emergence of a middle class in the South. These factors, combined with an increasing control of spending in the North, create new trade opportunities, in particular for developing countries. Deloitte (2008) plans on a 100 percent annual growth of outbound medical tourism in the US over the next few years. It remains that a number of obstacles need to be removed, such as the absence of portability of health insurance, for trade to really flourish.

Not all trade modes are equally developed and have similar prospects. A recent ECIPE study suggested that there was a great deal of variation within different segments of international trade in health services. The author suggested (focusing on the European Union) that, for the most part, international trade was conducted through the movement of foreign health professionals between countries (mode 4), as well as the presence of foreign healthcare firms in local markets (mode 3). Trade based on the travel of healthcare consumers to foreign markets remained very low (mode 2), but still significantly higher than international cross-border trade in health services (mode 1) (Herman, 2009).

It should be reminded also that a number of ancillary services and products are traded at the margin of the global health services trade. These include medical education and training, offshore business services, paramedical and wellness, health insurance, pharmaceuticals and medical equipment/supplies, etc. Sometime, health services are also commingled with other services, such as tourism and travel (see case-study n°3) or real estate (e.g. retirement homes with medical facilities). The global health market is therefore much larger than rough estimates on services suggest.

|**Case Study n°3:**|
|---|
|**Travel and Health Industries Commingling – The Case of Thai Airways**|

|A number of travel and leisure companies have invested in the health sector and/or offer their clients packages that<br>include some health care. For example, Thai Airways offers a number of health packages through its Royal Orchid<br>Holidays program. These include:<br>Package in Bangkok|
|---|
|<br>Superior Physical-Check-Up at Bangkok Hospital (3 hours)|
|<br>Medical Check-Up: Hearth Care Programme at Bangkok Hospital (3-4 hours)<br><br>Premier Healh Examination at Bumrungrad International (3-4 hours)<br><br>Physical Check-Up at Ramkhamhaeng Hospital (3-4 hours)<br><br>The Dental Examination and Cleaning at Bumrungrad International (30 minutes)<br>Package in Chiang Mai|
|<br>Physical Check-Up at Chiang Mai Ram Hospital (3-4 hours)<br><br>Check-Up at Rajavej Chiang Mai Hospital (3-4 hours)<br>Package in Phuket<br><br>Medical Check-Upat Bangkok Phuket Hospital(3-4 hours)|
|**Source:** www.thaiair.com|

# <u>Mode 1</u>

As suggested above, trade in health services under mode 1 remains largely anecdotal at this stage, at least if one adopts a narrow definition of health services (for precise definitions, see Nielson, 2006). If one includes off-shoring of other business or financial services, such as medical transcription or health insurance and claims processing, then the market is larger and largely untapped: according to McKinsey (Figure 1) up to 55 percent of these jobs in the high income countries’ health sector could be outsourced. Most outsourcing would be done domestically, but some developing countries could capture part of the market. In the case of the Philippines (see case-study n°4), exports of medical transcription services has grown over 100 percent annually for the recent years.

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