08 March 2022
The ASEAN region is a popular destination for medical tourism. The region accounted for 31% of the market share in 2020. As the COVID-19 pandemic limited patient movement due to travel restrictions, top line for the industry declined in the same year. According to Patients Beyond Borders, patients prioritized overseas medical travel only for critical health issues that require expensive treatment and postponed simple procedures (such as dental fillings, vision care, screenings, etc.). Nevertheless as of early 2022, the market has started to recover as the pandemic eases and governments in different countries introduce favorable policies.
Pre COVID-19, Southeast Asia’s medical tourism sector was expanding faster than anywhere else in the world, largely because of competitive rates, short waiting time, technological advancements, stringent enforcement of tourism authorities, and a highly rated, reliable medical care. Singapore, Thailand, and Malaysia are attractively marked in the global medical tourism map in terms of medical infrastructure, qualified professionals, and government initiatives. Foreign patients are equally important for local medical players, as around a third of revenue generated by Southeast Asian private hospitals comes from foreign medical tourists. In addition to medical care, most tourists also combine their medical treatment packages with leisure travel.
As global coverage of medical insurance, unavailability of affordable, timely treatment in developed countries, non-inclusion of treatments in healthcare plans, and entry of new players with innovative solutions become prominent, these serve as leading driving factors for the region’s industry.
ASEAN countries do not have formal regulatory policies specifically for the medical tourism industry but would largely be covered under local healthcare regulations. However, policymakers focus efforts to introduce a slew of development measures so that medical travelers can make informed decisions – examples include industry recognition awards, accreditation programs, easing of visa restrictions for medical tourists, infrastructure development, and global promotion of local brands.
Considering private players (who serve the large portion of medical tourists), the market is relatively fragmented and is made up by many regional and local companies. Key players such as IHH, BDMS, and KPJ are acquiring or building capacity to capture potential growth across provider segments.
This report analyses the current state of ASEAN6' medical tourism and identifies sector attractiveness, industry drivers and the level of regulations currently enacted for the industry's development.
In 2020, Asia Pacific dominated the global medical tourism market with a revenue share of 46%, even at a time where global tourism’s top line declined sharply due to travel restrictions imposed during the pandemic. Southeast Asia received only 26.1 million tourists in 2020 against 143 million in 2019, registering an annual decline of 81%. However, medical tourism in the countries that are getting their population vaccinated and relaxing travel restrictions is expected to rebound to pre-pandemic levels by the next two to three years.
In terms of demand markets, US medical tourists followed the same trend as the UK, where more and more patients increasingly travel overseas for medical treatments. One major reason can be is that the cost of hospital-stays such as in the USA is much higher than in Asian countries like Thailand. The US Centers for Disease Control and Prevention has estimated that ~150,000-320,000 US patients travel overseas on average annually. The center also stated that by 2026, overseas spending on medical needs by US residents will reach more than USD 300 billion. Further to costs, certain medical procedures such as stem cell therapy for heart failure are not available in developed nations, yet are easily obtainable in ASEAN. Such facts drive medical tourism demand and the possibility to combine medical need with affordable leisure travel adds to the benefits.
Driven by availability of cross-border healthcare service provisions and increasing focus on medical tourism, the ASEAN region has become the most approachable destination for international travelers seeking medical treatments, though breadth and length of medical facilities varies between countries.
While the more established countries like Thailand, Malaysia, and Singapore, may seek to further solidify their key offerings which is complex medical procedures, emerging regional players may attempt to specialize in a niche within the medical industry. For instance, Vietnam tries to build a name in the traditional medicine space, and Indonesia targeting the wellness tourism market.
The ASEAN is not just a cost focused medical provider, but also heavily focuses on its quality of offerings. This is evident in the numerous indexes which ranks its countries by the service it provides its patients.
Differences in medical tourism countries considering Quality of Medical Facilities, Medical Safety, and the overall favorability is proved by the 2020-2021 Medical Tourism Index (MTI). Singapore held the topmost position within Asia based on overall ranking for the destination’s attractiveness, medical tourism, and quality of services and facilities available. The other two ASEAN countries among the highest rated where Thailand, which was placed sixth, followed by the Philippines at seventh place.
Majority ASEAN’s private hospitals generate a sizable portion of revenue from foreign patients (~1/3rd of their total revenue) largely backed by the well-established Joint Commission International (JCI) accredited healthcare centers which are recognized as ‘Gold Standard’ in healthcare and patient safety.
According to the Medical Travel Quality Alliance (MTQUA), an international body that promotes quality medical tourism, Southeast Asian hospitals are among the world’s best healthcare facilities. In 2020, two ASEAN hospitals – Singapore’s General Hospital (8th) and Bangkok’s Samitivej Hospital (54th) were among the top healthcare facilities in the world.
Further, Singapore, Thailand and Malaysia have been among the top performers among 56 economies studied under Bloomberg Health-efficiency index 2020. Singapore was ranked first for its health efficiency. Malaysia emerged as one of the fastest growing countries in the race, moving up nine places to number 22 while Thailand ranked ninth.
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