Reforming the provision of cross‐border medical care: Evidence from Spain

Cross‐border medical care, defined as care facilitated by a local health provider under pre‐established regional agreements, as in the case of European Union (EU) citizens accessing care within EU countries, has been on the rise. Unlike medical tourism, typically sought by patients through their own volition and paid for out‐of‐pocket, cross‐border medical care is often reimbursable or paid for directly by the responsible government. Yet, because nations vary in the extent of health coverage offered to their residents, these expenditures are often only partially reimbursed. The resulting financial burden for some countries can be large and not reciprocal, straining regional and country‐level finances. We analyze the effectiveness of a legislative measure adopted by a Spanish region in January 2012 with the purpose of curbing cross‐border medical care. Using a comprehensive administrative dataset of all medical procedures performed in the country between 2008 and 2015, we find that the measure led to a drastic drop in the number of foreigners' hospitalizations and a reduction of 4.8 million euros/trimester in costs. Finally, the decrease in hospitalizations did not disproportionally affect patients based on their gender, age, or origin, although it fostered a reduction in readmissions.