A LEGAL ANALYSIS OF THE CROSS BORDER TRADE IN TELEMEDICINE: THE SINGAPORE PERSPECTIVE Brian K Sugg (A.B., Harvard; LL.B./M.B.A., Dalhousie) A THESIS SUBMITTED FOR THE DEGREE OF MASTER OF LAWS FACULTY OF LAW NATIONAL UNIVERSITY OF SINGAPORE 2003 © Brian Keith Sugg, 2003 ACKNOWLEDGEMENT First, I wish to express my gratitude to my supervisor, Professor Terry Kaan for his assistance in this thesis. His affable nature and straightforward advice made the experience a pleasant one. His suggestion to make my thesis useful helped me regain my focus on many late nights. I also would like to thank the staff in the law library at the National University of Singapore. Their warmth and friendliness was surpassed only by their helpfulness. In the law school administrative offices, a special thanks to Chin Yee and Normah. I would also like to express my gratitude to the entire administration at the Faculty of Law for their patience and understanding behind the scenes during the difficulties that I have experienced in my life over the past few years. But most of all, I am eternally grateful to my wife, Ruby. Despite all the personal sacrifice, she has always been a source of constant support and encouragement as I struggled through the chapters of this thesis. The remaining chapters of our life together have yet to be written but I look forward to devoting my constant attention to her from now on. Although I am indebted to many for their assistance, I alone bear the responsibility for any shortcoming of this thesis. ii ABBREVIATIONS AELA Application of English Law Act (Singapore) ASEAN Association of South East Asian Nations ATFA ASEAN Free Trade Agreement CPC Central Product Classification (United Nations) DC Developed Country D2D Doctor-to-Doctor D2P Doctor-to-Patient EU European Union FSMB Federation of State Medical Boards (United States) GATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GNS Group of Negotiations on Services (GATS) HSWG Health Services Working Group (Singapore) ISDN Integrated Services Digital Network ITO International Trade Organization KBE Knowledge Based Economy LDC Less Developed Countries MASEAN Medical Associations of South East Asian Nations MFN Most Favoured Nation MTN Multilateral Trade Negotiation NAFTA North America Free Trade Agreement NGO Non-Governmental Organization NTB Non-Tariff Barrier OECD Organisation of Economic Cooperation and Development SARS Severe Acute Respiratory Syndrome TNC Trans-National Corporation TRIPS Trans-Related Aspects of Intellectual Property Rights UNCTAD United Nations Conference on Trade and Development WHO World Health Organization WPPS Working Party on Professional Services (GATS) iii TABLE OF CONTENTS INTRODUCTION CHAPTER I: TELEMEDICINE AND INTERNATIONAL FREE TRADE 15 A. B. C. 15 17 21 22 23 The Liberalisation of the Trade in Telemedicine Services The Origin of the GATS An Overview of the GATS 1. Cross Border Delivery: The Mode of Supply of Telemedicine 2. Most Favoured Nation (MFN) Treatment and Transparency: General Obligations a) The Most Favoured Nation clause 23 25 b) Transparency and the GATS 3. Market Access and National Treatment: Discretionary Obligations 26 a) Market Access b) National Treatment c) The Specific Commitment Approach of the GATS i) The Classification Structure ii) National Schedules iii) The Data Dilemma in Services Trade 28 28 31 32 33 40 4. Domestic Regulation and Recognition under the GATS 42 a) Balancing Domestic Regulation with Free Trade b) Recognition of International Standards and Procedures D. 43 45 5. Regional Economic Integration The GATS and International Telemedicine 47 48 CHAPTER II: LICENSING THE INTERNATIONAL TRADE IN TELEMEDICINE 50 A. B. C. 53 56 58 59 61 63 The Purpose of Medical Licensure The Classes of Telemedicine The Regulation of Cross Border Telemedicine 1. The Practice of Medicine 2. The Place of Telemedicine Practice 3. The Approaches to Licensure a) Unilateral Licensure i) The California Approach to Licensure ii) The Malaysian Telemedicine Act b) Joint Licensure i) Mutual Recognition in the European Union ii) Reciprocity in Australia iii) ASEAN and Mutual Recognition c) International Licensure D. E. F. 64 69 70 71 74 74 75 76 Licensure and the GATS The Telemedicine Business Model International Telemedicine, Licensure, and the Regulation of the Medical Profession in Singapore 80 87 94 iv CHAPTER III: CONFLICT OF LAWS I: MEDICAL NEGLIGENCE, JURISDICTION, AND INTERNATIONAL TELEMEDICINE A. B. 98 Whose Law is it Anyway? Jurisdiction of the Singapore Courts 1. General Aspects of Jurisdiction 2. Service Outside Singapore – Obtaining Leave of the Court 100 102 105 106 a) Establishing Singapore’s Jurisdiction – Can Singapore Courts Decide the Case? i) The Heads of Jurisdiction – Order 11 Rule a. Rule 1(f) b. The Location of the Tort c. Rule 1(f), Rule 1(p) and the Common Law: A Partial or Substantial Connection? ii) A Proper Case for Service Outside Singapore – Does the Case Have Merit? b) Should Singapore Courts Decide the Case? The Most Appropriate Forum C. 107 107 107 109 112 123 125 Jurisdiction and International