Monday, February 27, 2012

Where to Give Birth

There was an interesting piece in the New York Times last week that caught my attention.  This article tells the story of residents of mainland China going to Hong Kong to give birth.  This demonstrates an interesting set of economic principles and just how health and other considerations are traded off in people's utility.

First, to go from one place to another to give birth is not always all that easy.  As my wife and I found out with our oldest--sometimes birth timing is unpredictable.  The lack of precision is both in terms of the date on which the birth will occur and how long the birth will take.  That could be an issue just for choosing a hospital across town other than the nearest hospital. Choosing to go to Hong Kong instead of mainland China would be even more complicated.

Second, the tradeoffs are interesting ones.  Apparently, the benefits of a birth in Hong Kong are sufficient for people to want to spent the resources to make the choice to plan for a birth in Hong Kong.  The benefits include higher quality medical care (according to the article) and certain benefits of citizenship.  These are traded off against cost, possible inconvenience, time issues, and really a possible threat to the health of the mother and child depending on just how long before the birth the mother is able to be in Hong Kong.

Third, it points to the degree to which individuals with higher income see both peri-natal care and the other benefits of a birth in Hong Kong as luxury goods.

Finally, it is interesting to think about what the appropriate response by authorities in Hong Kong should be.  Places to give birth in a modern setting are not things that can be easily added to the market quickly.  When there is a shortage being created how should the market respond?  How should the government respond?  And how should the residents of Hong Kong respond?  Additionally, if there are efforts now to build up the perinatal care capacity and at some later point residents of mainland China decide it is not worthwhile to come to Hong Kong to give birth, what woud that do to the market for services in the long-term?  This is an issue that the government of Hong Kong will have to consider carefully in order to provide sufficient services now without having an inefficient overabundance later as sometimes happens in health policy when change takes a long time and the market forces leading to differential demand sometimes change more quickly than the constructions of new facilities.

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