Penang Hospital for the Orient


As south-east Asia develops and its peoples become richer, the demand for good health services naturally grows. But even the sick are mobile now, and giving them a choice of healthcare is becoming very big business. And Penang is getting things right – very right.

Nearly four years ago, a CNBC special report highlighted Malaysia’s rapidly expanding medical tourism sector. It was a surprise for many viewers that the US-based network focused on Penang’s private hospitals considering that Malaysia’s capital has 24 private hospitals compared to Penang’s 121. However, in 2009, Penang hospitals accounted for over 75% of the country’s medical tourism market, a market share it still holds today.

Penang’s edge lies in its modern private hospitals, highly trained medical personnel, competitive pricing and simply being in the right place at the right time. “When the CNBC report came out, health tourism was in a real buzz phase. We even had some US patients travelling to Penang for treatment. When Obama came into office, the numbers started to drop though!” said Ronald Koh, CEO of Gleneagles Medical Centre. He also noted that the National Economic Advisory Council (NEAC) has highlighted the potential of medical tourism as a significant contributor to the local economy and an important source of foreign revenue.

Right place, right time

Before the terms medical tourism or health tourism came into vogue, Penang’s historical trade and education links with cities in Sumatra were already well established (cemented by direct flights between Medan and Penang as well as a regular ferry service). In the 1970s it was not unusual for Indonesian business travellers, typically from Medan, to seek medical treatment at private hospitals on the island.

This traffic continued throughout the 1980s and 1990s, but the growth of private hospitals in Penang was primarily driven by local demand. Many wealthy Indonesians were already travelling to Singapore for healthcare and Penang didn’t register on their radar.

According to Koh, “It was only when the Asian financial crisis hit in 1997 that we really started to see large numbers of Indonesians coming to Penang and Malacca for medical treatment.” 

Compared to Singapore, Penang was seen as a more cost-effective option and its private hospitals had a good reputation built up over decades, enhanced by the fact that most Malaysian doctors had been trained in the UK (or other Commonwealth institutions). Similarities in culture and language were also powerful draws; just imagine having to describe your problems to a doctor who didn’t speak the same language.

Proximity and good travel links made it especially easy for Sumatran patients to prefer Penang the flight journey between Medan and the island took only an hour, compared to nearly two-and-a-half hours between Medan and Jakarta. Once Indonesian patients began travelling to Penang en masse, the island’s reputation as an international centre of medical excellence steadily gathered momentum.

It was only much later that a formal body to represent and promote Penang’s private hospitals internationally was mooted, which led to the formation of the Penang Health Association in 2006. The Penang Health Association, now known simply as Penang Health, was Malaysia’s first medical tourism promotion association. “Penang Health is an icon as far as health travel is concerned,” said Dr Chan Kok Ewe, the organisation’s founding chairman.

Within Malaysia, Penang Health is certainly unique for aligning the aims of its member hospitals with regards to medical tourism and presenting a single, united front. The association’s founding chairman and vice chairman explain how it came about, its hopes for the future and the challenges it faces.

How did the association get off the ground?
Nora Hamid, vice chairman of Penang Health: Before Penang Health was formed there was already a sense of camaraderie among the private hospitals. Many of the hospitals would independently send representatives to the same expos in Indonesia. We’d end up talking to each other, having meals together, sharing info, etc. Perhaps Penangites like to stick together!

So the good rapport was already there among the various hospitals’ marketing teams, but it took Dr Chan’s vision to sit down with the other CEOs and formalise Penang Health for a platform for structured, long-term cooperation to come into being. I would describe him as a very transparent and fair person; there was never any issue of him only furthering his own hospital’s agenda but Penang Health as a whole. Honestly, we don’t need to compete as individual hospitals, there’s more than enough cake slices for all of us.

Chan Kok Ewe.

Dr Chan Kok Ewe, chairman of Penang Health: All patients go to the hospital they want to go to, there’s nothing I can do to persuade them otherwise. Even if I stand outside another hospital and say, “Eh, please don’t go in there,” it doesn’t work. So it occurred to me, why don’t we get together, join forces, galvanise our powers and see what the outcome will be.

We managed to sell the idea to the state government at that time and then went on a trip to Jakarta for a health exhibition for the first time ever under the banner of Penang Health. Initially it was just about marketing synergies, but then as time went on we began to talk to each other across the table without any difficulties at all. Instead of one person trying to develop the market, we are now many, and that makes it easier. 

