America is at war with cheaper Asian medical care

Healthcare and MoneyAmericans are strapped with the highest medical care costs on the planet, but the citizenry has been told repeatedly for at least fifty years or so that it is the “best medical care available anywhere in the world.”

The truth is that American medical care is OK (especially for the wealthy), but certainly not the best care available anywhere for the non-rich. Medical treatment in places like India, Thailand, Mexico, Costa Rica and a host of other countries have built reputations for excellent care at a fraction of the cost in the US.

The number one medical tourism destination is Bangkok, a city I can personally vouch for having the most amazingly excellent hospitals, medical staff and cutting edge treatment.

As more and more Americans, Westerners, Middle Easterners and others are discovering the benefits of traveling to these medical tourism destinations, the old guard in the homeland is fighting back. They are doing this not in a competitive way (by figuring out how to make the cost of medical care in their country less expensive), but by economic and political pressure to make medical care more expensive in the destination countries.

As the Huffington Post reports: “The Obama administration and members of Congress are pressing India to curb its generic medication industry. The move comes at the behest of U.S. pharmaceutical companies, which have drowned out warnings from public health experts that inexpensive drugs from India are essential to providing life-saving treatments around the world.”  Huffington Post, 28 June 2013 

When big business (in this case, the pharmaceutical industry) makes demands on the US government, the government takes action, whether it be through diplomacy or aggressive pressure.  For the US federal government. what is best for individuals, including Americans, is not nearly as relevant as protecting the bottom line of American big corporations.

Low cost generic drugs produced in India is one of the major reasons medical treatment has much lower costs in Asian countries, and Big Pharma sees that as taking money out of their pocket. These companies have sought to impose aggressive patenting and intellectual property standards in India, measures that would grant the firms monopoly pricing power over new drugs and lock out generics producers.

One of the major tenants of the TPP , The Trans Pacific Partnership free trade agreement (which has little to do with free trade and a lot to do with protecting US business), that Obama has been successfully selling to other countries extends to the patent rights for medicines to Big American Pharmaceutical companies. The designed protections for this US industry will be paid for by higher medical costs for consumers in all TPP signature countries.

On a second front with the American attack on cheap medicines in Asia, the Secretary of State and member of the Skull & Bones, John Kerry, went to India in the last week of June (of this year). During that trip, he applied pressure to the Indian Trade Representative about generic drugs manufactured in India and exported throughout Asia and Africa. A State Department spokesperson said that during his trip, Kerry “discussed a number of economic and trade issues with Indian officials, including ongoing issues in the pharmaceutical sector.” In addition, the U.S. Patent and Trademark Office and the Office of the U.S. Trade Representative have been pressuring the Indian government on its patent standards.

The Obama administration placed India on a special trade blacklist in a move some public health advocates said was retaliation for the country allowing generic versions of expensive drugs produced by U.S. Pharmaceuticals. The Office of the U.S. Trade Representative has placed India on its “Priority Watch List” for several years, citing issues valued by the American pharmaceutical industry every year Obama has been in office. The list is little known in the U.S. and has no recognizable immediate impact. Still, it is a significant economic tool abroad that can have political repercussions, although some experts argue that it’s relevance has waned recently as more countries are standing up to the pressure from the US and not cooperating.

Judit Rius, U.S. manager of the Doctors Without Borders, has said “The U.S. Trade Representative’s decision to place India on its annual trade ‘Watch List’ is a bully tactic being used to punish the country for taking steps to ensure access to affordable, lifesaving medicines and to prevent other developing countries from following similar strategies.”

To give you a clearer picture of the specific financial effects for customers (aka “patients”) of medicines, one of the drugs that is involved in this conflict is a generic alternative to Nexavar, an expensive cancer drug patented in India by the German giant pharmaceutical company, Bayer AG. Bayer was charging more than $5000 per month for standard doses of this medication, way out of the price range for about 90% or more of the world population. A generic version, approved by the Indian government, cost just $157 a month. Under the compulsory license issued by the government, Bayer received a 6 percent royalty on sales of the generic drug.

