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The Globalization of Healthcare: Telemedicine Under the WTO Framework

Matt Toothacre

INTRODUCTION 2

TELEMEDICINE 3

APPLICABLE LAW – GENERAL AGREEMENT ON TRADE IN SERVICES 5

PRIMARY CLAUSES WITHIN GATS 7


MARKET ACCESS CLAUSES WITHIN GATS 8
ENFORCEMENT OF GATS PROVISIONS 11

TELEMEDICINE UNDER GATS FRAMEWORK 15

CONCLUSION 18
Introduction

A number of recent trends have led to the expansive growth of telemedicine in recent

years. There has been an improvement in the quality of care provided by developing countries,

which allows patients to obtain health care from professionals farther away. 1 The internet has

continued to advance in regards to medicine through both the number of users searching for

health information online and its increased use by patients, providers, and medical

professionals.2 Similarly, patients are no longer required to live in the same area as their medical

professionals because of the digitization of medical data and the advancement of

telecommunication.3 Further, there has been a trend towards globalization in the health care

industry as it is one of the fastest growing markets in the world.4 There has also been a trend

towards the privatization of health care sectors in foreign countries, meaning that non-citizens of

countries are able to obtain treatment.5 These trends have led to the advancement of

telemedicine, which is seen as a way to increase access and improve the quality and cost of

healthcare.6 This new demand for cheaper and more convenient medicine has stimulated the

growth of telemedicine.7 “As technology improves, and the ability to provide healthcare services

to remote areas through telemedicine increases, legal, policy, public health, and medical queries

arise and will have to be addressed.”8 This paper will address how Telemedicine is governed

pursuant to the World Trade Organization.

1
Article: Patients Without Borders: The Emerging Global Market for Patients and the Evolution of Modern Health
Care, 83 Ind. L.J. 71, 82.
2
Id. at 85.
3
Article: The Future Of Telemedicine & Its Faustian Reliance On Regulatory Trade Barriers For Protection, 16
Health Matrix 443, 443
4
Supra Cortez note 1, at 88.
5
Id. at 86.
6
Comment: A Piece Of The Puzzle: Telemedicine As An Instrument To Facilitate The Improvement Of Healthcare
In Developing Countries?, 18 Emory Int'l L. Rev. 151, 152.
7
Article: The Global Market For Health Care: Economics And Regulation, 26 Wis. Int'l L.J. 591, 604.
8
Supra Mendelsohn note 6, at 152.
Telemedicine

Telemedicine is defined by the United States government as being “the use of electronic

communication and information technologies to provide or support clinical care at a distance.”9

Telemedicine can also be broadly defined to refer to the transfer of a medical service to a patient

over a virtual network.10 The telemedicine system allows patients and medical professionals to

share information, technology, knowledge, and expertise in an instant.11 At its core, the system

allows a medical professional to deliver medical care, diagnoses, consultation, and treatment to

patients in a different location.12 Although telemedicine is a rather new concept13, it has received

large amounts of funding from state and federal governments in the United States and it has been

focused on providing healthcare to rural areas and populations with special needs. 14 The internet

has been a catalyst for the advancement of telemedicine as internet speeds have increased and an

increasing amount of people have gained access to the internet. 15 The increase in internet

technology has allowed telemedicine providers to bring less expensive and more convenient

health care to patients in other areas of the world from the provider.16 telemedicine is the

economic reality that health care services can be purchased substantially cheaper in developing

countries where the cost of physician labor is substantially less.17

There are four categories of categories of telemedicine, which include: doctor-to-doctor;

remote clinical, diagnostic, and monitoring services; remote provision of patient care; and claims

9
Articles: Distance Health Services Under the General Agreement on Trade in Services, Vol. 35, No. 1, HOSPLW
83.
10
Supra McLean note 7, at 592.
11
Supra Mendelsohn note 6, at 162.
12
Id.
13
Supra McLean note 7, at 594.
14
Supra Yeo note 9, at 83.
15
Id.
16
Supra McLean note 7, at 592.
17
Id.
management and hospital administration from remote countries.18 Each of these categories can

be thought of the same as trading in goods and services because international trade in healthcare

services exists.19 In developing countries there tends to be a shortage of medical professionals to

staff facilities, less access to quality healthcare for patients when compared to those in western

countries, and limited or even no access to healthcare within a patient’s locality.20 The purpose

of having international trade in healthcare is to bring advanced technologies and individuals with

expertise to countries that have shortages.21 One way to prevent or counteract shortages in the

area of healthcare professionals is to have the have healthcare professionals travel from abroad

and provide health services.22 However, having individuals, whether it be the patient or the

healthcare professional, travel to another location can be time consuming and very expensive.

