Civica
Financial intelligence for Asia's healthcare markets
 
 
Remember me:

Analysis: How far can medical tourism in Asia expand?

Jacob Pope explains why medical tourism remains one of the region’s most significant industries.

Medical Tourism has been a growing industry for the past decade or so, but in its earlier days, only the affluent or upper classes had the means the travel for their health or medical needs.

But over the past decade, a new – and much more robust – type of medical tourism has taken centre stage. As healthcare infrastructure in some developing nations continues to improve, patients from more developed nations are increasingly looking to emerging economies for high-value prospects in healthcare.

There is plenty contributing to this trend. Widespread, affordable air travel is driving globalisation to new heights. At the same time, rising healthcare costs across much of the developed world make finding more affordable medical care a matter of necessity for some – even if that means travelling overseas.

While there are many medical tourism hubs around the world, a select few have emerged as the indisputable leaders in this trend. The southeast Asian region has performed particularly well in this regard, with Thailand stepping out as a medical tourism powerhouse. Singapore and Malaysia have also benefited from this trend.

Bangkok’s success as a rising medical tourism destination is a shining model of how a developing nation can cater to the healthcare needs of the world at large. Tourism on the whole is one of Thailand’s main economic drivers, weighing in third after manufacturing and the automotive industry. And while medical tourism accounts for a relatively small percentage of tourism revenue, this niche sector is posting impressive year-over-year growth rates.

Private hospitals in Thailand, which are the primary domain of medical tourists, have sustained robust, double-digit growth rates in recent years. They’ve become increasingly reliant on the industry for this very reason.

Thailand’s Kasikorn Research Centre, a think tank operated by a prominent Thai bank, recently looked into this trend. The centre found that the share of private hospital revenue supplied for foreign patients reached 27% in 2015, beating a 2011 projection by two percentage points. This year, they expect that figure to rise to 30%.

And while many of these patients hail from Australia, New Zealand, Europe and, to a lesser extent, North America, the think tank recommends looking to other markets – including the Middle East and even neighbouring Myanmar – to sustain these growth figures.

If this trend continues, Thailand could well develop into the go-to international destination for healthcare procedures. In some cases, this is occurring even to the chagrin of officials in other southeast Asian nations, where some wonder what’s stopping them from duplicating the success of Thailand, Malaysia and Singapore.

Indonesia is one such nation. Stephen Lock, head of public Affairs for Edelman, believes that Indonesian policy makers would be wise to be mindful of Thailand’s success – not to mention the role that Indonesian patients have played in it. Lock reckons that Indonesian health tourists inject well over US$1 billion per year into the Malaysian economy, with as much as 30% growth per year. This accounts for almost 5% of Indonesia’s annual healthcare spend (domestically and abroad). Capitalising on the medical tourism trend would likely bring these medical tourists back home, and attract a slice of the international market as well.

It’s worth noting that Bali has had success with medical and dental tourism, but this is the exception rather than the rule in Indonesia. Bali has a robust tourism industry in general, and the local medical tourism industry has been able to flourish because of this.

Countries keen to cash on the medical tourism movement are wise to consider where the greatest gains are possible so that early revenue can be reinvested in developing further infrastructure. For many medical tourism destinations, elective procedures offer the greatest potential.

The rationale behind this is relatively straightforward. Life-or-death medical procedures must be conducted where the patient is currently located, as time is of the essence. Pressing non-emergencies leave time for planning a visit overseas, but procedures of this nature are covered by national programmes in Australia, New Zealand and many European nations. The same cannot be said of non-essential, elective procedures.

This is why cosmetic surgery and dental operations have become so popular in southeast Asia. International patients plan discreet holidays in South-East Asia so that they can avail themselves of breast augmentation in Bali or rhinoplasty in Bangkok. Other types of cosmetic surgery in Asia – from Botox injections to teeth whitening – are also popular.

The impressive revenue streams generated by health tourism in Bangkok, Bali and elsewhere in the region have paved the way for major re-investment. As a result, southeast Asia features truly state-of-the-art medical facilities and some of the world’s highest value-for-money treatment options.

Paul McTaggart, CEO of Medical Departures, explains many of his organisation’s clients actually prefer undergoing cosmetic surgery in Thailand or Bali rather than at home in Australia or New Zealand.

“Our clients tell us that it’s more than the modern facilities or value-for-money proposition that draw them to facilities like KTOP Clinic or Phuket Plastic Surgery Institute,” he says. “We’ve heard over and again that the level of care and attention they enjoy at our partner institutions is unlike anything they would receive at home,” he added.

Jacob Pope is digital marketing director of Medical Departures.

 

Posted on: 25/08/2017 UTC+08:00


News

Shares in Sisram Medical, a Israeli subsidiary of Shanghai Fosun Pharmaceutical, and which manufactures medical aesthetics devices, slumped on their Hong Kong Stock Exchange debut today. By late morning they were down more than 6%.
Auckland-based ehealth software company Orion Health has signed a five-year contract with Integrated Health Information Systems (IHiS), the health technology agency for Singapore.
Irish healthcare, IT and services company Clanwilliam Group has taken a majority shareholding in HealthLink, Australasia’s leading health-system integrator. Financial terms have not been disclosed.
Strategic initiatives and expansion have driven a rise in first quarter profits at iKang Healthcare Group, China’s largest private preventive healthcare services provider.
Optiscan Imaging, which develops microscopic imaging technologies for medical markets, has announced an exclusive distribution agreement with Chinese based China Gate Scientific for the newest Optiscan preclinical research system, ViewnVivo.
Contract genomics organisation WuXi NextCODE has appointed Rob Brainin as executive vice president and chief operating officer. Brainin joins the company from Illumina, where he was vice president and general manager of life sciences and applied genomics.
Melbourne-based medtech company Novita Healthcare has appointed Bruce Higgins as chairman. He is an experienced non- executive director, chairman and former chief executive of both private and listed companies within Australia and internationally, spanning over 25 years in diverse companies ranging from engineering, manufacturing and professional services to larger contracting businesses.
In what is another setback for Perth-based digital healthcare operator Resapp, Médecins Sans Frontières/Doctors Without Borders has decided not proceed with its planned field evaluation of the group’s software. ResApp’s main product is a cough-based diagnostic test that works with a smartphone to analyse the sound of a patient’s cough and to diagnose any underlying conditions.



Analysis

By 2042 there will be more over-65s in Asia than the populations of the Eurozone and North America combined. We look at the business opportunities this creates.
Albert Wong argues that biomedical technology should not be ignored and explains how the Hong Kong Science and Technology Parks Corporation can support it.
Jacob Pope explains why medical tourism remains one of the region’s most significant industries.
APACMed’s Fredrik Nyberg looks at how local and multinational IVD companies are developing novel solutions for Asia’s unique needs.
It is perhaps a curious line in the sand to draw, but the new hospital in Dunedin, the second-largest city in the South Island of New Zealand, is gearing up to be a significant battle in the use of private-public partnership funding in the APAC region.
The ADB’s Eduardo Banzon argues that ASEAN countries need to guarantee the same health coverage for citizens when they are in foreign countries.
Mercer’s Catherine Li explains how companies in China can avoid common pitfalls when they establish employee health management programmes.
Lieven Jacquemyn, PPP international development director at GE Healthcare Singapore, discusses how governments, providers and investors can work together to bring universal health coverage to the region.


Civica

HealthInvestor Asia Summit

AON

Podcasts

Hedge Fund Focus

HealthInvestor Asia twitter feed
HIA Indices