The Obama Administration lashed out at the Indian government accusing it of violating World Trade Organization treaties because of the Nexavar generic and other big name drug alternatives. Apparently, putting things in priority, it is more important to the US federal government that the big pharmas get a higher income over the idea of whether it would be available to most people in the world or not. The Supreme Court in India decided, however, that Bayer failed to meet demand for the medication and the firm’s failure to offer the drug at “reasonably affordable price.”

When a Big Pharma company develops a new drug, they are awarded a twenty year monopoly worldwide. Nexavar is beyond that 20 year protection period.  Big Pharma has tried to work around the restriction of twenty years for a monopoly by making very slight changes to a drug, so that appears as a new medicine. The Obama regime has backed this practice and claims that these slight changes provide ‘enhanced efficiency’ of medicines available (in addition to giving the Big Pharmas another twenty year monopoly). The highest court in India has found that some of these “enhancements” of a medicine did not constitute a legitimate innovation since the “new” active ingredient has been around for many years (this was the ruling in the case regarding a Novartis leukemia drug called Gleevec or Glivec).

BOTTOM LINE: There is a financial war going on with medicines manufactured in India and other Asian countries. On one side are the consumers (patients), most doctors outside of the US, hospitals outside of the US and high courts in Asian countries. On the other side is Obama, big American and European pharmaceutical companies, the US State Department and the US Trade Representative. And most Americans inside of the US are even aware of what is going on.

Prices for medicines is one side of the war against low priced medical care outside of the US. Another side is the US fighting the services sector of overseas medical care.

It is the recent trend for Americans to get medical care in Asia, and it is supported by many private medical insurance firms that see major cost savings. Many Americans are insured by Medicare (over 47 million Americans), and despite that system running short of money, they will not pay for services outside of the border of the US. When a Medicare patient gets a treatment, they must get it in a US hospital, and Medicare pays for it (most of it, anyway). If the price for the same procedure in Thailand is just a fraction of the cost in the US, it would seem reasonable that Medicare should be pleased to pay for the procedure at the lower amount.  But that is not going to happen.

It must be brought to the attention of all Americans the principal that Medicare benefits are not here for the benefit of the patient. Medicare benefits are here for the benefit of the US medical industry. That concept may be a shock to most Americans, but that is the reality.

Why are medical costs so high in the US? The Root Causes:

  1. High labor costs. Put simply, nurses and doctors and medical technicians are paid much more than their colleagues overseas.
  2. High costs of medicines due to Big Pharma business practices and the expensive approval process imposed by the federal government.
  3. Tort law that allows for many claims and lawsuits (and lawyers) with extremely high amounts of plaintiff awards.
  4. High administration expenses.  It costs a lot of money to run a hospital and meet the bureaucratic requirements.
  5. Heavy regulation by the federal and state governments.
  6. Discouragement of competition

There is a lot of debate on these above issues about how much is too much, and which of these issued should be tackled, but is there anyone in the medical industry or in political office that is tackling any one of these issues? The much ballyhooed “Obama Care” addresses mandatory health insurance for all Americans, but does not tackle any of these root causes to the problem of high medical costs.

“If you think American health care is expensive now, wait until you see what it costs when it’s free.” – P.J. O’Rourke

The one thing medical treatment opportunities overseas offers is new competition for American medicine (fighting one of those root causes of high medical costs). Any American needing medical treatment where they must pay (with or without the help of a private health insurance company), would be absolutely foolish if they did not at least consider the benefits of getting that treatment outside of the US border.

Check this out:  06 July 2013 – Medical tourism in Thailand on the rise – Channel News Asia

21 July 2013 – Who decides what a doctor is worth (in the US)? - Washington Post TV (video) – The AMA is a price fixing racket, and the elite main stream media is starting to finally notice.

22 July 2013 – Medical Pricing (in the US) Is A Total Scam – Business Insider

Incidentally, all this applies equally to the the Dental Industry. For instance, in Thailand dental work is often 10% to 30% of what the same treatment costs in the US. And it is as good or better quality treatment than the typical dental treatment in the US.  Good dental work is provided in many countries at a fraction of the expense of US American Dental Association (ADA) offices.  Dental service prices in the US are practically fixed by the ADA, providing dentists with higher incomes than most medical doctors.

