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How Global Trade Can Rein in Health Costs

Authors: Jagdish N. Bhagwati, and Dean Baker
September 16, 2011


The notion of international trade in health care may seem strange. The issue may also seem far removed from the current policy preoccupations in Washington.

However, we believe it is finally time trade played a central role in the current debt debate. One of the basic facts that the congressional super committee must confront is that the debt problem is not excessive current deficits, but rather a problem with the longer term budget. And the main reason for the large projected deficits well into the future is the growth in health care costs. Public sector programs like Medicare and Medicaid will be increasingly unaffordable.

The health care system must be reformed -- no easy task. President Obama and Congress sought to do it last year. But it remains to be seen how much the Affordable Care Act will accomplish, if Congress even allows it to take effect.

With the future uncertain, anything that we can do to contain costs significantly in other ways must be exploited.

We have a partial solution: medical trade, or allowing Americans to take advantage of different forms of international transactions in medical services.

The fact that medical care of comparable quality is available at much lower prices elsewhere in the world can be used to rein in costs in the United States.

The idea holds remarkable promise. Here's how it could work.


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