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Malaysia Medical Tourism Overview

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If you are interested in this article and will like to know more, kindly email nicklaus.au@frost.com

If you are interested in this article and will like to know more, kindly email nicklaus.au@frost.com

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  • 1. Medical Tourism - Health is WealthIncreasingly, people are travelling outside their home countries for medical treatment,driven by factors such as more affordable costs, better specialization and quality of medicalcare, short waiting periods, and to tap advanced technologies.Globally, medical tourism is a rising trend, and at expected global revenue of RM244billionin 2010, Malaysia has a lot of growth potential to tap on the medical tourism market as wellas target new markets.Malaysia is becoming an alternate destination of choice for healthcare tourists afterestablished medical tourism locations – Thailand, India and Singapore. Many local privatehospitals now offer a variety of medical packages and special arrangements for foreignpatients.Malaysia’s healthy vitalsThe Malaysian medical tourism industry has been experiencing consistent growth at a rateof 15 percent throughout 2008 to 2009, despite the economic slowdown in that period.Frost & Sullivan’s Principal Consultant of Healthcare, Asia Pacific, Dr. Pawel Suwinskicommented, “At this growth rate, Frost & Sullivan sees potential revenue garnered from thissector reaching RM390million in 2010, as compared to RM150million 5 years ago.”The number of medical tourists visiting the country for medical tourism has more thanquadrupled since 2003 to hit approximately 425,500 in 2009, and Malaysia is expected toreceive 519,000 medical tourists in 2010. The majority of the visitors are from neighboringcountries such as Indonesia (69%), Singapore (12%) and Japan (4%) seeking moreaffordable medical treatment. “Whilst Indonesia still leads, the trend does show a slightincrease from Singapore and the Middle East over the last couple of years,” Suwinskielaborated.Johor Baru and Melaka are popular centres for medical tourism in Malaysia. Penang is thefavourite destination for health tourists from Aceh, who take advantage of an exemptionfrom Indonesia’s exit tax.Among other things, Indonesian tourists are drawn by the similarities in language, cultureand diet with Malaysia, says Suwinski. The ready availability of halal food is also anattraction for Middle Eastern visitors. Malaysia’s multicultural populace provides a distinctadvantage in this area, with doctors and healthcare personnel who speak in English, Malayand Chinese in ample supply.As the industry is bolstered by the mostly international patients that come from neighboringAsian countries with less developed medical infrastructure, as well as some from otherdeveloped countries from the West and the Middle East, the growth in these figures signifiesincreased foreign confidence of Malaysia’s more advanced medical care services. Comparedto its neighboring countries, Malaysia advantage for these international patients are thehigher foreign exchange rate in Singapore and the unstable political scene in Thailand.According to the Association of Private Hospitals Malaysia (APHM), some of the factorsfueling this growth for Malaysia include:• Medical staff are generally English speakers 1
  • 2. • Multi-cultural, multi-lingual, and multi-ethnic society• As a Muslim country, it is an attractive option for Middle Eastern and other Muslim patients• Favorable exchange rates (one Ringgit Malaysia is equivalent to approx. USD 0.26, Sterling Pound 0.18, Indonesian Rupiah 2700, Singapore Dollar 0.47)• Highly-trained medical specialists with recognized post-graduate qualifications from the UK, Australia and the USA• Comprehensive network of hospitals and clinics, where 88.5% of the population is within 5 km of a public health clinic or private practitioner• Affordable hospitalization costs, for example, a routine cardiac bypass surgery would cost in the region of USD 6,000 to 7,000, compared to USD 130,000 in the United States USA India Thailand Singapore Malaysia Procedure (USD) (USD) (USD) (USD) (USD) Heart Bypass 130,000+ 10,000 11,000 18,500 9,000 Heart Valve Replacement 160,000 9,000 10,000 12,500 9,000 Angioplasty 57,000 11,000 13,000 13,000 11,000 Hip Replacement 43,000 9,000 12,000 12,000 10,000 Knee Replacement 40,000 8,500 10,000 13,000 8,000 Source: Patients Beyond BordersSuwinski says that Malaysia targets the cost-conscious, middle-range group and isparticularly renowned for cardiovascular and orthopedic procedures although Malaysia haspatients for a variety of treatments including cosmetic surgeries, dental surgery and electivemedical surgeries and oncological treatments, and transplants. The fact that most patientsare from Asian countries is favourable as the physical build is similar amongst this typology– making for less complications and ease of medical operation, care and administration. Forthe Asian patients, proximity makes for convenience of travel, whilst cultural and languagebarriers are not an issue.Suwinski added that Singapore targets the higher-end market and is established for morecomplicated procedures – and in areas such as oncology and transplants. As theseprocedures are more expensive, Singapore may have less in terms of number of patients,but more in terms of revenue.Given that both Singapore and Malaysia get their largest number of medical tourists fromIndonesia, price competitiveness relative to Singapore will be a key factor to swayIndonesian patients to seek treatment in Malaysia instead of Singapore.“Bumrungrad, Thailand’s JCI accredited, world class hospital in Bangkok is amongst the top4 hospitals recognized globally for medical tourism, and attracts about 450,000 internationalpatients annually. On the whole, Thailand received 1.7million medical tourists in 2009, withtheir largest numbers coming from China and Japan” Suwinski explains.“The undisputed regional leader in medical tourism is Thailand, with an estimated twomillion medical visitors expected in 2010 generating US$2.2 billion — 3.24% of the globalmarket, and almost 10% of the global share of medical tourists” says Suwinski. 2
