Exclusive: Obamacare’s Unintended Beneficiaries

by ALEX ALEXIEV July 2, 2009
With the de facto nationalization of America’s healthcare sector seemingly only a matter of time now, it is worth pondering some of the less well-known likely consequences of this frontal assault on our free enterprise system. Much has been written already about the immediate effect of a government healthcare monopoly, such as artificially induced scarcity resulting in inevitable rationing of health care in the form of limited individual choice, long-waiting times for service and unavailability of life-saving treatments and technologies. None of this is theoretical. It has long been, to one degree or another, an integral part of the healthcare experience of people who live under socialized systems such as those in Western Europe, Canada and elsewhere. These are what could be called the intended consequences of nationalizing medicine, since they are both inevitable and known to the architects of the grand socialist experiment called Obamacare.
What is less-well understood are the just as inevitable unintended consequences to coercive government dictates whether in medicine or any place else. The prohibition of private business in communist states simply pushed a very large chunk of the economy and entrepreneurial talent in the black market to the huge detriment of the socialist economy. Similarly, exorbitant payroll taxes in Western Europe have only served to drive business in the underground economy, thus severely affecting government revenues and encouraging illegal immigration and fraud. Closer to home, confiscatory taxes on cigarettes created a booming tax-free internet cigarette market and, worse still, a huge counterfeit industry that nurtures organized crime and our terrorist enemies like the Taliban, for whom counterfeit cigarette smuggling has become the second largest funding source after drugs. In all of these examples, coercive policies have harmed the governments’ lofty objectives and helped unintended beneficiaries.
And so it will be with Obamacare. Faced with the inevitable deterioration of healthcare in this country under socialized medicine, many will opt out for what oppressed people have traditionally done the world over: vote with their feet. In this case, to find better and cheaper healthcare outside the United States by means of what has euphemistically been called medical tourism.  
I got a glimpse of what’s to come while visiting newly democratic Bulgaria with a group of American investors exploring investment opportunities late last year. As part of our tour, we paid a visit to the first 100 percent private clinic and hospital in Bulgaria called Akta Medika (aktamedika.org) in the provincial town of Sevlievo, which was seeking investment to expand. The hospital was founded in 2000 by Dr. Todor Hinov, a local anesthesiologist and several other practicing physicians for the expressed purpose of providing an example of how one can start repairing the dismal legacy of communist monopoly healthcare by means of free enterprise and entrepreneurship.
While there, a friend from Virginia who was on the trip inquired whether they can do an inguinal hernia repair he needed to have done and how much it would cost. The answer, after an examination, was that they can do it the same day and the fee, as posted on their website, was $1,200 plus $50/day for a private room with cable TV and wireless internet. Prior to coming to Bulgaria, my friend had received three estimates for the same procedure from northern Virginia doctors, which averaged $15,000 for surgeon and anesthesiologist fees and two or three days in the hospital. He had the surgery successfully performed at Akta Medika a month later during another business trip to Europe and now plans to do all of his dental work there as well. In the meantime, Dr. Hinov and his colleagues believe that the nationalization of U.S. healthcare will bring a stream of American medical refugees from Obamacare to them and are planning another hospital in the capital city of Sofia, training their staff in English and having the present one internationally certified.
They are far from being overly optimistic in these expectations. With socialized medicine reigning supreme in most of Western Europe and in the government-run and mismanaged Medicare and Medicaid half of the U.S. healthcare sector, a huge private healthcare market catering to medical refugees from the West has sprung around the world from Mexico and Guatemala to Eastern Europe and from Turkey to India, Thailand and Singapore. In most cases, medical treatment in these mostly modern facilities is immediate, highly competent and at a fraction of the cost back home.
Hard figures are predictably difficult to come by, but an estimated 200,000 patients from the U.S. (not counting the 1 million U.S. Mexicans who go home to be treated every year) and 90,000 from Great Britain alone are reported to have travelled for treatment abroad last year. There are at least 220 foreign hospitals certified to American medical standards by the U.S. accreditation agency, Joint Commission International (JCI) currently and their number and volume of operations performed is growing exponentially. The industry is already reported to be generating $20 billion per annum and growing at 15 to 20 percent every year. What its potential is could be glimpsed from a recent study of the National Health Service (NHS) in Great Britain, which revealed that 7.6 million Brits supposedly covered by NHS cannot find a dentist in the UK. To no one’s surprise there are now dozens of dental clinics in Hungary, less than an hour from Vienna airport, that cater almost exclusively to NHS dental refugees.
The huge potential savings to be realized by medical tourism are now forcing American insurance companies to start exploring coverage for treatment abroad for their clients and several are already offering it. In Europe, the European Commission recently issue a ruling directing national healthcare monopolies to cover “cross-border”  treatment in other EU (read Eastern European) members. As the business continues to expand dramatically, many Western doctors see greater opportunities in these new dynamic markets than in their own sclerotic health establishments and move there. Already, quite a few of the dentists in the Hungarian dental clinics, for instance, are German and English expatriates. The same is true with Western medical entrepreneurs and investors who increasingly see medical tourism as a huge money-making opportunity.  
Undoubtedly, many of these actors will benefit handsomely from the coming convulsions of American medicine under Obamacare and the expected massive transfer of wealth by Americans to healthcare providers abroad. Unfortunately, most of them will not pay taxes in America.
FamilySecurityMatters.org Contributing Editor Alex Alexiev is a visiting fellow at the Hudson Institute in Washington D.C.
 

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