Telemedicine 131 CHAPTER IV: CONFLICT OF LAWS II: MEDICAL NEGLIGENCE, CHOICE OF LAW, AND INTERNATIONAL TELEMEDICINE A. National Approaches to International Tort Law 1. The American Montage: Choice of Law Approaches to Tort Actions a) b) c) d) e) f) Place of the Tort (lex loci delicti) Restatement of Torts (Second) Approach – Closest Connection Law of the Forum (lex fori) Significant Contacts test Government Interest Analysis Better Law Method g) Combined Modern Approaches 142 143 145 146 146 147 147 2. Choice of Law in England and Singapore 150 a) The Origin of Choice of Law in England b) Choice of Law in Singapore c) English Choice of Law – The Statute Takes Over 150 160 161 3. The Canadian Approach 162 a) Background to Choice of Law in Canada b) Canada’s Radical Move to the Traditional Model: The Tolofson Decision B. C. 162 163 4. Choice of Law Down Under: The Australian Approach 5. European Choice of Law International Telemedicine and Choice of Law 1. A Double Locality Tort a) b) c) d) 137 141 141 170 172 173 175 The Foundation of the Doctor-Patient Relationship The Location of the Parties Administrative Factors Drawing on the Lessons from Products Liability i) The Canadian Approach to Choice of Law in International Products Liability ii) Choice of Law under the International Convention on Products Liability 178 180 181 184 184 186 2. The GATS and Choice of Law 3. A Pre-Existing Relationship A Choice of Law Direction for International Telemedicine in Singapore 187 190 193 CONCLUSION TABLES BIBLIOGRAPHY 195 204 211 v SUMMARY The government of Singapore has recently indicated its intention to build on Singapore’s reputation for medical excellence and transform the city-state into an Asian health care hub. This paper proposes that as an integral part of its hub strategy Singapore combine its strengths in health care and telecommunications to create a telemedicine strategy. The technology used in modern telemedicine continues to improve over time making telemedicine an increasingly practical and cost-effective form of delivering health care. The main impediment to the proliferation of telemedicine is no longer technological. Legal obstacles are now the greatest challenge to telemedicine’s global commercial development. This thesis focuses on the three major legal obstructions to the international trade in telemedicine, all of which must be resolved in advance in order to gain the confidence of telemedicine providers as well as their insurers and investors. The first impediment lies with the international services agreement itself. Chapter presents the mechanism of the GATS, the global instrument designed to liberalise the international trade in services. Under the GATS, nations must take positive steps to open up their health care sectors to the cross border trade of telemedicine. Before allowing foreign professionals to practice telemedicine within its borders, a country will want to ensure that the health and welfare of its citizens is adequately protected. In the field of health care, a country protects its people by regulating the individuals who are entitled to provide health care and by ensuring there is an available legal avenue for injured patients to receive compensation in the event that something goes wrong during treatment. The handling of these issues is equally important to telephysicians who face the prospect of civil liability and criminal punishment if they not comply with a country’s licensure requirements or find vi themselves in the midst of a medical negligence lawsuit. The cross border trade in telemedicine has the added dimension of double locality in which the physician and patient are located in different countries. Naturally, the separation raises important questions concerning which laws will apply to the issues of licensure and tort liability. Clarity and certainty in the law is of paramount importance to all parties involved. It enables countries to make calculated decisions as to whether they will open up their health care sector to foreign telemedicine providers. It also allows telemedicine providers to weigh the risks of practising across international borders. Chapter looks at the issues surrounding national licensure and considers several possible approaches to the cross border regulation of telemedicine. Chapters and consider the problems relating to the choice of forum and the choice of appropriate law for international tort cases, respectively. This paper addresses the issues telemedicine raises with respect to the GATS, national licensure and the conflict of laws. Bearing in mind Singapore’s plan to develop itself as a medical hub, this paper assesses the clarity and certainty of Singapore’s law in furtherance of this goal and the legal changes needed for telemedicine to form a key part of its strategy. vii INTRODUCTION The advent of telemedicine technologies has created immense new opportunities for the delivery of quality health care over far-reaching distances that will alter the very structure of health care. Telemedicine has been part of the health care profession since doctors began