Why the need for Penang Health, given the rapid expansion of medical tourism without any major marketing campaigns?
Chan: For an international market you must have the proper organised structure. This is an industry that is growing fast without very much governmental support. Well, what they have given us so far is moral support. The point is that it is not just an RM2mil business... we hope this year it will touch the RM300mil mark.

For an international market you must have the proper organised structure. This is an industry that is growing fast without very much governmental support. Well, what they have given us so far is moral support. The point is that it is not just an RM2mil business... we hope this year it will touch the RM300mil mark.

Since there is a record of people loving us, the rationale is, why not go out and expand? Penang Health must go out into countries with potential. When you work with emerging markets you have to be very forward looking because your product is not known there. So how do you make your presence felt?

The advantage of having a group like Penang Health is that we portray a destination brand and not a hospital brand. As far as patients are concerned, I don’t care whether they choose Island Hospital, Gleneagles, Adventist or whoever. The most important thing is that foreign patients choose Penang.

Our advantage is that our individual members do not compete on the ground, but if I see that you have a nicer dress than I do, I will go buy a better dress. If I upgrade my machines, who benefits? The patients. Locals benefit as well as foreigners. Ultimately the brand is enhanced.

With more patients coming in we feel we have to better our services, better our quality. By coming together under the umbrella of Penang Health we are also serving the local hospital community, we no longer fight and we’re all heading towards the same purpose. Everyone benefits from this, look at our (Penang Health’s) growth, nearly 20% every year.

How effective has it been so far?
Nora: Joining forces to market Penang as a health tourism destination is a major aspect of Penang Health, what is also important is how member hospitals share information in order to plan for the future.

For instance, Penang Health was able to negotiate with Air Asia to request a direct Penang-Jakarta route based on the strength of our numbers. Air Asia was initially very cautious but we told them to look at our numbers, we could definitely fill up their planes.

Because we compile so much patient data on a regular basis, even the Ministry of Health has requested that we share information with them. In this sense medical tourism in Penang is too large to ignore.

How does Penang Health fund its activities, how much government support does it receive?
Chan: Not much funding at the moment. Each hospital spends its own money but expenses are shared equally by the seven members when we travel. It’s just like friends going out for dinner and splitting the bill.

The Malaysia Healthcare Travel Council (MHTC) was formed because the government felt that there should be a separate body looking into its (medical tourism) potential, but how much does the government know about medical tourism? It is hard for the government to align with a private organisation, there is no real integration. Both sets of KPIs are not always in alignment, so how can it work? There is a loose association but no incorporation. 

What are Penang Health’s plans for the future?
Chan: The MHTC has talked about expansion to China and Vietnam, but to do so we need to spend big bucks. We have to be committed to spending first with no returns. There’s no way we can invest RM1mil and expect returns of RM1.5mil. No way! We have to gain the con dence of the people. Once the door is open, once the seed has germinated, the tree will grow and you will have fruits.

It is a time-consuming, long-term process. There is no guarantee for success. We cannot guarantee that a seed will grow into a healthy plant, but if we don’t plant the seed we will definitely not succeed.

First of all there are not that many hospitals in China or Vietnam willing to partner us. Basically the challenge is to make our presence felt. These are very difficult markets for us in the sense that medical services are mainly provided by the government in these countries. But the time will come when private medical services will see rising demand, not because government services are not good, but the fact is that there must be room for individuals who want something different.

Another issue here is flight connections. KL and Singapore have plenty. Now that Air Asia flies direct from Penang to Jakarta our numbers have risen, but to tap into these new markets we’ll need more direct flights.

Nora: Penang has always had a good reputation for medical tourism in Medan which was historically served by the airlines and the ferry but now we are reaching out to more Indonesian cities. These are new markets. We are dealing with people who have never even heard of Penang and have no idea what to expect.

When attending expos in Indonesia, our first task is to put away all the hospital brochures and bring out all the tourism material we can. We are literally ambassadors selling Penang first as a destination, and only later do we talk about the medical facilities offered.

Due to this, we (Penang Health) have established a good rapport with state tourism agencies, first with the Penang Tourism Action Council (PTAC) that was really very helpful, and now Penang Global Tourism (PGT). Recently we travelled to Banda Aceh with PGT that arranged useful B2B meetings for us. Travelling with a government agency makes it a lot easier for us as it eliminates time-consuming bureaucracy, especially as promoting medical tourism in Indonesia can be quite a sensitive issue.

