Assessing the potential of telemedicine in health care services
This article is authored by Aakanksha Shrawan, research associate, Centre for Social and Economic Progress, New Delhi.
The potential of telemedicine in the world was untapped until the pandemic struck. Not only the populace in the urban but also the patients in Tier 2 and Tier 3 cities were able to access critical healthcare services via doctors on Zoom. In addition to evaluating the patients who did not require in-person attention for Covid-19, it also played a substantial role in avoiding the transmission of the virus which otherwise would have led to contagion in the event of traditional doctor patient visits. According to a study by EY-IPA, the domestic telemedicine market in India is expected to reach $ 5.5 billion by 2025. Akin to the cross-border movement of Covid-19 vaccines where India exported almost 6% of its total supply of doses to the world, unlike other lower-income countries, there was a concomitant increase in the provision of medical services via online platforms.
While there was a significant decline in the overall global trade in medical services by around 9% in 2020, however, trade in medical services via cross-border telemedicine services soared by 14% during the same period partially offsetting the steep decline in the overall medical services’ trade. According to The General Agreement on Trade in Services (GATS), there are basically four modes of supply of services; Mode 1 (where neither the producer nor the consumer crosses borders and the services are delivered internationally via phone, fax or e-mails), Mode 2 (where the consumers travel to another country to consume services locally, for instance, tourists), Mode 3 (where the producer establishes an affiliate in another country where the consumers are located) and finally Mode 4 (where the service providers travel temporarily to render their services such as doctors, nurses and midwives etc.). Even before the onset of the pandemic, while the trade of medical services was constituted dominantly via Mode 3 (75%), the share of Mode 1 had seen a slow but steady rise (5.6%) since then. For instance, the United States has seen a substantial rise in telehealth trade from 3.3% in 2010 to around 10% in 2019.
A focus on the exports of health services via online channels has gained more significance for India as it was ranked 47th out of 50 countries (including 38 Organization for Economic Cooperation and Development countries) in the recently released Services Trade Restrictiveness Index (STRI) by the OECD for the year 2022, improving by one position vis-à-vis the last year. The STRI summarises the trade policy regimes in the service sector of these economies by calculating an index that ranges between 0 and 1, where 0 indicates the most liberal trade policy regime and 1 denotes the most protectionist trade policies in the service sector. With stringent restrictions on the movement of healthcare personnel, limited market access, regulatory bottlenecks and the exorbitant costs of obtaining work visas and permits, trade in services, in general and medical services, in particular, becomes extremely difficult in cases which involve the movement of personnel. As the figure shows, India has the third highest trade restrictions in the services index vis-à-vis other countries in the sample in the year 2022. Even according to the World Bank, which provides data on services’ trade restrictiveness for 103 economies, India had the second most restrictive policy framework in trade in services vis-à-vis developing as well as developed countries.
Medical tourism (Mode 3) in India, in addition to constituting the dominant mode of service trade, already stands as a testimony to India’s image as a ‘global health destination’ and the tremendous scope of the country in the provision of health services to patients abroad at a fraction of the cost. According to the ministry of tourism, for instance, during 2018-19, there was a growth of around 8% in foreign tourist arrivals. After dropping starkly in 2020 in the wake of the pandemic, there has been a resurgence in the inflow of tourists for medical purposes in 2021. Telemedicine services can provide a boost to medical tourism in India as well because successful treatment and recovery are contingent on the presence of post-operative care. Telemedicine consultation can be a powerful tool for patients as it can replace frequent visits by foreign patients along with cost savings in the post-operative stages.
E-Sanjeevani, a flagship telemedicine scheme of the government to bridge the gap between rural and urban areas by virtually connecting patients and doctors was launched in April 2021 and has completed more than 72 lakh tele-consultations since then. SAARC Telemedicine Network Project comprising six nations of the regional group, an initiative of the ministry of external affairs, is a noteworthy example. To expand the ambit of telemedicine across borders, the Indian government has submitted a paper to the World Trade Organization pitching for the portability of health insurance to aid the usage of cross-border telemedicine with doctors and patients situated in different countries.
Despite its innumerable benefits, several points of concern need to be addressed while going forward with the large-scale implementation of telemedicine in India and its exports. While issues pertaining to differences in data-sharing rules and guidelines (for instance, General Data Protection and Regulation in the European Union) remain the main point of concern, it is also imperative to address widespread inefficiencies in the digital infrastructure, streamlining the accreditation and qualification process for the doctors both in and outside India, cross-border liability issues, improvement in the reporting and collection of data for the international trade in health services under the System of Health Accounts (SHA) framework etc. for India as well as the world to adequately realise the benefits of telemedicine.
This article is authored by Aakanksha Shrawan, research associate, Centre for Social and Economic Progress, New Delhi. The views expressed are the writer's own and not those of the Centre for Social and Economic Progress (CSEP).