Sample Essay on Interconnectedness in Health Care

Interconnectedness in Health Care

Hospitals are expected to update their surgical and medical departments, training their health care providers, and most important upholding quality in the hospital to ensure more revenue. Developed nations for instance Australia, the United States and Europe, use modern technology as compared with other nations across the globe (Burns, Bradley, & Weiner, 2011). This gives hospitals an added advantage because patients from all over the world prefer to visit such hospitals.

Discretionarily of Flows in Health Care

Over the previous decades, globalization has drawn vital attention in health care. It is considered as the key source in the international system of economics with vital effects in all spheres of health and health care. Traditionally, globalization played a significant role in promoting business, but presently it plays a vital role in promoting health care. Globalization has contributed to the rising interconnectedness among societies and also increasing interdependence of the human community. Because of events that occur in one region of the earth, individuals feel the effects of health from far away (Kumar, Breuing, & Chahal, 2012). Non-governmental organizations, multinational corporations, and open trade have made globalization possible through transforming the ways that international health problems and governance are handled.

Furthermore, increasing complexity of telecommunications technology and enormous migration of individuals together with other above-mentioned forces impacts provision of health care. Globalization has also played a vital role in spreading infectious diseases. Additionally, it has changed directions affecting health care workers, patients, and managerial practices. The majority of the patients seek medical services outside their motherlands, health care workers prefer to go wand work abroad, and new managerial practices are spread from one nation to the other. They are explained as follows:


Medical tourism is defined as the travel by individuals from one nation to the other with the major objective of getting treatment. It defines the activities of individuals who make decisions to go abroad and seek medical attention. From a business perspective, medical tourism refers to trading in medical services and products. From a wider perspective, it entails every facet of clients looking for treatment, and improvement through wellness or medical practices. To attain these, they are forced to cross a global border (Kumar, Breuing, & Chahal, 2012). In order to get information about existing treatments abroad, clients, patients, and the media use search engines. This enables them to get information about various treatments and where they can access these treatments. For government planners, researchers, and economists, medical tourism is a replica of information concerning the movement of people and the value they bring with them. There are several drivers for medical tourism and they include increasing health care expenses in one’s nation of residence, increasingly aging populations, advancement in medical technology in some nations, highly experienced specialists, the accessibility of prescription drugs and increasing incidence of chronic illnesses.

Excitingly, it has been found out that the present trends towards medical tourism are in the US where its citizens move to lesser developed nations to seek for medication (Sharma & Sharma, 2012). As a result, patients behave more like customers and prefer to play a critical function in managing their health.

Most individuals have learned of various medical specialties in varied nations through the use of the internet. For instance, these specialties are: Mexico is recognized for dental work, Costa Rica for spinal and orthopedic surgery, Singapore for orthopedic and spinal surgery and cancer treatment; Thailand for cosmetic procedures and cardiac care, and orthopedic surgery (Kumar, Breuing, & Chahal, 2012). India is specialized in orthopedic surgery specifically knee and hip replacement. It is significant to note that medical tourism is at times considered “disruptive innovation” and because of this it needs more and good clinical and managerial focus. Important factors for medical tourism pertain to the clinical reputation of the healthcare providers based on the technological back up and outcome together with the use of sophisticated medical processes.

Health Care Workers

The flow of health care employees entails both unskilled and skilled jobs and one clear trend is the rising number of females who are part of this population. There is a big difference between transnational labor migration and the movement of capital, goods, or services. Transnational migration brings individuals from varied nations, ages, genders, ethnicities, and races into close proximity, resulting in new relationships and changing the prevailing ones.  There are various reasons explaining why health care workers look for employment and they include the following; seeking for greener pastures, other nations like Cuba, India, and the Philippines have national strategies that entail a labor export plan. These three nations have played a significant role in investing in training of health care workers for export. This implies that these workers do not contribute to the economies of their home nations.

It is also critical to note that remittances for migrant health employees are deemed an essential part in the fabric of international developmental finance. Consequently, destination nations receive help from migrant health care employees. These workers contribute to an increase in labor force, and a rising population diversity that make the economy vibrant. These countries also save a lot because they are not required to train these workers. The nations of origin have suffered because of brain drain.

Managerial Practices

An improvement in telecommunication has made it possible for individuals far away from one another to share managerial practices and policy instruments. A good example is the patient classification system (PCS). Ultimately, the US Congress enacted a type of PCS referred to as Diagnosis-Related Groups (DGRs) for hospitals to adopt (Burns, Bradley, & Weiner, 2011). The key reason why researchers designed DRG was to give a tool that would determine the case mix variations from one hospital to another to make it easy to determine expenses and pricing effectively. By 2010, varied nations of the DGR have been legislated in 26 nations (Burns, Bradley, & Weiner, 2011).