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9 thoughts on “America is at war with cheaper Asian medical care

  1. This is a very accurate assessment of the situation, as only someone who has had opportunity to compare more than one healthcare system is able provide. But if you are writing to try to change the US healthcare system, you are wasting your ink. Americans by and large believe that their system is Number 1, as usual. Facts and reality only get in the way of their beliefs, as usual. Add to this a circumstance that most people do not want to admit, which is racism as it impacts the providing of healthcare in the U.S., and now you really have a quagmire of a problem.

    One reason, I think, Americans do not want to see the system improved and extended to all citizens in a fair way is that they are afraid that one of their neighbors, or some “freeloader” of another color perhaps, might get more than they deserve. This is not the Christian spirit that Americans like to be known for, but it does not matter when healthcare is being considered.

    Normally I do not dwell on this everlastingly intractable problem which does not so much plague more homogeneous societies because not only is it hopeless, I also have during the past few decades found super healthcare in another country, Taiwan. I really cannot say enough in support of this type of high quality healthcare which is very low cost or free to all citizens, and which never bankrupts anyone, not even the government. If you want a good comparison of the Taiwan system, and others, there was a very good program produced by PBS Frontline a couple of years ago, which is accurate. So it is not that there is no good data to show Americans what they need to do to fix their travesty of a healthcare system, the problem is that Americans wish to hold onto ideology which is contrary to reality, and also bend over to the will of the insurance companies and to drug companies, and to the manufacturers and suppliers in the U.S. healthcare industry.

    Until the Americans step outside their bubble and “get real”, they will find it difficult to make real progress, and this situation has already been prolonged for decades.
    It is therefor wise to consider Bangkok for many medical procedures, as well as dental care. If you speak Chinese, or you want to hire a translator, you might consider Taiwan, which has excellent care, even better than Thailand in my opinion. Many of the doctors and surgeons in Taiwan are also US trained, and the equipment is first class.
    Still, if I were to have major surgery I might want to combine Taiwan and Thailand. Have the surgery in Taiwan and then recover in Thailand, where the food is better, the weather milder, and the nurses just as pretty and helpful. Thailand has the best massages, too, I hear.
    Try asking your nurse in the U.S. for a full Thai massage and see what you get.
    Maybe a fat lip.

  2. Though I have “Retiree Medical Insurance” in the States that will cover some procedures outside the USA, I choose to pay cash and control the treatment that I want.

    Example: Recently hit by a car in Bangkok, thrown through three lanes of traffic. Hospital Bill including night in ER Ward, multiple xrays and tests, as well as medical care, follow-up for removing sutures and physical therapy…….$837and a few cents.

    Well below my deductible.

    In the States….one day to see a Doc in Seattle as a “back-up” check on my recovery was a little over $1200 with all the tests and the Health Insurance provider is “UNITED” in their refusal to cover the Doctor visit and tests because I didn’t notify them right away, rather, I went back the States three weeks later. (I was to beat up to sit in an airline seat for 16 hours)

    Also, the prior 25 years of marriage to a Doctor and being intimately involved with the billing process for patients, as well as the Insurance requirements and games, has given me a little more insight on the “border-line, criminal bullying by Insurance providers.

    They are extremely threatened by people seeking treatment elsewhere and carry a large, heavy-handed threat to any Senator or Congress Person that won’t support legislation that will force the average wage earner to submit to their “McCarthyistic” ways.
    I haven’t yet given up my USA based retiree Insurance yet and still pay about $6000 a year for my share of the premiums, BUT….I seriously think about it. My long time lady friend is a Thai Pharmacist with several shops in the BKK area. We often talk about the issues she has in bulk purchase of Pharmaceuticals from outside Thailand. She suspects that influences from the USA are controlling prices on shipments into Thailand through political wrangling from USA. Ironically, the USA Pharmaceutical Business could capture some on the “high-end” market World-wide if they would try to match competition, as opposed to stifling it.

    Mak-Mak, Bravo!…..Great article Greg.

