Medical tourism - International Conference, Call For Paper ...

MEDICAL TOURISM
“INVESTIGATING THE CONTRIBUTING FACTORS TO
MEDICAL TOURISM IN MALAYSIA AND IT’S IMPACT ON
PROFITABILITY”
Shamini Kandasamy FCCA, MBA
Universiti Tunku Abdul Rahman
&
Puspavathy Rassiah ACMA, MBA
Universiti Tunku Abdul Rahman
ABSTRACT
This research is designed to investigate the factors which can enhance medical tourism in
Malaysia. These factors can be identified through the empirical evidence that was collected
by means of interviews with hospital administrators. Some competitive advantages from
successful medical tourism spots such as Thailand and Singapore had also been identified.
For the past few years the number of medical patients who visited Malaysia had been growing
gradually, however it was not sufficient as compared with its neighbouring countries. There
were fewer tourists who sought medical treatment in Malaysia. As a result, it had an impact
on Malaysia’s economy. Firstly, it reduced the revenue generated from health industry.
Secondly, there were fewer tourists who visited Malaysia and thus decreased the profit of
tourism industry. Lastly, it minimised the number of jobs available in Malaysia and led to
unemployment. In a nutshell, this study was conducted in order to investigate various ways to
attract medical tourists to Malaysia and increase Malaysia’s profit from medical tourism.
Keywords: Medical Tourism, Factors Affecting Revenue, Malaysia.
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1.0 Introduction
Medical tourism refers to the many patients that are currently traveling overseas for immediate and
affordable treatment. Caballero-Danell and Mugomba (2007) defines medical tourism as the pursuit of
medical care abroad and simultaneously engage in more conventional forms of tourism.
According to Daub’s study (as cited in Newman, 2006), medical tourism is the attempt by many
Americans to save money by traveling to other countries for their medical needs. This focuses on the
Americans while others define differently.
Keckly and Underwood (2008)
noted that medical tourism is the process of “leaving home” for
treatments and care abroad or elsewhere domestically. It is an emerging phenomenon in the health care
industry.
In addition, according to Horowitz and Rosensweig (2007), “medical tourists” seek modern health care
at affordable prices in countries at variable levels of development. Medical tourism is different from
the traditional form of international medical care where patients typically journey from less developed
nations to major medical centers in highly developed countries for advanced medical treatment. This
means even patients from a highly developed country such as The United States can go to those
developing countries such as Malaysia and its neighbours for medical treatment.
In short, medical tourism is the attempt by patients to seek for a qualified and high quality medical
health care at foreign countries at an affordable price or cheaper price. It does not limit to traveling to
modern countries to seek for better service but most important is the affordable price with the same
quality of service. This combination of surgery and tourism is a relatively new type of nonexclusive
niche tourism that promises to have significant growth over the next few years.
Connell (2005) found as health care costs have increased tremendously, patients in the developed world
are looking overseas for medical treatment. Patients in developed countries always suffer from long
waiting time. They have to take turns to wait for the medical treatment. Thus, consumers commit to
travel overseas for their medical treatment. Often, consumer will also take the opportunity to be a
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tourist in the visiting country and enjoy what it has to offer. Therefore, consumers may combine their
holiday and medical care into one venture.
Besides that, medical tourists seek for medical tourism because those foreign countries offer a better
price with the same service provided. Patients also travel to medical tourism destinations for
procedures that are not available in their own countries such as stem cell therapy for heart failure.
Other reasons for medical tourism are the natural attractiveness in the foreign countries, the medical
expertise and the medical quality.
Horowitz and Rosensweig (2007) mentioned that medical tourism is market driven which is shaped by
the complex interactions a combination of medical, economic, social and political forces. All of these
are interrelated and needed to be developed in order to become a competitive medical tourism.
1.1 Background
Calvin, C. and Ivy, T. (2005) mentioned medical tourism in Asia is relatively new. Medical tourism
was brought on in the aftermath of the Asian Financial Crisis that led private hospitals to seek
alternative revenue sources. Malaysia started to be actively participating in medical tourism since 1998
with the setting up of the National Committee for The Promotion of Medical and Health Tourism. In
Malaysia, the medical solutions range from traditional medicine to telemedicine.
