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April 2009
An Insight on Medical Tourism Sector Developments in Asian Countries
Due to high medical costs of medical insurance systems in advanced nations in Europe and the U.S.A., inadequate resources, and long waitlisting, demands for ‘medical consignments’ arose in order to cut down medical costs, ensure quality medical services, and facilitate overseas medical tourism markets for recreation purposes. At present, nations around the world actively engage in tourism sector development through government departments; in particular, flourishing development in Asian nations. Since the medical field in Taiwan has high potentials for development, The Executive Yuan, Republic of China (Taiwan) has allocated NT$ 10 billion to set up a comprehensive medical tourism sector chain as regulated in ‘Industrial Development Package Plan.’ Obviously, the medical tourism sector will be the future development focus of Taiwan. In this research, the strengths and features of medical tourism developments in major nations around the globe are compiled to serve as reference for medical tourism sector development in our nation.
Chen Shu-chiao
Summary of Global Medical Tourism Sector Developments
Medical tourism is a popular sector that emerged only recently. According to data of ‘Bworldonline’ and ‘ITRI Industrial Economics & Knowledge Center, IEK’, the global medical tourism market comprised of 19 million people in 2005 with a total production value of US$20 billion. The market is expected to expand to 40 million people by 2010 or 4% of the total travel population with a total production value of US$40 billion.
Due to high medical costs of medical insurance systems in advanced nations in Europe and the U.S.A., inadequate resources, and long waitlisting, demands for ‘medical consignments’ arose in order to cut down medical costs, ensure quality medical services, and facilitate overseas medical tourism markets for recreation purposes (i.e. The 2006 data of Centers for Disease Control and Prevention shows that 43.6 million people in the U.S.A. have not purchased medical insurances). According to a research by Synovate, The World’s Top 10 Marketing Research Company, Malaysia accommodates about 100,000 international medical tourists annually and there were 400,000 medical tourists in Singapore in 2005. (According to statistics by Singapore Tourism Board, the related revenues amounted to US$1.5 billon, which is expected to reach US$3 billion by 2012) It is also expected that the figure will reach 1 million by 2012 and the production value will take up 1% of the GDP. There were 1.4 million medical tourists in Thailand in 2006 and the production value amounted to NT$20.7 billion. In 2007, the figure increased to 1.54 million with a production value of NT$24.5 billion. With regard to other nations’ medical tourism sectors that continue to head toward prosperous developments, the medical standards of Taiwan have high potentials for development. As a result, The Executive Yuan, Republic of China (Taiwan), R.O.C. (Taiwan) has allocated NT$ 10 billion dollars to set up a comprehensive medical tourism sector chain for the ‘Industrial Development Package Plan.’ Moreover, ‘Development Vision for 2015 First-Stage Three-Year Sprint Program’ is now undergoing planning, as internationalized medical services are one of the major development focuses.
The medical tourism sector development focus, current status, and features of 10 nations in Asia and Europe will be compiled. (See Attachment) In addition, the summary of medical tourism and approaches in major Asian countries such as Thailand and Singapore shall also be probed into. The nation’s development strategies and modes shall serve as reference for medical tourism developments in Taiwan.

Attachment Current Status of Medical Tourism Sector Development in Major Nations around the World

Attachment Current Status of Medical Tourism Sector Development in Major Nations around the World (Cont’d)

Attachment Current Status of Medical Tourism Sector Development in Major Nations around the World (Cont’d)

Current Status of Medical Tourism Sector Development in Asia

Countries undergoing active medical tourism sector developments through government assistance include: Singapore, Thailand, Malaysia, India, Korea, Israel, Jordan, Cuba, South Africa, Lithuania, Austria, Dubai, Argentina, Philippines, Hong Kong, China, and Caribbean nations. Among them, developments in Asia are considered the most prosperous. According to Newsweek (U.S.A.), the medical tourism market is expected to grow to US$4.4 billion in scale.
In recent years, Singapore, Thailand, South Korea, and India that has recently emerged have achieved most effective results in medical tourism promotion. These four countries each has a unique medical tourism package creating employment opportunities and contributing to the production value with governmental program implementations.
The medical tourism development items in cover: barrenness and health checkup in Singapore, gender reassignment surgery and health checkup in Thailand, plastic surgery and health checkup in Malaysia, Surgery and disease management in India, and plastic surgery in Korea. The customer groups mostly come from Japan and Europe. In view of the different customer sources and demands, a variety of features have been created in terms of medical tourism market developments in these major Asian nations (Note 1) including:
1. Medical feature-based type: specific medical acts, professional medical care, and low-cost world-renowned plastic surgery in Korea, and gender reassignment surgery in Thailand.
2. Recreational & tourism service-based type: Target recreation, travel, and tourism while medical & health are complimentary. Through government-private cooperation in Thailand, Singapore Malaysia, and India, various travel packages are available. (i.e. health promoting activities such as Spa, spiritual devotion, and health checkup)
The Government of Thailand actively engages in integrated tourism and medical & health marketing strategies including: versatility of sales strategies, quality medical services, relative lower medical fees, instant services, health travel brand image creation, etc. These development strategies have helped create Thailand’s unique competitive edge in the international travel market.

