Medical tourism is an important component of the tourism industry and a significant economic contributor. It has fuelled growth and has done so in a highly efficient manner, generating more income per visitor than the average. As Thailand continues its shift towards high-quality tourism offerings, health care-related development will remain a focus.
However, the subsector is at a crossroads. While it is being heavily promoted by the government and remains the target of private investment, medical tourism is under pressure from competing jurisdictions. Countries around the world are now matching what Thailand offers, sometimes coming in with lower prices. The sector is going to have to upgrade, innovate and respond in creative ways to remain the industry leader.
Health & Wellness
Medical tourism provides disproportionate gains. According to Siam Commercial Bank’s Economic Intelligence Centre, it accounts for fewer than 9% of Thailand’s visitors, but visitors seeking medical help tend to have a much greater economic impact. On average, someone in Thailand for cosmetic surgery, for example, spends $4200 and stays for two weeks, while a leisure tourist will spend $1300 over six days. Estimates by the Tourism Authority of Thailand (TAT) put the numbers significantly higher, especially when health care is defined broadly, and suggest that half of the tourists travelling to the country come for health and wellness reasons. According to the TAT, more than 928,700 come for health care services and 17m for wellness. Thailand earned BT63.49bn ($1.8bn) from health and wellness tourism in 2015, and medical tourism makes up 0.4% of Thailand’s GDP.
While doubts have been raised repeatedly about the sustainability of medical tourism in Thailand, especially in the light of some periods of civil and political in recent years, the market is seen as particularly resilient. The country created a base of medical infrastructure after the 1997-98 Asian crisis that would be difficult to replicate. Installed capacity is impressive in terms of both scale and quality. In total, Thailand now has 53 hospitals accredited by the Joint Commission International (JCI), a US-based non-profit organisation that accredits hospitals across the globe.
From Luxury To It
The sector continues to develop on many fronts. Bangkok Dusit Medical Services (BDMS), the largest hospital operator in the country, is planning to spend BT12.8bn ($360.6m) on a luxury health centre. The new facility will be called the BDMS Wellness Clinic and will include a five-star hotel, Swissotel Nai Lert Park, in Bangkok’s business district.
More generally, Thai hospital groups continue to expand overseas. The Bangkok Hospital Group has two facilities in Cambodia, as well as offices in both Vietnam and Myanmar. Samitivej Hospital, another domestic private health group, is expanding domestically and internationally, with plans to establish itself throughout South-east Asia. It already has facilities in Myanmar. Bumrungrad Hospital has facilities in Mongolia, while Thonburi Hospital Group is active in Myanmar.
Marketing is also advancing, with the major groups going further afield for patients. Thai medical tourist centres, such as Bumrungrad, are becoming particularly active in China. Hospitals such as these are making significant investments in systems. Bumrungrad, which bills itself as the largest private hospital in South-east Asia, is now going fully digital. While much of its standalone equipment is already digital, the hospital would like to improve networking to achieve better connectivity. It will be implementing fully electronic medical records and making its entire platform interoperable, internally and with other systems with which it may link.
The sector is helped greatly by the ease of entry into Thailand. People from a number of countries in the region, such as Myanmar and China, as well as those from the Gulf Cooperation Council (GCC), can stay for 90 days without a visa if they are seeking medical treatment. The Thai government is continuing to push forward with visa liberalisation. In early 2017 it approved 10-year visas for people aged 50 or older, in a move that was designed for visitors seeking long-term or regular medical treatment in Thailand. Indian visa fees were increased, although there is a discount when applying online and medical visa fees remained the same.
The Ministry of Public Health has introduced a new campaign entitled “Visit Thailand, Enhance Your Healthy Life”. Foreigners who are in relatively good health but are in the market for an annual check-up are the main targets. The ministry has outlined three health packages priced by age group and type of service, with a total of 27 private hospitals having agreed to participate in the programme.
Thailand is also looking at longer-term prospects. Prime Minister Prayut Chan-o-cha has developed a 10-year plan to help promote the sector, while other national efforts take into account Thailand’s strengths. Under Thailand 4.0, the most recent economic strategy, the government will not only continue to build on its foundation of excellence in medicine, but will also use its strengths in medical tourism and leverage those into successes in other endeavours, such as medical devices and research and development.
Despite the efforts being made across the board, the environment is challenging. Low oil prices especially have taken a toll. Given these new economic constraints, potential customers from GCC countries must now think twice before travelling to Thailand for medical treatment. Insurance plans from the GCC region are starting to reflect these realities. At least one insurer in the GCC is making patients pay more if they opt for treatment in Thailand and has suggested they would prefer customers to use the local medical system. Share prices of health care companies in Thailand have started to reflect some of these dynamics. Earnings growth forecasts of companies have been downgraded as travel from the GCC started to weaken in early 2016. After peaking at BT243 ($6.85) in September 2015, which was up from BT75 ($2.11) at year-end 2012, Bumrungrad shares have been in decline ever since, falling to BT176 ($4.96) by June 2017. The Stock Exchange of Thailand’s benchmark index has been up over that time, despite a dip in late 2015.
However, the TAT believes that this concern has been exaggerated. The change in insurance options only applies to one insurer and only in Abu Dhabi. Overall inflows from the Gulf remain strong. The number of Omanis being treated in Thailand, for example, grew by 25% in 2016.
In addition, the dependence on the GCC may be overstated. While many people from the region do travel to Thailand, the country’s overall customer base is diverse. Visitors arrive from many countries, and increasingly from within the region. Residents of Myanmar make up 8.4% of visitors coming to Thailand for medical purposes, according to TAT figures. Emiratis come in second, at 8.3% of the total, followed by Omanis at 5.9%.
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