The Impact Of Medical Tourism On Economic And Social Welfare

Many people pay attention to both health problems and pursuit of leisure,so med-ical tourism has become a popular option for enjoying a leisure experience while also receiving cross-border medical services.As a new travel form that integrates medical care and travel relaxation,medical tourism overcomes the shortcomings of high costs of medical services,long waiting times,and lack of some medical services in devel-oped countries,bringing much good to medical tourists.At the same time,medical tourism also brings considerable foreign exchange to the destination countries,promot-ing the development of the local healthcare and tourism industries.However,opening medical tourism to foreigners has also aroused some controversy in developing coun-tries.Firstly,most medical tourism services are provided by private hospitals,which are limited to serving high-income local and foreign patients because of their expensive services and enjoyable experience.Meanwhile,most local low-income patients can-not afford such high-cost services so they must choose public hospitals,which causes overcrowding in those public hospitals.In addition,in the early development stage of medical tourism,local governments provide policy support for medical tourism prod-ucts and corresponding suppliers,which means resources that were originally used to ensure the basic medical welfare of the people are spent on private hospitals that do not benefit the general public.Based on the above realities,this paper explores whether destination countries should open medical services to foreign patients,considering service strategies and an optimal competitive equilibrium of the hospitals.Analysis is done on how the local gov-ernment can use policy to redistribute the foreign exchange earnings brought by medical tourism and existing medical resources.The goal is to avoid any irrational use of local resources and prevent the enlargement of health disparities among residents of different income levels caused by medical tourism fever,so as to improve the accessibility of medical services for local low-and middle-income patients.In order to quantitatively analyze the impact of medical tourism on the local econ-omy and social welfare,this paper established a queuing game model to describe the interaction among medical tourists,hospitals(public and private),and policy-makers.By comparing the equilibrium service strategies of hospitals(public and private)and the government’s equilibrium subsidies with and without medical tourism,we find that the waiting time at the public hospitals may be prolonged or reduced after opening medical tourism.The reason for the prolongation is that when private hospitals serve both high-income local and foreign patients,if there are too many foreign patients,their entering the country to receive medical services will occupy the medical resources originally used to serve local patients and drive up the price of medical services.Our analysis shows that when private hospitals serve only foreign patients,the prolongation of wait-ing time is related to medical expenditure per capita of the destination country.The latter expected result requires that the government sets higher welfare targets for local patients or controls the number of foreign patients entering the country for medical ser-vices.We also find that when the welfare objectives are the same,more foreign patients entering the country for medical services will help to reduce government healthcare ex-penditure but will increase the public hospitals’ waiting times.Further research shows that it’s possible to achieve a win-win situation for economic development and social welfare improvement,but difficult to adjust the level of medical benefits,the medical services tax rate,and the number of foreign patients.Our study provides suggestions and insights for the local government on how to promote economic development and guarantee national basic medical welfare.