A legal analysis of the cross border trade in telemedicine the singapore perspective

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 1

CHAPTER I: TELEMEDICINE AND INTERNATIONAL FREE TRADE 15

A. The Liberalisation of the Trade in Telemedicine Services 15
B. The Origin of the GATS 17
C. An Overview of the GATS 21
1. Cross Border Delivery: The Mode of Supply of Telemedicine 22
2. Most Favoured Nation (MFN) Treatment and Transparency: General Obligations 23
a) The Most Favoured Nation clause 23
b) Transparency and the GATS 25
3. Market Access and National Treatment: Discretionary Obligations 26
a) Market Access 28
b) National Treatment 28
c) The Specific Commitment Approach of the GATS 31
i) The Classification Structure 32
ii) National Schedules 33
iii) The Data Dilemma in Services Trade 40
4. Domestic Regulation and Recognition under the GATS 42
a) Balancing Domestic Regulation with Free Trade 43
b) Recognition of International Standards and Procedures 45

5. Regional Economic Integration 47
D. The GATS and International Telemedicine 48


CHAPTER II: LICENSING THE INTERNATIONAL TRADE IN TELEMEDICINE 50

A. The Purpose of Medical Licensure 53
B. The Classes of Telemedicine 56
C. The Regulation of Cross Border Telemedicine 58
1. The Practice of Medicine 59
2. The Place of Telemedicine Practice 61
3. The Approaches to Licensure 63
a) Unilateral Licensure 64
i) The California Approach to Licensure 69
ii) The Malaysian Telemedicine Act 70
b) Joint Licensure 71
i) Mutual Recognition in the European Union 74
ii) Reciprocity in Australia 74
iii) ASEAN and Mutual Recognition 75
c) International Licensure 76

D. Licensure and the GATS 80
E. The Telemedicine Business Model 87
F. International Telemedicine, Licensure, and the Regulation of the
Medical Profession in Singapore 94



iv
CHAPTER III: CONFLICT OF LAWS I: MEDICAL NEGLIGENCE, JURISDICTION,

AND INTERNATIONAL TELEMEDICINE 98

A. Whose Law is it Anyway? 100
B. Jurisdiction of the Singapore Courts 102
1. General Aspects of Jurisdiction 105
2. Service Outside Singapore – Obtaining Leave of the Court 106
a) Establishing Singapore’s Jurisdiction – Can Singapore Courts Decide the Case? 107
i) The Heads of Jurisdiction – Order 11 Rule 1 107
a. Rule 1(f) 107
b. The Location of the Tort 109
c. Rule 1(f), Rule 1(p) and the Common Law: A Partial or Substantial
Connection? 112
ii) A Proper Case for Service Outside Singapore – Does the Case Have Merit? 123
b) Should Singapore Courts Decide the Case? The Most Appropriate Forum 125
C. Jurisdiction and International Telemedicine 131

CHAPTER IV: CONFLICT OF LAWS II: MEDICAL NEGLIGENCE, CHOICE OF LAW,
AND INTERNATIONAL TELEMEDICINE 137
A. National Approaches to International Tort Law 141
1. The American Montage: Choice of Law Approaches to Tort Actions 141
a) Place of the Tort (lex loci delicti) 142
b) Restatement of Torts (Second) Approach – Closest Connection 143
c) Law of the Forum (lex fori) 145
d) Significant Contacts test 146
e) Government Interest Analysis 146
f) Better Law Method 147
g) Combined Modern Approaches 147
2. Choice of Law in England and Singapore 150
a) The Origin of Choice of Law in England 150
b) Choice of Law in Singapore 160

c) English Choice of Law – The Statute Takes Over 161
3. The Canadian Approach 162
a) Background to Choice of Law in Canada 162
b) Canada’s Radical Move to the Traditional Model: The Tolofson Decision 163
4. Choice of Law Down Under: The Australian Approach 170
5. European Choice of Law 172
B. International Telemedicine and Choice of Law 173
1. A Double Locality Tort 175
a) The Foundation of the Doctor-Patient Relationship 178
b) The Location of the Parties 180
c) Administrative Factors 181
d) Drawing on the Lessons from Products Liability 184
i) The Canadian Approach to Choice of Law in International Products Liability 184
ii) Choice of Law under the International Convention on Products Liability 186
2. The GATS and Choice of Law 187
3. A Pre-Existing Relationship 190
C. A Choice of Law Direction for International Telemedicine in Singapore 193

