How Hospitals Are Helping U.S. Trade Policy

No matter how divided Washington may be when it comes to foreign policy, one aspect proved to forge agreement throughout the 2014 winter: The U.S. should promote free trade, particularly with the European Union, countries along the Pacific Rim and GCC nations. A critical aspect of trade promotion that I’ve seen unfold in my own daily work concerns the trade and exporting of health services.

The U.S. has signed and renewed an increasing number of FTA’s around the globe, with the hopes that industries will engage in foreign trade. Healthcare appears to be of paramount priority to the U.S. Commercial Service, as they promote market cooperation and various types of joint ventures abroad.

When I first started working with U.S. providers — both academic medical centers and private healthcare systems — I understood that many hospitals invested in global satellite locations and overseas brand building, but it completely surprised me the degree to which many invest, beyond “bricks and mortar.”

Most large U.S. hospitals are placing “boots on the ground” in various forms of offshore joint ventures, management contracts, research contracts, advisory services and medical education. Two questions remain: Why are hospitals involved so extensively abroad? Why does the government care?

The reality is that in the last decade, and probably dating back even further, the development of offshore healthcare activities has spiked as hospitals seek to serve a global patient market. Despite all the resources that they will invest in doing so, both in human and financial capital, when executed carefully and under the right circumstances, they are able to yield any of the following: attracting patients from abroad, developing strong international brand reputation, advancing the organization’s research and education missions, and receiving sometimes huge returns on investment.

These activities have possibly materialized approximately $1 billion in referring international patients to the U.S. for high level tertiary care, according to University HealthSystems Consortium and the U.S. Cooperative for International Patient Programs, a healthcare trade association that seeks to remove barriers to U.S. healthcare.

On the government side, the Department of Commerce and International Trade Administration have been heavily invested in the trade and export of health services and medical devices due to global promotion of the U.S. healthcare brand, and the high volume of revenue that it brings into the U.S. each year, in the form of hospital services and discharges as well as (medical) tourism related revenue. The impact is simply astonishing!

As U.S. trade policy continues to liberalize free trade globally, I believe healthcare will play an increasingly important role. We’re very used to leveraging the manufacturing assets of our economy. However, international medical travel is a burgeoning aspect of global healthcare, due to growing consumer choices and web-based self-referral. We will see more “patients without borders” and most countries with advanced healthcare infrastructures will seek to gain a piece of this lucrative pie. The U.S. should and most likely will keep barriers low for hospitals to trade services globally and for international patients to access treatment in U.S. hospitals.