Telemedicine, on the other hand, allows local medical professionals to contact either patients or

other medical experts in order to diagnose, treat, or at the least to consult with about their

patients.23

In developing countries, there also tends to be a shortage high quality hospitals or

healthcare systems because they are usually located in urban centers in order to be as wide-

reaching as possible and the distribution of healthcare tends to be poor.24 Not only does the

advancement of telemedicine improve the treatments that a patient receives in an area with

shortage, but it also increases the doctors knowledge by allowing him to learn from an expert.25

Additionally, the advancement and increased use of telemedicine will make healthcare more

18
Supra Yeo note 9, at 83.
19
Id.
20
Supra Mendelsohn note 6, at 155.
21
Supra Yeo note 9, at 83.
22
Supra Mendelsohn note 6, at 155.
23
Supra Yeo note 9, at 83.
24
Supra Mendelsohn note 6, at 155.
25
Supra Yeo note 9, at 83.
affordable to patients by giving them broader availability of providers, which increases

competition and in turn drives down costs.26

Infectious diseases are the leading cause of early death in developing countries.27 On the

other hand, developed countries, which used to have infectious disease as the leading cause of

early death, now deal with chronic diseases including heart and lung disease and cancer as the

greatest health risks to patients.28 In developing countries, it is common for infants, babies, and

children to be unvaccinated and without access to clean water, medicine, or any form of

healthcare.29 In developing countries, on the other hand, poverty has led to an increase in a

decrease in life expectancy, malnutrition, homelessness, mental illness, stress, suicide, family

disintegration, and substance abuse.30 Although developing and developed countries deal with

different problems, many of the issues they currently face can be helped through the use of

telemedicine. One main point is that telemedicine allows specialized doctors to consult with

patients in other countries or with the patient’s doctors in order to provide a specialized

treatment.

Applicable Law – General Agreement on Trade in Services

The WTO was created in 1995 and came from an international system of trade called the

General Agreement on Tariffs and Trade (GATT).31 The WTO has three essential functions: (1)

to provide a forum to negotiate, (2) to implement a set of rules, and (3) to settle disputes.32

26
Id.
27
Supra Mendelsohn note 6, at 154.
28
Id.
29
Id.
30
Id. at 154-55.
31
The World Trade Organization in Brief, at 3.
32
See id. at 7.
Currently the WTO has 164 trading nations that are a part of the agreements.33 The WTO

agreements that arose from the GATT were negotiated by a majority of trading nations and were

eventually adopted by them.34 The WTO agreements essentially set forth a groundwork for how

international trade is governed and provide a dispute settlement system. 35 The agreements are

contracts that bind WTO member nations to implement trade policies that comport with the

negotiated language of the WTO agreements.36 Although the agreements were negotiated and

adopted by the member states, the main goal of the agreements is to “help producers of goods

and services, exporters, and importers conduct their business, while allowing governments to

meet social and environmental objectives.”37 The WTO is now the main venue for members to

resolve trade disputes, which has subsequently reduced and prevented trade wars.38

The purpose of the WTO is to enhance trade between countries by limiting or resolving

disputes between them and helping developing countries throughout the process.39 This involves

implementing rules for international trade that give rights to individual investors, corporations,

and member countries.40 The implementation of rules for international trade involves the creation

of rules that are clear and understandable.41

In the most recent round of WTO negotiations, the General Agreement on Trade in

Services (GATS) was adopted by the WTO.42 The GATS purpose was to protect international

commerce by prohibiting any discrimination based on nationality, which has increased the