CONCLUSION 195
TABLES 204
BIBLIOGRAPHY 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 1 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 do 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 2 looks at
the issues surrounding national licensure and considers several possible approaches to the

cross border regulation of telemedicine. Chapters 3 and 4 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,
1
a Canadian surgeon conducting a complex anti-reflux stomach
operation using robotic arms on a patient located 400 kilometres away,
2
and American
physicians diagnosing illnesses and providing healthcare advice to inhabitants of remote
Alaskan villages without the need to be physically present.
3

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,


1
Sheryl WuDunn, “Japan Bets on a Wired World to Win Back Its Global Niche,” in The New York Times,
30 August 1999, p. A1
2
Joseph Brean, “Robot operates for doctor 400 km away: Hamilton hospital touts procedure as a world first, in
The National Post, 5 March 2003, p. A3;
Bruce Gillespie, “Cost-cutting operation,” in The National Post, 12 May 2003, p. BE 1
3

Tina Kelley, “Internet Showing Its Value In Remote Alaskan Villages,” in The New York Times, 5 August 1999, p. G9
1
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.”
4

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.
5
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.
6
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$ 1 trillion.
7
Forty years later, the GDP for these nations has grown
to over US$ 27 trillion.
8

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


4
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
5
Ibid
∗
Australia, Austria, Canada, Finland, Germany, Iceland, Ireland, Japan, Norway, Spain, Sweden, Switzerland,
United Kingdom, United States
6
Organization of Economic Co-operation and Development (OECD), Health Data 2002, 4
th
edition (Paris:
OECD, 2002)
7
Organization of Co-operation and Development (OECD). Main Economic Indicators: Historical Statistics, 1955-1971
(Paris, OECD) at 500. The GDP in 1960 was US$1,009 billion
8
Organization of Economic Co-operation and Development (OECD), Main Economic Indicators, Vol. 2002(1)
(Paris: OECD, 2002) at 17
2
from US$ 527.4 billion in 1960 to over US$ 10.2 trillion in 2001.
9
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.
With fewer financial resources available, less developed nations tend to be underserved
by health care professionals and institutions. At a basic level, the number of health care
professionals in developed countries is much higher than in developing countries. For
instance, on a per capita basis, Canada has eight (8) times as many doctors than
Cambodia or Myanmar and more than twelve (12) times the number of nurses than

9
United States Department of Commerce. Statistical Abstract of the United States: 2002 at 417
10
OECD Health Data, supra footnote 6
11
Singapore Ministry of Health. Health Facts Singapore 2003
12
Singapore Ministry of Health Statistics cited in Toh Mun Heng and Linda Low, Health Care Economics,
Policies and Issues in Singapore (Singapore: Times Academic Press for the Centre for Advanced Studies,
National University of Singapore, 1991) at 25
13
Eva Liu and S.Y. Yue, Health Care Expenditure and Financing in Singapore, Hong Kong Special Administrative
Region, Research and Library Services Division, Legislative Council Secretariat (09 July 1999) at 14
14
OECD Health Data, supra footnote 6
15
UNCTAD Secretariat, “International Trade in Health Services: Difficulties and Opportunities for Developing
Countries,” in International Trade in Health Services: A Development Perspective (Geneva: UNCTAD-WHO
Joint Publication, 1998) at 4
3
Cambodia and nearly thirty-five (35) times the number of nurses than Myanmar.
16
Even
within the ASEAN region, the numbers of health care professionals servicing the medical
needs of the population show a wide variance between the wealthier and underprivileged
members (See Table 1). Infant and child mortality rates and maternal mortality rates
also highlight the health care divide between rich and poor nations. In the world’s
wealthier developed nations only six (6) children per 1,000 die under the age of five (5)

years compared to nearly twenty-seven (27) times that number in the world’s less
developed countries, where 161 children per 1,000 population died under the age of five
(5) years.
17
Table 1 sets out the gap in health care between ASEAN’s wealthier nations
of Singapore, Brunei, and Malaysia and its poorer members by illustrating the stark
differences in infant mortality and maternal mortality rates – two key measures of health
care development.

