Comparative Advantage

I love TechCentralStation.com. You get an adult daily dose of economics, market news, and junk-science-debunking from a libertarian perspective.

The last couple of days have included a few good health care pieces. One discusses European drug manufacturers' choice to focus on generics. This will help them with the bottom line in price-controlled, socialist markets. But this will not provide capital for R&D, so we should not look to the EU nations for any more medical innovation.

Another discusses "Activist Medicine." Unlike Activist judges, activist medicine is not necessarily a pejorative, just a reference to using all resources to diagnose and treat every illness. My wife's life was saved six weeks ago by activist medicine but I still see Kling's point: Can we afford to throw everything at every case?

But the one that gets excerpted is A Passage to Indian Health Care which describes the advantages of traveling to India for inexpensive, high quality health care.

Medical tourism to India started fairly recently when NRIs (non-resident Indians -- those living and working in the West) began to go "home" to India seeking not just their roots, but root canals. They returned with killer smiles and tales of the staggering savings in costs -- even factoring in airfares -- and excellence of treatment. NRIs, aware from their families of India's state-of-the-art technology and the level of surgical skill, also head off "home" for more critical treatment, like kidney transplants, hip replacements and open heart surgery. Indeed, India's 20 million diaspora returning to the US and Britain after successful treatment are India's best ambassadors.

Britons plagued by their socialist and inefficient National Health Service waiting lists (people diagnosed with cancer or degenerative heart disease can wait for an operation for a year or even more) and Americans who didn't keep up their health insurance after retiring -- or never had any -- are now choosing their hospitals and surgeons on the internet and booking their flights to India. And to make it even easier, there are medical tourism companies in India who will take care of all these details for them.

Now, some enterprising hospitals offer greet-and-treat services with an all-inclusive health-tourist package, including the desired medical procedure, hotel, air travel, bookings and admissions to popular tourist attractions. And India has the overwhelming advantage being Anglophone.

Comparative advantage. Free movement of labor and capital. Let India perform non-emergency health care, EU nations manufacture generic drugs and we will have the money to develop new treatments and perform cutting edge emergency medicine at home.

Pharmaceuticals Posted by jk at May 13, 2005 6:38 AM