Current Status of Medical Tourism Sector Development in Thailand.

(1)Summary of Medical Tourism Sector

The tourism sector has long been Thailand’s major economic development focus. Since the medical standards are considerably high in Thailand, it became known for its gender reassignment surgeries since the 70s. In recent years, the government’s active promotion of marketing strategies related to integrated tourism and medical planning has successfully facilitated Thailand’s competitive edge in the world travel market. According to statistics by World Travel & Tourism Council (WTTC), Ministry of Public Health, and The Tourism Authority of Thailand (TAT), travelers to Thailand for medical tourism purposes totaled 730,000 people with a production value of US$480 million in 2003, 1.4 million people with a production value of US$630 million in 2006, and 1.54 million people with a production value of US$740 million in 2007. Apparently, Thailand has become a medical tourism-based nation with the highest number of visitors worldwide. This figure is expected to reach 2 million people by 2010, according to speculations of Kasikorn Research Center. Consequently, business opportunities related to travel, hotel accommodation, tourism, and consumption will be strengthened.

(2)Government Policy

According to news coverage of Times Magazine (U.K) Thailand was reputed as ‘The world’s cheapest medical & health market.’ The 5-year National Development Plan implemented integrated tourism strengths in promoting medical sector internationalization. Thailand is expected to become the ‘Health Tourism Hub of Asia, Wellness Capital of Asia, and Thai Herbs for Health.’ The development scope of this plan covers: medical care services, health services, and herbal products. In the early stage of its implementation, the target development areas include: Bangkok, Chiang Mai, Phuket Island, and Su-Mei Island. Also, ten other provinces will also be developed. Other than Ministry of Public Health’s Dominance in the implementations, respective government departments will also engage in overall planning marketing, monitoring services, and price standardization, certification, regulation, biotechnology related R&D, etc.(Note 2)

(3)Marketing and Development Strategies

Integrated tourism and medical & health marketing strategies have become the promotional focus of public departments in Thailand. The marketing and development strategies are summarized as follows:

1. Sales Strategy Versatility
Thailand engages in medical & health travel activities and collaborates with hydrotherapy, Thai massage, shopping center and beach resort proprietors in order to construct globalized advertising and attract customers from Europe and the U.S.A. (Diversified marketing strategies such as: Promoting Thailand’s SPA concept and overseas branches, promoting ‘Made in Thailand Spa’ concept, issuing ‘Thailand Elite Card’, setting up world’s first national elites club that entitles its members to lifetime privileges) Foreign tourists are drawn to Thailand after receiving media news coverage and through consumers’ positive word-of-mouth.

2. Quality Medical Services and Relatively Lower Medical Fees
Thailand boasts over 400 private hospitals. Established in 2002, Bimrungard Hospital is the first JCI certified hospital in Asia certified by National Fire Protection Association. It is also listed as one of the world’s top 10 scenic spots in Newsweek. In addition, Bangkok Hospital provides translation services in 29 languages and offer customized diets to suit the need of patients of different cultural backgrounds. Most hospitals in Bangkok are equipped with comprehensive and modern medical facilities. The skilled medical team that received training in the U.S. or Europe is also recruited to provide various low-cost medical services. According to research data by McKinsey & Company, medical services of the same nature may vary in price by several folds. For example, an interventional surgery costs about NT$250,000~350,000 in Thailand, NT$1.8 million~2.1 million in the U.S., and NT$300,000~400,000 in Singapore. Moreover, dialysis costs about NT$5,400 in Thailand, NT$10,000 in Japan, and NT$6,000 in Singapore. (The fee charges cover diagnosis fees, supplies, hospitalization excluding transportation and recreation costs)(Note 3)

3. Instant Services
Due to high medical costs of medical insurance systems in advanced nations in Europe and the U.S.A., inadequate resources, and long waitlisting, demands for ‘medical commissions’ arose. Although advanced nations in Europe and the U.S.A. provide comprehensive medical social welfare, non-life threatening medical items frequently requires prolonged waiting. In Thailand, the problem is resolved by providing comprehensive planning of instant medical packages that suit travelers’ needs depending on their lengths of stay. Other than the medical provisions, health checkup packages are also available to gain a competitive edge in the market.

4. Own Branding & Manufacturing (OBM)—Health Travel
With 450 SPA hydrotherapy centers, Thailand is reputed as the ‘Asia’s Hub in Medical Tourism SPA and Wellness.’ It has received Top 5 Best Spas in consecutive years. The promotion of Thai massage and hydrotherapy has successfully introduced the ‘quality services (land of smiles)’, ‘exotic Thai travel packages’, ‘Thai massage techniques’, and ‘Thai herbal therapy’ to the world. Furthermore, SPA hotels have also undergone transformation into joint health centers that offer ‘health travel services’ such as tourism, shopping, cuisine travel packages that meet every customer’s needs.
As Singapore aims to become the medical center in Asia, it actively engages in creating quality internationally certified brands. Currently, 11 hospitals have received JCI certifications. In order to enhance disclosure of medical fees and extend wellness services, Singapore’s government websites are directly linked to international medical service sites. Singapore also plans to engage in expanding regional cooperation network to encourage international technical exchanges and international medical seminar holdings.
Current Status of Medical Tourism Sector in Singapore