Telemedicine has emerged as a cost effective means available for developing
nations to import expertise and training from developed countries without building and
maintaining expensive health care facilities. Its potential was noted in 1997 by Dr
Hiroshi Nakajima, then Director-General of the World Health Organization when he
stated that “developing an adequate and affordable telecommunication infrastructure can
help to close the gap between the haves and the have-nots in health care.”
18
The benefit
of telemedicine for wealthier nations is that it expands the trade potential for health care
services and reduces health care costs at home. Generally, expensive and state-of-the-art
health care equipment and facilities together with the best trained medical personnel are
concentrated in the urban centres of developed nations or at specialised institutes like
Minnesota’s Mayo Clinic. Telemedicine utilises existing health care infrastructure more


16
World Health Organization, WHO Estimates of Health Personnel 1996-1999
17
United Nations, Demographic Yearbook 2001, UNICEF Statistics
18
“WHO Director-General Highlights Potential of Telemedicine,” WHO Press Release WHO/65, 16 September 1997

4
efficiently by expanding the market reach of these health care hubs through technology
links as well as by reducing the need to expend human and capital resources in more
rural, less efficient regions. One report by McKinsey Consultants estimates “that the cost
savings to the American health care system could amount to $270 billion per year with an
annual outlay of $50 billion for the telecommunication and information systems
necessary to support telemedicine.”
19
In international trade, greater liberalisation of
telemedicine services would allow the advanced health care economies to take advantage
of their comparative advantage as well as move towards realising greater economies of
scale in the health care industry.
20


Telemedicine, therefore, holds advantages for both developed and developing
nations. Developed nations stand to increase revenues by selling the expertise of their
skilled health care personnel and the advanced diagnostic and treatment capabilities from
their existing medical facilities to nations in need of their knowledge and technology.
The advantages of telemedicine for developing and least developed nations are obvious.
Rather than investing billions of dollars in the expensive medical infrastructure of
hospitals and equipment, these nations can obtain top quality medical expertise and
access to advanced medical technologies on an as-needed basis by linking into the
telemedicine technology corridor. Such linkages would certainly bring savings in early
detection and diagnoses of illness. Health care dollars that move out of the country
when citizens go abroad could be retained at home.
21
Telemedicine consultations and
diagnoses could also benefit local health care professionals by offering a lower cost
alternative to skills upgrading currently accomplished by sending people abroad or

19
Cited in The Economist, “Bugs and Viruses,” 26 February 1998 at 66
20
Matthew S. Yeo, “Distance Health Services Under the General Agreement on Trade in Services,” (2002)
35:1 J. Health Law 83 (Digital version) at 4
21
UNCTAD Secretariat, supra footnote 15 at 21
5
bringing in consultants. Telemedicine could have the added benefit of stemming the
‘brain drain’ of qualified medical professionals flowing out of the developing world.
22

Lending its weight to the telemedicine debate, the World Bank is supportive of
telemedicine initiatives because it
enables tertiary health care units to access expensive equipment and expert
advice from a centralised location, thereby improving diagnoses and
reducing unnecessary referrals to already overcrowded hospitals. Patients
also benefit by avoiding the cost and hardship of traveling far longer
distances.
23

Critics of telemedicine have raised the issue of misallocation of health care
resources in developing countries. “The risk,” according to one commentator from the
developing world, “is that telemedicine will channel revenues away from rural and
primary health care and towards specialized centres, thus concentrating technologies
which cater to the affluent few in developing countries.”
24
Another drawback of

telemedicine is the expense of the enabling telecommunications and energy
infrastructure
25
as well as the reliability of the delivery systems. Despite the misgivings
with respect to telemedicine, the benefits of this new system of delivering health care
globally make telemedicine a compelling technology for the future. In the early stages,
there are bound to be some issues related to the cost and reliability of the delivery
systems, both of which are likely to be overcome by the same technology that spawned
telemedicine. This thesis does not, however, delve into the technological debate over the
plausibility of telemedicine. It moves ahead from the point that telemedicine is a proven
and beneficial technology whose growth is delayed more by legal barriers than
technological constraints. The future progression of telemedicine depends on its ability
to overcome the formidable legal barriers at both the international and domestic levels.


