have introduced special curricula and created private schools for training nurses desiring to move abroad. The benefit of such scheme is to limit the government losses (in terms of education) and avoid poaching into the local supply of healthcare providers (since the two training curricula are separate). Some foreign governments have also offered to sponsor some of these dedicated schools in developing countries, which would contribute to reduce even further the risks of public resources’ leakages. In the case of South Africa (case-study n°9), some private health services providers have concluded agreements with foreign healthcare networks to provide short-term opportunities for their staff abroad, while controlling returns (this personnel is prohibited from working in the UK system for two years after the completion of their temporary assignment within the UK branch of the South-African group).

## **Case Study n°7**

## **Mitigating distributive and other adverse effects of trade in health services – The Case of Thailand**

The combination of a rapidly rising domestic demand for healthcare, a rapid increase in medical tourism, and a publicly subsidized medical education system that supplies health professionals to both the public and private sectors, presented a formidable policy challenge for policymakers. Thailand’s experience with ‘flanking policies’ aimed at mitigating distributive and other adverse impacts of mode 2 trade in health services provides an important set of possible options for policymakers in countries looking to promote medical tourism to draw upon.

## **The problems** :

In Thailand, private hospitals that treat foreign patients do not participate in social health insurance schemes. Foreigners and upper-income Thai pay out of pocket or are covered by private health insurance. This diverts medical personnel away from public hospitals that serve Thai patients only; many of which participate in the social health insurance schemes. By one estimate, an extra 100,000 patients seeking medical treatment in Thailand leads to an internal brain drain of 240-700 doctors (Fink, 2007; Pannarunothai and Sunak, 2004). A related concern is that tertiary medical education is provided almost exclusively by the public sector, thus private exporting hospitals hire from the same resource pool as public hospitals but do not share the costs of medical education.

## **The solutions:**

Thailand has long enforced a three-year compulsory public service for medical graduates. Two-third of these graduates work in rural areas. Financial incentives for rural doctors include hardship allowance, no-private-practice allowance, overtime and special service allowances. After implementation of the universal coverage in 2001, financial incentives were announced in 2004-05, as a result of which a new medical graduate in the most remote rural district can earn a salary equal to that of a senior doctor in the central department with 25 years of experience. In 2004, the government approved the “One District, One Doctor Project”, under which new medical students are recruited from high schools in rural districts, educated in a local university and local hospital, and retained to work in their own districts. These measures are aimed at curbing urban concentration of medical professionals – an important concern in Thailand. In mid-2004, the government also approved a project to rapidly increase the acceptance of medical graduates during 200514. The first batch of these graduates is expected in 2011. This highlights the need for a long term and pro-active approach to human resource planning in the health sector, where the duration of education is long. Finally, awards and high-level career classifications encourage rural service and counter internal brain drain.

These measures on the supply side are supplemented by measures on the demand side, e.g. health promotion campaigns, that are expected to curb the domestic population’s need for heavy healthcare – as opposed to preventive care.

**Source:** Blouin et al. (2007).

# **<u>2. WHAT CAN BE DONE TO FOSTER TRADE IN HEALTH SERVICES?</u>**

Increasing trade in health services could be beneficial to both importing and exporting countries, in the high-income as well as in the poorest developing countries. A number of conditions are attached to success, however: the market is very competitive, and not all countries have a comparative advantage in health services; countries interested in entering and contesting the market need to carefully assess their resources and design trade promotion strategies that have both domestic and international dimensions.

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