[ Special Feature ]

Healthcare Tourism in : Pain Ahead? Ivy Teh, Clearstate

Riding the Wave in Asia is currently generating US$1.3 Medical tourism billion in revenue and is expected to grow to US$4.4 billion by 2012, growing at a compound annual growth rate (CAGR) of 19%. The major countries competing for medical tourists in Asia are Thailand, Singapore, India and Malaysia. The main attraction for seeking medical treatment in these countries includes lower costs, quality treatment, and less waiting periods. Thailand has presented itself as a leader in medical tourism in this region with more than a million patient visits in 2005, generating revenues of US$615 million.

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Till the recent military coup, Thailand’s medical tourism industry condition of serving in Thailand after Thailand had an edge over other was born. Since then, other private the completion of their educational countries in the region in attracting healthcare groups have followed courses. medical tourists. The country is suit. a highly popular tourist haven. It Now, private vying Only Destination in the has a relatively low cost of living, for the medical tourists’ dollar treat Region to Attract Patients a very friendly and tourist friendly this segment seriously as one of from Around the World culture, and a relaxing environment their primary sources of revenue Patients from the US and Europe for recuperating patients. For that rather than just an alternative. constitute about 20% of the total reason, Thailand’s medical tourism Significant investment in the latest inflow of foreign patients to Thailand services are focused on treatment technology, quality certifications — the same is growing every year areas that are more popular amongst (ISO), accreditations (a total of by around 40% for US and 50% for vacationers such as cosmetic surgery, 33 hospitals) and attracting highly Europe patients. Aside from cosmetic dentistry, LASIK and general medical skilled doctors have been made in surgeries, a higher proportion of US checks. order to stay ahead of competition. and European patients tend to seek However, with competition Bumrungrad has even gone higher end treatment such as hip heating up for medical tourists’ to the extent of investing in premier and knee replacement and organ dollars globally, Thailand cannot marketing tools to attract foreign transplants. On the other hand, simply rest on its current success. To patients. Other successful marketing South-east Asian patients will seek maintain its dominance, Thailand avenues employed by Thai hospitals medical attention mainly for general must expand its capabilities and include tie-ups and affiliations with check ups. move up the value chain of medical travel agencies, referral agencies and After 9-11, travel restrictions offerings. Already, the more reputed hospitals in patients’ home country. have diverted Middle Eastern private hospitals in the country Unlike in other countries like patients from their traditional such as the Bumrungrad Hospital Singapore and Malaysia, the Thai destinations such as the US and and General Hospital are government had initially taken a the UK to Thailand. The number marketing and promoting their rather passive role in developing of Middle Eastern patients has capabilities in performing higher- medical tourism. However, the grown exponentially since then. end surgical procedures such as huge success of the private sector Bumrungrad alone saw Middle hip replacement, heart bypass and has led to greater involvement by Eastern patients increased from organ transplant. But are the efforts the government. The government 5 000 in 2000 to 70 000 in 2005. An of the private sector sufficient at of Thailand recognizes the strong astonishing 1300% growth! maintaining the inflow of medical potential for medical tourism and Thailand is unique in that it tourists? This article examines the value it will add to the tourism attracts patients from different Thailand’s opportunities as well as industry overall. Several initiatives parts of the world instead of just the growing threats it faces internally to support and promote the sector a particular region or country. and externally. have since been implemented. Visa Malaysia, Singapore and Australia procedures for foreign patients have are dependant, to a large extent, Private Sector — The Engine been simplified. There are plans to on one source of medical tourists, that Drives Medical Tourism invest US$10–15 billion in the next namely the Indonesians. Aside from Medical tourism growth in Thailand 10 years for the construction of new Thailand’s natural attractiveness has been largely led by the private hospitals. Government expenditure as a tourist haven, the proactive sector. When revenues from private on healthcare is also on the rise, and aggressive marketing efforts of Thai patients dried up on the onset of and was estimated to account for private hospitals at sourcing from the Asian financial crisis, Bumrungrad nearly 13.6% of total government new markets have tremendously Hospital began to venture out to expenditure in 2005. Students enhanced the country’s awareness source for overseas patients. It was are being funded to attain higher as a medical tourism destination through these pioneering efforts that medical education abroad on the globally.

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Medical Tourists to Thailand by Country of Origin (2005) Me dica l tourists to T ha ila nd by C ountry of Origin (2005)

Japanese 23%

Others 37%

US 11%

Europeans British SEA 9% 10% 10%

Source: Ministry of Import and Exports, Thailand

Is the Medical Tourism Growth of Medical (2000-10) Industry Healthy? All these efforts have not only 2500 translated into volume growth but 2000 also value increase for Thailand’s 1500 medical tourism industry. In 2004, 1000 the inflow of foreign patients coming 500 to Thailand for medical reasons was 0 around 790 000 generating revenues 2000 2003 2004 2005 2010 of US$531 million. The number of foreign patients has grown by 27% Number of Patients in 000's annually and was estimated to be around 1.28 million in 2006. In terms of revenue, medical tourism has shown an annual growth of 35% over 2500 the same time period (2004–2006) 2000 and is expected to show an annual 1500 growth of 20%–30% till 2010. However, is this growth 1000 sustainable in the long run? Many 500 hospitals in Thailand still promote 0 themselves firstly as a low cost 2000 2003 2004 2005 2010 venue for medical vacation. Low cost remains its main draw among Revenue in USD 000's medical tourists. As a comparison, a basic operation like hip replacement Source: Ministry of Import and Exports, Thailand

