1 HEALTHCARE DISPUTES ACROSS NATIONAL BOUNDARIES: THE POTENTIAL FOR ARBITRATION DETH SAO,* AMAR GUPTA,t AND DAVID A. GANTZI ABSTRACT Trade in international health services has the potential to play a leading role in the global economy, but its rapid growth is impeded by legal barriers. Advances in technology and cross-border movement of people and health services create legal ambiguities and uncertainties for businesses and consumers involved in transnational medical malpractice disputes. Existing legal protections and remedies afforded by traditional judicial frameworks are unable to resolve the following challenges: (1) assertion of personal jurisdiction; (2) choice offorum and law considerations; (3) appropriate theories of liability for injuries and damages arising from innovations in medical care and delivery of health services; and (4) enforcement offoreign judgments. Such legal uncertainties and ambiguities call for a uniform means of redress that is more flexible and predictable than litigation in a court room. Arbitration, a private streamlined adjudication process that has been successfully utilized on an international level to resolve several of the above mentioned legal quandaries, offers a potential solution. The voluntary, flexible, and legally binding nature of arbitration agreements across jurisdictions makes this form of dispute resolution more efficient and adaptive to changes in the health services industry than litigation. With careful construction of an approach that accounts for arbitration costs, reasonable recovery amounts, and complementary mechanisms such as no-fault compensation, international arbitration of medical malpractice disputes will more fairly and efficiently reallocate the legal risks borne by businesses and consumers. * J.D. 2010, James E. Rogers College of Law, University of Arizona; B.A. 2001, Wellesley College. t Thomas R. Brown Endowed Professor, University of Arizona; Ph.D. 1980, Indian Institute of Technology Delhi; M.S. 1980, Sloan School of Management, Massachusetts Institute of Technology; B.Tech. 1974, Indian Institute of Technology Kanpur. + Samuel M. Fegtly Professor of Law and Director, International Trade and Business Law Program, James E. Rogers College of Law, University of Arizona; J.S.M. 1970, Stanford Law School; J.D. 1967, Stanford Law School; A.B. 1964, Harvard College.
2 The Geo. Wash. Int'l L. Rev. [Vol. 42 I. INTRODUCTION As one of the fastest growing sectors in the world economy, business and legal circles have focused much attention and concern on the international health services industry. However, several trade barriers, chief among them legal liability risks and remedies for businesses and consumers, impede the potential of the health services industry to be a leading player in the global economy. Earlier scholarship in international health services trade has analyzed legal barriers in this industry, and this Article attempts to build upon such existing scholarship by proposing the use of arbitration as a method of dispute resolution for transnational medical malpractice claims involving businesses and consumers. International arbitration of medical malpractice disputes would more fairly and efficiently reallocate the legal risks borne by patients and foreign healthcare providers. To build a case for such a proposal, Part II will discuss the globalization and growth of the health services trade and its unmet potential. Part III will address the ways in which inefficiencies and inadequacies of current litigation systems contribute to a gap between the industry's present performance and its potential. Part IV proposes the use of arbitration as a viable alternative dispute mechanism to national courts that more effectively resolves the uncertainties associated with legal liability risks and remedies of traditional medical malpractice litigation. Part V will examine how the features and processes of arbitration may be best applied to medical malpractice claims in the context of a business-to-consumer dispute. In particular, this section will address public policy considerations, potential allocation of costs and liabilities of all parties involved in the transaction, complementary dispute resolution mechanisms, and alternative forums and contract provisions. Finally, Part VI will conclude with the observation that the proposal of an international arbitration framework for cross-border health services disputes represents merely one of several feasible and potentially successful paths to pursue, including some that have yet to be thought of. This Article seeks to continue the dialogue demonstrating the necessity to consider and act upon new solutions. Just as with the Industrial Revolution in the nineteenth century and the Information Technology Revolution of the twentieth century, we are now presented with another inevitable transformation of the global economy through the cross-border transfer of persons and technological advances for medical care. And, just as international business and legal practices adjusted to the two former
3 2010] Healthcare Disputes Across National Boundaries global revolutions, so too must we develop flexible frameworks to accommodate the ambiguous and ever-changing nature of the health services industry. 1 II. GLOBALIZATION OF HEALTH SERVICES While cross-border exchange in health services is not a new phenomenon, the industry's scope and geographic reach has grown tremendously in the past twenty years. 2 Although there are some exceptions, 3 a historical overview reveals that until recent decades, health services were primarily local in nature, involving local parties and resources in all stages of such transactions. 4 Several factors accounted for the industry's circumscribed geographic scope, including limitations in medical knowledge, technology, and transportation. 5 Only within the past few decades have technological advances catapulted trade in health services to an international level. 6 In 2001, the World Health Organization (WHO) reported health services as one of the fastest growing global markets. 7 In 2009, the healthcare industry ranked among the top twenty fastest growing global industries. 8 The nature and scope of international trade in health services may be best understood through the four modes of supply adopted 1. See generally Amar Gupta, David A. Gantz, Devin Sreecharana & Jeremy Kreyling, Evolving Relationship Between Law, Offshoring of Professional Services, Intellectual Property, and International Organizations, 21 INFO. RESOURCES MGMT. J. 103 (2008) (discussing international frameworks for international property law). 2. Lior Herman, Assessing International Trade in Health Care Services 4 (European Ctr. for Int'l Political Econ., Working Paper No. 03, 2009), available at publications/ecipe-working-papers/assessing-internationa-tradein-heathcare-services/? searchterm=lior%20herman. 3. For example, in pre-historic times dating as far back as the Bronze Age, people traveled to spas throughout Europe in the belief that mineral water had curative powers. JOHN C. PAIGE & LAURA SOULLItRE HARRISON, OUT OF THE VAPORS: A SocIAL AND ARCHI- TEGTURAL HISTORY OF BATHHOUSE Row 1 (1986), available at history/onlinebooks/hosp/bathhouse-row.pdf. 4. Thomas R. McLean, The Global Market for Health Care: Economics and Regulation, 26 WIs. INT'L L.J. 591, 591 (2008). For an in-depth analysis of the historical local nature of health services, see Amar Gupta & Deth Sao, The Constitutionality of Current Legal Barriers to Telemedicine in the United States: Analysis and Future Directions of its Relationship to National and International Health Care Reform, 21 HEALTH MATRIX (forthcoming 2011) (manuscript at 27-30). 5. McLean, supra note 4, at Herman, supra note 2, at Rupa Chanda, Trade in Health Services, 80 BULL. WORLD HEALTH ORG., 158, 158 (2002), available at 8. Global : Top Performers - Fastest Growing Industries, CNNMONEY.COM, /money.cnn.com/ magazines/fortune/global500/ 2009/ performers/ industries/fastgrowers/ (last visited May 3, 2011).