using radios and the telephone to consult with patients and other practitioners. The proliferation of information and telecommunication technologies in the 1990s transformed the nature of telemedicine in the same way that these technologies transformed other industries – allowing greater global reach, improving speed and quality of service, and lowering costs. Recent applications of telemedicine include monitoring a Japanese stroke patient’s blood pressure and electrocardiograms by a doctor in another part of the country, a Canadian surgeon conducting a complex anti-reflux stomach operation using robotic arms on a patient located 400 kilometres away, and American physicians diagnosing illnesses and providing healthcare advice to inhabitants of remote Alaskan villages without the need to be physically present. Essentially, telemedicine is the application of information and telecommunication technologies to the health care field. The innovation of telemedicine does not improve health care in the same way as the development of a new drug or medical procedure but, rather, it adds an important new dimension to the way in which health care is delivered. By using the new technologies, health care providers are able to consult, diagnose, and educate over vast distances. Current uses of telemedicine include diagnosing to and from remote locations, gaining access to medical information and expertise on a global scale, Sheryl WuDunn, “Japan Bets on a Wired World to Win Back Its Global Niche,” in The New York Times, 30 August 1999, p. A1 Joseph Brean, “Robot operates for doctor 400 km away: Hamilton hospital touts procedure as a world first, in The National Post, March 2003, p. A3; Bruce Gillespie, “Cost-cutting operation,” in The National Post, 12 May 2003, p. BE Tina Kelley, “Internet Showing Its Value In Remote Alaskan Villages,” in The New York Times, August 1999, p. G9 providing expert assistance in emergency situations, and delivering home health care. A World Health Organization (WHO) report provides a comprehensive definition for telemedicine as “the practice of medical care using audio, visual and data communications; this includes medical care delivery, consultation, diagnosis, treatment, education and the transfer of medical data.” Telemedicine has become an important issue in health care policy because it holds the potential of solving two of the key problems confronting modern health care, namely, cost and access. The enormous costs associated with health care have become an increasing burden on economies over the past few decades. The development of expensive life saving technologies coupled with populations that are living longer has caused national health care expenditures to soar. The fourteen OECD nations ∗ that reported health care statistics in 1960 showed an expansion of their total expenditures on health as a percentage of GDP from an average of less than 4.0% in 1960 to more than 8.6% in the year 2000. During the same period, these nations experienced unprecedented growth in their economies. In 1960, the total GDP for the OECD nations was slightly over US$ trillion. Forty years later, the GDP for these nations has grown to over US$ 27 trillion. As a result, health care expenditures are now receiving a bigger slice of a larger pie. Expenditure in the United States, for instance, jumped from 5.1% of GDP in 1960 to 13% today. During the same time, the GDP of the United States swelled Salah H. Mandil, “Telehealth: What is it? Will it propel cross-border trade in health services?” in International Trade in Health Services: A Development Perspective (Geneva: UNCTAD-WHO Joint Publication, 1998), at 86 Ibid ∗ Australia, Austria, Canada, Finland, Germany, Iceland, Ireland, Japan, Norway, Spain, Sweden, Switzerland, United Kingdom, United States Organization of Economic Co-operation and Development (OECD), Health Data 2002, 4th edition (Paris: OECD, 2002) Organization of Co-operation and Development (OECD). Main Economic Indicators: Historical Statistics, 1955-1971 (Paris, OECD) at 500. The GDP in 1960 was US$1,009 billion Organization of Economic Co-operation and Development (OECD), Main Economic Indicators, Vol. 2002(1) (Paris: OECD, 2002) at 17 from US$ 527.4 billion in 1960 to over US$ 10.2 trillion in 2001. In particular, the last decade has shown enormous growth in health care expenditures in many countries. The per capita expenditure in the United States jumped from US$ 2,739 in 1990 to US$ 4,631 in 2000. 10 Even in non-OECD countries, the increase in health care expenditures has been dramatic. In Singapore, expenditures on health care amounted to over S$ 1.5 billion in 2002 11 compared with S$ 635 million in 1980 and S$ 85 million in 1960. 12 During this time period, Singapore’s total health expenditure as a percentage of GDP remained consistent even as Singapore experienced extraordinary economic growth rates. 13 Health care expenditures have also increased substantially in developing nations. Mexico’s expenditures nearly doubled in a decade from US$ 260 million in 1990 to US$ 490 million in 2000. 