22
Ibid
23
World Bank, E-Government – Health Sector at www1.worldbank.org/publicsector/egov/health.htm
24
Rupa Chanda, “Trade in health services,” (2002) 80:2 Bulletin of the World Health Organization 158 at 160
25
Ibid
6
In its bid to move away from its traditional manufacturing base towards a
knowledge based economy (KBE), the Singapore government has identified health care
along with education and tourism as key sectors in reshaping Singapore’s economy. In
September 2002, the Healthcare Services Working Group (HSWG) presented its
recommendations to Parliament’s Services Industry Subcommittee and the Economic
Review Committee. The final report tabled by the committees to Parliament recognised

that other countries within ASEAN are also developing their health care sectors and pose
significant competition for the city-state.
26

Lower cost health care and sound health care facilities in both Thailand and
Malaysia have caused the foreign patient flow into these countries to surge since the
regional economic crisis of 1997. In a report prepared for the HSWG by Asia Market
Intelligence, foreign patient flow in Thailand is estimated to have more than tripled
between 1998 and 2001 to nearly a quarter of a million patients and is projected to swell
to nearly 500,000 foreign patients in 2004.
27
Thailand’s Bumrungrad Hospital on its own
attracted more foreign patients in 2001 than all of Singapore.
28
The reasons for the
success of the Thai medical establishment are its lower costing of services, marketing of
medical holidays, and focussing on specialised procedures such as cosmetic surgery. The
number of patients travelling to Malaysia for medical treatment is estimated to show
steady growth through to 2004 while foreign patient flow to Singapore has stagnated
since the economic crisis and is projected to remain flat until 2004.
29
In light of recent
developments in the SARS crisis in East Asia and Singapore in particular, foreign patient


26
Developing Singapore as the Healthcare Services Hub of Asia, Executive Summary, Recommendations to the
Singapore Parliament by the Services Industry Subcommittee and the Economic Review Committee on
Developing Singapore’s Education and Healthcare Industry, 16 September 2002
27

Ibid, Annex 3
28
Salma Khalik and Sandra Davie, “Fighting for a piece of the services pie (III),” in The Singapore Straits Times,
24 January 2003
29
Developing Singapore as the Healthcare Services Hub of Asia, supra footnote 26, Annex 3
7
flows will likely show sluggish growth even beyond 2004. Singapore faces the challenge
of establishing its place in the medical marketplace between the lower cost alternatives
found in other ASEAN nations and the higher quality of service associated with medical
treatment in Western countries.
30
Setting its sights high, the vision of the HSWG is to
attract one million foreign patients to Singapore worth an estimated $2.6 billion in
revenues by expanding its share of the Asian health care market from 1% in 2000 to 3%
by 2012.
31


The HSWG report makes recommendations to support its dual strategy of
building a strong brand for medical care and to attract large numbers of foreign patients.
The recommendations of the parliamentary committees focus on the measures required to
bring patients into Singapore in order to make the city-state the region’s foremost
medical hub. The report makes passing reference to creating “one-stop centres” in
important regional markets “to facilitate the inflow of foreign patients and market
Singapore’s healthcare services”, investing in regional facilities, as well as “expanding
the regional referral network via training of doctors from the region.”
32
No mention is
made in the report of employing telemedicine technology to further these aims. These

recommendations of the report are buried within the national marketing initiative
designed to regain “mindshare” for Singapore as the region’s medical hub.
33
It is
submitted that the development of a Singapore presence in major centres throughout the
region should be regarded as more than a mere marketing strategy. Such a presence is
fundamental to the creation of a strong and viable spoke system to funnel business
generated from health care services into and out of the medical hub.

30
Ibid, Annex 1
31
Ibid, Executive Summary
32
Ibid, Executive Summary, Recommendation 1
33
Ibid, Executive Summary
8
Other service sectors such as the transportation industry have revolutionised the
business model by implementing a hub-and-spoke model to gain economies of scale and
the accompanying efficiencies. Similarly, in its bid to retain its status as South East
Asia’s premier medical hub, Singapore should focus on the spokes that not only siphon
patients into Singapore but also provide a conduit for medical expertise based in
Singapore to be delivered throughout the region. As it stands, the Singapore strategy
seems mired in traditional thinking by seeking to achieve greater economies of scale by
attracting more patients to Singapore. This approach ignores the economic reality that
many neighbouring countries are improving their domestic health care systems
compounded by the strong competition for wealthier patients from Western nations and
other countries within ASEAN who are designing their own centres of medical expertise.