4 The Geo. Wash. Int'l L. Rev. [Vol. 42 by the General Agreement on Trade in Services (GATS) of the World Trade Organization (WTO): (1) cross-border delivery, where both supplier and consumer remain in different countries; (2) consumption abroad, where a consumer travels to a supplier's country to consume a service; (3) commercial presence, where a foreign supplier establishes a commercial presence in a consumer's country; and (4) presence of natural persons, where labor moves to a consumer's country. 9 In the context of international health services, mode one encompasses a variety of services, ranging from telemedicine, to remote education, to the purchase of health insurance. 10 Mode two is broadly termed as medical tourism, where foreign patients travel abroad for specialized or more affordable medical care unavailable in their home countries. 11 Mode three primarily encompasses foreign-ownership of medical practice and hospital activities in a patient's country. 1 2 Mode four commonly occurs when individual foreign healthcare providers move to a consumer's country to offer their medical services. 13 This Article will focus on modes one and two of international health services, as these cross-border transactions are the most likely to involve the legal ambiguities and uncertainties that businesses and consumers face in the event of a health services dispute. Existing scholarship lacks comprehensive data on the extent of the health services trade, 1 4 but an overview of the services trade in all sectors offers an instructive introduction to the nature and trends of this sub-sector. Contrary to public perception that services outsourcing only flows one way-from industrialized countries to developing countries 15 -the following observations reveal that trade in services is a two-way flow among many participating countries. For instance, foreigners regularly have sought health care in U.S. hospitals and facilities such as the Mayo Clinic for 9. Herman, supra note 2, at Id. at DELOITTE CTR. FOR HEALTH SOLUTIONS, MEDICAL TOURISM: CONSUMERS IN SEARCH OF VALUE 6 fig. 5 (2008) [hereinafter DELOITrE], available at assets/dcom-unitedstates/local% 20Assets/Documents/us-chsMedicalTourismStudy (3).pdf (identifying the most popular locations for medical tourism in the world). 12. Herman, supra note 2, at 14. For example, a foreign commercial presence would arise if an Arizona hospital established a subsidiary in Mexico. 13. See id. at Id. at See Mark B. Burger, "The Technology Dog Ate My Job": The DogEat-Dog World of Offshore Labor Outsourcing, 16 FLA. J. INT'L L. 807, (2004) (citing T.K. Bhaumik, Outsourcing Outcry: West Should Compete, Not Whine, ECON. TIMES (Feb. 17, 2004), economictimes.indiatimes.com/ /news/ _1_outsourcing-outcry-globalisation-countries (last visited May 13, 2011)).
5 20101 Healthcare Disputes Across National Boundaries many decades. 16 Gary Hufbauer and Sherry Stephenson cite studies affirming the bilateral nature of trade in health services..17 These studies also reveal that what one uses as the basis for measurement determines a country's ranking with respect to terms of insourcing and outsourcing activities. 1 8 In a 2002 study that used the share of gross domestic product (GDP) to measure the value of services being outsourced abroad, developing countries ranked among the top outsourcers. 19 A 2004 study using raw dollars ranked industrialized countries such as the United States, United Kingdom, Germany, France, and the Netherlands among the top insourcers. 20 In 2006, India had a higher rate of insourced skilled work than call-center work, underscoring the variance in and two-way flow of the services trade. 21 Just as with services trade in general, the sub-sector of health services flows back and forth at varying levels among its country participants. 22 The present information available and offered below affirms the health services industry's emergence in the international market place and its potential to be one of the leading players in the global economy. A. Cross-border Delivery of Health Services As discussed above, the cross-border delivery of health services encompasses a wide range of activities. 23 Telemedicine constitutes the bulk of these cross-border activities, 24 and is itself a sub-category covering a plethora of services. Defined as "the use of medical information exchanged from one site to another via electronic communications to improve patients' health status," 25 telemedicine has the potential to perform essentially any medical 16. Glenn Cohen, Protecting Patients with Passports: Medical Tourism and the Patient-Protective Argument, 95 IowA L. REv. 1467, 1471 (2010). 17. Gary Hufbauer & Sherry Stephenson, Services Trade: Past Liberalization and Future Challenges, 10J. INT'L ECON. L. 605, (2007). 18. See id. 19. Id. Hufbauer & Stephenson cite examples such as Angola, the Democratic Republic of Congo, and Mozambique. Id. at 25. Significantly, the United States ranked 117th among the countries examined in this study. Id. 20. Id. 21. Id. 22. Herman, supra note 2, at Id. at McLean, supra note 4, at 593 ("The global market for health care services is composed of medical tourism and telemedicine."). 25. About Telemedicine, AMERICAN TELEMEDICINE Ass'N, org/i4a/pages/index.cfm?paged=3331 (last visited May 3, 2011).
