Home > healthcare, Immigration, Jagdish Bhagwati, President Obama > Border Walls and the High Cost of Healthcare

Border Walls and the High Cost of Healthcare

President Obama’s signature legislative achievement goes a long way toward improving America’s healthcare insurance system – now he’s calling on congress to fix our defective immigration rules. But healthcare costs still pose significant problems and America continues to overpay for medical services compared to other nations. So the president might as well aggravate the anti-immigrantion Right further and break down the wall separating these two issues. The GOP keeps saying they want more free market solutions for healthcare, President Obama should offer one.

The administration should seek an international agreement to recognize foreign medical accreditation, increase visas for qualified doctors, and encourage insurance companies to finance patient travel. Fred Hansen in an Institute of Public Affairs article writes,

Although up from 500,000 in 2006 to 750,000 in 2007, the number of Americans traveling abroad for healthcare is tipped to increase to 6 million by 2010.

Unfortunately I can’t find more up-to-date numbers, but it is clear that medical tourism will continue to grow. Of course, many people naturally fear the idea of foreign medicine, but if importing medical services or traveling abroad for them lowers prices or provides access to otherwise unavailable higher quality care to a suffering patient that xenophobia can be an expensive and dangerous delusion.

In 1993, the trade economist Jagdish Bhagwati wrote a piece for the Journal of Commerce advocating that Hillary Clinton’s healthcare task force open the borders for medicine and doctors.

The entry of more foreign doctors wouldn’t require anything as formidable as easing immigration restrictions. Temporary visas for providers of professional services can be made available readily to qualified doctors from abroad.

[…]

Economic research strongly suggests that the AMA makes [foreign medical] examination tougher when doctors’ earnings are under pressure, thereby reducing the pool of eligible applicants for visas. Limiting entry eases competition among doctors and keeps their earnings-and the cost of health care-higher than it might otherwise be.

As the healthcare cost graph (linked above) shows, Americans spend $64 billion in excess costs because of overpriced healthcare workers. As President Obama goes around the country to push for immigration reform he might think about how he can build on his previous success by tearing down a few walls.

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  1. Bill
    May 13, 2011 at 4:05 pm

    Overpriced healthcare workers? You’ve got to be kidding.

    What about overpriced health insurers or does that not count?

  2. May 14, 2011 at 12:53 am

    Well, that statistic is referring to cost compared to other countries so keep that in mind. It’s also focused on doctors. I think nurses could be doing a lot more than they are (probably at higher wages), but there are legal restrictions that inflate the need for doctors.

    And take a look at that chart – you’re absolutely correct that health insurance financing is incredibly inefficient and costly.

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