Specialisms and Stakeholders in the Fastest Growing Medical Tourism Markets of AsiaPac

In the first part of our investigation into medical tourism in Asia-Pac we introduced the market, its dynamics, trends, and pull and push factors. In this second part of the series, we explore to greater length specific countries and investor groups within the AsiaPac region, and their characteristics and activities pertaining to medical tourism.
We also list the most sought after and popular medical specialties and types of care for medical tourists. Along with medical tourism HC providers and patients, other new stakeholders also arise (e.g. brokers, insurers, accreditors, etc.), as well as market-specific challenges (e.g. staff shortages, political stability, etc.).

The countries. Where are the hotspots?

The top 5 medical tourism countries, with a combined market share of over 95% in Asia-Pac:

  1. India
  2. Thailand
  3. Singapore
  4. Malaysia
  5. Republic of South Korea
  6. The Philippines

Some of the most active hospitals and hospital chains are:

IndiaAsian Heart Institute, Mumbai & Fortis Hospitals
ThailandBumrungrad International & Bangkok Hospital Medical Center
SingaporeGleneagles Hospital
Kuala Lumpur, MalaysiaPrince Court Medical Center
Seoul, KoreaWooridul Spine Hospital

Below you will find profiles for the most promising medical tourism markets, as well as a number of other countries entering the medical tourism arena.

India flagIndia

India attracted over 4 m medical tourists in 2016, generating around €4 bn of healthcare revenues.

Several hospitals are accredited by the Joint Commission International (JCI). They are typically staffed by highly (US and Europe-) trained physicians.

The Indian HC tourism sector focuses on cardiac treatment, transplants and orthopedics.

The country has introduced a special visa category, i.e. the “M visa”, to facilitate the visits of the growing number of medical tourists.

The Fortis group and Apollo Group are leaders in the Indian market.


Thailand flagThailand

Medical tourism is big business in Thailand. In 2016, over 3.5 m foreign patients came to the country spending over €4 bn on healthcare.

Thailand has perhaps the most advanced medical tourism sector with end-to-end solutions; fully integrated with air travel, hotel accommodation for traveling families, and airport greeting.

The Thai health tourism sector attracts patients from Japan, the Middle East, the UK, the USA, and Australia, and also from its neighboring countries.

Its main competitor is India, who offers more price-effective care.

15 hospitals have been accredited by the JCI. One of the most reputated hospitals for medical tourism is Bumrungrad International Hospital, where foreigners account for one-third of the patients.


Singapore flagSingapore

Singapore is one of the top destinations for medical tourism in the region. The country’s healthcare system has the sixth best healthcare system in the world (WHO). It has a well-developed infrastructure and offers high quality treatment. 18 hospitals are accredited by the JCI.

HC tourism accounted for almost €1,6 bn in 2016, with close to 0.9 m patients.

It‘s a global center of excellence in oncology, neurology, cardiology and stem cell therapy, which results in high revenue levels per patient.

However, Singapore must withstand fierce pricing competition from Thailand and Malaysia, due to its higher (and faster rising) costs. In the last few years, this has led to holding a smaller piece of the medical tourist and revenue pie.

There is also the emergence of high-end private hospitals in China, which adds to the competitive pressure.

Lately, the above has resulted in a slowdown, and even a stagnation within some branches, of Indonesia’s market growth.


Malaysia flagMalaysia

In 2016, around 1.2 m medical tourists came to Malaysia and spend around €1,4 bn. This sector is growing 15-20% annually. About 20% of the patients are Indonesian.

The government actively promotes -and is strategically developing- its medical tourism sector, accounting for Malaysia’s success in establishing high-standard health tourism facilities. It’s the fasted growing HC tourism hub in the region.

The patients are mostly from Indonesia, Singapore, Japan and West Asia.

9 hospitals have been accredited by the JCI.


South Korea flagRepublic of South Korea

The Korean government demonstrated their commitment to the expansion of the inbound medical tourism market through targeted investments, to compete directly with other Asian countries.

The Korean government actively promotes the healthcare industry, both domestically and internationally.

The Korean medical tourism sector markets itself as offering high-quality care in hospitals of the “developed world“ at lower costs. The high quality and low cost of treatment is used to target Korean expatriates and communities abroad.

Furthermore, there is the development of South Korean cities that are particularly focused on healthcare provision, with a high concentration of healthcare facilities.


China flagChina

China is a newcomer in HC tourism. There is a definite link between the increase of private hospitals and clinics, and the rising interest in HC tourism.

The impact of private investors (e.g. by Fosun, Chindex, and China Phoenix Healthcare Group) on hospital infrastructure is rapidly growing, as is the interest in medical tourist.

For example, since 2013, China Phoenix Healthcare Group (a private hospital group) tripled their number of hospital beds, along with their revenues.

Today, the number of private hospitals in China represents over 50% of the entire hospital market. However, the amount of services delivered by these private providers only accounted for 15% of the total care.


Indonesia flagIndonesia

Indonesia is not a center for healthcare tourism; it is a source of patients for its next-door neighbours. Indonesian patients spend around €2 bn in Malaysia and Singapore on healthcare services.

Indonesian regulations preventing foreign doctors from practicing domestically have hampered foreign direct investment into its medical sector.