6 The Geo. Wash. Int'l L. Rev. [Vol. 42 service across distances. 26 Presently, trade in telemedicine includes a wide range of applications, including but not limited to: two-way video conferencing; 27 electronic communications of diagnoses, second opinions, and consultations; and telehealth services such as telepathology, teleradiology, and telepsychiatry. 28 Several reasons account for the emergence and proliferation of cross-border delivery of health services. The lack of access to healthcare facilities that many patients face in different parts of the world is a significant factor. 29 In both developing and industrialized countries, hospitals and health care providers are often located in urban areas, depriving patients in rural areas of medical care. 30 Additionally, cross-border delivery of health services helps to alleviate the stresses and shortages of medical professionals associated with providing round-the-clock medical care. 31 Spurred by these societal concerns and the economic benefits from expansion into new markets, many countries are participants in cross-border delivery of health services. 32 These countries are at varying levels of economic development and experience different degrees of involvement as importers and/or exporters. 33 Lior Herman, an expert in international trade, has conducted trade pattern studies of several Organization for Economic Cooperation and Development (OECD) countries that indicate no clear categorization of export or import countries, with few exceptions; instead, 26. McLean, supra note 4, at What is Telemedicine & Telehealth, AMERICAN TELEMEDICINE ASS'N, americantelemed.org/files/public/abouttelemedicine/what-is Telemedicine.pdf (last visited May 3, 2011). 28. Chanda, supra note 7, at 158. For an in-depth analysis of telemedicine and its benefits, see John D. Blum, The Role of Law in Global E-Health: A Tool for Development and Equity in a Digitally Divided World, 46 ST. Louis U. L.J. 85, 85, 109 (2002); P. Greg Gulick, E- Health and the Future of Medicine: The Economic, Legal, Regulatory, Cultural, and Organizational Obstacles Facing Telemedicine and Cybermedicine Programs, 12 ALB. L.J. Sci. & TECH. 351, , (2002); Thomas R. McLean, The Future of Telemedicine & Its Faustian Reliance on Regulatory Trade Barriers for Protection, 16 HEALTH MATRIX 443, 452 (2006); Susan E. Volkert, Telemedicine: RXfor the Future of Health Care, 6 MICH. TELECOMM. & TECH. L. RaV. 147, 149 (2000). 29. Herman, supra note 2, at Id. 31. Id. The World Health Organization and the American Cancer Society have linked health hazards to the graveyard shift. Amar Gupta, The 24-Hour Knowledge Factory: Can it Replace the Graveyard Shift?, COMPUTER, Jan. 2009, at 66, 66, available at lmp/news/gupta.pdf. This also impacts medical professionals who must work as a consequence of such circumstances. 32. See Herman, supra note 2, at See id.
7 2010] Healthcare Disputes Across National Boundaries most countries alternate between trade surpluses and deficits. 34 For instance, the United States engages in both offshoring and insourcing activities. In 2004, the nation's telemedicine market had an estimated worth of $380 million and grew at more than 15% annual rate. 35 Due to the domestic shortage of several physician specialties, offshoring is a necessary practice. 3, For example, approximately three hundred U.S. hospitals offshore outsource imaging services to cover for the shortage in radiologists 37 and one hundred U.S. hospitals use foreign healthcare providers for remote monitoring of Intensive Care Units (ICUs) to cover for the shortage in intensivists. 38 Additionally, U.S. hospitals provide medical services to countries in Central America and the Eastern Mediterranean, including telediagnoses, surveillance, and consultations. 39 Elsewhere, suppliers employ physicians in India at costs below foreign physicians' wages. 40 Researchers estimate that India currently serves 2% of the U.S. healthcare market. 41 Further, healthcare institutions in Bangladesh and Nepal outsource telepathology services to India. 42 Similar to India's relationship with its neighbors, China-based health providers offer telediagnoses to patients in Macao and several southeast Asian countries. 43 B. Consumption of Health Services Abroad As discussed above, the consumption of health services in foreign countries is broadly termed as medical tourism, which involves "the act of traveling to another country to seek specialized or economical medical care, well being and recuperation of acceptable 34. Id. at 5. Most of these countries have high-income economies. See Members and Partners, ORG. FOR ECON. CO-OPERATION AND DEV., 7,en_ _ ,00.html (last visited May 15, 2011); Herman, supra note 2, at Herman, supra note 2, at 4. This is likely a conservative estimate, as a 2006 federal report observed that many U.S. health institutions underreport their offshoring activities. Sanjiv N. Singh & Robert M. Wachter, Perspectives on Medical Outsourcing and Telemedicine - Rough Edges in a Flat World?, 358 NEw ENG. J. MED. 1622, 1623 (2008), available at 36. Nicolas P. Terry, Under-Regulated Health Care Phenomena in a Flat World: Medical Tourism and Outsourcing, 29 W. NEw ENG. L. REV. 421, 444 (2007). 37. Id. at Id. at Chanda, supra note 7, at McLean, supra note 4, at Singh & Wachter, supra note 35, at Chanda, supra note 7, at Id.