(1)Summary of Medical Tourism Sector
Due to scarce medical resources in neighboring countries, Singapore became the upper class’s designation for health checkups. Its low-cost health checkups and anti-aging beauty therapies have attracted a large number of tourists from the neighboring countries.
Singapore ranked No. 1 in Asia (No. 6 in the world) for its comprehensive health care services, according to the First Global Health Care Service Assessment conducted by the WHO in 2002 which surpassed the ranking of Japan (No. 10 in the world) and the U.S.A. (No. 37 in the world). According to a survey by The Political Economic Risk Consultancy in 2003, the medical & health system of Singapore ranked No. 3 in the world only after the U.S.A. and Australia.
There were 320,000 patients of foreign nationalities who were received in Singapore in 2004, and the figure increased to 400,000 in 2005. Based on ‘Singapore Medicine’ undertaken by Singapore Economic Development Board, Singapore Tourism Board, and IE Singapore, 1 million patients of foreign nationals are expected to seek medical attention in Singapore annually with a production value of US$3 billion.

(2)Government Policy
Singapore engaged in ‘Singapore Medicine’ promotions in 2003 in order to reach the goal of becoming the medical center in Asia. The Americas Conference on Information Systems (AMCIS) promoted ‘MediStay’ in 2004. Currently, 11 hospitals have received JCI certifications. In order to promote wellness services, Singapore’s government websites are linked to international medical related service sites. (Descriptions of visa issuance and accommodation)

(3)Marketing and Development Strategy
The marketing strategy is to provide backup for hospital approaches and requirements in order to create a quality internationally certified brand, facilitate regional cooperation network expansion, and effectively integrate resources needed in promotional activities or international medical seminars.
In terms of development strategy, the Thai and Indian customer groups as well as middle-high income Asians are targeted. On the other hand, active efforts in collaborating with foreign countries will also encourage technical exchanges internationally and international medical seminar holdings (e.g. Asia Pacific Congress of Cardiology) and accommodate John Hopkins Hospital’s (U.S.A.) branch hospital in Singapore.

Analysis of Medical Tourism Sector

Based on the sections above, reasons for consumers to engage in medical tourism overseas as well as strengths and features of medical tourism developments in major nations around the world are listed as follows:

(1)Reasons Consumers Engage in Medical Tourism Overseas
1. Relatively lower medical fees
2. Long waitlisting for medical services locally
3. Inadequate medical facilities or techniques locally
4. Advanced technology or facilities overseas
5. Integrated medical and cultural experience overseas
6. Comprehensive planning of insurance system

(2)Strengths and Features of Medical Tourism Developments in Major Nations
1. Enhanced trust level as there is no language barrier when seeking medical attention
2. Low-cost
3. Advanced medical techniques and state-of-the-art facilities 。
4. Professional medical features
5. Instant and applicable medical tourism package planning
6. International marketing propaganda
7. Lifting of restrictions on medical related laws and ordinances

(Author: Assistant researcher of Taiwan Institute of Economic Research)

■ Annotations

1. Data Source - Chang Gung Memorial Hospital, 2007.
2. Data Source – Aungkasuvapala (2005), ECCP&GTZ (2005), Scott (2005).
3. Data Source - Singapore International Medical, Bumrungrad Hospital in Bangkok, Chang Gung Memorial Hospital.

■ References

1. Industrial Economics & Knowledge Center, IEK,
http://iek.itri.org.tw/internet/Search/Search.aspx?index=*
2. Hotel Travel.Com (1999)
http://www.hoteltravel.com/cn/thailand/guides/medical_tourism.htm
3. Executive Yuan, Republic of China (Taiwan) (2006), “Development Vision for 2015 First-Stage Three-Year Sprint Program (2007-2009)”, Council for Economic Planning and Development
4. Wang Chen-yi (2007). “Medical tourism in Asia is booming, so our country has to make use of its technological advantage to catch up.”, Industrial Technology Intelligence Services
5. Council for Economic Planning and Development (2007), “International Experience of Medical Tourism Service Development and Taiwan’s Development Niche and Challenges (2nd Half)”, Taiwan Service Sector Development Newsletter Bimonthly, 12, Page 3~7
6. Chang Tzu-wei (2006). “Taiwan’s Medical Tourism Sector Strategy Assessment-Based on Value Innovation”, MBA Thesis, College of Management, National Taiwan University, Taipei.
7. YANG Sheng-ping (2007), A Consigned Case Study of “Regional Planning and Development Mechanism of Integrated Leisure, Health, health-preservation, and Medical”, Taipei: Chang Gung Memorial Hospital (Consigned by Council for Economic Planning and Development)
8. Aungkasuvapala (2005), ECCP&GTZ (2005), Scott (2005).
9. World Economic Forum (WEF) (2007), Travel and Tourism Competitiveness Report 2007.
10. Henderson, J. C. (2004), “Health Tourism in Southeast Asia”, Tourism Review International, 7, 111-121.

 

 
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