While medical tourism in Malaysia has become increasingly popular as a result of soaring health costs throughout the West, the global recession presents a unique opportunity to capitalise on the country's competitive prices. All signs are that this lucrative niche industry will survive the crisis, as well as see continued growth in the future.
Medical tourism refers to the practice of travelling across international borders in order to obtain medical services at lower costs. According to Deloitte & Touche, the world market for medical tourism was valued at $80bn in 2008 and is expected to grow to $100bn by 2010.
Malaysia's market is ranked third worldwide in terms of both quality and affordability. Current official figures show a heart valve replacement would cost $200,000 in the US, but only a fraction of that in Asia. Besides, hospitals and clinics arguably use the most up-to-date technology and equipment, and are internationally accredited. In addition to the compulsory standards set for private hospitals by the Ministry of Health, all hospitals are recognised by the MS ISO9002 and certified by the Malaysian Medical Society for Quality of Health.
The high quality of services attracts patients from various countries in the region such as Indonesia, Singapore, Bangladesh and Japan, as well as from the Middle East and Europe. Services that in demand range from orthopaedics, cardiac and cancer treatments, to plastic and reconstructive surgeries.
According to Tourism Malaysia, the government agency in charge of promoting tourism, 75,210 foreign patients were treated in 2001. By 2006 that figure had grown to 296,687, amounting to $59m in revenue. The Malaysian Association of Private Hospitals forecasts the number of medical tourists will continue to increase by 30% per year until 2010.
"Medical tourism will remain robust and resilient despite the current economic slowdown," OSK Research told the local press at the end of January.
Along the same lines, Rudy Rupak, CEO of Planet Hospital, a southern Californian start-up company that makes the arrangements for patients to receive care overseas, told BusinessWeek, "the problems facing the medical tourism industry won't hinder growth."
Others are less optimistic though. Ruben Toral, CEO of Mednet Asia, a Manila-based consulting firm that specialises in medical tourism has expressed concerns over an expected decline in tourists in need of curative medical treatment. While it might be logical to "think tough economic times would make more people interested in saving money by having their operations in low-cost hospitals in Asia," many people simply cannot afford treatments. Although the price is significantly reduced to an out-of-pocket expense of only $10,000, it's $10,000 that most people no longer have to spare. Customers are now looking to state-subsidised treatments at home.
To remain competitive in the market, medical tourism companies and overseas cosmetic surgery providers are dropping their fees, which will only further improve the Malaysian hold on the market as it already has a price advantage over Singapore. Meanwhile, Malaysia's other main competitor, Thailand, has suffered from political instability, leading to a drop in the number of medical tourists, especially following the closing of the Bangkok airport last year.
The current situation provides Malaysia with a unique opportunity to capture a larger share of the market. By lowering prices and capitalising on the need to save costs, Malaysia's medical tourism industry is expected to come out strongly during the economic downturn.