Outsourcing Healthcare

If you didn't like the idea of sending automobile manufacturing jobs to China, you're really going to hate sending healthcare jobs to Mexico.

A recent report from the Economic Policy Institute says American companies have created 1.4 M jobs overseas this year, compared with fewer than 1M in the US. Those overseas jobs would have lowered the unemployment rate to 8.9%. This, in part, explains why corporate profits are rising, the stock market is at a 2 year high, but the US unemployment rate  stubbornly approaches 10%.

The same is happening to healthcare jobs. With the global demand for quality care mirroring the rise of the middle class in emerging nations, foreign medical doctors and nurses decide to stay in China, India or Brazil. I call it pre-sourcing. Why come to the US only to find out that you had a better opportunity at home? What's more, despite a predicted manpower shortage , places like NYC are making it harder for 3rd and 4th year students at foreign medical schools to do clinical rotations in their hospitals. Telemedicine and medical travel, growing to a 1B industry by 2012, is also leveling the playing field and enticing US doctors to go overseas to practice either full time or in locums placements. Exploding expatriot retirement communties in Mexico, Costa Rica, Panama and the Caribbean are singing an irresistable siren's song attracting medical talent to those balmy shores to care for local patients and aging Americans who want care closer to their new homes.

And, it is not just doctors and nurses going abroad. Demerol dollars are following them. Take, for example, the idea being floated that Medicare pay for cheaper, similar quality care outside of the US for retired Americans...at a price that's 50% less. If that idea doesn't get your blood boiling, how about allowing Medicaid patients the option of choosing less expensive care in Latin America or Asia, in their native language?

The economics of medicine is fundamentally no different in one part of the world than in another. Money and people flow to where they are treated best. Companies hire people and build plants where the demand is the highest and the profits most attractive.

Did you ask for Rosetta Stone software for Christmas?

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[Arlen D Meyers, MD,MBA]

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