"For Americans, the attraction is obvious: medical care is a lot cheaper abroad." - James Surowiecki
Could Oregon cut Medicaid costs by permitting funds to be spent abroad? James Surowiecki suggest yes in his The New Yorker article “Club Med” on medical tourism (here):
….. If more Americans sought care abroad, it wouldn’t just save them money; it could also help control medical costs at home. Medical tourism can be considered a kind of import: instead of the product coming to the consumer, as it does with cars or sneakers, the consumer is going to the product. More medical tourism would increase free trade in medical services, something there has not been much of in the past. The U.S. has been religious about breaking down barriers to free trade, especially in manufacturing and service industries, exposing ordinary workers to foreign competition. But health care has been insulated from the forces of globalization. This has been great for hospitals and doctors, but less good for consumers. It’s one reason that the cost of health care has risen so much faster than that of almost everything else.
It has been generally assumed that medicine is inherently a local business. But that would change if we allowed Medicare and Medicaid funds to be spent in foreign hospitals, or if insurers cut consumers in on the savings from treatment abroad. And if domestic hospitals actually had to compete with places like Bumrungrad or CIMA, the way American car companies have to compete with Toyota and Honda, they might be forced to become more efficient. Even an increase in domestic medical tourism—people journeying to lower-cost U.S. hospitals, like the Cleveland Clinic—would help. There are other ways to bring free trade to medicine, too. As the economist Dean Baker has argued, making it easier for foreign doctors who met standardized requirements to practice in the U.S. would hold down costs and improve service. In addition to exporting patients, we could import doctors. Politically speaking, of course, this all seems improbable, because the medical industry is a powerful lobby and uninterested in competition. But the reality is that, unless we find some other way to rein in health-care costs, the logic of free trade in medicine is going to become harder to resist.