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

Medical diagnostic imaging services provider Capitol Health has said that it expects to return to profitability in the next financial year and has upgraded its outlook for the year.
Paragon Care, a leading distributor and manufacturer supplying medical equipment to hospitals, has said that it is “targeting strong growth in 2018 across all key metrics”.
Malaysian medical glove manufacturer Supermax Group has reported a 42.8% jump in Q1 profits to M$27.9 million (US$6.8 million) on revenues that 16% to M$312 million.
At its annual general meeting, international pathology, imaging and medical centres operator Sonic Healthcare reaffirmed guidance for the year. Chief executive Colin Goldschmidt said that the first quarter of the 2019 financial year confirmed expectations that underlying earnings would grow between 6% and 8% on a constant currency basis.
It has been another great quarter for China Cord Blood Corporation (CCBC), the country’s largest provider of cord blood storage and ancillary services. For the second quarter in a row, profits more than doubled. They came in at US$10.2 million.
New Zealand-based medical device manufacturer Fisher & Paykel Healthcare has reported a steady set of first half figures. Profits were up 4% to NZ$81.3 million (US$55.3 million) on revenues that rose 8% to NZ$458.4 million.
Retirement village operator Arvida has reported a 14.5% slump in profits for the first half of the year to NZ$14.5 million (US$9.9 million). At the same time, revenues were up 27.9% to NZ$60 million.
Medical device manufacturer Microport Scientific Corporation plans to acquire the cardiac rhythm management (CRM) business of London-based medical device manufacturer LivaNova for US$190 million.



Analysis

The promise of a bottom in Singapore’s office market has caused its ranking as an investment market to soar from next-to-bottom last year to third in this year’s “Emerging Trends in Real Estate Asia Pacific 2018” report, a real estate forecast jointly published by the Urban Land Institute (ULI) and PwC.
Kamal Brar, vice president and general manager of Asia Pacific for data software company Hortonworks, looks at how data analytics can provide effective and affordable healthcare in Singapore.
The latest Sun Life Financial Asia Diabetes Awareness Study reveals an alarming knowledge gap in diabetes. A third of Asian women who are or were pregnant in the past three years are unaware of the risk of developing gestational diabetes in pregnancy, while one in seven births in Asia is currently affected by gestational diabetes.
Gan Kim Yong, Singapore’s minister for health, explains why the private sector needs to get behind the National Electronic Health Record System.
Business leaders in Asia Pacific’s healthcare industry are showing urgency in embracing the fourth industrial revolution, according to the Microsoft Asia Digital Transformation Survey. More than three-quarters of them believe that they need to transform to a digital business to enable future growth and yet only a quarter said that they have a full digital strategy in place today.
An agreement for an additional US$15 million funding from the World Bank will be used to expand health and nutrition coverage in the Lao People's Democratic Republic. It is expected to benefit more than 1 million people across 14 provinces.
Bart Van den Mooter, CEO of the TforG Group, looks at the drivers behind the rapid growth in Asia’s medical tourism market.
The ambitious healthcare agenda under Moon Jae-in's liberal presidency will seek to expand national health insurance reimbursement and limit the burden of excessive medical costs, while overhauling the healthcare system. BMI Research looks at the winners and the losers in the presidential agenda.


Civica

Podcasts

AON

Hedge Fund Focus

HealthInvestor Asia twitter feed
HIA Indices