33
https://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm
34
Id. at 2.
35
See id.
36
Id.
37
https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm
38
Shawn Donnan and Demetri Sevastopulo, Trump team looks to bypass WTO dispute system, FINANCIAL TIMES,
Feb. 27 2017, at 4-5.
39
See supra note 33, at 5.
40
Id.
41
See id.
42
Supra Yeo note 9, at 83.
globalization of the world since its inception.43 Medicine and insurance are specifically

stimulated by many clauses in the GATS that have increased free trade through the removal of

trade barriers.44 Further, the GATS requires member countries to take reasonable measure to

ensure that governments within the country are observing GATS provisions.45

Primary Clauses Within GATS

There are two primary clauses within the GATS that promote non-discrimination in trade

are the Most Favored Nation and National Treatment clauses46, which are derived from the

GATT.47 “The [Most Favored Nation] clause is a ‘favor one, favor all’ clause that mandates that

all WTO members must provide their best trade-in-service terms to all WTO members.”48 In

other words, the Most Favored Nation clause requires each country to treat each member country

equally.49 The National Treatment clause requires members of the WTO to regulate or treat

providers of foreign services the same way they regulate or treat providers of domestic

services.50 The Most Favored Nation and National Treatment clauses are both applied rather

broadly in that they may apply to regulations that are worded neutrally but which incidentally

discriminate against another country.51 However, each of these clauses have many exceptions

43
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 39.
44
Id.
45
Donley Lecture Series: Health Care In America: Realizing The International Human Right To Health: The
Challenge Of For-Profit Health Care, 113 W. Va. L. Rev. 49, 58.
46
Supra note 43, 39-40.
47
Supra Yeo note 9, at 83.
48
Supra note 43, 39-40.
49
Supra Yeo note 9, at 83.
50
Supra note 43, 40.
51
Id.
that are somewhat ill-defined within in the GATS because they apply to all classes of services.52

For instance, the GATS “specifically excludes from coverage services provided in the ‘exercise

of governmental authority,’ which are services that have neither a commercial nor a competitive

basis.”53 This exception, however, is not expansive enough to allow countries to shelter their

involvement in telemedicine or the medical industry from the GATS provisions.54

Market Access Clauses Within GATS

GATS also contains three other clauses that essentially opens market access for other

countries.55 The first of these clauses is the market access clause, which is not found in any other

multilateral treaty.56 The market access clause prohibits WTO members from protecting a market

by limiting: (I) the number of suppliers; (2) the value of transactions; or (3) the number of

persons employed.57 Because the market access clause restrictions are framed in absolute terms,

they actually impose a greater degree of restriction than even the MFN and NT provisions do on

the ability of a government to regulate its economy.58 They allow countries to make market

access commitments for services that are reasonably tailored to the conditions of that country.59

Under the GATS, each member state enters into a "Schedule of Commitments" that sets forth,

for each service sector, the specific market access and National Treatment commitments that it is

prepared to make, if any.60 When a member state agrees to permit market access in a particular

52
Supra Yeo note 9, at 83.
53
Supra note 3, at 479.
54
Id.
55
Supra note 43, at 40; Supra note 3, at 484.
56
Supra note 43, at 40
57
Id.
58
Id.
59
Supra Yeo note 9, at 83.
60
Id.
service sector, it must avoid implementing a number of defined types of trade restrictions that

generally resemble quotas (e.g., limitations on the number of doctors or hospital beds).61 The

member state's National Treatment commitment for each sector defines the extent to which it

will treat foreign services and service suppliers in the same manner as national services and

service suppliers.62 In short, the market access restrictions clause of GATS could someday be

used as powerful leverage to open the domestic telemedi-cine market to foreign competition.63

The second clause is the proposed domestic regulation clause, which limits the criteria

that can be used to license, certify, or set technical production goals. 64 the proposed domestic

restrictions clause is of concern to the future of telemedicine because under this clause any

licensing, certification, and technical standards imposed by a nation on a particular sector of its

economy must not be "more burdensome than necessary to ensure the quality of the service."65

Under the domestic regulation clause, a country can only impose standards on an industry that

are no "more burdensome than necessary to ensure the quality of the service." 66 Accordingly, if

the WTO adopts the domestic restriction clause, many existing healthcare regulations would

become inconsistent with GATS, including: "(1) obligations on providers to accept all patients;

(2) limitations on fees so that access to healthcare is available to all; and (3) [guidelines that

mandate] disciplining providers with licensure revocation rather than using a scheme that fines