Five Segments of Patients

There are five segments of patients who are willing to travel across global borders to seek medical attention. Firstly, patients from nations with high gross domestic product (GDP) like Japan and the US, look for medical treatment abroad because of cheaper medical expenses in some nations. Even though Japan and the United States have comprehensive and outstanding health care systems, they are also fairly costly. A good example are the Apollo Hospitals in India give instant access to and good services for procedures like coronary artery bypass for only 10% of the medical expenses in the United States. Furthermore, a patient that seeks medical attention in Thailand than in the US saves 75% of what he could have spent.

Secondly, patients from nations with long queues prefer to look for medication abroad. Studies indicate that waiting for treatment causes physical and psychological tolls particularly for the elderly (Deloitte, 2008). For instance, in Scotland, mature patients in need of knee or hip replacements must wait for approximately 30 months in case it is urgent and up to 78 months for cases that are not urgent. As patients wait to receive treatment, they experience mobility problems, pain, and some opt to seek medication in another facility.  Another category of patients are those that seek for medication abroad if their health insurance cannot cover them. For example, in 2010, approximately 20,000 people went to look for treatment in United Kingdom because their medical insurance could not cover them (Deloitte, 2008). Fourthly, some patients look for medical treatment abroad because of privacy concerns, particularly for those seeking for plastic surgery, change of gender operations, or rehabilitation.

Furthermore, there are medical tourists who look for medication out of the country because the procedures they require and want are not provided in their home countries. For example, non-fertile Iranian couples look for reproductive or fertility treatment overseas because of considerations like moral and lawful restrictions and religious constraints (Kumar, Breuing, & Chahal, 2012). For, instance, the private health care sectors in Bangkok, Thailand has high quality facilities like gamma knife, mammography capacity, and computed tomography (CT) as compared with other nations like Thailand. Most of the private hospitals are highly recognized because of the offers they give to patients for example, free airport transfers, VIP waiting lounges, meal plans for patient’s clients, and reduced hotel accommodations.

Yes, there are other segments of patients and they include the following; affluent patients who cross borders to seek medical attention because they are dissatisfied with their local health system  for instance, lack of proper treatments, poor quality services, lack of modern technology,  and insufficient health care providers. The majority of the patients who are well funded travel to nations with a history of receiving foreign patients like the United States of America and Switzerland. Others may travel to nations that have enough facilities and trained professionals.

Another segment of patients are those who travel abroad because they want to find a better place they can stay as they recover especially those undergoing a major surgery (Kumar, Breuing, & Chahal, 2012). There are some private hospitals that have related travel agents that make arrangements for patients in case they will undergo an operation. There are also those patients who seek medication abroad because it is easier to make an international travel. Although it can be a little expensive to travel abroad, such expenses can be offset by the reduced costs of medical procedures abroad.

Another segment of patients are those from nations that expect them to cater for the increasing part of health care expenses.  This implies that patients have monetary incentives to look for medication elsewhere. Such patients opt to travel to nations that offer quality health care at significantly reduced expenses. Such type of patients also travels to neighboring nations that provide health services of the same quality at a reduced price (Burns, Bradley, & Weiner, 2011).

Some patients travel abroad because they want to save money. This is a common case with Americans because the cost of medical care in America is high. Based on the type of treatment and country, underinsured and uninsured patients who seek for medication abroad save approximately 15-85% of the price of treatment in America.

Another category of patients are those that travel abroad because hospitals abroad are inpatient friendly. Such patients may enjoy the flexibility in foreign hospitals because they are encouraged to take more time in hospital. Furthermore, the ratio of patient to staff is usually lower abroad. An improvement in standards of hospitals abroad has necessitated travelling abroad.

Growing Rivalry for Inbound International Patients

The leading countries where medical tourists come from are Japan, Canada, Europe, Middle East, and the United States. These countries use medical technology and medication that attracts most patients. It also gives them an added advantage over other developed nations to attract patients across the world.

Patients are hopeful of receiving better treatment because of high incomes among the majority of the population. In most cases, the required treatment lack in their home nations. Studies indicate that most Americans travel abroad seeking for medical attention. It is further involved in inbound medical tourism. Conversely, there is an increase in the number of Americans looking for inbound medical tourism. Europe and North America are recognized for offering medical tourism services. There are also Asian nations that offer medical tourism and they include Thailand, Singapore, India, and Indonesia.

Inbound tourism is a type of medical tourism whereby non-residents travel in the given nation. Many nations are experiencing strong competition for inbound tourists. Inward bound is considered a source of revenue for nations, the economy, and local financing system. Global health care includes all definitions of medical tourism. A tourism health care prevails in every nation related with the classification scheme for individuals of varied socioeconomic classes. The main objective of medical tourism is to incorporate the needs of private and public sector health care markets (Jacek, 2012). The final objective is improving access for all citizens meet the needs of various individuals from different socioeconomic classes. Individuals who opt for medical tourism are from varied economic and socioeconomic classes and may want to save expenses in comparison to a cost that is available in their home countries. There is a big difference in the price of surgery in different nations and this may be too high for some people to afford.

