The Dynamism of ASEAN’s Medical Tourism Sector

Medical tourism has long been recognised as big business in the region, particularly in countries such as Thailand, Malaysia and Singapore. In this article, ACE Spotlight look at the landscape, enablers and potential growth areas that regional SMEs could tap.
The World Health Organisation (WHO) defines medical tourism as “medical tourist elect to travel across international borders to receive some form of medical treatment”. These treatments span across a full-range of medical services with the most common treatment being dental care, cosmetic surgery, elective surgery and fertility treatment. In defining medical tourists, it is important to subtract international patients who are expatriates seeking care in their country of residence as well as emergency cases.

Based on a report by US-based Patients Beyond Border, an organisation which monitors trends in medical tourism globally, it is estimated that the medical tourism sub-sector globally is expanding at a rate of more than 25% annually and is valued over US$55 billion with a market of over 11 million consumers. From these figures, nearly a third comprise of medical tourists travelling to Southeast Asia.

Nevertheless, it is important to appreciate that many medical tourists in Southeast Asia arrives from within the region itself. For instance, from an estimated 840,000 medical tourist arrivals to Malaysia, circa 640,000 hail from within Southeast Asia. Both Thailand and Singapore attracts 550,000 and 400,000 intra-ASEAN tourists, respectively.

In general, broad factors influencing people in the region to travel for healthcare includes medical cost, shorter waiting times for procedures, access to treatments unavailable in their native countries and more affordable travel cost given the availability of low-cost airlines. In addition, cultural similarity and distance are also factors influencing regional patients in their choice of medical care destination as evident in the influx of medical tourist travelling from Laos to Thailand and Indonesia to Malaysia.

According to Ghazali Musa, Professor of Business Strategy and Policy at Malaysia’s University Malaya, the region’s medical tourism explosion had its origin in the 1997 Asian Financial Crisis when more developed Southeast Asian countries looking to diversify their income sources began promoting affordable and high-quality medical care to attract foreign patients.

Today, medical tourism is a big business in the region with countries beginning to carve a niche beyond the broad factors discussed earlier. For example, Singapore is well-known for excellent diagnosis and treatment of oncology as well as stem cell regenerative therapies while Malaysia for its comprehensive health screenings and Thailand for cosmetic surgery.

While we have looked at the macro level on factors influencing foreign patient’s decision in determining countries in the region where they obtain medical treatments and care, perhaps we could dig deeper to appreciate factors influencing their selection of healthcare provider. In this regard, it is important to first and foremost satisfy their primary motivation which is to get high-quality medical care that is otherwise unavailable in their home country at lower-cost.

With quality and access serving as the most important factors, it is thus key for healthcare providers to invest in state-of-the-art medical equipment and facilities and to recruit quality medical practitioners such as specialist doctors and nurses. However, this doesn’t end here; healthcare providers also need to strategically market their services in ways that appeal to the medical consumers.

One way to gain the confidence and trust of consumers is through obtaining internationally-recognised accreditations which certify the level of quality for the healthcare services provided. With regard to this, the Joint Commission International (JCI) is a reputable group that has been vetting healthcare providers in the region since 2002. Today, Thailand boasts 53-accredited hospitals, followed by Singapore and Malaysia with 22 and 13, respectively.

One way to gain the confidence and trust of consumers is through obtaining internationally-recognised accreditations which certify the level of quality for the healthcare services provided. With regard to this, the Joint Commission International (JCI) is a reputable group that has been vetting healthcare providers in the region since 2002. Today, Thailand boasts 53 accredited hospitals, followed by Singapore and Malaysia with 22 and 13, respectively.

Moreover, small medium enterprises (SMEs) should also consider enhancing the tourism component of medical tourism by venturing into tourism-related products such as accommodation, transportation and travel. As many foreign patients are accompanied by loved-ones, perhaps healthcare operators may consider packaging their services with tourism-related activities which the region is already so famous for. In this context, healthcare operators should consider collaborating with players involved in the tourism industry.

Halal Medical Tourism - There is a growing demand for halal medical tourism in the region, especially in Malaysia and Singapore which receives a large share of medical tourists from neighbouring Indonesia. Halal medical tourism refers to medical tourism which adheres to the guidelines under the Shariah Law. For instance, healthcare providers should provide halal medications when available such as porcine-free gelatin capsules for medications and non-porcine insulin.