14 As the world economies spend increasing amounts on health care each year, delivery of health care by a more efficient and economical means has become a priority for many nations. 15 Greater access to health care is the other compelling benefit of telemedicine. 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WorldCare Clinical, Inc. information page available at http://www.worldcare.com. 227 [...]... principles of private international law, these chapters present Singapore s jurisdictional requirements for bringing an international tort action It also canvasses a broad range of choice of law approaches from around the world as a backdrop for an assessment of the current approach of the Singapore courts As a final introductory note, my analysis limits the scope of professional coverage of this thesis... paper looks at the main issues affecting the trade in telemedicine from both the international and the Singapore perspectives The first chapter begins with a look at telemedicine within the framework of the international agreement recently negotiated on trade in services – the General Agreement on Trade in Services (GATS) Chapter 1 also considers the viability of the GATS as an effective framework agreement... prosperity and limit political conflict between nations In March, 1948, the Havana Charter established the International Trade Organization (ITO) as the international agency that would oversee international trade issues and the GATT 47 The initial set of trade rules came into force in January 1948 as the Protocol of Provisional Application of the General Agreement on Tariffs and Trade (GATT) 46 47 Despite the. .. protect their citizens will only stunt the growth of international telemedicine Therefore, the spread of telemedicine on an international basis depends on a fair and just legal accord between nations but even more importantly, an arrangement that is both transparent and definite In many ways, Singapore is the ideal nation on which to base a legal study of international telemedicine Being a small city-state,... on the effective regulation of all aspects of the trade in international telemedicine as a single integrated activity The perils of focussing too narrowly on individual regulatory issues in analysing global trade was colourfully described by Westbrook in his essay on regulating transnational business The literature describing each field recalls the old saw about the blind men and the elephant, because... fears? The answer lies in formulating a clear and definite approach to licensing of foreign telemedicine providers and creating a set of predictable rules to resolve international tort disputes involving telemedicine Without an international telemedicine agreement, it falls to the laws of individual nations to bring order to the cross border trade in telemedicine The decentralisation of the regulatory... because each body of doctrine is analysed with only a minimal acknowledgement of the larger problem of which it is a part The lack of articulation of the dominant problem has contributed to muddy analyses in each of these areas Failure to recognize that they all have the same problem in common has made them inconsistent with one another and deprived each of the insights to be found in the others Appreciation... considered in relation to each other as well as to the overall issue of international telemedicine Analysis that, for example, proposes a choice of law model for disputes arising out of international telemedicine without reference to the GATS is flawed from the outset because it ignores an important and related part of the overall activity In the end, the goal of this thesis is to look at all of the major legal. .. C(3) (a) (iii) infra – The Data Dilemma in Services Trade Benz, supra footnote 39 at 99-101 44 Ibid at 98-99 45 Stahl, supra footnote 42 at 411 16 Other service areas such as legal services and health care are also subject to heavy governmental regulation in many countries B The Origin of the GATS Central to an understanding of the creation of the General Agreement on Trade in Services (GATS) in international... Appreciation that regulation of transnational business lies at the heart of each of these component fields will improve analysis within each field and lead to cross- fertilization among them The elephant of transnational economic activity has grown ever larger while the legal components of its regulation have remained largely separate The tail scholars describe it in tail-talk and the trunk scholars apply . shortcoming of this thesis. ii ABBREVIATIONS AELA Application of English Law Act (Singapore) ASEAN Association of South East Asian Nations ATFA ASEAN Free Trade Agreement CPC Central Product. telemedicine agreement, it falls to the laws of individual nations to bring order to the cross border trade in telemedicine. The decentralisation of the regulatory function of an international business. global trade in telemedicine depends on the effective regulation of all aspects of the trade in international telemedicine as a single integrated activity. The perils of focussing too narrowly