Push and pull factors of medical tourism development in AsiaPac determine specific obstacles and challenges in this market and definitely presented a lot of opportunities.
When building your strategy to enter the medical tourism market in AsiaPac, the key questions to ask are: what are the particular demands and medtech needs in this sector; how does one tackle market segmentation, and what are the objectives of the stakeholders involved? Continue reading to find out the answers, and to gain valuable insight to optimize your strategy, from commercial channels, to service portfolios, supporting organizations, and Business Intelligence!
Key components of an effective strategy to address the medtech segment in healthcare tourism
Several segmentation criteria apply to the HC tourism markets in AsiaPac.
- When assigning a relative weight and priority to the segment, it is important to acknowledge that HC tourism accounts for 10 to 50% of the total medtech market in the various HC-destination countries.
- 44-55% of private hospital revenues in Singapore, Malaysia and Thailand,
- 25% in India,
- and 10-15% in the Philippines, South Korea and Taiwan are accounted for by foreign patients.
- When deciding on commercial parameters, such as market positioning, sales and distribution strategies, DMU (Decision Making Unit) identification, etc., the respective business models of the care providers/governments play an important role, i.e.:
- Local vs. international hospitals groups
- Local vs. international investors
- The extent of government involvement in the promotion of the HC tourism sector
Understanding stakeholders’ needs and decision processes
HC tourism is evolving in a complex environment with many different stakeholders; each stakeholder requires their own commercial approach and needs to be deliberated into the business model. (To read more about the stakeholder types in detail, please consult Specialisms and Stakeholders in the Fastest Growing Medical Tourism Markets of AsiaPac)
Care providers are concerned with competitiveness, capacity, staff shortage, reputation, referral networks, accreditation, the optimization of the customer journey, etc.
Key challenges for care providers include:
- High market valuation
- Uncertainty over patients’ willingness to pay
- Dilution/reduction of the quality of care standards
- Inability to provide cost-effective healthcare delivery
As competition intensifies in the region, providers must ensure a rewarding patient experience with high-quality service. Examples of this high-quality trend:
- Parkway Pantai (Singapore) uses an international referral network to attract patients from across Asia and the Middle East to its medical hub in Singapore. They provide customized inpatient and ancillary services, such as visa application support.
- Fortis Healthcare’s Rajan Dhall Hospital (New Delhi) uses a business model that combines the personalized service of the hotel industry with the industrial processes of an automaker.
I.e. a highly customized and client-focused approach, with a large-scale, highly efficient and cost-driven supply/procurement mechanism.
- Patients are becoming much better-informed regarding the price and quality of the services they request/seek. HC-consumers can relatively easily compare the cost of procedures between various countries, facilities, staff credentials, procedures, performance records, etc.
Investors deal with topics such as revenues, ROI, willingness of the patient to pay for the services offered, the optimization of supplies, central purchasing, etc.
Governments wish to see a positive impact by the contribution of the sector on the national HC industry. They desire a beneficial interaction of HC tourism with local HC service provision, and are concerned with price controls, market/trade regulations, etc
Products and services must address the needs of the sector
The main needs that medtech providers must address are:
Private healthcare providers want to reduce costs without compromising on quality.
- Boosting central purchasing, supply and storage capacity and mechanisms. Medtech providers typically wish to consolidate large orders and stagger supply deliveries, in order to ensure sufficient on-site inventories.
- IT solutions will become increasingly essential for managing, coordinating and delivering qualitative and cost-effective healthcare.
- Medtech suppliers will face pressure to find innovative solutions to remain competitive, such as shifting from product-focused offerings to hospital-, department- or patient–focused value-based solutions.
- Care providers will turn to IT-based and value-chain solutions to gain and maintain a strong competitive advantage.
- Innovative solutions to address staff shortage are sought (e.g. telemedicine).
Quality and patient satisfaction
- The increased patient influx results in under-capacity issues, whilst there is the risk of quality and standard dilution. If an increased patient volume causes longer waiting hours, less medical attention, and results in medical errors occurring, this will likely impact the hospital reputation negatively.
- The use of IT solutions, such as EMRs (Electronic Medical Records) and automated pharmacies, is becoming essential to maintain high service and quality standards; yet the high cost and technical integration issues with these new solutions, may limit their apt adoption.
- Providers are shifting from surgical procedures to ambulatory treatments, in order to increase turnover, profitability and patient comfort.
The cornerstones of the sales & marketing strategy
Adapt commercial models and channels
- It pays off when companies build a range of go-to-market models that address the specific needs of the HC tourism sector.
- Companies that heavily rely on distributor networks may require deliberated tactics, because these networks make it more difficult to develop close relationships to the different stakeholders, and more arduous -respectively- to obtain clear insights into the procurers’ needs.
Product and service portfolio
- The specific opportunities, challenges and priorities associated with the care providers in this sector require the design of suitable, appropriate offers and the development of relevant products.
- This refers to products and services that are cost-effective and that optimize the care provision processes; that are specifically targeting the specialisms offered by the procuring hospitals and that manage patient-flows, etc.
- Companies must redesign and optimize their supply chains in line with the needs of the stakeholders.
- The opportunities and needs of the respective segments in the HC tourism sector require marketing, sales and service organizations that are fit for the task, and knowledgeable about the markets context, priorities and decision-making processes.
- The most successful Asian companies are competing with global brand leaders, and these regional players are benefitting from effective insights into their local market needs.
Global market leaders are often slower in responding to market needs, and cannot shift resources as quickly as local players can.
The bottomline for medtech success in AsiaPac’s medical tourism market
Effective Business Intelligence
Much of the above relies on detailed knowledge of the market situation and insights regarding its dynamics and processes. This includes a thorough understanding of:
- HC tourism patient flows
- The weight, size and growth of the sector
- The structure of the market and its segmentation
- The stakeholders and their priorities
- The competitive landscape
- The regulatory context
In summary, build your market strategies with the following in mind:
- Address the diversity of the market segments and stakeholders with targeted approaches/go-to-market strategies, engaging with and understanding the nuances of the various market players and potential procurers, to optimize addressing the market’s medtech demands/procurers’ objectives.
- Offer services/products that address specific needs, demands and concerns of the medical tourism market efficiently and appropriately.
- Ensure to have on-point and current local/regional market Business Intelligence regarding competitors, medtech demands, shortfalls and concerns, as well as forecasts and a thorough understanding of regulatory frameworks.
Download the full whitepaper
When interested in entering medical tourism markets in AsiaPac, the key questions to ask are:
> what are the demands and medtech needs in this sector?
> how does one tackle market segmentation?
> what are the objectives of the stakeholders involved?
Download the whitepaper ‘Medtech Opportunities in ASEAN Medical Tourism Markets – Finding the cornerstones of an effective marketing & sales strategy’ to discover the decisive elements when tackling market entry into AsiaPac’s medical tourism market and to optimize your medtech strategy.
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).