To explore the positive and negative effects of medical tourism on the economy, health staff and medical costs in Thailand.The financial repercussions of medical tourism were estimated from commerce ministry data, with modifications and extrapolations. Survey data on 4755 foreign and Thai outpatients in two private hospitals were used to explore how medical tourism affects human resources. Trends in the relative prices of caesarean section, appendectomy, hernia repair, cholecystectomy and knee replacement in five private hospitals were examined. Focus groups and in-depth interviews with hospital managers and key informants from the public and private sectors were conducted to better understand stakeholders' motivations and practices in connection with these procedures and learn more about medical tourism.Medical tourism generates the equivalent of 0.4% of Thailand's gross domestic product but has exacerbated the shortage of medical staff by luring more workers away from the private and public sectors towards hospitals catering to foreigners. This has raised costs in private hospitals substantially and is likely to raise them in public hospitals and in the universal health-care insurance covering most Thais as well. The "brain drain" may also undermine medical training in future.Medical tourism in Thailand, despite some benefits, has negative effects that could be mitigated by lifting the restrictions on the importation of qualified foreign physicians and by taxing tourists who visit the country solely for the purpose of seeking medical treatment. The revenue thus generated could then be used to train physicians and retain medical school professors.