Today, increases in the demand for healthcare are driving European governments to look for ways to control growth in healthcare expenditures and at the same time improve health outcomes. Consideration of ways to enhance trade in healthcare goods and services is important for governments as they struggle to find resources to finance this increasing demand for healthcare.
IV. Concluding Comments
The European healthcare sector will change as populations continue to age and as people demand more and better healthcare services. In several countries, the healthcare system is not prepared for the future, and governments will have to struggle to address patients’ needs and capacity limitations in order to avoid sharp increases in healthcare expenditures unless enhancements are made. Current approaches to control costs are not fit for that purpose – and they will lead to increasingly inequitable healthcare and health outcomes.
Encouraging healthcare providers to reap the benefits from trade and investment is essential to making future healthcare more efficient, equitable and affordable. The same factors that determine trade – combinations of different factor endowments – are already at play in national and regional healthcare systems. But they are limited and provoke outcomes that are far from optimal. The process of specialisation in the healthcare sector becomes more difficult and leads to less-efficient outcomes when factors of specialisation are limited by trade restrictions. It is critical for improving health outcomes that these restrictions are alleviated. Medical progress runs on the dynamic of specialisation and artificially fractured markets have a direct impact not only on the cost of trade but also how healthcare systems organise the process of specialisation.
For Europe, which places notable importance on the way healthcare is financed and organised, it will be even more important to connect healthcare to international trade as the efficiencies that usually come with market-based organisations do not represent a significant share of healthcare output. Getting the inputs of healthcare – especially human capital and technology – to work better and cooperate across borders will be an essential issue.
The Transatlantic Trade and Investment Partnership (TTIP) offers new opportunities to better integrate the healthcare sector across borders – and to allow for more efficient specialisation in the healthcare sector. TTIP is an opportunity in this regard simply because much of the work to improve patterns of healthcare specialisation through trade remains to be done and because there has to be a similarity in the standards that are used in the healthcare sector for trade to reach critical volumes. The global quest for improving trade in healthcare goods and services is important, but it is likely to be slow and incomplete because of the big differences between healthcare systems in the world. Trade in healthcare goods and services is easier to address in a context of similarities in regulatory ambitions and structures. Despite the differences between the EU and the US in how they regulate, it is striking how often the regulatory ambitions are identical.
There are direct gains to be reaped by deregulating the flows of trade and investment, reducing domestic policy restrictions to cross-border exchange, and building better institutions for such integration. Equally important, Europe and the United States also have an opportunity to shape a direction of trade and investment policy that also involves other countries in future. This is the key promise of TTIP – and for governments to deliver on that promise, they need to put greater focus on healthcare.
Stimulating trade in healthcare is vital to enhance the performance of healthcare services and drive innovation in the future. But it is also important for improving the authority and integrity of trade policy. Far too often, trade policy is focused on issues that do not connect with significant economic benefits. For new trade agreements to deliver benefits and be feasible, they need to connect with key economic challenges. The quest for efficient, equitable and affordable healthcare for all is such a challenge. This political desire is already challenged in Europe. According to current trends, healthcare will neither be universal nor of high quality for many European countries if solutions are not found now. Trade is no panacea, but it is a critical part of improving the use of healthcare resources and, ultimately, delivering on the promise of better healthcare for people everywhere.