Thailand’s medial tourism started immediately after the 1997 financial crisis in Asia, when private hospitals had to make revenue because of a reduction in the number of local patients. By 2004, the government of Thailand implemented policies that combined medical services to international travellers (Killingsworth, 2011). Furthermore, the Tourism Authority of Thailand created a website that provided important information about the various categories of treatments available in the country. These medical services together with destination guides, locations of clinics/hospitals, and promotions and packages from medical service providers were incorporated with tour offering provided by travel agents.

The major factors that contribute to medical tourism include better facilities and available in international countries. It is assumed that health care professionals in such skills have relevant skills in handling patients and this attract medical tourists. The majority of inbound tourists prefer to travel to the United States despite o high medical expenses because they believe that American medical care is the best across the world (Killingsworth, 2011). Reputation is the main factor to medical tourism.  If a health facility has proper facilities and use modern technology, but lacks modern technology related with quality backing it, it may not receive medical tourists. Further, it is paramount to make investments by specializing in a particular procedure that is not offered anywhere else. This will also depend on the available skills in the country.


Circumstances under which a Hospital Invest in Plant and Equipment to Attract International Patients

Capital productivity is defined as how efficient a hospital utilizes its fixed assets to generate income. The major productivity measure is the fixed asset turnover that measures the dollars generated from every invested dollar in plant and equipment. Increased values are preferred because these assets are long-lasting, illiquid, and fundamentally constant.

There are various conditions under which a private hospital should invest in plant and equipment to attract international patients and they include the following:

If a hospital intends to build its reputation as a medical tourism destination (, 2016). The majority of international patients prefer to seek medical attention in health facilities that are highly reputable, as a result a health facility may invest in infrastructure to ensure that its offers quality services that can attract patients. Secondly, if the hospital want to uplift the attribute of the hospital. There are various hospital attributes that may attract international patients for instance, the influence of hospital workers, more so the physicians, the kind of hospital for example, general, referral, or specialty. Teaching and specialty hospitals attract international patients’ more than general hospitals. As a result, a private hospital may prefer to invest in equipment if it aims at being classified as a specialty or teaching hospital.

The increase in demand for health is driving private hospitals to invest in more plants and equipment. This is also driven by increasing factors for instance, increasing birth rates and increased longevity. Developing nations have also seen considerable improvement in life expectancy rates. Similarly, individuals are now aware of various diseases among people, available therapies, and the rising need for high quality health care services. The majority of the individuals are willing to travel abroad to get medication at affordable costs. On the other hand, investment in equipment and plants should be associated with professionals with relevant skills in order to attract foreign patients. This is because inbound tourists may not travel abroad to get less costly medical care. The majority of the inbound tourists prefer to travel abroad despite thigh charges for medical services because of the reputation of some of the countries. The most significant factor to medical tourism is reputation. If a healthcare facility has proper facilities and utilizes modern technology, but it does not have a solid reputation backed with quality, then the investments do not make sense.

The rising prevalence of chronic diseases has also forced hospitals to invest in plant and equipment in order to provide treatment for such diseases. This will play a significant role in treating patients who are in need of urgent medical care.  This can also help medical to access particular procedures for example specialized treatments and complex surgeries, and other health care services. There are surgeries and procedures that cannot be covered under medical insurance making patients to move abroad. This has necessitated hospital to invest in equipment. With the growing concerns for increasing medical expenses, the aging population, together with other factors for instance rising health care awareness among individuals, medical tourism can play a significant role in helping people acquire the medication they require within a short period.

If the hospital wants to compete favorably. Competitor’s strategy concerning capital investment puts vital influence on the investment decision of a hospital. If competitors are investing in plants and equipment and are producing quality products and services, the existence of another hospital may be threatened if it does not invest. Furthermore, the advancement in technology may be related with the need of new equipment which may necessitate the need of re-assessing available capital equipment. The old equipment may be replaced with new equipment because of technical innovation. A hospital may want to invest in new equipment because it wants to remain relevant.

International competence refers to the degree of competence of a hospital in attracting and offering care to international patients. A hospital’s international competence is pegged on available equipment which includes: the size of hospital which can be measured in terms of bed capacity and the availability of staff. A hospital that would want to compete must have enough facilities that will enable health care providers to offer better services.   Medical tourists are willing to seek medication from hospitals that have enough facilities as compared to their home country hospitals.

