Medically necessary: Tracking progress and developing a model fit for domestic needs

As it stands now, choice is very limited for people seeking international-level medical care in Mongolia. The SOS Medica Clinic while extremely modern is small and not designed to keep patients for more than a few days. Serious cases are referred to local hospitals or patients are taken out of the country.

CURRENT RESOURCES: The Korean Friendship Hospital in Ulaanbaatar has foreign-educated doctors and is under the management of a top Korean teaching hospital, Severance Hospital of Yonsei University Health System, but it remains relatively low-tech. There is also Achtan Elite Hospital and Songdo Hospital; however, neither would be considered internationally renowned care institutions.

The fact is, with fewer than 3m people, many of whom are poor, historically very few foreign residents and a sizeable Soviet-style hospital system in place providing basic care at low to no cost, the economics have never made sense. And, for those who really need and have the means to pay for international level care, Beijing, Seoul and Bangkok are easily within reach and have long been the preferred option for non-emergency care.

NEW DEMAND: With the mining upswing and the growth of related industries such as finance and telecommunications, the economics are starting to work. There is simply a lot more money in Mongolia and people can now afford a higher level of medical care. Also with money comes information. What may have been acceptable medical care a decade ago looks very different to a person with access and the ability to pay for the Internet, books and international publications. Of course the international employees of mining companies will also demand medical care that conforms to international standards, and be able top pay for it.

While multinationals have long relied on evacuation services to take care of their employees, as numbers increase that will no longer be affordable. The case will improve for better local hospitals. Mongolia may at last have the critical mass to support and deliver better quality medical care.

Upgrading the local hospitals is an option, and indeed over time the top institutions, such as the Trauma Hospital and Hospital Number 2, have started to improve and close in on basic international standards. Medical professionals say they can do a very job at these institutions. Still, they also note that the Mongolian medical system is held back by history, in particular a bureaucratic system of administration and an outdated view of proper medical care.

The upgrading will likely be piecemeal for some time — new equipment, some technology transfer and training — and the local system will not be running at international standards for many years.

Indeed, the transformation the sector needs to undergo is quite massive: hospitals must be shut down and consolidated, the culture needs to change, and a whole new generation of doctors is probably required, a challenging task that will not be easy to achieve in Mongolia. Government bureaucracy has contributed considerably to the slow progress, Ts. Bolormaa, the president of the Mongolian Public Health Professionals’ Association and hospital project director at MCS Holding, told OBG.

AN OPPORTUNITY: This has left an opportunity for investors, international and local, to fill the gap.

There is a growing need for something more than a clinic or a section of a hospital. Demand may exist for an institution that runs according to global best practices. A number of projects of this sort are in the works to do exactly that. The most ambitious is the International Medical Centre, a 92-bed facility that is scheduled to be operational in 2013. The project is being supported by Newcom Group, whose properties include Mobicom, the country’s largest mobile telecom company, and Newcom Mining Services, and also by MCS, a diversified conglomerate with interests in mining, manufacturing, property, food, beverage and alcohol. MCS owns Unitel, the number two mobile provider in Mongolia, and is said to be the country’s largest private company. Other resource companies were also said to be involved.

SEVEN YEARS: According to Bolormaa, the project has been in the works for seven years and it has been a challenge to get the configuration and mix right. Despite the strong business case for an international hospital in Ulaanbaatar, the city still does not have the scale to justify a full-service international facility. Even if mining picks up and locals become wealthy, the traffic will not support a wide range of specialities. The low numbers also limit the amount of high-end equipment that can be bought.

Ulaanbaatar will probably never develop into a medical tourism destination, due to its isolation and given the competition in Thailand, India and increasingly China. This reality puts an additional cap on potential size and scope and boxes in the project. “We can’t develop as a Bumrungrad,” said Bolormaa, referring to the massive medical tourism focused hospital in Bangkok. “We only have 2.8m people.”

The strategy for the International Medical Centre (IMC) is to focus on a few areas that will always have a steady stream of patients, such as internal medicine, obstetrics, paediatrics and health screening. The hospital will also leverage its relationship with Korea University Medical Centre. The IMC signed a memorandum of understanding with the university in 2011, with the agreement calling for the Korean side to provide training and expertise, as well as to second staff the new Mongolian hospital. With a tight focus and the ability to call on the resources of a major Korean teaching hospital, the IMC is hoping to have a sizeable footprint, despite its relatively small size and its shortage of specialities.

SOCIAL RESPONSIBILITY: Bolormaa said that the shareholders are not necessarily looking to profit from their investments in the new hospital facility. With large interests in mining, they certainly have good reason to want see an improvement in Mongolia’s domestic medical capabilities. Better and faster care for their employees will increase productivity, and expensive evacuations will be avoided. Corporate social responsibility may also play a key role. The investors are all local and want to do something for society, Bolormaa notes.

At least one investor may have other reasons for wanting the medical sector to develop. Newcom signed a distribution agreement in May 2011 with GE for medical equipment and will most likely benefit if there is greater future demand for advanced health care technologies in Mongolia.

The government is believed to be in favour of the project, especially as it is forecast to lower the number of people going overseas for treatment. This is not only leading to a loss of currency and revenues, but it is also a burden to the citizens. Average Mongolians may borrow or spend their live savings to seek proper medical care abroad.

Some scepticism has been expressed about the project. While the IMC is generally praised, questions are raised about whether Mongolia is really ready for such an expensive facility. The creation of a two-tiered market has also been brought into question. Making the average citizen accept poor free to cheap local care while the rich are able to access a higher level of medical services is seen by some as a potential source of social discord. Bolormaa recognised that what she is attempting to do will not be easy: “Just because it is a good facility and high-tech does not mean it will succeed.”

COMPETITION IS GOOD: In general, the IMC is getting strong support from the community, including from potential competitors. The sense is that a high-level facility like the IMC will have a positive effect on the entire sector. It will create more awareness about the value of advanced medicine, as well as bring certain equipment into the country not currently available, and will help increase the number of advanced machines installed, thus lowering costs for everyone. It could even assist the development of the local health insurance market, and that would ultimately prove beneficial to the sector.

“MCS is going to challenge the Mongolian medical system to build up,” said Paul Choi, the general director of Yonsei Friendship Hospital, a Korean-invested hospital founded in Ulaanbaatar in 1994.

Other projects are also in the works in the country, but all of them are less ambitious than IMC. Aspire Mining, an Australian stock-exchange-listed coal development and exploration company, agreed in April 2012 to provide half of the funding to complete a 20-bed hospital at Tsetserleg soum (district) near its Ovoot coking coal project. Construction had been halted due to a lack of funds. The Asian Development Bank is hoping to fund the construction of a hospital in Ulaanbaatar after a project to renovate an old hospital was cancelled after a revision to the law. The Japanese government also has agreed to fund the expansion of a hospital in Bulgan province, which is located in the northern half of the country.

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The Report: Mongolia 2013

Health & Education chapter from The Report: Mongolia 2013

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