8 The Geo. Wash. Int'l L. Rev. [Vol. 42 quality with the help of a support system." 4 4 Operating as an unregulated industry, 45 the global medical tourism market reached approximately $60 billion in 2008, and was expected to grow to $100 billion by Over thirty-five countries serve more than one million medical tourists annually. 47 Patients seek medical care abroad because of a lack of domestic access to a particular treatment or because a treatment is less expensive abroad than in their own countries. 48 These patients fall within three categories: (1) patients in developing countries seeking specialized or high-quality care in developing or industrialized countries; (2) patients from industrialized countries seeking affordable or alternative care in developing countries; 49 (3) patients seeking medical services not offered in their home countries due to moral or ideological reasons including abortion, fertility treatments, and euthanasia. 50 Many destination hospitals provide greater incentives for foreign patients by obtaining accreditation of quality care from the U.S.-based Joint Commission on Accreditation of Healthcare Organizations' (JCAHO) international arm, the Joint Commission International (JCI).51 Such accreditation signifies that a hospital meets uniform requirements established by international healthcare experts. 52 Additionally, many foreign hospitals advertise that their physicians are U.S. board certified or are trained at highly regarded U.S. medical schools. 5 3 Just as with cross-border delivery of health services, many countries engage at varying levels of offshoring and insourcing activities 44. DELOIrrE, supra note 11, at 6 fig Dana A. Forgione & Pamela C. Smith, Medical Tourism and Its Impact on the U.S. Health Care System, 34 J. HEALTH CARE FIN. 27, 32 (2007). 46. DELOTTE, supra note 11, at 6 fig Id. 48. Nathan Cortez, Patients Without Borders: The Emerging Global Market for Patients and the Evolution of Modern Health Care, 83 IND. L.J. 71, 77 (2008). 49. Chanda, supra note 7, at Puteri Nemie J. Kassim, Medicine Beyond Borders: The Legal and Ethical Challenges, 28 MED. & L. 439, 443 (2009); Levi Burkett, Comment, Medical Tourism: Concerns, Benefits, and the American Legal Perspective, 28 J. LEGAL MED. 223, 229 (2007). 51. See The Joint Commission History, THE JOINT COMMISSION, 10-14, commission.org/assets/i/18/jointcommissionhistory.pdf (last visited May 3, 2011) (explaining that JCAHO implements strict accreditation standards for all aspects of the healthcare system, helping to create globally developed international standards for healthcare, and details accredited hospitals against standardized national performance standards). 52. See generally id. (detailing the various aspects of the development of the accreditation standards). 53. Burkett, supra note 50, at 230.
9 20101 Healthcare Disputes Across National Boundaries related to medical tourism. 54 With respect to the United States, foreign patients are drawn to the high-quality and specialized approach of its healthcare system, while domestic patients are driven away because of the system's high-costs relative to other countries. 55 A 2008 Deloitte study estimated that by the end of 2017, the United States will have treated approximately 561,000 foreign patients. 56 In comparison, approximately million U.S. patients will have traveled abroad for treatment during that same time period. 5 7 These cost-conscious consumers are drawn to countries such as India, Thailand, and Singapore, which offer comparable care for much lower prices-even as low as one-fifth of U.S. prices. 58 Similar to the United States, other countries capitalize on their medical areas of specialty and market their services to attract foreign patients; Latin American countries such as Brazil, Cuba, and Mexico provide instructive examples. Brazil offers medical procedures, including cosmetic surgeries, at 40-50% of U.S. prices. 5 9 Cuba focuses on specialized hospitals offering high-quality care at competitive prices to target markets such as Latin America, the Caribbean, Europe, and Russia. 60 Mexico provides mainly dental and cosmetic surgery at 25-35% of U.S. prices, and otherwise draws U.S. patients due to its proximity. 61 In addition to Latin American countries, several Asian countries have emerged as pioneers in medical tourism. 62 Thailand is currently regarded as the industry leader, successfully marketing its 54. See Herman, supra note 2, at 5-6, See DELOITrE, supra note 11, at 5, Id. at 21 fig Id. at 5 fig. 3. It is important to note that the Deloitte study does not indicate a distinction between patients that obtain treatment only once or multiple times. Additionally, research on U.S. patient travel abroad has unearthed wide variations in estimates. See AMA COUNCIL OF MEDICAL SERVICES, MEDICAL TRAVEL OUTSIDE THE U.S. (2007), 2 0June% pdf. (estimating that 1.5 Million U.S. patients will have traveled abroad for medical care by 2020); How MANY AMERICAN MEDICAL TOURISTS ARE THERE?, INTERNATIONAL MEDI- CAL TRAVEL JOURNAL, (last visited May 27, 2011) (noting extreme variations in estimates for U.S. patients traveling overseas by different institutions and studies). 58. See id. at 6 fig See id. at 6 fig. 5. As the U.S. dollar has traditionally been the default global currency, see Edieth Y. Wu, Recent Developments in the Currency War: The Euro, the Dollar, the Yen, and the Bemu, 15 CONN.J. INT'L L. 1, 12 (2000), the U.S. dollar will be used as a basis for the following price comparisons and throughout this Article. 60. Chanda, supra note 7, at DELOITrE, supra note 11, at 6 fig Burkett, supra note 50, at
10 The Geo. Wash. Int'l L. Rev. [Vol. 42 hospitals to expatriates and foreign patients abroad.6 3 In 2006, Thailand treated 1.2 million foreign patients at an average of 30% of U.S. prices. 64 India is close on Thailand's heels and is the fastest growing medical tourist destination. 65 Patients from developed and developing countries are attracted to India for several reasons: specialty areas including neurology, cardiology, endocrinology, nephrology, and urology; surgical expertise; highly qualified medical professionals; 66 and affordable treatment averaging at about 20% of U.S. prices. 67 In Malaysia, foreign patients primarily visit for cosmetic surgery and alternative medical care with treatment averaging at 25% of U.S. prices. 68 Recognizing the potential and profitability of medical tourism, several Asian governments have implemented new policies designed to promote growth in this industry. In Korea, the government is involved in the planning stages of new medical facilities with international patients in mind. 69 In Taiwan, the government pledged $318 million towards the development of medical services. 70 European countries also target their medical services to patients in neighboring and distant countries. Hungary attracts European patients by offering dental and cosmetic surgery at 40-50% of U.S. prices. 71 Several nations are attractive destinations because they offer certain procedures unavailable in several surrounding European countries for moral reasons. 72 For instance, Norway permits euthanasia 73 and Slovenia performs fertility treatments. 74 III. THE LEGITIMACY OF LITIGATION IN RESOLVING CROSS-BORDER MALPRACTICE CLAIMS ON A GLOBAL LEVEL Notwithstanding the global reach of health services and the industry's accompanying social and economic benefits, the indus- 63. Id. at DELOrrTE, supra note 11, at 6 fig Cortez, supra note 48, at Chanda, supra note 7, at DELOIrrE, supra note 11, at 6 fig Id. 69. Id. at Id. 71. Id. 72. Kassim, supra note 50, at 443; Burkett, supra note 50, at Kassim, supra note 50, at Burkett, supra note 50, at 230.