61
Id.
62
Id.
63
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 485
64
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 40
65
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 485
66
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 40
or publishes wrong-doers' names in public forums."67 if GATS's domestic restrictions clause

should ever become applicable to the U.S. health care sector, this clause could seriously

undermine the authority of state boards of medical examiners by limiting the ability of these

governmental agencies to adjudicate and discipline provider's quality of care and professional

conduct.68

The third clause is the operational clause, which limits the provisions of the GATS to

certain sectors within a nation’s economy, not to its economy as a whole.69 It will be limited

based on the country’s commitments and the mode of commerce the specific sector is in. 70 But

even if a country commits its health care sector that does not necessarily mean the country has

opened its borders to foreign providers regardless of trade mode.71 Under GATS, each sector of a

nation's economy is further subdivided into modes based on how a particular service is

supplied.72 There are four supply modes based on the geographic relationship between the

service supplier and consumer.73 When a nation commits a sector of its economy under GATS,

that nation may only make a commitment for a particular mode.74 Accordingly, the mode by

which a service is supplied is a non-trivial matter under GATS because different aspects of a

sector of a nation's economy--like health care--may receive different degrees of commitment

67
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 40
68
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 485
69
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 485
70
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 485
71
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 486
72
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 486
73
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 486
74
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 486
depending on the mode of the service's delivery.75 Within each service sector, the member state

can make different market access and National Treatment commitments across four different

"modes of supply," which encompass four different means by which a service provider in one

country might seek to export services to another country.76 These modes are: (1) "Cross-border,"

which would include, for example, the use of the Internet to provide health services across

national borders; (2) "Movement of Persons," which would entail, for example, a patient who

travels abroad to receive health services; (3) "Commercial Presence," which would include a

situation in which a company decides to construct a hospital in another country; and (4)

"Movement of Service Providers," which would include a situation in which a physician moves

to another country to provide services.77 Each member state's Schedule of Commitments is,

therefore, a matrix that is defined by the different types of services on one axis, and the four

different modes of supply on the other. Within each of the resulting boxes, the member states

make either no commitment (in trade parlance, that box is "unbound"), or it makes a market

access and National Treatment commitment subject to whatever conditions and qualifications it

has imposed.78

Enforcement of GATS Provisions

GATS contains two enforcement mechanisms for dealing with regulations promulgated

by WTO members that are inconsistent with the principle of non-discrimination. First, there is

75
ARTICLE: THE FUTURE OF TELEMEDICINE & ITS FAUSTIAN RELIANCE ON REGULATORY TRADE
BARRIERS FOR PROTECTION, 16 Health Matrix 443, 486
76
Supra Yeo note 9, at 83.
77
Id.
78
Id.
the "liberalization" provision.79 Under GATS, during each round of trade negotiations WTO

members are expected to lower trade barriers for services. 80 The purpose of this clause is to

move the world's trading community progressively towards truly free trade. As the liberalization

clause is applied to each successive round of WTO negotiations, it will tend to standardize the

laws and regulations around the world, thereby making the laws of all nations consistent with

each other and eliminating trade barriers.81

Second, GATS provides a forum for WTO members to arbitrate trade disputes.82 To the

extent that one nation feels that the laws or regulations of another country are inconsistent with

GATS, a country may arbitrate the dispute before the WTO.83 In the event that a nation's laws or

regulations are found to frustrate free trade, the WTO has authority to impose trade sanctions

against that nation unless the nation enacts remedial legislation.84 A recent dramatic application

of the WTO's arbitration process played out over steel commerce. 85 In March 2002, the U.S.

enacted a protective steel tariff, to which the E.U. immediately objected. After preliminary

discussions to modify the tariff failed, the E.U. sought to arbitrate the dispute before the WTO. 86

The WTO concluded that the U.S. steel regulations amounted to an attempt to unreasonably

protect the U.S. steel market from foreign competition, and authorized a $ 3 billion trade

