A recent article from McKinsey International highlights the magnitude of the challenge that leaders of governments in the developed countries are going to have to deal with sooner rather than later. The article looks at the increasing proportion of a country's wealth that is going to be dedicated to the health of its citizens in future years.
In Europe currently around 9% of GDP is spent on healthcare; in the USA, it's higher, nearer 16% of GDP. For the last fifty years, the increase in health care spending in OECD countries has been 2% above the GDP...... which means that healthcare is taking an increasing proportion of the national wealth. But what happens if this continues? McKinsey says that "if current trends persist to 2050, most OECD countries will spend a fifth of GDP on healthcare. By 2080, Switzerland and the United States will devote more than half of GDP to it, and by 2100 most other OECD countries will reach this level of spending."
Those are pretty astonishing statistics! There's a decent analysis in the article, outlining the supply and demand factors that drive this growth, and offering some arguments as to why this trend will not or cannot continue at this rate. However, the harsh reality is that whatever governments do, they and their citizens will be faced by the burden of ever increasing healthcare costs.
And that's the reason why healthcare is becoming global, and medical tourism is being talked about as one of the solutions. More and more, governments will not be able to provide and consumers will not be able to afford the healthcare that they need. The global market in healthcare provision will expand to meet the growing demand from both consumers and governments for low cost treatment overseas. And that's where medical tourism comes in.
Reference: Healthcare costs: A market based view: McKinsey International
Date published: 13 Nov 2008
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