Costs and Benefits of the International Flow of Health Workers

Research Paper (postgraduate) 2017 9 Pages

Health - Public Health



Drivers of Health Human Resources Migration

Costs and Benefits Dynamics Health Human Resources Migration

Welfare Costs of Health Human Resources Migration




Health economics is seemingly becoming one of the most significant elements of healthcare sustainability. Despite the slowdown experienced in the realization of health transition in most countries, the current wave of globalization seems to have exerted a positive impact on global healthcare systems. However, shortages of health workers remain to be the greatest challenge to the development of healthcare systems, leading to imbalances in international human resources migration (Afzal et al., 2011). This challenge has also prompted many countries to adopt cost-effective healthcare reforms to improve the sustainability of healthcare systems and improve health outcomes. For instance, training for health workers has been intensifies in developing countries. OECD (2010) reports “Since 2000, the number of nursing graduates has increased at least by 50% in Australia, France, the United Kingdom and has doubled in Canada” (p. 4).

In 2008, Australia drafted primary healthcare reforms to ensure efficient flow of healthcare services by reducing healthcare expenditure. These reforms were designed based on the estimation of healthcare expenditure, which was expected to increase from 3.8 percent, in 2006-07 to 7.3 percent of the Gross Domestic Product, in 2046-47 (Commonwealth of Australia, 2009).

However, trends of healthcare costs are changing drastically, owing to the current international flow of healthcare professionals, which has influence health economics. Therefore, this paper will provide an overview on the costs and benefits of health human resources migration.

Drivers of Health Human Resources Migration

Economic reports indicate that cross-border flow of health professionals has been enhanced by globalization leading dramatic changes in low-income economies. The demand for health professionals in industrialized countries is influencing the flow of healthcare professionals from middle and low-income countries to developed countries such as the U.S, Australia and European countries. Currently, developed countries are experiencing enormous challenges in developing their healthcare systems because they lack adequate health human resources. Therefore, globalization seems to have enhanced the ability of developed countries by influencing the flow of healthcare professionals from other countries to fill the gap in their healthcare systems (Bundred, Martineau & Kitchiner, 2004).

Some of the principal drivers of health human resources migration, which have been created by globalization, include eased migration restrictions, health human resources policies, international financial support and economic situations in various regions.

Currently, the global labor market provides a significant platform for the exchange of professional skills, in which health professionals stream towards the region with high levels of employment opportunities. In regard to the flow of health human resources, deficits in high-income countries favor the migration of health professionals from low-income countries, owing to the eased migration restrictions. Ordinarily, health professionals who possess internationally accredited professional knowledge migrate abroad to seek for employment opportunities abroad, primarily in developed countries where deficits on health human resources are experienced because their professional knowledge is regarded to as a valuable commodity in the global job market (Bundred, Martineau & Kitchiner, 2004).

The second driver of health human resources migration is the deterioration of economic situations in various regions around the globe. For instance, inappropriately-timed market liberalization in Africa and Latin America has led to massive out-migration of health professionals leading to an unprecedented influx of nurses and doctors in the developed countries. Despite the continued efforts by the international monetary agencies to address market liberalization challenges in developing countries through the extension of grants and loans to the concerned countries, market stability remains a significant challenge, which is influencing migration of health professionals to high-income economies.

Costs and Benefits Dynamics Health Human Resources Migration

Ordinarily, international, macro and micro-economic dynamics influence the costs and benefits of health human resources migration. In regard to domestic macro-economic dynamics, there are several factors, which play a significant role in determining cross-border migrations. Some of these factors include economic growth rate, employment trends, and public expenditure on healthcare. On the other hand, economic, social and political stability has been found to influence the migration of health professionals. Moreover, judicial governance and political administrative policies influence health human resources flow in and out of the concerned country.

On the other hand, domestic micro-economic dynamics influence health human resources migration, more or less the same as macro-economic dynamics in a given country. For instance, structural and institutional features of the health sector influence the volume of migration streams of health professionals. In most cases, shortages of employment opportunities accompanied by poor compensation are believed to drive health workers to their country of choice in search of well-paying employment opportunities.

Moreover, global dynamics such as the mobility of medical human capital, changes in immigration policies and standardization of medical education influence cost and benefits of health human resources migration. For instance, developed countries experience an unprecedented demand and supply imbalances in their health labor markets, which favor migration of health workers from foreign countries (Forcier & Giuffrida, 2004).

Benefits of Health Human Resources Migration

From an economic perspective, cross-border migration of health workers is associated with several benefits, which make most countries allow foreigners to be integrated in their healthcare systems. Some of the most common benefits of health human resources migration include financial remittance flows, network externalities and social welfare.

In regard to financial remittance flows, source countries are believed to receive economic benefits from emigration of health human resources from their countries. For instance, the countries received foreign exchange from international revenue transfer, enabling them to sustain financial expenditures in their healthcare systems. According to the World Health Organization (2006), financial remittance flows involve millions of foreign currency, which are remitted to the source countries by migrants, and this has been observed to have reduced poverty in most developing countries (WHO, 2006). India is n outstanding example in regard to the contribution of financial remittance inflow from health emigrants.

India’s Financial Remittance from Health Emigrants (Chishti, 2007)

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On the other hand, foreign revenue received from migrants helps to improve healthcare systems in developed countries by increasing budgetary allocation on health sector, and this leads to the improvement of public health in the source countries.

On the other hand, international migration of health workers contributes to network externalities in terms of trade, technology transfer and investment flows. Ordinarily, immigrants create extensive social and business networks, which enable developing countries to benefit from technology transfers. For instance, foreign direct investment by developed countries in developing countries facilitates the establishment of healthcare facilities in developing countries in the effort of harnessing business opportunities in these countries. As a result, foreign firms introduce foreign technology and advanced educational skills, which are integrated into the local health workforce leading to the improvement of healthcare systems (Wescott, 2006). Ideally, foreign direct investments are allowed by host countries so as to benefit from technological spill-over, which occur when foreign health firms release their employees after training them. Moreover, these foreign health firms provide employment opportunities to local health professionals enabling the host country to retain its health professionals because there are adequate employment opportunities.



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Egerton University
health economics healthcare sustainability




Title: Costs and Benefits of the International Flow of Health Workers