79
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 40
80
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 40
81
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 40-41
82
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
83
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
84
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
85
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
86
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
sanction in the form of an E.U. boycott of Florida citrus fruits.87 Faced with a significant trade

sanction, the U.S. repealed the steel tariff.88 In short, GATS makes it very difficult for a WTO

member to protect its economy from foreign invasion.89 In particular, GATS has the potential to

make it difficult for a nation to protect its healthcare sector with regulations that: (1) impose

certificate-of-needs requirements; (2) use a regional licensure system or a licensure system that

limits the total number of licenses that will be issued; or (3) cap the total value of healthcare

services to be reimbursed.90 This means that as WTO members progressively open their markets

with each round of negotiation, by 2018 China may be encouraged to open its healthcare market

to free trade.91 If China were to do so, nothing would stop an underemployed American cardiac

surgeon from opening cybersurgical facilities in Beijing to capture Chinese healthcare dollars.92

The WTO’s dispute settlement system is the forum created by the WTO in order to

resolve trade disputes between member countries and is essentially a high court that determines

whether a country is in violation of WTO rules and resolves the dispute.93 This dispute

settlement system of the WTO was created pursuant to the Dispute Settlement Understanding

(DSU) and it enables member countries to bring a lawsuit against another member when they

claim there has been a WTO violation.94 The lawsuit is then decided and resolved by a WTO

87
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
88
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
89
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
90
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
91
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
92
ARTICLE: International Law, Telemedicine & Health Insurance: China as a Case Study, 32 Am. J. L. and Med.
7, 41
93
See Daniel C.K. Chow, How China Promotes Its State-Owned Enterprises at the Expense of Multinational
Companies in China and Other Countries, 41 N.C.J. Int'l L. & Com. Reg. 455, 462.
94
Id. at 464.
panel.95 Further, the U.S. and China have been in many WTO disputes independently and against

one another.96

First, the WTO has implemented rules for trade that involves goods.97 The trade rules that

apply to goods are enumerated under the Agreement on Trade Related Investment Measures

(TRIMs).98 The TRIMs agreement does not allow any member country to implement a trade

related investment measure that goes against Article III (national treatment) or Article XI

(quantitative restrictions) as set forth in GATT 1994. Section two of the Annex from the TRIMs

Agreement gives an “illustrative list” of TRIMs that do not comport with the GATT 1994. One

such example is a restriction on “the importation by an enterprise of products used in or related

to its local production by restricting its access to foreign exchange to an amount related to the

foreign exchange inflows attributable to the enterprise.”99 Second, the WTO and thus its member

countries have adopted treaties and agreements that govern how foreign corporations and

investors should be treated by member countries.100

Some worry that GATS could be used to force developing countries to align their health

policies at the expense of domestic needs. For example, GATS encourages WTO members to

liberalize free trade by requiring each WTO country to treat all countries alike (so-called "most

favored nation" status) and to treat foreign companies as if they were domestic ("national

treatment"). As a result, local health care providers may struggle to compete with foreign

providers for scarce resources. Other critics of GATS worry that market-driven health care

systems reduce widespread access to health care, as observed in the United States and in many

95
See id.
96
See id. at 464-65.
97
Agreement Establishing The World Trade Organization, at 9.
98
Agreement on Trade-Related Investment Measures, page 139.
99
See id.
100
Monika C.E. Heymann, International Lawand The Settlement Of Investment Disputes Relating To China, 11(3) J.
Int’l. Econ. L. 507, 508-09.
Latin American countries. In fact, several international observers worry that these market

reforms will create international convergence towards the U.S. health care system, which is

dominated by for-profit, private sector companies. It is easy to understand the cause for concern.

The U.S. health care system is famous for its spending, accounting for roughly half of the $ 4

trillion spent on health care each year worldwide. But by most estimates, Americans are neither

healthier nor happier with their health care system than citizens in peer countries.

ARTICLE: INTERNATIONAL HEALTH CARE CONVERGENCE: THE BENEFITS

AND BURDENS OF MARKET-DRIVEN STANDARDIZATION, 26 Wis. Int'l L.J. 646, 699-

700

Telemedicine Under GATS Framework

Whether GATS is applicable to a particular market depends upon the delivery mode and

whether a country has committed a particular sector of its economy to free trade.101 GATS views

services as being delivered by one of four methods or modes.102 Mode I transactions occur when

services and capital flow freely and bidirectionally across an international border; Telemedicine

falls in to this category.103 a Mode II transaction occurs when a service is consumed while a

person is abroad.104 Under Mode III delivery, rather than having the consumer traveling to

receive a service, a supplier sets up a commercial presence in a foreign country.105 Mode IV