Are you concerned about the dependence on Indonesian patients who account for 90% to 95% of all medical visitors to the state?
Chan: Medicine is like this, if you’re good you don’t have to worry. One day a friend of mine rang me up at 5pm for a chat. I asked him what he was doing in the hospital. “Oh, I’ve come to see one of your doctors. I’ve been waiting since 9am.” “I’m so sorry!” “Why do you want to be sorry? He’s good, I don’t mind waiting.” For this reason I don’t worry. Over 1,000 people travel to Penang every day for treatment. 

Nora: As far as Indonesia is concerned, Penang is the anchor. In Indonesia, people relate health to Penang. That’s the strength of the Penang brand, so I’m very optimistic that we can expand further in Indonesia. 

As far as Indonesia is concerned, Penang is the anchor. In Indonesia, people relate health to Penang. That’s the strength of the Penang brand, so I’m very optimistic that we can expand further in Indonesia.

Does Penang Health have a representative office in Indonesia?
Chan: We don’t have an office overseas because what we do is very much based on personal relationships. We would rather have facilitators in the country.

How do people find these facilitators though?
Chan: Word of mouth! That is the most powerful tool. This is how medical tourism in Penang has developed. It’s a so sell, not a hard sell.

The mass of people that come have a wide range of complaints, they want to go to a place that can treat a wide range of illnesses. We concentrate on the total market, in the same way that supermarkets operate. It’s the bread and butter we’re talking about.

What are the challenges for future growth?
Nora: We would like to work closer with Tourism Malaysia because a large part of what we do is destination selling. It would be very helpful if Tourism Malaysia offices overseas could display our (Penang Health) marketing material. 

The government obviously realises the potential of medical tourism for Malaysia and set up the MHTC. They have been very proactive in putting together expo calendars and arranging travel for us. My concern is that they are now casting the net too wide and inviting clinics, spas and even dental clinics to travel overseas under the MHTC banner.
I think they need to be careful as this could jeopardise Malaysia’s image, especially when people travel here expecting to be treated at a large, modern hospital and instead end up at a row of shophouses. 

By Jeffrey Hardy Quah

Asni was at a loss. Her two-year-old son Kenrick was having diarrhoea, and pus and blood had been found in his faeces. There was no fever yet, but he was in critical condition. Kenrick spent a week at a government hospital in Nias, the largest of 131 islands o the western coast of Sumatra, but even there none of the doctors could gure out what was wrong with him. And as time passed, he was growing paler and quieter.

Asni is a staff nurse herself, and her husband, Yupitar, is a government servant. None of that mattered; Nias simply couldn’t help them. Finally, in desperation, the young parents flew to Penang, where Kenrick was hospitalised for a month. It was the first time they ever set foot on the island. But after just a week here, Kenrick began showing renewed signs of life. “He’s getting better,” said a tired but relieved Asni. 

class="caption">Rosalena and husband.

Spend enough time with Indonesian patients at a Penang hospital, and Asni’s story becomes a familiar one. Many, many Indonesian patients would rather fly to a neighbouring country than use their local hospitals, and to hear them tell it, they have good reason. “ The doctors in Niah didn’t have the skills to help him,” explained Asni. Her Penang doctor, on the other hand, accurately diagnosed that Kenrick had an infection in his small and large intestines. A prescription of antibiotics later and Kenrick’s condition soon improved. “ The doctors here are much faster at making diagnoses.”

Speed and accuracy are common compliments when it comes to Penang’s doctors. “My father was sick, and for three months the doctors couldn’t tell us what was wrong with him,” said entrepreneur Rosalena. “But a lot of people said the hospitals in Penang are very good, and many of my friends have been patients here. So we came to Penang to see if they could tell what’s wrong with him. And they did!” It turned out that her father, Sampai Barus, needed a heart bypass. The operation was a success, and they’re back in Penang for a routine follow-up. “ The doctor was very thorough,” she added. “He checked everything.”

Some patients attribute Indonesian hospitals’ relative inefficiency to greed. “ They want more money,” retired businessman Anwar, who was in Penang to treat his high blood pressure, said bluntly. “ The doctors can’t help you, but they don’t want you to go to other hospitals. The doctors here are more responsible.” Like so many other patients, his friends in Medan recommended that he go to Penang instead. Anwar has now been coming to Penang for the last seven years, and has been to Lam Wah Ee, Adventist and Island hospitals.

“In Penang,” said Hajah Hamidah of Medan, whose husband is suffering from a stroke, “if the doctor can’t treat you for something, they will say they can’t. In Indonesia, if they can’t treat you, they will still say they can.”