11 2010] Healthcare Disputes Across National Boundaries try is far from reaching its full potential. 75 Herman's study of OECD countries' trade in health services noted the discrepancy between national and private healthcare expenditures and the relatively low trade in health services in relation to GDP. 76 While the average ratio of total healthcare trade to GDP is 0.01% of total GDP, the average ratio of national and private health expenditures to GDP rises well above 20%. 7 7 Furthermore, Herman notes that while 80% of European-based health providers utilize advanced e- health infrastructures to store patients' data, only 0.7% of such data is transferred across national borders. 78 Thus, the lack of correspondence between these figures and the underutilization of e- health infrastructures point to the unmet capacity for international trade in health services. 79 To account for such shortfalls, earlier scholarship in this area has identified several trade barriers in the health services industry. These works note that the chief challenges for cross-border delivery of health services include dissimilar licensing requirements for medical professionals and differing national and sub-national legal liability and regulatory regimes. 8 0 Similar to the problems encountered with cross-border delivery of goods and other types of services, the legal uncertainties of malpractice liability presents one of the major obstacles to medical tourism. s 1 Such legal limbo merits closer examination, as health providers and consumers are hard pressed to find legal recourse resulting from differences in legal and regulatory regimes, and diverse cultural expectations. 8 2 Because the nationalities of the parties and the place of contract breach or injury necessarily share no common situs, ambiguities abound surrounding appropriate jurisdiction, choice of law, and 75. See Thomas R. McLean, Telemedicine and the Commoditization of Medical Services, 10 DEPAULJ. HEALTH CARE L. 131, 164 (2007). 76. Herman, supra note 2, at Id. at Id. at Id. 80. Kassim, supra note 50, at 448. It should be noted that in addition to trade barriers, resistance to the globalization of health services may result from public policy considerations. Such a discussion is beyond the scope of this paper, but arguments against globalization include ethical considerations surrounding seeking treatment abroad for procedures deemed illegal in one's home country, and unequal access to health care in developing countries as a result of a preference for foreign patients because of their ability to pay more for services. Id. at Id. at 441, 445; McLean, supra note 75, at Nathan Cortez, Recalibrating the Legal Risks of Cross-Border Health Care, 10 YALE J. HEALTH POLY L. & ETHICS 1, 3-4 (2010).
12 The Geo. Wash. Int'l L. Rev. enforceability of foreign awards. 8 3 In order to understand the nature and scope of these legal barriers, this section will separately examine the challenges for dispute resolution in (1) cross-border delivery of health services and (2) consumption of health services abroad. A. Legal Barriers to Cross-Border Delivery of Health Services [Vol. 42 The use of telemedicine across different national legal and regulatory regimes raises a variety of legal dilemmas. Two scenarios demonstrate the difficulty in deciding which party should be held liable, which judicial system has jurisdiction over the claim, which laws or regulations apply, and whether the selected laws or regulations adequately define the telemedicine transaction in question as medical malpractice: 8 4 (a) misdiagnosis or other injury by a healthcare provider performing the telemedical service in a different jurisdiction than where the patient is located; and (b) misdiagnosis or other injury resulting from technological error by telemedical device, and not by human error. 8 5 These matters are further complicated when including sub-national legal and regulatory regimes as part of the analysis. For example, many of the same issues arise when health services are delivered across state lines in the United States, as each state has the authority to regulate health professionals who practice in their territories and differing procedural and substantive laws govern healthcare disputes in different states. 8 6 Because no international agreements or protocols concerning telemedicine exist there are no answers to the issues discussed above. 7 The uncertainty exists because telemedicine is still too small and too new of an industry to attract international attention and action. 88 Irrespective of the reasons behind such neglect, businesses and consumers suffer from higher transaction costs or forgo participation in cross-border trade of health services due to the lack of reliable legal remedies and protection See id. at 4-7; Kassim, supra note 50, at Singh & Wachter, supra note 35, at Kassim, supra note 50, at See Gupta & Sao, supra note 4, at Leah B. Mendelsohn, 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, 153 (2004). 88. Thomas R. McLean, The Offshoring of American Medicine: Scope, Economic Issues and Legal Liabilities, 14 ANNALS HEALTH L. 205, 248 (2005). 89. Kassim, supra note 50, at 441 (noting that "countries, like the United States, have not been able to benefit as greatly from medical tourism because of increased legal liability and policy").
