Free Trade: The Surprise Solution to the Health Care Crisis

On Thursday, February 26th, the Wharton Politics and Business Association sponsored Jagdish Bhagwati, a University Professor at Columbia University and Senior Fellow in International Economics at the Council on Foreign Relations, to come to talk about how international trade can be exploited to provide better and cheaper health care services. Professor Bhagwati was Economic Policy Adviser to Arthur Dunkel, Director General of GATT (1991-93), Special Adviser to the UN on Globalization, and External Adviser to the WTO. He has also served on the Expert Group appointed by the Director General of the WTO on the Future of the WTO and the Advisory Committee to Secretary General Kofi Annan on the NEPAD process in Africa. He was also Paul Krugman’s mentor and worked with him on the work that earned Paul Krugman the Noble Prize. 

In the first part of his lecture, Professor Bhagwati talked about how International Trade is desirable. He warned us, however, that it is often very hard to battle special interest groups and change our trade policies so that they are closer to free trade. He noted that President Obama’s advisers are not completely free trade, and he encouraged the President to give a speech on free trade, as the President did on race. Professor Bhagwati said that he “doesn’t expect the changes, but who knows?” He acknowledged that “moving forward [on free trade] is impossible” but he expressed hopes that at least we don’t move backwards.

Moving on to more technical topics, Professor Bhagwati talked about different modes of delivery of health care and the distinction between goods and services that require proximity to deliver and those that do not. He mentioned how utilizing the mode of the internet, which does not require proximity, has resulted in billions of dollars of savings in Radiology, with the potential for up to 750 billion dollars in savings. He commented on how Radiology scans taken in the United States are interpreted in countries with opposite times zones, like Australia and India, to increase the speed and decrease the cost of health care delivery. Yet he objected to how the American Medical Association derailed this method by refusing to board-certify the doctors abroad, because it was afraid that American doctors would lose jobs and patients.

In the end, he tied his thoughts on International Trade to something closer to home – the financial crisis. He mentioned that in times of economic crisis, countries tend to divert the limited demand to their own country’s goods and services through trade barriers in a kind of “Nash Equilibrium.” In the end, he hoped, that global leadership tries to prevent a repeat of the trade wars in the 1930s.

Related posts:

1. Lecture: “Free Trade: The Surprise Solution to the Health Care Crisis”
2. WHAT ASPECT OF HEALTH CARE DELIVERY IS MOST IN NEED OF REFORM? By Arnold Rosoff, Professor of Health Care Management and Legal Studies
3. Barriers to Health Care Access in Philadelphia By Marla Gold, Dean, Drexel School of Public Health

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