Thursday, July 7, 2016

Malaysia - Medical tourism to drive healthcare hubs in Johor, Penang, Malacca

KUALA LUMPUR, July 7 — Malaysia's multi-million medical tourism industry is expected to fuel the rise of healthcare hubs in Johor, Penang and Malacca, a research report said today.

BMI Research said this trend will also be supported by both the government's efforts to turn the industry into a key economic growth driver as well as private healthcare providers' business strategy of tapping into such opportunities.

"As Malaysia's medical tourism sector matures, the country will see the rise of core geographic centres focused on the industry," the research firm said in its outlook for Malaysia’s medical sector and medical tourism.

While it noted that private healthcare providers have long been gathering at key locations in Malaysia, BMI Research said this trend has been reinforced by the government's announcement last month to set up a medical hub in Johor's Iskandar Malaysia.

"We highlight that beyond Johor, other locations identified by the government as potential medical tourism hubs include Penang and Melaka," it added.

Private healthcare providers KPJ Healthcare and IHH Healthcare are expected to benefit from the government's plans to turn these three areas into medical tourism hubs, BMI Research said.

The report also said KPJ Healthcare had in its annual report last year earmarked four of its hospitals to cater for medical tourists, noting that two of these — KPJ Johor and KPJ Penang — are located in the potential medical hubs.

The report also noted that IHH Healthcare, which has hospitals in all three locations, had previously said it wants to increase the proportion of its revenue derived from medical tourists — 10 per cent in 2015 — over the next five to 10 years.

BMI Research said multinational pharmaceutical firms may shift their sales strategies with the rise of Malaysia's medical tourism hubs, noting that international patients have on average been found to spend 20 per cent more than locals on healthcare.

Citing Malaysia Healthcare Travel Council's (MHTC) data, BMI Research said however that the Malaysian government may face challenges in meeting its “ambitious” target this year of RM1.3 billion in revenue from the medical tourism industry.

It noted that Malaysia's medical tourism industry had a strong annual revenue growth of 16 per cent from a reported RM900 million last year compared to RM777 million in 2014, but highlighted that MHTC showed a four per cent dip in annual number of medical tourists last year.

"This suggests that 2015's revenue growth came solely from higher spending per international patient," the report said.

BMI Research also said that it believes Malaysia will seek to differentiate itself from competitors by integrating its healthcare offerings into its tourism industry, noting the need for Asian medical tourism hubs to stand out amid the rise of South Korea and India.

It pointed out a 2013 study in Thailand where 43 per cent of medical tourists surveyed placed an equal importance on both having a holiday in the country and receiving medical treatment.

"To that end, Penang and Melaka in particular are well positioned given their position as key tourism destinations within Malaysia," the report said.

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