101
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 626
102
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 626-627
103
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 627
104
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 627
105
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 627
services are delivered by the movement of natural persons, which in health care means services

provided by physician immigration.106

Most examples of telemedicine services would fall under the classification of "Medical &

Dental Services" on a GATS schedule of commitments. To the extent that the services are

provided to inpatients, they could also be classified as "Hospital Services." Telemedicine

services are services that are provided overwhelmingly, if not exclusively, in "Mode 1." This

means that they are provided by remote means across national borders without the movement of

the patient (Mode 2) or of the service provider (Mode 4). The provision of telemedicine services

to a particular country may or may not entail the establishment of a commercial presence in that

country (Mode 3), but in most cases it probably would not.

After a service mode is selected, unless a country has made a commitment, GATS does

not attach.107 A commitment is a sector and mode specific schedule "made by individual

countries allowing specific foreign products or service providers access to their markets." By

making a commitment, a WTO member creates a legally enforceable guarantee that its sector is

stable with respect to market conditions; and that its sector is not a target for further regulations

that would undermine an investor's interests. After a WTO member commits a sector of its

economy to free trade, the country is obligated to economically administer that sector with (1)

"reasonable, objective, and impartial manner"; (2) provide "adequate procedures to verify the

competence of professional or any other member"; and (3) any further regulations should be

made to conform to "common international standards" for services. Once a country makes a

106
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 627
107
ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND REGULATION, 26 Wis.
Int'l L.J. 591, 627
commitment to free trade, all of GATS' rules come into play. The general structure of GATS is

that of a "top-down" treaty; meaning that, unless a country makes a specific reservation, all

aspects of GATS are applicable to that sector and mode of delivery. Under GATS, after a

commitment is made, countries are also expected to progressively remove any barriers to trade

for that mode and sector of service. The importance of GATS trade liberalizing provisions

becomes clear when it is juxtaposed with the domestic restrictions clause, which states that any

licensing, certification and technical standards [*629] imposed by a nation on a particular sector

must not be "more burdensome than necessary to ensure the quality of the service."

ARTICLE: THE GLOBAL MARKET FOR HEALTH CARE: ECONOMICS AND

REGULATION, 26 Wis. Int'l L.J. 591, 628-629 *

The truest measure of how much work remains to be done in the area of health services

liberalization is the fact that, of all the service sectors covered by the GATS, only the educational

sector has received fewer national commitments than the health sector. It is, in other words, the

second most trade-restricted service sector in the global economy, despite the fact that health

services account for a very significant portion of the gross domestic product of many countries,

especially economically advanced countries. In one recent study of healthcare commitments

under the GATS, only 54 WTO member states had made any sort of commitment for medical

and dental services, in any mode of supply. By contrast, over 100 WTO member states have

made commitments in the area of financial services, and close to 100 WTO member states have

made commitments in the area of telecommunications.


Within Mode 1, which is the mode of supply most relevant to telemedicine, only 27

WTO member states have made either a full or partial market access commitment for Medical &

Dental Services, and only 15 member states have made market access commitments in the area

of Hospital Services. This means that there are very few countries that have in any way opened

their markets to remote health services from other countries. Interestingly, the absence of

specific commitments in Mode 1 may reflect the fact that many countries did not believe that it

was technically possible to provide health services in this mode of supply: several member states

noted "technical unfeasibility" as the reason for the absence of Mode 1 commitments in health

services, particularly Hospital Services. This perception may have been somewhat more justified

in the mid-1990s, when most countries prepared their schedules of commitments, but it

undoubtedly also reflects the fact that national health authorities who understood the potential

applications of telemedicine played little or no role in the preparation of these schedules.

Supra Yeo note 9, at 83.

Conclusion

Under the WTO framework, there are many rules countries must abide by in order to

participate in the international trade of telemedicine, however, at the same time, there are

remedies a country may use in order to deal with countries they think are violating the rules.

Countries under the GATS framework must abide by the two main clauses of the GATS, the

Most Favored Nation and the National Treatment clauses. This means a country must provide

the same trade-in-services terms to each country without discrimination and to treat foreign

service providers the same as domestic service providers.

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