  • 3. Malaysia biggest advantage over Thailand is the language barrier issue, but with the politicalunrest in Thailand now, Malaysia has the potential to take some market share fromThailand.India captures more of the US and UK market, whilst up and coming contender - SouthKorea, has already embarked on a very aggressive health tourism promotion drive andcould knock Malaysia out of the 4th spot in Asia Pacific.Band of Aid by Malaysia’s GovernmentThe growing interest in Malaysia and potential to tap this potentially lucrative market hasattracted the government’s involvement in extending supplementary service infrastructurefor this sector. The government has initiated several attractive incentives for investors andtravelers and has begun working with several government agencies to promote the countryand encourage growth within the medical tourism sector.The Ministry of Health (MOH) has set up a medical tourism website, titled“www.myhealthcare.gov.my”, to help with the planning of medical trips, visa requirements,and lists the hospitals that provide medical tourism services. Furthermore, the government,through the website, offers medical tourism as a package deal, complete with bundling ofhospital, hotels and leisure travel, making the prospect of coming to Malaysia attractive formore than just a stop for a medical procedure. In order to encourage this, the governmenthas extended the visa period for health tourists from one month to six months, which allowspatients to extend their stay and travel within the area whilst recuperating, thus leavingwith a positive impression of their experience.Additionally, the Malaysian Ministry of Health (MOH) has set up a healthcare travel council,to work in tandem with the Economic Planning Unit, government agencies and theAssociation of Private Hospitals of Malaysia to further encourage growth within the medicaltourism industry. Along with the formation of the council, the Malaysian government hasfive incentives to encourage medical tourism: • The government will provide a tax exemption equivalent to 100 percent for capital expenditure over a period of five years for the construction of new hospitals or for expansion, modernization or refurbishment of existing hospitals. To be eligible for the exemption, the hospitals must be registered with the MOH for the promotion of medical tourism • To encourage private hospitals to attain high quality of healthcare services, expenses incurred to obtain domestic or internationally recognized accreditation would be eligible for a double deduction incentive under the Income Tax Act 1967 • To encourage more Malaysians to return, or non-Malaysian medical specialists to come from abroad to serve in local hospitals, their non-Malaysian spouse qualified as a professional under the Malaysian Classification of Occupation (MASCO) will automatically be offered an employment/professional pass • To facilitate efficient arrival, stay, and departure for medical tourists, permits would be issued to hospitals registered under the MOH for the promotion of medical tourism. The permits would allow hospital vehicles to ferry patients and any accompanying people to and from the airport and hotel 3
  • 4. • International patients entering Malaysia for medical treatment during an emergency, using a Visa on Arrival, would be allowed to convert their status to social visit pass upon recommendation of private hospitals registered for the promotion of medical tourismFigure 1-2 illustrates the various factors that are involved in making a country an attractivemedical tourism option. In this table, evaluation of the most suitable location is based on 8factors, which are scored from 1 to 5 for each country, where 1 most favorable and 5 is theleast. Thus, the lower the total score, the more attractive the country is as a medical touristdestination. Malaysia yields a low score of 19, making it a viable option for those seekingmedical care.Figure 1-2Malaysia Medical Tourism: Relative Ranking of Countries South Ranking China India Singapore Thailand Malaysia Korea Political Stability 3 4 3 1 5 2 Governments support for medical tourism and regulation towards 3 3 2 1 2 1 foreign investment Availability of medical expertise 3 3 2 3 2 2 Volume of patients 3 3 2 2 1 2 Medical Tourism Revenues - 2005 3 3 2 1 1 2 (USD) Duration of travel to treatment 4 4 2 4 4 4 destination Physician referral networks 3 3 1 2 2 2 Number of competitors serving 2 3 4 4 4 4 foreign patients Total score 24 26 18 18 21 19 Source: Frost & SullivanThe Malaysian government’s move to address issues such as visa requirements andimmigration hassles, and stepping up marketing and promotional activities to raiseawareness of Malaysia as a tourist hub for leisure, travel and healthcare are crucial factorsin working towards making Malaysia a top choice destination in Asia. “Malaysia still has lowexposure in countries with a potential customer base, and needs to catch up with countrieslike Thailand and Singapore that have already established their advantage and globalmarket share,” states Suwinski.The role of private hospitalsIn other areas, increasing healthcare expenditure in Malaysia is driven by greaterprivatization within the healthcare services sector. Healthcare in Malaysia is dominated byprivate hospitals, where 62 percent of the total hospitals in Malaysia are privately owned. 4