Just talking about Indonesian doctors was getting Anwar worked up. “ The doctors just guess,” he said. “ They give you three, four different types of medicine and tell you to try them first. If they don’t work, they give you different medicine.” 

“It’s faster and more accurate here,” said 55-year-old mechanic Muhammad Nur Imansyah, who brought his sister to Penang to treat her diabetes. “ The treatment is at a much higher level.” His sister’s husband used to be treated in an Aceh hospital, an experience that he described as “less than satisfying”. “Treatment took too long.” And not because of the facilities; after the 2004 tsunami, aid from countries like Japan and Germany resulted in quality medical facilities, facilities that Muhammad Nur believes the medical staff could not live up to. “ The manpower was just lacking,” he said ruefully.

Muhammad Nur Imansyah.

Indonesia’s nurses aren’t spared the patients’ wrath either. “ The nurses are no good,” said 64-year-old Muhammad Husen Abdullah. “Back in Aceh, we have to go look for them! Here, the nurses look for us.”

The consensus seems to be that Penang simply has better doctors, nurses and hospitals than Medan or Aceh or Nias. But to truly understand Indonesians’ frustrations with their healthcare quality, you only need to look at, of all things, the IV drips. If you ever crash your Honda Cub into a tree and wake up in a hospital in Penang, chances are you’ll find yourself hooked up to a drip bag. It’s practically a given.

Not in Aceh. “We have to buy them ourselves!” said Muhammad Nur. “ The doctor gives instructions on what we need to buy, then we buy them in the pharmacy and bring them to the doctor. Here, the hospital does everything.”

After their experiences, no wonder Penang’s healthcare system would seem so enticing. It helps that, though patients are travelling to a different country, the cultures are similar enough for them to feel comfortable as they get treated. “It feels familiar, even the food,” said Hamidah. “We have similar tastes.” Hamidah also points out that just because Penang is in another country doesn’t mean it’s harder to get to; the National Cardiovascular Center Harapan Kita is based in Jakarta, two-and-a-half hours away from Medan. A ight to Penang takes just an hour.

Hajah Hamidah and husband.

Anecdote is admittedly not data, but it certainly doesn’t look like Indonesians are going to stop coming to Penang anytime soon. Muhammad Husen came to have one eye treated, and will return to have his other eye looked at. Others will return for follow-ups. Word of mouth will likely remain strong, as patients return to their hometowns to gush to their friends and families about their respective treatments. “Everyone wants to come here,” said Anwar.

Asni and Yupitar keep vigil over Kenrick in his hospital bed, as nurses discreetly set up monitoring equipment. As civil servants, they don’t earn much, and treatment in Penang is generally more expensive than in Niah, but at least Kenrick’s medication is cheaper here. The family has been on the island for 15 long, gruelling days, but his condition has been steadily improving. Asni explained that the doctor said to give the little guy another week to see how he would progress.

On cue, Kenrick gurgles and waves his arms around, and Asni couldn’t help but laugh. “He’s much fussier now. We can start him on solids next week.”

By Sharyljit Kaur

Patients who come to Penang seeking treatment usually do not come alone, they tend to travel with their spouses or families. As such, they need spacious accommodations. The demand is for apartments that are comfortable and equipped with facilities such as a good kitchen, to make their recovery and stay a smooth and stress-free one. 

Kenny Cheng, an agent representing KS Evershine, a company that arranges apartments for medical tourists, says that patients usually want him to arrange for transfer services to and from apartments located in Batu Lanchang, just a short walk from Lam Wah Ee Hospital.

Cheng says the apartments tend to experience a very quick turnaround as guests usually stay for an average of only three or four days. These numbers include relatives of those patients who opt to continue staying in the apartments after they are discharged from the hospital, to recuperate before the flight home.

“Sometimes it’s just a husband and wife,” he says. “Sometimes they are with their children. Sometimes it’s with their friends who come to give emotional support.”

Cheng says that his guests enjoy Penang and that even though relatives of the patients come here to support the patients during their treatments, they do try to squeeze in a bit of shopping and eating. 

An apartment in Batu Lanchang, often used by medical tourists.

“It depends on the individuals’ interests. Some want to shop for branded goods and I usually take them to Gurney Plaza or Queensbay Mall. Some prefer buying knickknacks in Prangin Mall. There are some who want to taste local delicacies. But this is only if they have money le over after their medical expenditures.”

The bulk of Cheng’s guests usually comes from Medan, Penang’s sister city. There are at least 11 flights coming from Medan to Penang daily. His guests usually say that a critical deciding factor for them is the common languages they share with the locals, which include Malay and Hokkien.