Beyond offering halal medications, healthcare operators involved in halal medical tourism should consider offering Muslim-friendly services such as halal food, qibla directions, prayer facilities, provide doctors and nurses that are the same gender as the patients and if required, funeral services according to Islamic requirements.

The potential is there as within the Organisation of Islamic Cooperation (OIC), Malaysia has already carved its name as the most popular destinations among Muslim tourists, while Singapore and Thailand rank as first and second among non-OIC members.

“We realise that if we can come up with halal pharmaceutical products there’s a big market for it. As far as Muslims concerned, if you have a halal product, there is no compromise,” says Jamil Bidin, CEO of Malaysia-based Halal Industry Development Corporation.

Dental Tourism - It is not just the most developed countries in the region that are reaping the benefits of medical tourism. Cambodia is beginning to gain a reputation as a low-cost and high-quality destination for dental tourism. Accordingto Josef Woodman, CEO of Patients Beyond Borders, there is an excellent opportunity for the country to promote itself as a dental tourism destination. People from countries such as the US, Australia as well as neighbouring Southeast Asian countries could save up to 70% on the cost of dental treatments in Cambodia. With the savings, they could cover the cost of a holiday in Cambodia.

In essence, as access to healthcare in Southeast Asia’s less developed countries improves in tandem with region’s overall economic progress, it is unlikely that the demand for medical tourism would subside anytime soon. The region’s rising affluence would influence the consumer’s conditions and preferences. Should ASEAN achieve its intended goal of becoming a single regional; the more likely scenario would be a dynamic sector with healthy competitions and collaborations driven on innovative healthcare packages and services.

Tapping into a Competitive Yet Rewarding Halal Business

By Sheikh Ghazali Abod, PhD
Representing 1.7 billion or about a quarter of the entire world population, the potentials of the Muslim market is extremely huge. This is even made more astounding, considering the Muslim populace is growing at two times the rate of the global population. In 2015, the market is estimated to be worth a staggering US$1.8 trillion and is forecasted to rise to US$2.6 trillion by 2020. The International Monetary Fund (IMF) remarked that while the global economy is stagnating due to decline in investment and an ageing population, the outlook of the Muslim economy is a stark contrast by being among the fastest growing markets in the world.

From a regional perspective, ASEAN SMEs are well positioned to capitalise on the opportunities of this huge and rapidly growing Muslim market. Although it may not be as lucrative as the market of the Gulf Cooperation Council (GCC) countries, the region is home to a sizeable Muslim consumer base. Approximately 265 million or about 43% of the Southeast Asia populace practice the religion of Islam with majorities of them in Brunei, Indonesia and Malaysia as well as Pattani in Thailand and Mindanao in the Philippines.

It only makes business sense for the SMEs in the region to leverage the proximity of this large Muslim market appearing at their doorsteps, positioning it as a springboard in pursuing their halal ventures. In capitalising such an opportunity, the SMEs cannot afford to continue the “business-as-usual” approach, for the level of competition in the halal market is becoming increasingly sophisticated and strategically continuously changing to map the equally everchanging consumer landscape and demands. After all, the halal business industry is never reserved only for the Muslims and by the Muslims.

In as much as the market is regional and global, the competition is equally complex. This is even made more challenging when considering the increasingly developed ITinfrastructure, mobile apps penetration and online business rate of consumption. The SMEs need to appreciate the nature of business today. The then culture of elbowing competitors to get ahead, need to be reviewed with the current spirit of sustaining growth via inclusive collaboration. The market is in itself simply too huge for any particular player to command, hence the need to look beyond one’s business shore.

At the regional level, for the SMEs in the halal trade to be a force to be reckoned with, some of the key players in the various industries need to take some lead roles in developing a well-defined structured halal-based eco-system that would collectively help in competing and penetrating the global marketplace - where demand and lucrative pricing are in store for halal products and services of excellent quality. This will ultimately lead to the creation of halal industry giants – preferably with diverse areas of specialty – that are capable to compete vigorously in the global arena.