  • 5. Additionally, the number of private hospitals has increased dramatically from 50 in 1980 toan estimated of 224 private hospital in 2008.Private hospital groups and major private healthcare providers such as Gleneagles IntanMedical Centre and Pantai Hospitals have invested in setting up international patientdepartments specifically for the admission and support of international patients. On theother hand, KPJ Medical Group, Mahkota Hospital and Sime Darby Medical Center havetaken a different approach through tie-ups with travel agencies and hotels to providecomprehensive tourism packages in conjunction with healthcare services, as well as settingup representative or referral offices.Privatization of the healthcare services sector has also given rise to the adoption of HealthIT investment. Such was the examples of Prince Court Medical Center, a new internationallyJCI accredited hospital, that has invested in a Total Hospital Information System software.The software helps in managing patient information from admission to discharge in order toachieve a seamless operation. Through its collaboration with the Medical University ofVienna, the hospital also aims to be the forefront in establishing innovative telemedicine,telepathology, teleradiology and telecytogenetics services in Malaysia.“The government’s role and working closely with the private sector is an essential factor togenerate the full range of benefits,” Suwinski says. If Malaysia intends to look towardWestern and developed countries, then another factor would be JCI accreditation, as mosthospitals in Singapore are already accredited, whilst most in Malaysia are working towardsapplying for accreditation now. JCI accreditation allows patients to pay for treatment underUS health insurance plans. The Prince Court Medical Centre, which is backed by national oilcompany Petronas, Penang Adventist Hospital, and the International Eye Specialist Centre,Kuala Lumpur and the Institut Jantung Negara (IJN) are already accredited.In a technology-driven global market in health services, innovation in the form of thedigitisation of healthcare is changing the market and redefining opportunities. Investmentsin healthcare personnel as well as healthcare IT on all levels are critical factors for thosevying for leadership positions.In the area of Electronic Health Records (EHR), US based company Unival, signed a contractwith the leading facilitator of medical tourism to Malaysia, Malaysia Healthcare (MHC), inearly 2010 to create portable medical records for U.S. patients traveling to receivehealthcare services in Malaysia. Prior to leaving for Malaysia, patients forward their medicalrecords to Unival where nurses convert them into an electronic format. Images of all theirrecords are made, along with a conversion of the information in their records to a Continuityof Care Record (CCR) that can be easily carried to Malaysia for use during theirtreatment. This information is also sent to the individuals’ Microsoft HealthVault personalhealth record. After their treatment in Malaysia, patients send discharge summaries andother information from the Malaysian treatment centers back to Unival and that data isupdated in their Microsoft HealthVault to be shared with their treating physicians back home.Imaging the futureAs healthcare costs skyrocket, there will always be a place for medical tourism. Thecombination of low costs, expert care, latest technology, and comfortable accommodationswill continue to be an attractive option for foreign travelers. Increased efforts to advertisethis message in the context of Malaysia will be a key factor to gaining a greater influx ofmedical tourists. As an area of industry that continued to grow in the midst of the economic 5
  • 6. downturn, globally positioning Malaysia as a top medical destination has become crucial tothe growth of this sector.Moving forward, concerted efforts must be made to raise the expected quality of healthcareservices in Malaysia. Creating an attractive option for travelers includes elevating the levelof clinical and service excellence and adopting superior technology and patient-orientedfacilities. This would include everything from extending support and services toaccompanying family members and adopting Healthcare IT (HIT) systems such as ElectronicHealth Records (EHR),” Suwinski added.It is up to a combination of the government and association of medical institutions toencourage travelers by providing lucrative travel packages, top class medical technologyand talent, while keeping cost low. The relative stability of the government, together with areputation as a comprehensive healthcare provider for its own population, are essentialpoints of importance for foreign travelers seeking reassurance before embarking onessential surgeries and subsequent recoveries. The growth in the number of medicaltravelers shows that Malaysia has provided that reassurance, but the country mustcontinuously work on widening that net to gain a greater share of the market.This article was authored by Dr. Pawel Suwinski, Principal Consultant, Healthcare Practice,Asia Pacific, Frost & Sullivan.Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth andachieve best-in-class positions in growth, innovation and leadership. The companys GrowthPartnership Service provides the CEO and the CEOs Growth Team with disciplined researchand best-practice models to drive the generation, evaluation and implementation ofpowerful growth strategies. Frost & Sullivan leverages over 45 years of experience inpartnering with Global 1000 companies, emerging businesses and the investmentcommunity from 40 offices on six continents. To join our Growth Partnership, please visithttp://www.frost.com.Media contact, please email nicklaus.au@frost.com or djeremiah@frost.com 6