Developing a regional telemedicine strategy would situate Singapore at the centre
of the region’s medical axis and consolidate the city-state’s position as a medical hub.
By placing telemedicine as the cornerstone of a hub-and-spoke strategy, partnerships
could be established with hospitals and clinics in the region and assistance provided to
defray the cost of implementing the expensive telemedicine infrastructure. A strong
Singapore presence from the outset would position its medical personnel to provide
expertise and education to local health care providers in less developed countries
throughout the region. By doing so, Singapore could achieve economies of scale for its
health services sector by utilising technology to consult, diagnose, and treat patients in
foreign countries, as well as educate foreign health care professionals. Combined with
these outflow services Singapore could develop a special relationship with its network of
foreign hospitals and doctors to become the primary referral and treatment centre for
more critical cases. In sum, a telemedicine strategy would allow Singapore to reap the
9
benefits of scale economies for its health care sector without relying on the traditional
growth model predicated on filling up more Singapore hospital beds with more patients.

The development of telemedicine has essentially three inhibitors; technology,
investment, and the law. Over the past decade, technological advances have transformed
many visions of telemedicine into reality. Investment is sure to follow a proven
technology that has economic benefit spurring even greater technological advances. The
law, however, remains the major question mark, posing the greatest challenge to the
successful deployment of telemedicine on a global scale.

Health care is a service. Providing a service in the international arena now raises
legal issues of international trade. In his definitive work on international trade under the
GATT framework, John H. Jackson identifies three levels of law involved in the
international trade transaction; the private law such as contract law and conflict of laws,
the rules and regulations imposed by national governments, and the agreements that exist
between nations.

34
All of these elements have a direct bearing on the global trade in
telemedicine and each is a key issue to be resolved prior to the promulgation of
telemedicine at the international level.

This research paper explores the three Furies of the law upon which the
immediate fate of international telemedicine depends – successful implementation of the
international services agreement, imposition of accessible, fair and transparent national
licensure measures, and a uniform approach to the international choice of law that is
acceptable to all parties involved. These three obstacles blocking the road to


34
John H. Jackson, World Trade and the Law of GATT (Indianapolis: The Bobbs-Merrill Company Inc., 1969) at 7-9
10
telemedicine’s development share the same basic need. They all crave certainty in the
law.

A nation will be reluctant to open up its health care sector to international trade
without safeguards in place to protect the health and welfare of its citizens and the
interests of its domestic medical establishment. Foreign health care professionals will be
equally reluctant to offer their services in another country that may put them at risk of
civil and even criminal liability as well as the peril of practising without insurance
coverage.
35
So, how is certainty achieved in international telemedicine to allay such
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 function of an international business activity such as telemedicine to
individual states creates two basic problems. An individual nation usually applies its own
laws to a dispute that reflects its own legal traditions and self-interest.
36
The other
problem is one of orientation. The study of international telemedicine has been probed
and prodded from the various angles of international trade law, national licensing law,
and the international conflict of laws. Until now, the legal scholarship on telemedicine
has dealt with specific pieces of the regulatory puzzle in isolation from one another. The
shortcoming of a piecemeal analysis is that it provides only a snapshot of the regulatory

35
Ben Stanberry, The Legal and Ethical Aspects of Telemedicine (London: The Royal Society of Medicine Press
Limited, 1998) at 147
36
Jay Lawrence Westbrook, “Extraterritoriality, Conflict of Laws, and the Regulation of Transnational Business,”
(1990) 25:1 Tex. Int’l L. J. 71 at 77
11
issues vis-à-vis the particular branch of law under consideration. Such an approach
ignores the larger picture of providing a legal framework for the entire service of
international telemedicine. Promotion of the 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 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 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 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 trunk-talk . . . but
the entire elephant has not often been addressed.
37


Borrowing the terminology from Westbrook, the dominant issue under consideration here
is the regulation of the transnational business activity of telemedicine. The international
trade in services, the domestic laws overseeing the licensure of medical professionals,
and private international law, are all important elements of the dominant issue but should
be 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 issues that affect the
development of the cross border trade in telemedicine.