13 2010] Healthcare Disputes Across National Boundaries 1. Potentially Liable Parties In either of the liability scenarios described above, potentially liable parties may include a remote healthcare provider, any affiliated local healthcare provider working in consultation or contracting with that remote healthcare provider, 90 and the supplier of the telemedical device. 91 The ability of telemedicine to involve several parties in different locations and at varying capacities in the course of medical treatment complicates the nature and scope of a defendant's liability in malpractice claims. 92 For instance, a plaintiff pursuing a malpractice claim in the United States must prove, among other elements, that the defendant had a duty to the patient arising out of a physician-patient relationship. 93 The departure from the traditional face-to-face physician-patient relationship in telemedical care makes it difficult to determine when such duty arises and whether the standard of care is violated. 94 State case law from the United States has established that a physician-patient relationship begins "[w] hen the professional services of a physician are accepted by another person for the purposes of medical or surgical treatment." 95 In general, state courts interpret this standard to mean that such a relationship is based primarily on implied or express contract. 96 If a patient goes to a local hospital for treatment, and that hospital outsources pathology services to an offshore healthcare provider, it is unclear which parties have formed a physician-patient relationship. 97 Another similar dilemma may occur where a local hospital utilizes a telemedical device that may be supplied by an offshore entity that treats a patient without the aid of any human assistance. While in the United States the "ostensible agency" doctrine may apply-making the hospital liable for acts of offshore healthcare providers-the lack of well-established case law leaves this question unanswered Heather L. Daly, Telemedicine: The Invisible Legal Barriers to the Health Care of the Future, 9 ANNALS HEALTH L. 73, (2000). 91. Id. at Id. 93. Id. 94. Id STEVEN E. PEGALIS & HARVEY F. WACHSMAN, AMERICAN LAW OF MEDICAL MALPRAC- TICE 24 (2d ed. 1992). 96. Id. at Singh & Wachter, supra note 35, at Id. The above considerations in determining an appropriate liable party similarly apply to health care providers seeking to minimize their liability while engaging in crossborder telemedicine. In addition to facing such legal uncertainties, these health care providers have the additional burden of finding malpractice insurers willing to cover such activ-
14 The Geo. Wash. Int'l L. Rev. [Vol Determining Appropriate Jurisdiction to Litigate and Enforce a Claim In addition to determining which parties are liable, the injured party has the challenge of selecting the appropriate forum that will litigate and enforce the claim. The selected court must have jurisdiction over the claim, as jurisdiction grants the court authority to prescribe, adjudicate, and enforce judgments against persons and property. 99 Presently, the available options in countries such as the United States are legal proceedings in (1) plaintiff's domicile state or (2) defendant's domicile state. A party's domicile is "the state where an individual habitually resides, or the state where a company or legal person has its 'seat' or center of management." ' 100 As the analysis below demonstrates, each option presents its own set of difficulties and uncertainties. a. Establishing Jurisdiction in Plaintiffs Domicile State Should the plaintiff decide to sue in his own domicile state, he must be able to assert personal jurisdiction over the defendant and ensure that any favorable judgment rendered will be enforced.' 01 This requirement presents several difficulties for plaintiffs. Not only do common and civil law countries have different approaches to asserting personal jurisdiction, but countries from either legal system also may make different determinations because of their interpretation of the laws in question In civil law countries, a defendant may be sued in his domicile and in any jurisdiction where he commits a tort. 03 This guiding principle elicits a variety of interpretations, with some national laws broadening its meaning to include an injury sustained by a plaintiff within a jurisdiction while others restrict its application to the act of committing a tort This distinction is crucial in telemedicine disputes where a foreign healthcare provider renders a telemedical service in a different location than where the plaintiff suffers an injury resulting from that service. Additionally, some civil law countries have ities with unknown risks. See Daly, supra note 90, at ; Singh & Wachter, supra note 35, at RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE UNITED STATES 401 (1987) Gary B. Born, Reflections on Judicial Jurisdiction in International Cases, 17 GA. J. INT'L & COmP. L. 1, 13 (1987) Singh & Wachter, supra note 35, at See, e.g., Born, supra note 100, at Id. at Id. at
15 2010] Healthcare Disputes Across National Boundaries enacted legislation broadening their reach of personal jurisdiction.' 05 In France, the French Civil Code grants its courts the power to hear any case involving a French citizen Similarly, Luxembourg and the Netherlands grant their courts jurisdiction over almost all cases where parties are nationals or residents In comparison to civil law countries, their common law counterparts adopt a flexible multi-factor approach to establish personal jurisdiction.1 08 Unlike the civil law reliance on territoriality, the common law system considers the principles of fairness and reasonableness by examining the quantity and quality of contacts between the defendant and forum state. 109 The test utilized by U.S. courts is a representative example, as it requires a finding of the following three elements: (1) the plaintiffs state has a long-arm statute allowing for personal jurisdiction; (2) the defendant has minimum contacts with the plaintiffs state, as evidenced by foreseeability of liability and "purposeful availment" of the privileges and protections of the laws of that state; and (3) the exercise of personal jurisdiction is reasonable and does not violate "traditional notions of fair play and substantial justice" guaranteed under the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution. 110 This test, like the civil law approach, is open to different interpretations and offers no reliable outcome to either party in a telemedicine claim. 11 ' Even if a plaintiff succeeds in asserting the claim in his domicile state, the defendant may utilize the common law doctrine of forum non conveniens to dismiss the claim Forum non conveniens empowers courts to dismiss cases under particular circumstances, and common law countries apply the doctrine differently from one 105. Id. at Id Id Paul R. Dubinsky, Human Rights Law Meets Private Law Harmonization: The Coming Conflict, 30 YALEJ. INT'L L. 211, (2005) Id. at See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, (1985); Hanson v. Denckla, 357 U.S. 235, (1958); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, (1980); Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, (1987) Several other common law countries have statutes governing transnational tort claims. For instance, Great Britain asserts personal jurisdiction on a foreign defendant if the tort is committed within its territory. Born, supra note 100, at 12. As discussed above, the nature of several telemedical services in which several parties are involved in different capacities and locations makes it difficult to determine where the tort was committed See generally Martine Stfickelberg, Lis Pendens and Forum Non Conveniens at the Hague Conference, 26 BROOK. J. INT'L L. 949, (2001).