Some of the patients and guests come from Jakarta, Banda Aceh, Surabaya and Bandung.

By Sharyljit Kaur

With their hospital arrangements made and apartments reserved for their accompanying relatives, all that’s left for these medical tourists to do is head to the hospital. They walk out the airport lackadaisically and get into the first taxi they are hustled into. Problem is, these taxis are often illegal ones.

Hafizi Ahamad

Hafizi Ahamad, the chairman of the Airport Limousine Drivers’ Association located near the Penang International Airport, says this flow of events is all too common.

“At the airport people are so often flustered. You get your bags, you deal with your children and as you exit the airport, the end goal is to get to your destination. So sometimes you don’t think. You just go where people are calling you to.” At that point, people generally aren’t going to differentiate between legal and illegal taxis.

But that’s not the only dilemma Hafizi faces. The other more prevalent one is that most of these medical tourists have made arrangements with agents, some of whom do not have permits, who in turn hire illegal drivers without their own permits. Hafizi says that medical tourists only make up about 30% of his customer base per month; most medical tourists are usually shanghaied by illegal taxi drivers at what the tourists believe is a cheaper rate than the association’s taxis.

“ They lie and actually hustle these tourists into paying more than they would have to if they use our taxis. For instance, they don’t charge passengers as a whole per trip, they charge per person in the taxi for that trip. You cannot do that.”

Hafizi says that these illegal drivers do not have permits to ferry these people to and from the airport and that by right, his company should be the only one ferrying people out of Penang International Airport to their destinations, in this case the hospitals.

He says he has spoken to various local authorities including the Land Public Transport Commission (Spad), Road Transport Department ( JPJ), Polis DiRaja Malaysia (PDRM) and Malaysia Airports Holdings Berhad (MAHB) several times to reason that by right it is the taxis of the Airport Limousine Drivers’ Association that should be the ones ferrying the medical tourists to the hospitals and other tourists to their destination. No action, he says, has been taken so far.

Hafizi adds that these illegal taxis give his taxi drivers a bad name. Not too long ago, a tourist was robbed and when asked where she got her taxi she said she boarded the taxi from the airport.

“When this lady was brought to me saying that she was robbed by one of our drivers, I told her to show me her ticket. And she said she did not buy a ticket. So it couldn’t have been any of my drivers as you need a ticket before we take you to your destination. It’s not fair that our name gets tarnished. We have permits. We follow the rules.” 

Hafizi says that medical tourists and tourists in general should be more careful of the taxi services they use. They should not use illegal taxies because their safety cannot be guaranteed.

“Check the taxi, make sure the taxi and the number plate are white. Look for the permit on the windshield.” 


By Sharyljit Kaur

Post-procedure diets can be tricky. Patients have different dietary needs but it is very common that they are told to consume little to no meat. As such patients need a restaurant that has a flexible menu.

Lily's Vegetarian Kitchen is just one of the restaurants that patients and their family members choose to go to. Run by Lily Wong, her three sisters and her niece, the restaurant offers a very varied menu.

" The patients who come here have special dietary requirements. Some can't eat beans or have oil in their food, for example."

Patients are usually advised to eat bland food like rice and noodles with lightly stir-fried or blanched vegetables, and high-fibre foods like fruits. Family members on the other hand are free to sample a wide variety of local cuisines, which proves a great thing for them as this is usually the first time most of them are in the state or even the country.

Wong says that she gets about 20 medical tourists a month, and the number has been slowly increasing in the past five years. Most of them come from Medan and Jakarta, choosing to go to doctors in Island Hospital, Adventist Hospital, Loh Guan Lye and Lam Wah Ee over their own local doctors. "Most of the patients come because they have cancer or are going for various checkups. Some come here for acupuncture and to detoxify their bodies."

Wong, who has been running her business for about six years, adds that vegetarianism is catching on in Penang, especially among youngsters and middle-aged people.

1 Association of Private Hospitals of Malaysia, www.hospitals-malaysia.

2 Adapted from Association of Private Hospitals of Malaysia (APHM) as cited by SERI. “Medical Tourism – A New Growth Frontier for Penang in 2009 and Beyond.” Penang Economic Monthly. Vol.11 No. 4. 2009, p. 11.

3 Penang Global Tourism as cited in SERI. “Penang Blueprint 2010” draft. 2010c, p. 11.

Special thanks to Nurjannah Md. Zain

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