Medical tourism is growing strongly around the world, including in countries in Asia such as India, Malaysia, Singapore, South Korea and Thailand. One estimate puts the value of the worldwide medical tourism industry at US$100 billion. Asia’s share of this figure is still a modest $8.5 billion. This leaves plenty of room for further growth and improvement.
India and Thailand have traditionally dominated the industry in Asia. However other regional competitors, including Singapore, Malaysia and the Philippines, are recognising the industry’s potential and implementing government-sponsored initiatives to promote development of the industry within their borders.
The results of these initiatives have been impressive. For example, in the past few years Malaysia and Singapore have been averaging annual compound growth rates of 29.2% and 11.9% respectively.
A range of factors is driving patients to seek treatment outside of their home countries, including high cost, long waiting times for treatment, advances in medical technology in countries such as Thailand, and low cost-international air travel. Cost is a particularly compelling consideration. The US Medical Tourism Association has compiled comparative data for the cost of treatments in the United States and various Asian destinations. The table shows the results, which are quite startling.
The advent of the Asean Economic Community (AEC) in late 2015 will further enhance the growth of medical tourism within the region. The AEC will facilitate the free flow of medical services and hence foster medical tourism within the Asean community.
Increased activity in cross-border mergers and acquisitions (M&A) among Asean healthcare providers is another positive development. Private hospitals and other healthcare providers within the AEC are actively pursuing M&A activities beyond their own national borders in a calculated policy to tap into new opportunities that will be created by the AEC.
These opportunities are on both the demand and supply sides of medical tourism activity. On the demand side, there is the ability to tap into a larger pool of patients; on the supply side, there will be access to a greater talent bank of healthcare professionals.
The future looks to be bright for the medical tourism industry in Asia. However there is little room for complacency. There will be challenges as well as opportunities. Government policies and practices should actively foster the industry. There are plenty of competitive players in other regions of the world waiting to profit from this lucrative market.
Peerapan Tungsuwan is a partner-chair of the Asia-Pacific Pharmaceutical and Healthcare Industry Group at Baker & McKenzie. E-mail: firstname.lastname@example.org
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Writer: Peerapan Tungsuwan