Southeast Asia - Rebuilding Medical Tourism amid the Pandemic

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Southeast Asia’s medical tourism industry grew to become a major player driving global medical travel in recent years. Among the popular ASEAN (Association of Southeast Asian Nations) destinations for medical travel, Thailand, Singapore, and Malaysia had become major players, driving inbound travel to the region for their competitive rates, top-line medical care, technological advancement, and renowned medical expertise. However, the coronavirus pandemic slackened the growth of the industry in the region, with stakeholders uncertain about the future of the industry. 

Health buyers from other Asian countries including China, as well as the US and the UK, travel in millions annually for a wide range of medical care from medical screenings to high-end surgical procedures such as cancer treatments, neurology, oncology, transplant surgery, and orthopedics. 

In the last decade, these ASEAN destinations gained the reputation of being the most preferred medical travel site in the region. In Malaysia, the health ministry sped up the growth and development of the industry, setting up regulations to put the country’s medical travel business on a global scale. In 2016, the country’s revenue from medical tourism rose to more than $238 million from its over 900,000 medical tourists that year. The Malaysian Healthcare Travel Council further expanded the market to attract over 1.2 million medical tourists and increased its revenue to more than $360 million in 2019. 

Similarly, Singapore upped its stake in the medical tourism market by rebranding its medical travel industry to attract international patients who seek affordable complex medical treatments. The country improved the quality of its healthcare facilities to obtain accreditations from the Joint Commission International (JCI), attracting more than 500,000 medical tourists to its burgeoning market. 

Thailand also closed the gap of top medical destinations in Asia, outpacing other countries in the region. Thailand is home to Bumrungrad International Hospital, one of the largest private hospitals in Southeast Asia and one of the most preferred medical tourism destinations in the region. The hospital serves over 1.1 million patients yearly, more than 50 percent of which are international patients from well over 190 countries. The hospital, which provides niche medical care in cardiology, oncology, and neurosurgery, is accredited by global quality organizations including the Global Healthcare Accreditation, further boosting the destination’s medical travel brand. 

Although the United States remains the major international market for medical tourists, the ASEAN destinations have recorded the fastest growth in the last few years, expanding at a predicted growth rate of 15.5% between 2017 and 2023. International patients travel to these destinations to receive top-notch medical care at a fraction of the cost of similar treatments in the US. In many hospitals in ASEAN countries, the cost of care is up to 70% cheaper than in the US. For instance, a coronary artery bypass graft costs around $92,000 in the US but can be done for less than $17,000 in Malaysia. 

But with the widespread coronavirus travel restrictions, the projected growth of the industry has reversed. Several months-long travel restrictions that have barred medical tourists from entering the region to seek care, decelerating the growth of the industry in the region.

In August, Bumrungrad Hospital announced a 90 percent drop in its profit in the second quarter of 2020 after its revenue ebbed by more than 40 percent due to the coronavirus crisis. Further, from January to June 2020, Bumrungrad saw a profit of about $25 million, falling by more than 55 percent from the first half of 2019, with much of its earnings from domestic patients. 

Malaysia’s Penang Adventist Hospital, one of the country’s top medical tourism sites, also recorded a similar drop in revenue. The hospital, which is renowned for its advanced heart surgery treatments, reported a 66 percent and 55 percent decline in revenue in April and May respectively, as foreign patient visits dropped to zero and all but essential treatment for domestic patients was suspended. 

According to the Malaysia Healthcare Tourism Council, fewer than 300,000 medical tourists visited for treatment in 2020, compared with over 1.2 million in 2019. Further, the council says the country’s revenue from medical travel dropped more than $263 million in 2020, compared to about $120 million in 2019. This estimate is short of the $400 million the industry earned in 2019 and nearly $500 million short of its earlier projections for 2020.

However, the country is taking measured steps to revitalize the industry amid the souring pandemic. In July, Malaysia opened its doors to medical tourists from six countries, including Singapore, Japan, and Australia, which have a relatively small outbreak. 

Malaysia has also remodeled its healthcare for the international market, leveraging telemedicine to provide medical care until global travel is restored. Malaysia’s hospitals are focusing on using telemedicine platforms to provide international patients with access to cancer treatments, cardiology clinics, and fertility treatments.

Thailand is also making a bold move to rejuvenate the industry. In July, a month after reporting zero virus transmission, the province of Phuket in Thailand reopened its doors to international patients in a $97 million project to revive and expand the industry. The project, which is subject to the approval of the ministries of Public Health and Tourism and Sports, involves the construction of four world-class medical facilities, an international health plaza, an ultramodern long-term care center for the aged, and a comprehensive rehabilitation center. 

The first phase of the project, expected to cost about $30 million will be completed in September 2021 while the second phase, which will focus on ramping up pandemic preparedness for future outbreaks, will commence in 2022. The Thai government hopes the program would expedite the recovery process for the industry, and also make it a major medical travel destination in the post-COVID-19 era.

However, the future is still uncertain and stakeholders suggest that the country may not record any significant recovery continue until the next few years. 

Even though the pandemic remains under control in most parts of Southeast Asia, the erratic nature of the infection has discouraged authorities from opening up their borders and also dissuaded patients from visiting medical travel destinations still battling with the pandemic. Malaysia, for instance, is still closed to foreign arrivals until further review, and it remains uncertain if the travel ban will not be extended afterward. 

Ultimately, the future of medical tourism in the region will depend on how governments respond to the COVID-19 crisis. Governmental strategies to rein in the outbreak and prevent future spikes will potentially influence the choice of international patients when selecting a travel site in the post-pandemic era, becoming a key component of the medical tourism destination brand. For now, that future is still hazy, and with concerns of the second wave of infections hitting many countries, it’s uncertain when the region’s medical travel industry will return to its robust pre-pandemic levels.