Southeast Asian Healthcare Market Greater Risks Lead to Greater Rewards
For a long time whenever someone mentioned the phrase medical tourism, people would think of Thailand. The Thai dominance of the industry was so strong because the major hospital Bumrungrad International (BH) was among the first to promote itself internationally as a medical tourist destination. This was before most people had even heard of medical tourism. Soon BH was in competition with Bangkok Dusit Medical Services (BGH), another Thai hospital catering to international patients. Recently BGH has invested in BH, making the competition less intense and today both hospitals are roughly the same size, same quality, and same expertise. But now they are being threatened by other hospitals in the nation and abroad. Their current method of staying put and letting patients come to them will no longer work.
Within the Asian healthcare market the main competition for BH and BGH is from Fortis Healthcare, an umbrella corporation with more than 75 hospitals all across India and partners all across the globe. Their model is to have many hospitals in many locations, to make it easier for their patients to come to them.
It is clear why this new model is beating the old one used by BH and BGH, Fortis is simply able to reach more patients than the others, more locations means more patients in various markets.
Fortis has recently teamed up with GE to create CritiNext, a program that will allow doctors to monitor 200 patient signs remotely, so the patient does not need to be moved, helping the critically ill and the people in remote villages.
It is BH and BGH’s refusal to adopt new ideas like this, and that is holding them back. While new groups like Fortis are leaping ahead in competitiveness by putting themselves on the cutting edge, the old vanguard is sticking to old methods that worked years ago.
The trouble is that the times are changing quickly and innovation and risks are needed to stay ahead. The fear of taking risks is a natural one, but one that must be overcome so progress can flourish, if not then they will be left behind in a changing, dynamic world.
This is best exemplified by the fragmentation of the Singapore healthcare market. The large hospitals are venturing into small specialty areas and small boutique hospitals as noted by Rhennu Bhuller, vice-president of Frost and Sullivan’s Asia-Pacific healthcare.
They are able to take these risks because they already have the large basis to support themselves, the brand recognition helps as well. These small sectors are growing quickly, with 3,681 small establishments in 2007; and 4090 by 2010. Simultaneously the large establishments with 100 employees more was numbered at 51 in 2008, but fell to just 40 in 2009.
These are some of the options available to BH and BGH. “The market is competitive and a large one size fits all approach may not be the best approach for all. Moving into specialty areas can be used to differentiate the hospital, as well as meet niche market needs,” said Bhuller.
In order to meet the changing needs of the medical tourism markets, these major Thai hospitals must take the risks necessary to venture out of the tried and true methods, which are bringing diminishing yields, into the new method of opening many smaller clinics. The hospitals do not need to close their already established centers.
By opening the smaller boutique hospitals along with their already existing ones, they can apply this brand-name to the small ones. This serves the dual purpose of getting more beds, more availability for patients and expands the brand name. By engaging in these practices they can not only offer better service to their international patients, but can offer expanded services to the domestic Thai patients as well.