2017 GH Sesi 4 YM World Trade vs World Health

International trade in health services
Yodi Mahendradhata

International trades in services

Cross-border
trade

Consumption
abroad

Commercial
presence

Natural
presence

International trades in services

Cross-border
trade


Consumption
abroad

Commercial
presence

Natural
presence

Consumption abroad
(Medical Tourism)

Indonesia is the biggest outbound global medical
tourism country source
Number of Indonesian patients seeking
treatment overseas

Annual spending on overseas medical
treatment (in thousand dollar)


700,000

16000

600,000

14000
12000

500,000

10000
400,000
8000
300,000
6000
200,000

4000


100,000

2000

0

0
2006

2012

2006

2012

O er ie of the de elop e t of Malaysia
Health are to ards Medi al Touris , Dr Mary
Wong Lai Lin, CEO of Malaysia Healthcare
Tourism Council, 2012


Indonesia is a source of patients for its
next-door neighbours

• Singapore

– Indonesian market accounted for 56 per cent of total medical tourism
revenues in 2013
– Revenue from Indonesian medical tourists in 2013 was S$463 million
(US$347.35 million), down 38 per cent from 2012

• Malaysia

– 2011 data: >330,000 Indonesians sought treatment in Malaysia spending
over $150 million in direct medical costs.
– 2013 data: > 400,000 Indonesians sought treatment in Malaysia -> may be
worth close to $1 billion in 2013 for Malaysia and this figure is growing
around 30% a year
Source: http://www.edelman.id/medical-tourism-in-southeast-asia-indonesias-opportunity-cost/;
http://www.asianewsnet.net/Singapore-losing-medical-tourists-to-neighbours-74854.html


Why do patients go
abroad?

Ma y people suggested that we come to Kuching
because they said that the medical treatment here
was good. The guy over there had the experience of
falling ill and being cured here. We ere t sure a out
coming to Kuching, but after we heard about it
through word-of-mouth, we decided to o e.
(Wife of an Indonesian medical traveller in Malaysia,
a civil servant in his 50s)*
*Source: Ormond (2014)

I thi k that 9 per e t of patie ts here come from
Indonesia – especially from Pontianak. We understand why.
Doctors here are more open, honest, and explain to us
whether illnesses can be cured or not. They will keep us
informed – giving us the percentage of likelihood for a cure,
giving us all the information we need. They are clearer and

more open – friendlier, more familiar.
(Indonesian medical traveller in Malaysia,
a small business owner in her 40s)*
*Source: Ormond (2014)

People are for ed to o e here [to Malaysia]. It s
about our lives. We already spent money on local
health treatment [in Indonesia] without being cured.
The situation makes it difficult for Indonesia to
de elop its health ser i es..
(Indonesian medical traveller in Malaysia,
a small business owner in his 60s)*
*Source: Ormond (2014)

Familiarity

Affordability

Perceived
quality


Availability
Drivers for foreign medical care
(Glinos et al 2006)

International patients visits*
1,600,000
1,400,000
1,200,000

1,000,000
Thailand

800,000

Singapore

600,000

Malaysia


400,000
200,000
0
2001 2002 2003 2004 2005 2006 2007 2008
*Kanchanachitra et al 2012

Annual Medical Tourism Revenue 2006-2008*
1600
1400

Million USD

1200

1000
800
600

400

200
0
Malaysia
*Kanchanachitra et al 2012

Philippines

Singapore

Thailand

Revenue per international patient*
2500

Million USD

2000

1500
1000

500
0
Malaysia

*Kanchanachitra et al 2012

Thailand

Singapore

Popular Medical Tourism Services*
Services
Cosmetic surgery
Health screening

Orthopedics
Cardiology
Coronary artery bypass
Neurosurgery
Oncology

Hip replacement
Stem cell
Internal Medicine
Endocrinology
Health rejuvenation
*Kanchanachitra et al 2012

Malaysia

Philippines

Singapore

Thailand

Areas of origin of the medical tourists attending five
hospitals, Thailand, 2010*
Origins

Number of med tourist (%)

Eastern Mediterranean

40,554 (38.7)

Southeast Asia

14,730 (14.1)

Europe

14,004 (13.4)

South Asia

12,703 (12.1)

North America

9,481 (9.0)

East Asia

4,166 (4.0)

Africa

3,957 (3.8)

Australasia

3,949 (3.8)

Unknown

1,252 (1.2)

Other area
TOTAL

*Ref: Noree et al (2016)

34 (0.0)
104,830 (100.0)

