound international patients. When a hospital realizes the fact that its facilities are not useful enough to target the patients, significant investments in the plant and equipment tends to assist in equipping the hospital with the required tools and thus render better services to the patients. Most of the healthcare organisations operating through old plants have identified the fact that they are not capable of competing with those organisations having new plants and equipments. The reason behind this is that these organisations gain advantages in terms of cost efficiencies along with quality linked with new technologies and facilities. It has often been a proven fact that in the hospital industry, the new plants and equipments attract patients as well as physicians linking quality with new facilities. It is worth mentioning in this regards that although, the hospital would be in a risky position if it tends to overinvest in plants and equipments, it would also be in the depths of despair to under invest in capital owing to the presence of fierce competition (Cleverley & Harvey, 1992). Stating precisely, organisations making use of the older medical equipments during operations, offering substandard quality medications, making use of inadequately trained healthcare professionals or administering poorly stocked operating clinics, tend to be highly affected by the restraining behaviours of the inbound international patients. It is owing to the reason that such infrastructural lacunas shall probably hamper the quality of healthcare rendered, thereby dissatisfying the requirements of the inbound international patients to avail better healthcare services. Hence, under such circumstances the hospital needs to invest a significant amount of money to consume efficient plants and equipments, so that it can improve the quality of the services offered to the patient offering greater satisfaction (Turner, 2007). Global Price Differential It has been observed that the healthcare cost in Massachusetts is rising at a rapid pace than the growth of the state economy as a whole. Researchers have demonstrated the fact that the prices paid by commercial health insurers to the hospitals differ substantially amongst the healthcare providers. Such differences in the pricing structure are generally correlated with the market leverage. The principle motive behind elevated hospital costs in Massachusetts is that a significant percentage of the total patient care is offered by hospitals also engaged with providing costly training services. The rates for surgery as well as other treatments are also quite high with a greater number of professionals employed by the hospitals (Wang, 2011). There are several debates over the fact that the pricing structure in medical settings can be framed with the intersection of the supply as well as the demand curve. The demand and supply relation can be explained with the help of an illustration. For instance, owing to high brand image of the hospital, the demand for the services of the healthcare unit tends to be elevated and hence the demand curve is observed to be quite inelastic. In case of high demand for product or services, a supplier might like to augment the price of the services being offered enabling it to develop more efficient technology services or train the staffs that are lacking skills and capabilities. As represented in the diagram below, the rise in the cost is demonstrated by the shift back in the supply curve i.e., S1 to S2 which further converts into higher equilibrium price P2 in the market (Wang, 2011). Source: (Wang, 2011) It can be analysed that the global price differential can be explained by quality of care, brand name, income distribution within an area and cost shifting. There is a favourable link between quality of care offered and the price of services in health market. It is because of the fact that patients, especially those bearing the cost of travelling overseas, require superior quality of care indicating an outer shift in the demand curve. This also tends to make the demand curve more inelastic as it is apparent that high shifts in magnitude would lead to small shifts in price. In both the cases, the supply as well as the demand curves will traverse at higher price ranges. Better care demonstrates higher cost in terms of greater number of physicians along with efficient specialists, greater testing equipments and more nurses (Wang, 2011). Furthermore, if the hospital is situated in an area that possess well-insured patients, they will be capable of charging high since the healthcare organisation is well aware of the fact that their patients will be capable of affording the bills without refraining them (Wang, 2011). For instance, prices might be positively related with the allowance concerning patient charges ascribed to insurers because of cost shifting (Wang, 2011). High Cost of Hip Replacement It is a well known fact that US spends huge amount of its funding in healthcare sector in contrast to many other countries. Subsequently, for visiting the patients, the physicians obtain high fees. Furthermore, orthopaedic physicians generally obtain high fees for hip replacements in US with comparison to the countries such as Germany, Canada, France, Australia and United Kingdom. In this regards, a study was conducted comparing the price for physician’s services in US with that of five other countries. It was observed that public as well as private payers in the US were paying high fees to the healthcare physicians when making office visits. They were paying higher fees to orthopaedic surgeons to render better efficient services in comparison to international competitors. It was observed that in Canada, the fees for hip replacement had been $652 while in US the service was rendered at a cost of $1634. Furthermore, the private insurance fees in the US was nearly $4000 for hip replacement which was two times higher than the private rates in Germany, Canada, France, Australia and United Kingdom. Hence, it can be concluded that higher physician fees instead of higher cost of implementing, the quantity of service offered are the main drivers of higher spending for doctor’s services in the US (Common wealth fund, 2011). Conclusion Human beings have the right to access preventive healthcare system facilities and thus attain medical treatment. However, because of several hurdles in the domestic settings, it becomes difficult for the patients to have their treatments in local areas. This necessitates the requirement of the patient to travel across the domestic setting and attain healthcare facilities. The directionality of flow is determined by the patients, health workers as well as the managerial practices as well. There are generally five segments of the patients who prefer visiting abroad to obtain healthcare. They are temporary visitors abroad, people retiring to other countries, people in border regions, people sent abroad by their home country and people going abroad on their own initiative. The other segment for patients visiting healthcare sectors abroad are often termed to be the invisible patients who are generally migrants and are victims of social and legal segregations and thus travel abroad to attain medical care. However, the number of inbound patients is quite few which trigger competition in the international arena. Most of the patients travel to countries outside US because of high cost of treatment practiced within the American healthcare units. Therefore, it becomes imperative for the US healthcare organisations to minimise the total cost of operation so that there is greater influx of inbound international patients within the country. It is majorly owing to the fact that the fees paid to the US physicians tend to be higher which increases the cost of services offered to the patients by the American healthcare centres in comparison to other countries who offer services at a relatively lower cost. However, it is to be mentioned that global price differential takes place because of quality of care, brand name, income of area and cost shifting. Therefore, US needs to pay due attention towards all the above aspects to attract the inbound international patients and thus prevent outbound patients from moving overseas for medical treatment. References Cleverley, W. O. & Harvey, R. K. (1992). Does hospital financial performance measure up-cover story. Retrieved from http://findarticles.com/p/articles/mi_m3257/is_n5_v46/ai_12509556/pg_2/ Common wealth fund. (2011). Higher fees paid to U.S. physicians drive higher spending for physician services compared to other countries. 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