Unbiased Analysis of Today's Healthcare Issues

EU Health Market

Written By: Jason Shafrin - Sep• 07•06

The BBC reports that patients in the EU may soon have the right to go to any EU country for medical treatment.  In a September 5th article (“EU chief…“), one can see a future of medical tourism in the EU.

Many EU members have argued that medical services fall outside the scope of the single market.

But the European Court of Justice ruled in May, in the case of British woman Yvonne Watts, that patients facing “undue delays” in their waits for operations should be entitled to have treatment in other EU countries.

Mrs Watts went to France for a hip operation because she faced a year-long wait for an NHS procedure.

European nations face a tradeoff when considering financing medical procedures.  If they attempt to reduce the generosity of payments to providers in order to save money, doctors will work fewer or fewer individuals will enter the medical profession.  Thus, there will be longer waiting times for procedures.  Nations can reduce wait times, but only if they want to increase their budgets dedicated to health care.

An open market for medical services is likely to have a small effect in aggregate due to the significant travel costs patients face as well as the reduction of information regarding doctors in a foreign country.  The numbers likely would be on the order of the number of Americans who seek medical treatment in Mexico. 

It is possible that countries with lower labor costs (such as in central and eastern Europe) could produce medical services of a similar quality at lower price.  While it is possible that western Europe could “outsource” some medical care to lower wage countries, the transaction costs for patients (eg: travel and psychic costs, less information on doctor quality) would likely outweigh any medical cost savings and thus any efficiency gains on an aggregate scale would be extremely small.

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