16 The Geo. Wash. Int'l L. Rev. [Vol. 42 another For example, Great Britain employs a two-step analysis that first requires the defendant to prove that another appropriate forum is available and second that under the circumstances justice demands jurisdiction of a British court. 114 In the United States, courts afford plaintiff domicilairies the presumption of convenience, 115 but employ the doctrine after a finding that the defendant will experience an undue burden and an alternative, more appropriate forum exists. 1 6 Thus, the existence and application of such a doctrine present another barrier to the adjudication of the claim in a plaintiff's domicile. Furthermore, it is important to consider the existence of any commercial or civil agreements that a country is a party to, as such membership may impact its rules regarding jurisdiction in relation to fellow member states. The Brussels Convention on the Jurisdiction of Courts and the Recognition and Enforcement ofjudgments in Civil and Commercial Matters (Brussels Convention), which only permits E.U. countries as members, is an instructive example. 117 The Brussels Convention prohibits a member state from employing "'exorbitant' jurisdictional devices" against defendants domiciled in fellow member states 1 8 and mandates enforcement of judgments rendered by fellow member state courts.' 19 These restrictions compelled common law member states such as England and Ireland to abandon their exercise of jurisdiction based on serving process to a defendant member-domiciliary while he was physical present in their territories. 120 Consideration of agreements such as the Brussels Convention is also important for enforcement of awards against a foreign defendant. Absent such regional agreements, no general consensus exists among countries to enforce each other's court-issued decrees.' 21 The first international agreement on enforcement of foreign judgments, adopted by the 1971 Hague Conference, failed 113. Id. at Id. at Id. at Cortez, supra note 82, at Born, supra note 100, at Id Id. at Dubinsky, supra note 108, at StTackelberg, supra note 112, at 952. In addition to the Brussels Convention, other regional agreements such as the Lugano Convention and the Inter-American Convention on the Extraterritorial Validity of Foreign Judgments and Arbitral Awards commit member states to automatic enforcement of commercial and civil judgments. Id.
17 2010] Healthcare Disputes Across National Boundaries as it was ratified by only three countries. 122 Such overwhelming recalcitrance is owed to wariness by most countries in automatically enforcing a foreign decree without domestic judicial review. 123 In this respect, membership in regional agreements offers the advantage of enforcement of judgments against both member-domiciliaries and non-member domiciliaries, in the event a member state court rendered the judgment. 124 b. Establishing Jurisdiction in Defendant's Domicile State In contrast with the effort to sue a defendant in a plaintiff's domicile state, no jurisdictional issues bar adjudication of a claim in a defendant's domicile state. Civil law countries consider a defendant's domicile to be a basis for jurisdiction for disputes involving domestic and international parties. 125 Similarly, in common law countries, the physical presence of the defendant or the defendant's property within its territories is sufficient to exercise jurisdiction. 126 A defendant domiciliary's use of forum non conveniens for dismissal may, however, curtail the relative ease in bringing forth a claim in this forum.' 27 In the United States, defendant domiciliaries routinely and successfully employ this doctrine to dismiss tort claims by foreign plaintiffs. 128 Unlike a U.S. plaintiff domiciliary, a foreign plaintiffs forum selection is not given the presumption of convenience but is viewed as a strategic choice of law preference. 129 As a result, an overwhelming number of forum non conveniens motions are granted in situations where the alleged injury occurred in another country. 1 0 This widespread practice provides a warning for prospective plaintiffs seeking to sue healthcare providers domiciled in common law countries, particularly the United States. 13 ' 122. Id Id Born, supra note 100, at Developments in the Law: State-Court Jurisdiction, 73 HARV. L. REV. 911, 913 (1960) Id. at See generally Walter W. Heiser, Forum Non Conveniens and Retaliatory Legislation: The Impact on the Available Alternative Forum Inquiry and on the Desirability of Forum Non Conveniens as a Defense Tactic, 56 KAN. L. REV. 609 (2008) (discussing how U.S. defendants are using the doctrine of forum non conveniens to dismiss lawsuits filed against them in the United States and how foreign countries are enacting retaliatory legislation to this U.S. practice) Id. at Id. at Id. at Plaintiffs must consider that medical malpractice claims are a subset of tort law and the nature of telemedical services makes the location of injury a subject of dispute. The potential impact of a defendant domiciliary's use of forum non conveniens in other
18 The Geo. Wash. Int'l L. Rev. [Vol. 42 In the event that a foreign plaintiff successfully brings suit in a defendant's domicile court, the plaintiff may face additional challenges. Foreign patients will not only have to navigate an unfamiliar legal system, but also adjust their cultural expectations to the forum state's remedies and procedures. 32 In particular, those patients hailing from industrialized countries are likely subject to more onerous burdens of proof and relatively inadequate legal protection afforded by developing countries.' 33 As a consequence, such challenges and shortcomings make litigation an undesirable solution for many consumers. 3. Choice of Law and Adequacy of Existing Laws In addition to identifying the appropriate liable parties and jurisdiction, telemedicine disputes are complicated by choice of law considerations and determinations of whether the selected law in question adequately resolves the legal issues raised by telemedicine. There is no uniform approach to choice of law determinations, as courts follow the particular rules adopted by their jurisdictions.13 For instance, Great Britain applies the lex loci delicti rule-the law of the place of injury governs the disputespecifically applying the rule to personal injury and death claims. 135 In contrast, a minority of states in the United States follow the lex loci delicti rule, but the majority has adopted the "most significant relationship" rule for tort claims, requiring a court to choose whichever law has the "most significant relationship to the occurrence and parties."' 1 6 Factors include: place of injury; place of conduct causing injury; parties' domiciles, residence, nationality, place of incorporation, and place of business; and place where relationship between the parties is centered The ambiguities surrounding how telemedicine fits within the practice of medicine countries is plausible, particularly because of the actions of several countries in response to U.S. forum non conveniens dismissals. See id. at 610. For instance, several countries have enacted legislation barring their courts from hearing any action from domiciliary parties previously dismissed on forum non conveniens grounds by another country. Id Cortez, supra note 82, at Cortez, supra note 48, at See William Tetley, New Development in Private International Law: Tolofson v. Jensen and Gagnon v. Lucas, 44 AM.J. CoMP. L. 647, (1996) (comparing tort choice of law rules in Canada to choice of law determinations in the United Kingdom, the United States, Australia, France, Switzerland, the European Union, Louisiana, and Quebec) Id. at Id. at Id. at 662.
