Statistics — February 26, 2013

Statistics – February 2013

MEDICAL TOURISM REVENUE

TABLE 1: MEDICAL TOURISM RECEIPTS/REVENUE IN MALAYSIA, 2000-2011

Source: Malaysia Healthcare Travel Council; Medical Tourism and the state in Malaysia and Singapore, National University of Singapore, Chee 2010.

Source: Malaysia Healthcare Travel Council; “Medical Tourism and the state in Malaysia and Singapore, National University of Singapore”, Chee 2010.

Medical tourism traditionally involved tourists cum patients from developed countries travelling to normally less developed countries to get treatment while on vacation. Nevertheless, the trend has changed. Both developed (e.g. Singapore) and developing countries (e.g. India and Thailand) now compete with a variety of medical packages and special arrangements for foreign patients. In 2007, the global medical tourism market stood at US$261.5bil, with Asia being responsible for about 13% of it [1]. Table 1 shows Malaysia’s impressive recovery from the economic downturn in 2008-2009 with total revenue from the industry rebounding to RM511mil (US$168mil) in 2011. Over the last 10 years, the country’s medical tourism market has grown more than 14 times. Additionally, it has an advantage of Islamic credentials and protocols to attract medical travellers from the Middle East.

SOURCE OF MEDICAL TOURISTS

Figure 1 shows the breakdown of medical tourists coming to Malaysia. After Indonesia, the next biggest contributors of such tourists by a large gap are Japan and India at just three per cent each. Countries listed under “other” in the chart include Bangladesh, Singapore and Saudi Arabia.

Indonesia is thus the biggest contributor of medical tourists to Malaysia in 2011. But though its absolute numbers continue to increase, the proportion of patients coming to Malaysia from Indonesia has experienced a steady decline. In 2007, its share was 72%, but this dropped to 68.19% in 2010, and currently stands at 57.49% [2]. On the other hand, the number of patients from countries listed as “other” has seen a significant jump from 2010 to 2011, registering a growth rate of 158.35%, increasing their market share from 14.36% to 25%. From these statistics, it appears that the source of medical travellers is increasingly diversified, thus reducing the Malaysian medical tourism industry’s dependency on Indonesian patients.

FIGURE 1: MEDICAL TOURIST ARRIVALS TO MALAYSIA, 2011

Source: Overview of the development of Malaysia Healthcare towards Medical Tourism, Dr Mary Wong Lai Lin, CEO of Malaysia Healthcare Tourism Council, 2012.

Source: “Overview of the development of Malaysia Healthcare towards Medical Tourism”, Dr Mary Wong Lai Lin, CEO of Malaysia Healthcare Tourism Council, 2012.

This diversification is underpinned by strong growth in the industry. As shown in Table 2, the number of travellers to Malaysia seeking medical help has steadily increased with the exception of years 2000 and 2009. The dip in 2009 can possibly be explained as an effect of the global financial crisis, where citizens of countries adversely affected by the crisis deferred non-essential medical procedures such as cosmetic surgery.

Even though the number of medical tourists has increased across most years, the growth rate is very volatile and does not exhibit a trend. The average growth rate in medical tourist arrivals from 2001 to 2011 is 25.37% per annum.

TABLE 2: TOTAL NUMBER OF FOREIGN PATIENTS IN MALAYSIA

Source: Malaysia Healthcare Travel Council; Medical Tourism and the state in Malaysia and Singapore, National University of Singapore, Chee 2010.

Source: Malaysia Healthcare Travel Council; “Medical Tourism and the state in Malaysia and Singapore, National University of Singapore”, Chee 2010.

There are two main pulling points that explain the popularity of Malaysia as a destination for medical tourists: the high quality of medical care and the low cost of medical procedures in Malaysia relative to most developed nations. Focusing on the latter, Table 3 shows the price difference between selected countries for the same medical procedure in 2007.

TABLE 3: PRICE OF SELECTED MEDICAL PROCEDURES IN THE US, THAILAND, SINGAPORE AND MALAYSIA (IN US$)

Source: Woodman (2007), as cited in Malaysia Healthcare Travel Council 2012.

Source: Woodman (2007), as cited in Malaysia Healthcare Travel Council 2012.

Based on the figures in Table 3, we can extract some information regarding the savings on medical procedures, as shown in Figure 2. Malaysia clearly offers cheaper medical procedures as compared to the other countries shown, with savings of up to 94% (heart valve replacements) if compared to the US. A second consideration is the relatively low cost of living for relatives or caregivers of the patients who choose Malaysia. Nevertheless, it must be noted that these seven medical procedures may not necessarily provide a holistic view of the price difference in medical care in Malaysia, and should only be seen as an illustration of a segment of it. On top of that, there are other considerations that cannot be quantified such as quality of nursing and procedural requirements for visa applications.

FIGURE 2: SAVINGS IN MALAYSIAN MEDICAL PROCEDURES (%)

statistics-feb13-fig2

TABLE 4: NUMBER OF JOINT COMMISSION INTERNATIONAL (JCI) ACCREDITED HOSPITALS/ORGANISATIONS IN KEY ASIAN COUNTRIES, 2005 AND 2011

Source: Extracted from www.cthospital.vn/wp/wp-content/uploads/apachealthcareoutlook-2012-2015-whatcomesnext-120117220141-phpapp01.pdf; figures for 2012 are extracted from the JCI website.

Source: Extracted from www.cthospital.vn/wp/wp-content/uploads/apachealthcareoutlook-2012-2015-whatcomesnext-120117220141-phpapp01.pdf; figures for 2012 are extracted from the JCI website.

Singapore and South Korea had the highest number of accredited medical centres in 2011 among Asian countries as shown in Table 4. Malaysia ranked seventh out of the eight countries that year. There are six hospitals accredited in Malaysia in 2012 whereas in 2011 there were nine. The National Heart Institute, Prince Court Medical Centre and Sime Darby Medical Centre Subang Jaya have withdrawn voluntarily from the accreditation list of 2012. Out of the six treatment providers in Malaysia, only one is from Penang, which is Penang Adventist Hospital. The other hospitals are mostly from the Klang Valley. In order to get the accreditation, Joint Commission International (JCI) sets stringent global standards, policies, procedures and evaluation methods for the applicants or hospitals. Hospitals in Penang lack the incentive to apply for the JCI accreditation, as it costs US$46,000 on average for a full hospital survey as of 2010. It also depends on the size or complexity of the hospital. Besides that, Penang’s medical tourism market is dominated by Indonesians, who will come to Penang for treatment regardless of the accreditation. Therefore, the accreditation is considered a bonus for hospitals in Penang to promote their services specifically to US citizens, who may feel more assured of a hospital’s quality with the accreditation.

[1] YAHOO! Finance, Asia Medical Tourism Analysis and Forecast to 2015, October 22, 2012.

[2] http://biz.thestar.com.my/news/story.asp?file=/2009/2/14/business/3245091&sec=business


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