37
Ibid at 75 - Emphasis added
12
The legal dilemma of international telemedicine cuts two ways. For importers of
telemedicine services, nations will want to open their markets to much needed medical

expertise at the price of allowing foreign medical personnel to ‘operate’ within their
borders. For exporters of telemedicine services, expanding outside its borders offers the
prospect of lucrative markets for high value services but also potentially exposes its
medical personnel to foreign laws. Both importing and exporting nations will likely want
to ensure their own laws protect their own nationals. However, solutions that either raise
the protectionist bar too high or, alternatively, diminish the ability of consumer nations to
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, its telemedicine
infrastructure would be designed mainly for external use. Its health care and
telecommunications infrastructure is well advanced especially in relation to many of its
neighbouring countries. It is a leading member of the ASEAN regional trading bloc and,
from a development standpoint, Singapore is positioned between western developed
societies and developing nations so it is potentially both an importer and exporter of
telemedical services.

In light of the legal hurdles facing the development of telemedicine, the primary
goal of this thesis is to consider the legal approaches that would foster agreement
between nations to enable the development of international telemedicine. Since this
thesis examines the issue from the Singapore perspective, I will consider the relevant
Singapore laws and whether they correspond with the specified goal of promoting
13
Singapore as an international telemedicine hub. Successful implementation of
telemedicine on a global scale depends on compliance with the governing international
agreement on trade, adapting the country’s medical licensure requirements, and a
consensus between participating nations on an approach to the international conflict of
laws. In sum, this 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
for promoting trade in telemedicine. Chapter 2 addresses regulatory issues encountered
at the national level. This section discusses the requirements of national licensure in the
field of health care and the various models of compliance suitable for telemedicine.
Chapters 3 and 4 address the central issues of international tort litigation: selection of the
appropriate jurisdiction and choice of law. Applying the 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. Telemedicine services will inevitably come to involve all health care
professionals including physicians, nurses, medical technicians, physiotherapists, and
even dentists and chiropractors. For clarity of presentation, however, I have limited my
discussion to physicians although in most cases the conclusions can be extrapolated to
other health care professionals.
14
CHAPTER I
TELEMEDICINE AND INTERNATIONAL FREE TRADE

A. The Liberalisation of the Trade in Services

The movement to recognise trade in services is a recent development. For
centuries, global trade regulation was confined to the trade in goods and economists
largely ignored the economic contribution of services. Services, however, have
recently received the attention of the international trading community and have moved
to the forefront of international trade discussions during the past decade.

In the trading environment, services are very different from goods. Services
account for a substantial and growing proportion of the economic activity and trade of
countries. In his submission to the United States Senate Finance Committee in 1999,
the Under Secretary for International Trade called services
the critical component in providing economic stability and vitality in the
next century. Services trade has become the engine of growth. Services
make up the bulk of jobs in modern economies and services inputs have
become the critical factor to competitive success in manufacturing and in
overall economic activity.
38

Global trade in services leaped from US$ 85 billion in the early 1970s to
US$ 350 billion in 1980.
39
In 2000, world trade in commercial services amounted to
US$ 1.435 trillion.
40
In the late 1980s, trade in services was estimated to account for
approximately twenty-five (25) per cent of all international commerce.
41


38
David Aaron, Under Secretary for International Trade, U.S. Department of Commerce, before the Senate Finance
Committee, Subcommittee on International Trade, 21 October 1999
39
Steven F. Benz, “Trade Liberalization and the Global Service Economy,” (1985) 19:2 J. World Trade 95 at 97
40
World Trade Organization, International Trade Statistics 2001, Table 1.4 at 20

41
Fred Lazar, “Services and the GATT: US Motives and a Blueprint for Negotiations,” (1990) 24:1 J. World Trade
135 at 135 According to the World Trade Organization, global services trade in 2000 accounted for nearly 20
per cent of reported international trade (WTO, International Trade Statistics at 20)
15
Despite the importance of services to national economies, especially those of
developed nations, the trade potential of services appears yet to be realised. One
commentator remarks that
[w]hile services represent the dominant component of the GNP and trade of
developed countries, they are less dominant in overall international trade.
Only about 20-25% of international trade flows are attributable to
services.
42