19 2010] Healthcare Disputes Across National Boundaries and the occurrence of injury allow for open-ended and contradictory interpretations of the outcomes of these tests. As alluded to earlier, only a handful of legal regimes have addressed telemedicine licensure and governance. 138 While more than half of U.S. states have addressed telemedicine licensing, 139 the international community is woefully behind-malaysia is the only country with a comprehensive telemedicine regime. 140 Malaysia's Telemedicine Act of 1997 (Telemedicine Act) provides detailed guidelines for telemedicine licensure and informed consent. 41 However, with the exception of informed consent requirements, these laws fail to address the legal liability considerations discussed above. 142 Furthermore, because no Malaysian courts have decided any medical malpractice cases involving telemedicine, there are no interpretations or applications of the intent and parameters of the Telemedicine Act. 143 Such gaps and inconsistencies in telemedicine regulation at subnational, national, and international levels complicate a court's application of the facts of telemedicine cases to traditional malpractice frameworks. As discussed above, 144 it is unclear whether a physician-patient relationship arises from performance of a telemedical service. 145 Another area of legal ambiguity lies in the appropriate standard of care, as it is unclear whether technological innovations and practices associated with telemedical services should change such a standard or if courts should create a new standard. 46 In the United States, the standard of care for online treatment by physicians in a medical malpractice case is still undefined by many states. 147 Other issues include whether the duty of 138. See supra Part III.A See Telemedicine Licensing Provisions by State, AM. C. OF RADIOLOGY, org/secondarymainmenucategories/gr_- Econ/FeaturedCategories/state/state issues/ TelemedicineLicensingProvisionsbyStateDoc8.aspx (last visited May 11, 2011) Hsing-Hao WNu, Evolving Medical Service in the Information Age: A Legal Analysis of Applying Telemedicine Programs in Taiwan, 27 MED. & L. 775, 784 (2008) (noting that Malaysia's telemedicine law "specifically addresses legal issues concerning telemedicine, such as licensure, informed consent and telemedicine, standard development") See id.; Kassim, supra note 50, at 447 n See Kassim, supra note 50, at Id See supra Part III.A See Kassim, supra note 50, at Id Some states follow the FSMB's view that online treatment warrants the same standard of care as in-person treatment, and that sole use of an online questionnaire is unacceptable. See FED'N OF STATE MED. BDS. OF THE U.S., MODEL GUIDELINES FOR THE APPROPRIATE USE OF THE INTERNET IN MEDICAL PRACTICE (2002), available at fsmb.org/pdf/2002-grpol-use-of-internet.pdf.
20 The Geo. Wash. Int'l L. Rev. [Vol. 42 confidentiality and informed consent extends to telemedical services. 148 B. Legal Barriers to Consumption of Health Services Abroad Many of the legal barriers surrounding telemedical service claims also impede successful adjudication of and recovery from medical tourism malpractice claims. Just as with cross-border teleiedicine service claims, no international regime exists for legal remedies resulting from unsatisfactory cross-border medical care. 149 The analysis below highlights the challenges that parties confront. 1. Potentially Liable Parties There are several potential liable parties in a medical tourism claim: foreign healthcare providers, 150 intermediaries, employers, and insurers Just as with cross-border telemedicine claims, however, a plaintiff must overcome personal jurisdiction and forum non conveniens challenges, which are discussed more fully below within the context of medical tourism. While procedural legal barriers impede pursuit of a foreign healthcare provider defendant, the difficulty of finding and proving theories of liability impede pursuit of the remaining potential defendants In the United States, intermediaries that serve as facilitators for overseas care, employers, and insurers may be liable for corporate negligence or failure to obtain informed consent.' 53 For both of these claims, the difficulties in obtaining evidence in a foreign country and differences in regulatory and credentialing standards between parties' countries make proving such claims a daunting enterprise. 54 In Great Britain, case law establishes no non-delegable duty to patients, leaving no theory of liability in claims against this insurer. 155 As a result, injured British patients must seek legal recourse against the place of treatment Kassim, supra note 50, at 447; see Singh & Wachter, supra note 35, at Kassim, supra note 50, at Cortez, supra note 82, at 9. Foreign health care providers are logical defendants because the injury causation and circumstances of treatment meet the elements of traditional malpractice frameworks See id. at See id See id. at Id See Terry, supra note 36, at Id.
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