In the blog of the Inter-American Development Bank (IDB), Juan Blyde commented on why the current pandemic is an opportunity for Latin America to export services related to telemedicine.

In recent months, health systems around the world have seen their capacity to serve the public overwhelmed. This problem is closely associated with pandemics, such as the one caused by COVID-19. Individuals run to hospitals, while medical personnel has no hands or time to deal with the ailments of all the sick.

Juan Blyde suggests that telemedicine has the power to reduce these problems, being able to take health services from one place to another through the telecommunication infrastructure that is currently available. According to the expert economist in commercial exchange, these activities represent a cross-border trade in medical services.

“Although telemedicine cannot replace all public care services, this practice is increasingly used in a variety of different services,” says the IDB expert. These services range from a simple consultation to remote medical procedures.

Encouraging cross-border trade in medical services is likely to increase the quality and variety of medical services, while at the same time lowering prices through increased international competition.

But it can also be beneficial when the health system in a country is overwhelmed by situations like COVID-19, such as what happened to hospitals in cities like Guayaquil, or by other events such as earthquakes or hurricanes that often hit countries in the Americas. Latin and the Caribbean. In these cases, some patients require reliance on the capacity of the healthcare system in other countries.

Recent events confirm that the time has come for Latin America to prepare for trade-in telemedicine services.
Juan Blyde, IDB commercial exchange specialist

Telemedicine: An emerging market

Specific data on the telemedicine trade is not yet available, but it is a fact that the cross-border trade in medical services is just taking its first steps. Blyde comments that worldwide, telemedicine still represents a tiny portion of the services of Health.

The value of telemedicine in Europe is still less than 10% of total health services.
Juan Blyde

A 2015 World Health Organization survey conducted in nine Latin American countries found a total of 67 telemedicine practices in different service lines, including dermatology, ophthalmology, and radiology. However, most of these services were national, and only three, in Peru, Argentina and Mexico, had parties located in two different countries. Overall, the evidence indicates that trade in medical services in Latin America and the Caribbean is absent or very limited in scope.

Telemedicine
TelemedicineHealth related travel exports
Source: IDB with data from EBOPS 2010

But data on health-related travel exports for the European Union, the United States, and Costa Rica, one of the leading exporters of these services in Latin America, indicates that there is potential demand for trade in medical services. Such an arrangement suggests a potentially significant demand for trade in telemedicine services as well.

What barriers prevent cross-border trade in medical services?

At the multilateral level, cross-border trade in medical services is governed by the General Agreement on Trade in Services (GATS). In general, the GATS did not exert a great impetus towards the liberalization of these services. To understand why countries have hesitated to liberalize their trade-in medical services, it is essential to look at the challenges on the ground. These include technological actors, laws, and regulations, as well as language and cultural differences.

The most visible of these efforts is the work done by the European Union. For years, the EU has produced various instruments and legal guidelines to set the stage for cross-border telemedicine, including the conditions for the licensing of health professionals who provide cross-border health services, as well as standards for the legal processing of data from Health. There is still a lot of progress ahead, but the goal is to make cross-border telemedicine a reality in all member states.

Given the variety of barriers that countries must overcome to promote cross-border telemedicine, the IDB’s Integration and Trade Sector is studying the specific types of challenges that Latin American countries must address in the coming years.

Opportunities in telemedicine for Latin America

The European experience can guide Latin American countries. Given the technological, regulatory, and cultural challenges, moving forward will require intense negotiations and agreements. This situation positions existing regional trade agreements (eg CACM, Mercosur, Pacific Alliance) as natural organisms in which such negotiations can take place. Pragmatic bilateral partnerships of limited scope can also offer practical ways to move forward in this area, particularly when substantial negotiations are moving slowly.

Cultural and linguistic challenges should be less of a problem in Latin America, given the history and shared language in the region.

The health sector of the countries involved should occupy a central place in the negotiations, especially since health professionals could feel threatened by the potential increase in international competition.

But this is no different than trade liberalization in any other sector of the economy. Domestic suppliers may feel disruption from foreign competitors. Still, they could also see an expansion of their services beyond their borders and could also benefit from the transfer of knowledge through telemedicine with professionals from other countries.

As is always the case in international trade, there are costs and benefits from the supply side and potentially significant benefits for consumers. All these factors must be taken into account.

Juan Blyde concludes that:

As the EU experience shows, the road to large-scale cross-border trade in medical services can be long and difficult. It is better to start rather than wait until the next catastrophic event arises.

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