ASEAN: Regional Trends in Economic Integration, Export ... - USITC

competition for foreign patients in the region 76 as more ASEAN countries export services
and develop the infrastructure necessary to meet local demand. 77 Additionally, providers
in Singapore and Thailand have watched as growing populations and economic growth
have fueled demand for healthcare in neighboring markets. ASEAN healthcare groups
have responded to the changing business environment by expanding their regional
presence. Many have invested in hospitals outside their home market, 78 but more
frequently they have established clinics or representative offices throughout the region.
For example, while ParkwayHealth owns hospitals in four ASEAN countries (including
Singapore), it has established patient assistance centers (which act as referral centers) in
19 countries, including in eight of the ASEAN members (except Laos and Thailand). 79
These patient assistance centers, such as the one in Vietnam, serve to expand Parkway’s
brand in a fast-growing new market, while avoiding issues such as infrastructure
investment or the shortage of skilled workers by referring new patients back to Parkway’s
hospitals. 80 Similarly, Thailand’s Bumrungrad Hospital has established 28 representative
offices around the world, which promote Bumrungrad’s services and refer patients to the
Thai facility. 81 Adopting such investment strategies has allowed ASEAN healthcare
providers to establish foreign commercial presences at lower cost, while also supporting
hospital facilities in their home markets through patient referrals. 82
While the ASEAN market has attracted growing investment in recent years, regional
investors have reported that some measures continue to impede investment. Remaining
equity limitations continue to reduce the region’s attractiveness, because providers prefer
to enter a market with full ownership, or at a minimum, majority-interest ownership, to
exert more control over operations. 83 Although many countries have committed to few or
no equity limitations in healthcare under the AFAS, other restrictions may prevent 100
percent foreign ownership. For example, many countries maintain restrictions on foreign
land ownership. Healthcare firms initially used Real Estate Investment Trusts (REITs) to
avoid the restrictions and maintain full foreign-ownership of the facilities; however,
certain ASEAN member countries are reportedly implementing requirements that compel
hospitals to own the land on which they operate, effectively forcing them to work with
local partners. 84
76 Currently, out of the 10 ASEAN member countries, at least 6 governments have announced national
initiatives promoting their healthcare services to foreign patients.
77 For example, healthcare providers in Thailand report seeing a drop in patient volumes from Bangladesh
as a result of the opening of advanced hospitals in Bangladesh. Industry representative, interview by USITC
staff, Bangkok, Thailand, March 17, 2010.
78 For example, ParkwayHealth (Singapore) has a majority interest or more in hospitals in Singapore,
Malaysia, Indonesia, and Brunei; KPJ Healthcare (Malaysia) holds controlling interests in facilities in
Malaysia, Indonesia, Bangladesh, and Saudi Arabia.
79 ParkwayHealth Patient Assistance Center Web site.
80 Industry representative, interview by USITC staff, Singapore, March 9, 2010.
81 Industry representative, interview by USITC staff, Bangkok, Thailand, March 16, 2010.
82 Industry representative, interview by USITC staff, Singapore, March 9, 2010; Chee, “Medical Tourism
in Malaysia,” January 2007, 23.
83 Industry representative, interview by USITC staff, Bangkok, Thailand, March 17, 2010.
84 Ibid.
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