The main specialisms involved. Which are the key components of care provision for HC tourist?

Medical tourists most frequently seek the following care/procedures:

  • Cosmetic surgery
  • Dental procedures
  • Bariatric surgery
  • Fertility/reproductive system (IVF, gender reassignment)
  • Ophthalmologic care
  • Orthopedic surgery
  • Cardiac surgery (angioplasty, heart bypass, heart valve replacement)
  • Organ and cellular transplantation
  • Eye surgery
  • Diagnostics and checkups

Certain countries have specialized in certain procedures, e.g. Thailand and India have specialized in orthopedic and cardiac surgery.

The stakeholders

There is a wide array of stakeholders engaging with the global HC industry. Besides the obvious players, i.e. the care providers, other and very different stakeholders are also significant participants in the medical tourism market.

Care Providers

Private hospitals (including chains), local and international players, as well as private investors are attracted by the medical tourism sector. Originally care providers were responsible for the largest share of the growth; yet nowadays, investor groups have taken the lead in the market’s pursuit of private hospitals’ growth and expansion.

Different business models surface:

Some players concentrate on one specific country, e.g. Siloam (Indonesia) and China Phoenix (China).

  • Siloam, part of Indonesian real estate company Lippo Karawaci, has 32 hospitals in Indonesia. By next year it plans the construction of another 10 sites, and aims to construct 50 hospitals in total by 2019.
  • The China Phoenix Healthcare Group tripled the number of its hospital beds (and its revenues) since 2013. In 2014, the Chinese government decided to pay Phoenix to run several public hospitals, and permitted that public insurance is applied to reimburse private care; however, implementation of this financing mechanism has not been very successful.

Other groups, such as Healthscope (Australia) and IHH Healthcare (Malaysia), plan to build an international network of high-end hospitals and clinics.

  • IHH has become the largest private hospital chain in Asia. In 2014, IHH bought Parkway (a Singaporean chain of high-end hospitals) and in 2011 it had acquired Acibadem (a Turkish hospital group). Its business presence stretches from Abu Dhabi to Vietnam.
  • Columbia Asia (Malaysia) is an international private healthcare company with 28 healthcare facilities (including hospitals, clinics and extended care facilities) in 4 countries, i.e. in Malaysia, India, Vietnam and Indonesia.
  • Many foreign hospital groups are investing into China, including Columbia Health (US), IHG, Optegra and Sinophi (all 3 from the UK), IHH, Raffles Group (Singapore), and Ramsay Health (Australia). Many of the facilities being created are world class.

Some market players offer good-enough, less costly treatment. E.g. Narayana Health (India) streamlined its hospital operations for efficiency and cost containment, and can offer comparatively lower-cost care.

 Governments

For some countries (e.g. Malaysia, Thailand, Singapore, and India) medical tourism represents a substantial component of their economic activity and GDP. A growing number of countries are competing for patients by offering a wide variety of medical services

The insurance industry

Particularly in western countries, insurance agencies have become an active player in the sector. Some insurers encourage patients to have their more expensive surgical procedures performed in lower HC cost countries. Long waiting lists in the patient’s domestic HC system, present another powerful driver to encourage insured patients to seek HC abroad.

Brokers

New players have risen in the communication and negotiation channels between hospitals and patients. These agencies connect patients to providers via the internet to assist patients to select, and compare: quality, pricing, comfort, countries, hospitals and even practitioners.

Health-related travel is driven by government agencies, public–private partnerships, private hospital associations, airlines, hotel chains, investors, private equity funds, and medical brokerages.

For some governments, such as those in Malaysia, Thailand, Singapore, and India, medical tourism represents a substantial component of the economic activity and GDP. A growing number of countries are competing for patients by offering a wide variety of medical services.

The insurance industry has also become an active player in the sector. Some companies encourage patients to have expensive surgical procedures at low-cost foreign medical facilities.

Accreditors

The Joint Commission International (JCI) is the most established medical tourist industry accreditor worldwide.

What are the challenges facing the market of medical tourism?

The main challenges and obstacles are:

Political stability

Thailand and Malaysia have recently faced political unrest (though only temporarily). Nonetheless, such instability impairs the attractiveness of its medical market, particularly for foreign investors and visitors.

Staff shortages

The growth of staffing needs often exceeds the availability of domestic trained personnel (in almost all of the aforementioned medical tourist destinations, including nurses, medical technicians and doctors). To ameliorate this staff deficit, many hospitals have started working with Western hospitals, as well as started hiring trained physicians from abroad.
In a further effort to reduce the stresses of staff shortages, hospital processes are under review to try and seek efficient operational solutions and improvements.

Competitiveness and cost pressures

Due to the rising popularity of medical tourism, and especially the profitability and attractiveness of medical tourism markets, hospital and investor numbers are growing, and so is the competition amongst them to attract the needed funds and patients.

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About Bart Van den Mooter

Bart is the founder of TforG and works closely together with over 50 global companies such as Abbott, Baxter, GE, J&J, Medtronic, Philips, Stryker and Covidien. In this function, he spends a lot time with Key Opinion Leaders and Health Policy makers in Europe and in Emerging Markets. He graduated at the Polytechnic University of Leuven with a Master of Engineering and has an MBA (Flanders Business School).