This blog contains posts and comments written by students in Dr. Tufte's economics classes at Southern Utah University.
2/26/2008
Increase in India Medical Care Because of Low Cost
Medical care is an important issue in today's world. When it comes to medical care, America is one of the best places to have work done. However, the best does not always mean the least expensive. People are starting to find out that they can get the same medical procedures done in India for a fourth of the price it would be elsewhere. The quality of service is just as good in India as it would be in other more expensive locations. This is causing more people with medical problems that do not have insurance coverage to go to India for their medical procedures. This affects the American economy by taking customers out of the U.S., therefore moving profits to other countries. The demand for good inexpensive medical care is high in today's society and India is now starting to meet that demand. This is creating further competition for America and other medical care facilities around the world. This is great for India's economy but will damage the American economy.
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5 comments:
Maybe this would lower our medical costs. If the demand is low here in America, the prices might come down. I am very much hoping this idea comes true because medical costs here are outrageous
-1 on Binoculars for poor proofing.
Without appearing to claim that medical care prices in the U.S. are low, I find this sort of report dubious.
I have no doubt that nominal costs are 75% lower in India. I have doubts about the claim that real costs are 75% lower - for which there is much less support.
For me, proof would have to include something capturing the relative tendency of people in other countries to come to the U.S. for medical care.
Another statistic would be the tendency of people of one nationality to check out early of hospitals in a country of a another nationality.
My suspicion is that this sort of story is like those about Americans who emigrate to Canada - that don't mention that a Canadian is 30 times more likely to be going the other way.
But ... I could be wrong.
Dr. Tufte-Extra Credit
I agree with you that this is similar to the ratio of Canadian to American immigrants. Over time I believe we will see more and more people travel abroad for medical procedures but it will never reach a level that will effect the American economy. The educated people of India are making their place in the world in business and medicine and they understand how people of the world think and respond to options. I just read a case study about the Aravind Eye Institute in India and was amazed to discover the quality of education of the people involved in its operations. MBA's from Michigan, doctors trained at the finest U.S. medical schools, and continuing education throughout their career. This article also mentions the quality of Indian doctors and that many are qualified to work in the best U.S. hospitals. They will find a way to attract more and more patients to their country as an alternative to the high prices paid in the United States and Europe. However, despite the financial benefits and the quality of the procedures performed the majority of people are not willing to travel far away from home. Because of this it will not make a noticeable impact on the American economy.
Dr. Tufte
I liked how you mentioned the fact that a lot of Canadians come to the US to receive medical care. However, I think the main reason for doing so is a result of how dysfunctional the universal health care system is. Subsequently, I hope we all take a good look at the Democratic health care reform initiative before we start voting just because the media has biased us that way. We should not worry that our hospitals will be shutting down any time soon due to India’s increased market share.
All of this is arbitrage, and that's a good thing.
I just wish that arbitrage opportunities weren't being created by government policies.
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