Medical tourism has implications for the equilibrium of health systems. The challenges medical tourism poses will be different across health systems, depending on their particular institutional features, on health insurance protection and on how provision of health care is organized. Health systems decisions influence both outbound and incoming medical tourism flows. By defining health insurance coverage for patients looking for health care in another country, health systems influence outbound flows. For incoming patients, in a country with difficult access to health care (reflected in the existence of waiting lists, for example), treating medical tourists on preferential terms may present political difficulties. Health systems with public providers participating in medical tourism initiatives will face challenges regarding differential prices and qualities between domestic and foreign patients. Engaging in medical tourism may work as a strategy by a health system in order to avoid medical brain drain. System-wide effects on quality of care are less clear. The existence of competition in quality may lead to more quality improvements. On the other hand, aftercare externalities may require carefully crafted payment systems. The way in which health systems are affected by medical tourism and how they adjust remains an important research area, both for theory and empirical work.