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of potential patients on the hygiene Thailand is not alone in seeing the potential standards. Malaysia, on the other hand, faces a shortage of medical of medical tourism. Competition is heating up manpower in terms of nursing staff globally as well as regionally. India, Singapore as well as doctors to further boost its reputation as a quality medical hub. and Malaysia are amongst the more aggressive Singapore may be the only real countries in the region promoting medical care competition for Thailand. The city as a tourist attraction. state provides a complete spectrum of healthcare services from primary care such as health screening, to quaternary care services such organ in Thailand is at least five times campaign for an independent Islamic transplants. Singapore is renowned for cheaper than in the US. Health state. However, foreign visitors’ a broad range of specialist care such screening packages in Thailand sentiments may change with the as cardiology, gyneacology, oncology often bundled with hotel and travel violence now appearing in Bangkok and neurosurgery. According to packages, is half of what Singapore itself. After the highly visual tsunami the World Health Organization, is charging. images and effects, Thailand needs Singapore’s health system is ranked Unavoidably, Thailand faces to now project its usual image of the best in Asia and amongst the credibility concerns when it comes serenity and peace. This is not the best in the world ahead of Japan to complex higher end surgical case at this moment. Singapore is and the US. treatment. Bumrungrad Hospital for watching closely and may leverage Singapore no longer remains instance, had to market and promote on this. contented servicing its traditional itself as an “American” managed source of foreign patients, specifically hospital to avoid the perception of “Lion city” May Take Up Malaysians and Indonesians. Private low quality services. Lion’s Share healthcare groups such as Raffles Without a shift towards higher Thailand is not alone in seeing Hospital and Parkway Group end medical offerings, Thailand the potential of medical tourism. Healthcare have marketing offices may risk being typecast as a low Competition is heating up globally in Greater China, South Asia, the end destination hence, limiting the as well as regionally. India, Singapore Middle East, Indochina and even potential revenue medical tourism and Malaysia are amongst the more Russia to raise awareness and market can generate. A balance between aggressive countries in the region their medical services. its bread and butter services such promoting medical care as a tourist Moreover, Singapore’s concerted as cosmetic surgeries and health attraction. Merging medical expertise efforts to boost tourism, with more checks versus the higher end and tourism has become government retail and leisure options and the surgical treatments such as hip/knee policy in these countries. Thailand upcoming integrated resorts are replacements, heart bypass and organ faces competition from both ends— expected to increase the island’s transplants has to be achieved. It is low cost treatments from India and attractiveness in tourism overall. estimated that this shift will increase Malaysia as well as high end medical Most importantly, price revenue per patient from US$615 services from Singapore. differentials between services offered million in 2005 to US$2.23 billion India and Malaysia have their in both countries has decreased. by 2010. limitations in being an all appealing Singapore is offering equivalent Concerns have been raised about medical tourism destination. Cost- medical treatment at comparable Thailand’s deteriorating security savings for instance, may not be prices to Thailand. Without the environment, with the recent New- enough for India to foster its medical cost advantage, Thailand risks losing Year-day series of bombings in tourism ambition. The sight of the its competitive edge as Singapore Bangkok. In the past, tourists have country’s slumps in its main cities, continues to build awareness and shrugged off unrest in the south, open sewers and garbage strewn raise the country’s profile in medical where insurgents have escalated a streets would unnerve the confidence tourism.

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Procedure Thailand Singapore Heart bypass US$11,000 US$18,500 Heart valve replacement US$10,000 US$12,500 Angioplasty US$13,000 US$13,000 Hip replacement US$12,000 US$12,000 Hysterectomy US$10,000 US$13,000

The above issues raise the following key questions: The author, Ivy Teh, heads • Will there be a clear cut market leader in medical tourism among the global healthcare and life Asian countries in the near science practice at Clearstate. future? She has led multiple regional and global advisory engagements for • How much business can Singapore capture from Thailand? Does healthcare multinationals. She Singapore want and need has also worked extensively with Thailand’s “cosmetic surgery South East Asian government business”? bodies to boost healthcare tourism. She is a recognized

• Will Thailand ever move up the authority in the field of healthcare tourism and medical value chain and be considered a diagnostics equipment marketing strategy. Clearstate is serious center of excellence for a consultancy company that is devoted to helping their higher end medical treatments? clients outpace competition, close growth gaps, and deliver breakthrough improvements in performance • What else can Thailand do to supplement its current medical and profitability. tourism activities? n

Contact Details: Ivy Teh, Clearstate Address: Medicon Associates 65 Upper Cross Street #02-02 Singapore 058353 Email: [email protected]

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