Global Outsourcing of Healthcare: A Medical Tourism Decision Model

Abstract

The demand for global healthcare services is experiencing tremendous growth. US patients are seeking to reduce their expenditures on healthcare through obtaining treatment on an internationally competitive basis. This trend, known as medical tourism, is on the rise, and US legislators and policy makers must be aware of the issues facing American patients. This paper seeks to model factors that influence a patient’s decision to seek healthcare services abroad. We develop a two-stage model for medical tourism - the first stage being the evaluation of the foreign country and the second stage choosing the healthcare facility. We argue country-specific characteristics influence the country of choice - including economic conditions, political climate, and regulatory policies. We also argue that certain factors - including costs, hospital accreditation, quality of care, and physician training - impact the choice of healthcare facility. The model suggests that no one factor is dominant in the decision, but all play a crucial role in choosing healthcare on an international basis. Policy makers must use these factors to evaluate the impact medical tourism will continue to have on the US healthcare system in order to effectively compete in today’s global, consumer-driven healthcare market.