This figure likely does not fully reflect the true volume of services trade,
however, due to the underreporting of services trade, and the difficulty in quantifying
trade flows and compiling statistics due to the intangible nature of services.
43
The
dearth of trade statistics relating to services is due to the difficulty in capturing trade
flows since a service transaction does not involve a good physically crossing a customs
border. Instead, the service flow usually entails the producer or consumer of the
service crossing a border or the service delivered electronically rather than as a
physically identifiable good.
44
Finally, an important distinction between services and
goods is the widespread domestic regulation that applies to many services because of
their perceived importance to a state’s national interest.
[G]overnments directly regulate certain specific services sectors because of
their perceived political sensitivity. Justifications for regulation include

consumer protection, standards maintenance, national security, prestige,
cultural preservation, competition, immigration control, financial prudence,
environmental protection, employment, development, and other political
goals.
45

In the GATS negotiations, wide segments of the service economy such as
telecommunications, air and marine transportation, and financial services were
excluded from the Agreement because of the perceived national interests involved.


42
Tycho H. E. Stahl, “Liberalizing International Trade in Services: The Case for Sidestepping the GATT,”
(1994) 19:2 Yale J. Int’l L. 406 at 409
43
See Section 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 trade is a brief review of the origins of the General
Agreement on Tariffs and Trade (GATT).

46
The GATT was established with the
construction of a new world order in the wake of World War II. Prior to the war, many
countries sought to protect their faltering economies by erecting trade barriers during
the great depression of the 1930s. The barriers did little to resolve the situation and, in
fact, exacerbated the world’s economic problems at the time. The poor economic
circumstances of this era led to the rise of new governments and political conflict
between nations that culminated in the devastation of the Second World War.
Following the war, trade liberalisation was regarded as one of the cornerstones of the
new political and economic world order that would usher in greater global 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). Despite the temporary nature of the GATT rules, the GATT outlived the


46
See Jackson, supra footnote 34 for a detailed account of the rise of the GATT system in world trade
47
The global community also created the United Nations (UN) and the International Monetary Fund (IMF) during
this same period to oversee international political relations and international financial affairs, respectively.
17
ITO. The ITO never came into force because it did not receive sufficient ratification by
member nations including the United States.

Over the next five decades, the GATT served as the main regulator of
international trade despite its lack of institutional roots and its impermanent origins.
The focus of GATT was on liberalising the trade in goods with a view to eliminating
tariffs and other non-tariff barriers. The GATT accomplished more openness in
international trade through a variety of rules agreed upon by member states regarding
the treatment of foreign produced goods (most-favoured-nation treatment and national
treatment), the elimination of subsidies and quotas, and the imposition of rules relating
to the dumping of goods. As the world economy became more complex and diverse,
the GATT responded to these changes with a series of eight rounds of multilateral trade
negotiations (MTNs). By the mid-1980s, however, the changing nature and sheer
growth of international trade rendered the GATT a less effective mechanism in
facilitating the liberalisation and expansion of world trade. Recognising the limitations
of GATT, Ministers from the Member States of GATT met in Punta del Este, Uruguay
in 1986 to launch the Uruguay Round of MTNs.
48
Included in the GATT Ministerial
Declaration was a commitment to conduct negotiations on two fronts; the trade in
goods and the trade in services.
49
The outcome of this final series of MTNs was the
establishment of the World Trade Organization (WTO) as a replacement to GATT with
its own administrative structure and permanent status. The creation of the WTO also
brought with it an expansion of the scope of global trade regulation with the inclusion
of the General Agreement on Trade in Services (GATS) and the Agreement on Trans-

48
A comprehensive history of the Uruguay Round negotiations can be found in William J. Drake and Kalypso
Nicolaidis, “Ideas, interests and institutionalization: ‘trade in services’ and the Uruguay Round,” (1992)
46:1 Int’l Org. 37 at 37
49

General Agreement on Tariffs and Trade (GATT) Punta del Este Ministerial Declaration, (1986) 25 I.L.M.
1623 – herein referred to as “Punte del Este Declaration”
18