With Asia now the world’s leading market for medical travel, the Philippines is targeting a greater share of this ever-expanding sector. To achieve this aim, however, the country will need to compete with other leading players in the market including Thailand, Singapore, and now, Malaysia.
Notwithstanding the challenge, the Philippines can leverage some impressive credentials. First, there is price, with certain operations and procedures less expensive than in other countries. Further, there is a high level of professionalism in a core of Philippine hospitals and medical facilities. Filipinos also have a solid reputation internationally as medical carers, with Filipino nationals working in a number of leading hospitals in the Middle East, Europe and the US. Indeed, historical links to the US has led to a large pool of Filipinos working in health care and developing a strong base of well qualified, English-speaking staff. In addition, the large diaspora is also a key asset, as Filipinos often prefer to return home for treatment. The Philippines also has a strong reputation in alternative medicines and natural therapies, playing into a growth area internationally – health and wellness tourism.
BY NUMBER: According to a 2012 report by the Confederation of Asia-Pacific Chambers of Commerce and Industry, the global medical travel sector was worth some $2.2bn in revenue that year. Other sources, such as Bloomberg, however, estimate revenue at around $5bn, while the Thai Board of Investment (BOI) claims that Thailand alone received $2bn in revenue in 2011. This wide discrepancy is largely due to different methods of accounting. For instance, some analysts argue that visitors who fall sick on holiday should also be considered as medical tourists, whereas others argue that only visitors travelling specifically for treatment should be counted. There is also often difficulty in obtaining exact data from medical facilities and statistical authorities.
In spite of the somewhat inconsistent data, most sector insiders agree that medical travel has seen major expansion since the turn of the century, with Asia largely leading the way. A 2010 survey by Youngman, for example, showed Thailand as the leading destination worldwide for medical tourists that year, with 1.2m medical visitors, followed by Singapore with 600,000. Other major Asian players included India, with 370,000, and Malaysia, with 350,000. In comparison, the UK received just 100,000 medical tourists, with the largest Western recipient being the US, with 400,000. The Philippines, meanwhile, attracted 80,000 – ahead of Germany, but less than Jordan.
PLANNING: A clutch of medical facilities dominates medical tourism in the country, consisting of the 21 hospitals included in the Philippines Medical Tourism Programme (PMTP). Put together by the Department of Tourism and the Department of Health (DoH) in 2006, the PMTP aims to bring in $2bn in revenues by 2015 and concentrates on four key areas: full hospital care and treatment; speciality clinics; wellness and spa centres; and retirement and long-term care for the elderly. The PMTP also drew up a roadmap for the sector’s development in 2011, which targets boosting the quality of medical infrastructure, ensuring better compliance with the highest international requirements, such as Joint Commission International (JCI) accreditation. As of the start of 2013, there were four hospitals in the Philippines that had JCI accreditation, three in Metro Manila – St Luke’s Medical Centre (SLMC), The Medical City and Makati Medical Centre (MMC) – and one in Cebu – Chong Hua Hospital. However, medical facilities in the country have achieved international certification through other institutions as well. The International Organisation for Standardisation, for instance, has accredited the National Kidney and Transplant Institute in Quezon City, Manila Doctors Hospital (MDH), and Davao Doctors Hospital. The Accreditation Canada qualification has been bestowed upon the Philippine Heart Centre in Quezon City, and also for MDH.
The roadmap also stressed addressing subsidiary issues, such as providing good transport links, as well as accessible, high quality local accommodation for the families of those undergoing treatment. Of the 21 hospitals under the PMTP scheme, 16 are private and five public, with all of the latter and 11 of the former in the Metro Manila area. One private PMTP-registered hospital is in Batangas Province, three in Cebu and one in Davao. The 21 hospitals have a total of 8158 beds between them, with 6478 of these in Metro Manila. These hospitals offer a range of services at prices that are highly competitive globally.
That said, there is more to developing niche medical segments, such as retirement communities, than offering only health provision. “Many factors make cities fertile ground for the development of retirement communities,” Veredigno P Atienza, general manager of Philippine Retirement Authority, told OBG. “Medical resources need to be available, plus evacuation facilities and connectivity, whether in mobile or broadband, to ensure safety and easy of activities of retirees.”
COMPARATIVE PRICING: According to a HealthCore study in 2011, heart bypasses, for example, cost $90,000-$143,000 in the US, yet only $11,000-$25,000 in the Philippines. Eye surgery could also be half the price of similar treatment in the US, while dental treatments costing $5500 in the US ranged between $ $600 in the Philippines. Yet, while these prices are much lower than in the US, they are quite comparable with those on offer in Thailand. The same survey showed heart bypass operations in Bangkok costing $23,000-$25,000, while eye surgery ranged from $ $600 in the Philippines. Yet, while these prices are $900. Some analysts suggest that Thailand has a range 650-of incentives to help it keep costs low – from tax-breaks on imported medical equipment, to state support for the local, generic pharmaceuticals industry.
At the same time, cost is only one consideration – albeit an important one – in determining choice among prospective medical travellers. Surveys, such as that compiled by McKinsey in 2008, showed that globally, such travellers also seek more advanced technology than available locally, better quality health care, and faster medical services before they consider price.
SPECIALISATION: Another factor is the ability to establish a niche market in medical travel, particularly in elective surgery. Turkey, for example, has become globally renowned for hair transplants, Brazil and Thailand for other, specific types of cosmetic surgery. In the Philippines, stem-cell therapy is perhaps the most widely known procedure, particularly regarding its anti-ageing properties. Indeed, Dr Enrique Ona, the secretary of health, told the media in November 2013 that the government is considering measures to encourage the Philippines to become an international centre for stem-cell research and therapy.
Currently, five hospitals have departments dedicated to this – MMC, SLMC, The Medical City, and a joint collaboration between the Lung Centre of the Philippines and NKTI. There are also a large number of stand-alone clinics specialising in stem-cell therapies, mainly based in Manila or Cebu.
Spa and wellness is another growth area, with revenue of approximately P4.5bn ($108.5m) in 2011, the last year for which figures were available. Of this, P3.04bn ($73.3m) went to hotels, P1.05bn ($25.3m) to spa destinations and the rest to other spa facilities. This represented 80% revenue growth on the 2006 figure of P2.5bn ($60.3m).
THE ROAD AHEAD: Sector professionals are examining how to move the sector forward. A 2013 report by the Philippine Institute for Development Studies laid down several key recommendations for strengthening the country’s medical travel strategy. This includes a clearer vision for the industry, enhanced coordination between stakeholders – some 48 organisations were involved in drawing up the PMTP, and the provision of tax and other incentives by the government to encourage growth.
This last recommendation is similar to the Thai model, and requires developing the existing Philippines Investment Priorities Plan (IPP). The IPP already promotes medical tourism zones and centres, parks and enterprises – which have special tax and other incentive regimes – with BOI data showing P20.5bn ($494.1m) in commitments to the health and social work industry from abroad between 2003 and 2011.
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