If the hospital want to attain its strategy. There are various categories of strategy for instance differentiation and focus strategy. Differentiation strategy entails creating services and products that will enable the hospital to be recognized as exceptional. On the other hand, focus strategy entails providing specialized services to customers than competitors. A hospital that has invested in plant and equipment will gain global reputation for innovative medical treatments and procedures and as a result, it can be recognized as extraordinary. This can be one of the factors that can attract patients to travel abroad to seek for medication even though the cost may be extremely high. A specific hospital that puts emphasis on the differentiation strategy will influence the number of international patients that the hospital can receive every year.

If the hospital intends to be a monopoly.  There are some chronic that cannot be treated in most hospitals because of lack of equipment. As a result, a hospital may decide to make such investments in order to attract foreign patients and dominate the market. In most cases, this happens in developed nations because they will want to take advantage over developing nations.

Global Differential in Pricing

There are variations in international pricing because of differences in accessing resources. As a result, efficient supply oh health care workers contribute to low labor expenses at the hospitals. On the other hand, when only few hospitals provide a particular medical technology, then charges for using such type of technology are high. Pricing of health care services in American hospitals is a complicated issue. This is due to the ability of the United States to give better health care services even though it has the worst health care system globally. America has an extremely fragmented health care system whereby patients get confused on which particular health care facility to visit for specific needs.

Research indicates that approximately 30% of health care offered in health care facilities in America because patients who receive these services do not benefit (Deloitte, 2008). Matters become exacerbated when services have a negative impact on patient’s health. Studies further indicate that on average 98,000 patients pass on in America’s hospitals annually because of medical errors that are preventable. Such medical errors explain why there are increasing health care expenses, which is also why some medical services are also higher in the United States.

The critical influence of the medical profession over the government and insurance companies is because of their capability in setting prices. It is also vital to note that at least 80% of Americans with medical insurance are not informed of the cost of medical services they are eligible to (Burns, Bradley, & Weiner, 2011). Furthermore, it is normal for medical professionals to discuss medical rates with health insurance providers or other institutions accountable for offering coverage. Consequently, this could create issues emanating from the chances to commit fraud.

Additionally, insurance companies dominate the sector and also serve as mediators between patients and health care providers, the health care industry in America makes it difficult for patients to make decisions on who to offer them services based on the cost. The price for knee and hip replacements are high in the United States because manufacturers have private agreements with hospitals concerning prices. There is no guideline that allows patients to make decisions on what hospitals must charge for which services. Consequently, lack of policies, consistency, and transparency with regard to pricing has resulted in reality that some services cost ten times as much in the US compared to other nations.

Reasons why Countries like the United States have 10x Charges for Procedures like Hip Replacements

There are various reasons that explain why countries like the United States have 10x charges for procedures like hip replacements and they include the following;

The health care system in the United States charges more as compared with other countries in most of the health care products and services they offer. The high prices are correlated with the United States increasing health care spending.

Secondly, the system in the United States uses more costly interventions versus lower preventive or primary care. This is based on the culture in the United States where people believe that they must do something better than other countries, even though the outcome may not be different from that of other nations (Wongkit & McKercher, 2013).

Although this may be bad for the health of people, it increases the overall expenses.

Another reason why hip replacement is costly in the United States is the fee for service payment model. Most bills in the United States depend on services offered. This implies that if more services are offered, the patient will be expected to pay more. The fee-for –service model provides perverse enticements to providers; it also gives no incentives to patients who do not want avoidable procedures.

Additionally, increased wages for doctors and greater use of specialists explain the high cost of health care in the United States is the fact that doctors in America are paid considerably more as compared with their counterparts in other developed nations, and America is most likely to hire high-paid specialists. A study carried out in America indicated that American patients had less but more costly relations with their doctors (Jacek, 2012). For example, on examining charges for hip replacement surgery, it was found out that Americans rarely made office visits and were high users of hip replacement surgery.

Furthermore, the government of the United States does not have laws to control medical expenses. In America, Medicaid and Medicare discuss medical costs on behalf of their members. On the other hand, providers charge different prices to varied insurers, and even charge more to the uninsured. Health care providers in the United States have the ability to set prices, and as a result, they set prices that are quite high. In addition, American wards have modern facilities; they also use costly machines instead of watchful waiting.  All these factors contribute to the extreme cost of hip replacement. The last factor is the increased level of wasteful and ineffective spending. The American system entails more administrative expenses. This is because of overtreatment of patients, lack of coordinated care,


The impacts of globalization have been realized in almost all aspects of life including the health industry. Consequently, individuals now understand the significance of the existence of varied societies in other countries. Because of the increased interconnectedness promoted by globalization, the directions affecting patients, managerial practices, and health care workers have been transformed. Medical tourism has enabled patients to seek for medication abroad. This is enhanced by various segments of patients who opt to seek for medication abroad. Furthermore, healthcare employees have been travelling abroad to seek medical attention. Because of these factors, it is clear that the health care industry in the United States has many weaknesses, for instance outrageous costs compared to other nations. Most hospitals can also attract international patients by investing in plants and equipment.



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