Medical Travel costs from major US cities (US$)
Chicago

Los Angeles

Miami

Bogota, Colombia

316

590

299

San Jose, Costa Rica

423

559

333

New Delhi, India

1264

1390

1313

Amman, Jordan

1307

4503

1626

Seoul, Korea

1170

1301

1758

737

642

521

Tel Aviv, Israel

1602

4229

5481

Bangkok, Thailand

3617

1369

3509

Kuala Lumpur, Malaysia

2603

1279

3804

376

578

346

Monterrey, Mexico

Managua, Nicaragua

Average cost of medical procedures (US$)*
Procedure

US

UK

Malaysia

Singapore

Thai

Heart-by-pass graft
surgery

113,000

13,921

9,000

20,000

13,000

Heart valve replacement

150,000

-

9,000

13,000

11,000

Hip replacement

47,000

12,000

10,000

11,000

12,000

Knee replacement

48,000

10,162

8,000

13,000

10,000

*Kanchanachitra et al 2012

Single private hospital room per night
1400
1200

USD

1000
800
600
400
200
0
Malaysia

Thailand

Singapore

US

Touristic healthcare services in demand
Lifestyle
Life enhancing
Stress reducing

Invasive
Dental work
Plastic surgery

Diagnostic
General check up
Bone density
testing
Skin improving
Eye surgery
Heart stress test
Sleep psychology Cancer treatment Lipid analysis
Physical therapy Joint
replacements
Holistic healing

Average cost of braces in the US (2012)

US$ 5,200

Dental tourism...
Favored destinations

Procedures in demand
Implants

Hungary

Veneers

Mexico

Crowns

Poland
Thailand

Teeth
whitening

Turkey

Bridges

Spain
Others

Braces
Others

I

o ati e

Toothache
tourism

edi al touris
Pregnancy
tourism

Fasting
tourism

Detox
tourism

Dialysis at
sea

Women on
wave/sperm
ship

Health
research

Suicide
tourism

Medical tourism by patient profile
Rich patients

From developed
countries

Poor patients

Elective invasive,
Low-tech invasive,
Diagnostic, Lifestyle Diagnostic, Border
medical care

From developing Elective invasive,
Diagnostic Lifestyle
countries

Border medical care

Incidental medical tourists?
8% of traveler
to developing
country
requires
medical care
(e.g. diarrhea,
malaria)

• Short term stayers
– Ordinary tourists
– Business traveler

• Long term stayers
– Foreign students
– Foreign workers
– Retirees

Strategies and comparative advantages: Thailand
• National strategy as Asian
Regional Med Hub, e.g. Center
for trans-sexual surgery
• Large number of JCI accredited
hospitals
• Highly skilled med professionals
• Strong private participation
• Competitive costs

Strategies and comparative advantages: Singapore
• Well-established medical tourism
destination
• High technology equipment
• Highly skilled med professionals
• Large number of JCI accredited
hospitals
• Strong goverment support

Strategies and comparative advantages: Malaysia
• Strong goverment support
• Competitive costs
• Strategic alliances with foreign
partners
• Easy entry for foreign patients
• Destination for Muslim Patients

Targets in medical tourism
Country
Singapore

Thailand

Target
• One million patients by 2012
• S$ 3 billion revenue (0.95% of its
GDP)
• S$ 400 million from related industries
• 13,000 new jobs
• US$ 3,2 billion for 2014

Malaysia s E o o i Tra sfor atio Progra

ETP

• Ear arked health are as o e of the ou try s Natio al Key
Economic Areas (NKEAs) deemed to have the potential to spur
growth
• Medical tourism is intended to generate MYR 9.6 billion in revenue
and MYR 4.3 billion in gross national income and to require 5,300
more medical professionals by 2020
• For-profit hospitals are expected to invest MYR 335 million in
hospital infrastructure in order to be prepared for 1.9 million
foreign patients annually by 2020.

Common policies and strategies (Johnston et al 2015)
• Creation of visas specifically for medical tourists
• Reduction or elimination of taxation on imported medical
equipment and supplies
• Incentives and/or requirements for international hospital
Accreditation
• International marketing efforts that advertise the high quality
of medical care available

8 success factors for medical tourism
Competitive price

Human capital

Local R &D

Developed physical
infrastructure

Developed political
and legal
institutions

Market economics

Confluence of
western and
traditional
medicine

Tourist appeal

Barriers to medical tourism
Standards.
Accreditation and
credentialing

Insurance

Legal recourse
and protection of
patients

Entry
requirements and
transportation

International
regulation

International trades in services

Cross-border
trade

Consumption
abroad

Commercial
presence

Natural
presence

Yodi_mahendradhata@yahoo.co.uk