  3. On your list of reasons you forgot to include: “illegal-immigrant-FREE-emergency-room-and-follow-up-care for everything from comprehensive labor and maternity to basic health care and even expensive cancer treatments and operations” *as long as you use the emergency room for your first point of contact.
    If you want to verify the veracity of this take a trip through any hospital in Southern California, look in the emergency room and then speak with admitting and ask them who pays for it all. Who does pay? Hint: look in the mirror.
    BTW did I mention it is FREE for illegal immigrants as long as they use the emergency room for the initial diagnosis? They NEVER pay for their own treatment (no matter how many collection agencies you use to try to collect).
    Signed an ex 5 year employee of Villa View Hospital (aka Killa’ Few Hospital).

  4. I have had lots of major dental work in the last 25 years. Most of it was done in Mexico and in Thailand. I did my due diligence in picking a dentist, of course, and I always received first class treatment at prices a fraction of what I would have had to pay in the US.

    Sometimes I meet a tourist in Thailand who asks me “Do you really dare to get dental work done in Thailand?” Hell no, here they use pick axes instead of dental drills and they clean their instruments with dishwashing liquid.

    Pardon my sarcasm, but especially Americans are so brainwashed that medical and dental treatment in the US is the absolute best, that I don’t know if I should laugh or cry about such statements. The “absolute best” idea has to justify the “absolutely highest prices in the world” fact, I guess.

    Problem is that it is not true. Thai doctors, dentists and nurses always treated me better, with more respect, with more personal attention and friendliness than in the US. There is way less paperwork here, way less waiting times, and more attractive environments in the better hospitals. The equipment is modern. A Thai dentist goes to school for 6 years to learn the craft, it is not a weekend seminar. The last crown which I had put on in Thailand came with a 7 year warranty by the dental clinic. One of the first crowns I had put on in Thailand well over a decade ago is still in my mouth.

    • Thanks for that report. I have found dental offices in Thailand to be leagues ahead of small little US dental office (the US offices are all very small, without the resources to get the newest equipment and adequate technicians). The ADA (American Dental Association) is a professional protection racket designed to keep prices high, and they have the news media wrapped around their finger so that reports of what is available outside of the borders are not brought to the attention of the American public. The American public is being fleeced! Big Time!

  5. Uninsured Americans are less likely to have regular health care and use preventive services. They are more likely to delay seeking care, resulting in more medical crises, which are more expensive than ongoing treatment for such conditions as diabetes and high blood pressure. A 2007 study published in JAMA concluded that uninsured people were less likely than the insured to receive any medical care after an accidental injury or the onset of a new chronic condition. The uninsured with an injury were also twice as likely as those with insurance to have received none of the recommended follow-up care, and a similar pattern held for those with a new chronic condition.

    • So having health care costs and health insurance that eats up most of the income for an average guy is going to make him healthier? You must sell insurance. If you cared about people, why wouldn’t you direct them to a place with affordable health care?

      • There are many reasons why so many Americans do not want all Americans to have good healthcare like they DEFINITELY do have in Taiwan, and I assume also have in Thailand. People do not like to hear it but it is a simple fact that racism plays a significant role, as does the fact that Americans do not see themselves as cooperative more homogeneous society like we find in Japan, Taiwan, Thailand and other places.
        Americans say they are a truly Christian society, but they would not wash the feet and heal the sick among their neighbors if it meant resorting to a fair system for all.
        I tell you, the American healthcare system is hopeless because there is a deep seated wish to glorify zany individualistic behavior which is no longer suitable for America, unless you live in some gunslinger town out west in the mountains, far from most of the rest of society.
        Wasting one’s breath using reason to change illogical ideology, which America’s healthcare system is based on will lead one no where.
        Very good essay you wrote which does again show the truths that many Americans refuse to admit that they themselves actually do see.

        • And, I think that more proof of my point that America can never become a country which is truly united, with a good and fair healthcare system, can be found at the present time in the current news, just by watching the Trayvon case unfold. How could a country as divided as America institute a policy of healthcare fairness for all citizens when there is still extreme racism and racially driven hatred not just under the surface, but also boiling over. I believe that you cannot expect America to ever be able to put in practice a system which is easily instituted in racially more homogeneous countries, such as Taiwan, Japan, and Thailand.
          America is still too full of children fighting over whether the pie slice mother gives them is ever so smaller than the same sized slice mother provides to their brothers of color.
          Healthcare has been in the fixing stage for a century, probably. But the U.S. needs to fix the race problem before America can heal itself.

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