Under Malaysia’s health tourism promotion drive, there are 35 private hospitals in Malaysia which
have been chosen to promote Malaysia as a health tourist destination. These 35 private hospitals are
members of the Association of Private Hospitals of Malaysia (APHM). Besides that, these hospitals
have been awarded the certification for internationally recognised standards for example MS 9002 or
accreditation by the Malaysian Society for Quality in Health and ISO 9001 Gupta (2005).
Malaysia achieved some success in establishing as a regional hub for good health care and its ability in
providing state-of-the-art medical facilities and services for medical tourists (Ministry of Health). All
of these successes were due to the combination of hard efforts by Association of Private Hospitals of
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Malaysia, Ministry of Tourism, Tourism Malaysia, MATRADE, the government agencies and the
private agencies.
Malaysia became a centre of medical excellence because of its high quality medical facilities and
services plus its highly trained and qualified medical specialists and staffs (Tourism Malaysia, 2007).
Malaysia’s natural attractiveness and most importantly the competitive medical fees provide additional
attractions to enrapture medical tourists to Malaysia.
1.2 Issues
Globalisation has caused many countries to re-evaluate their economical strengths and weaknesses, as
well as re-assess what products or services in which nations can benefit Morrison (2003). Nowadays,
medical tourism has grown tremendously in many countries such as Thailand and India. In 1990’s,
many Asian countries became the victims in Asian economic crisis. Thus, they need to find economic
diversification and solutions to settle this crisis. Malaysia is one of those countries. As a result, those
Asian countries started to involve in medical tourism.
In table 1.2.1is the statistics which shows the number of medical tourists who came to Malaysia has
been increasing from year to year.
Table 1.2.1: Number of International Patients and Revenue
Year Number of International Patients Revenue [(RM) ’million]
2001 75,210 44.3
2002 84,585 35.8
2003 102,946 58.9
2004 174,189 104.9
2005 232,161 150.9
2006 296,687 203.7
2007 341,288 253.84
(Source from APHM)
Through this statistical data, we understand that Malaysia has experienced an increasing number of
medical tourists over the years. However, Malaysia is still experiencing a smaller scale of medical
tourists compared to its neighbour countries such as Thailand and Singapore. According to Keckly and
Underwood (2008), in 2006:
Singapore attracted an estimated 410,000 medical tourists.
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Malaysia attracted an estimated 300,000 medical tourists.
Thailand attracted an estimated 1,200,000 medical tourists.
While in the year of 2007, India attracted an estimated 450,000 medical tourists. The data stated above
reveals Malaysia is the country that has least medical tourists. This small amount of medical tourists
indirectly reflects the quality and the reputation of our country’s medical tourism.
1.3 Statement of the Problem
Table 1.2.1 showed the number of patients and the revenue generated from medical tourism in
Malaysia starting from the first year of medical tourism in Malaysia to year 2007. The number of
foreign tourists does have a relationship with foreign earnings and revenue. The increasing number of
foreign tourists in Malaysia will cause the foreign earnings and revenue in Malaysia increase too.
However according to the data provided by Keckly and Underwood (2008), we know that Malaysia has
experienced smaller scale of medical tourists compared to neighbor countries. As a result, Malaysia
was having a lower foreign earnings and revenue from the medical tourism industry. Other than that,
Chan, K. E. (2009) said due to the economic slowdown, some medical tourists may postpone their
treatments which are not serious such as cosmetic surgery and knee surgeries in Malaysia. This even
makes the problem worse.
This delay would have an impact on hospitals which offer these services, hence reduce the inflow to
these hospitals and have a domino effect creating a reduction in the inflow of funds through medical
tourism.
According to the data provided by Keckly and Underwood (2008), the medical patients who came to
Malaysia for medical treatment were fewer than our neighbour countries. From this point of view, there
was a serious problem. Without a solution to this problem, Malaysia will be unable to compete with its
neighbours causing a loss in potential revenue.
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1.3 Research Objective and its significance
The main purpose of this research is to identify the effective factors for attracting international patients
to Malaysia. This could be done by identifying and examining the contributing factors to medical
tourism in Malaysia. Effective contributing factors refer to the factors that can identify, gain, maintain
and improve the current condition of Malaysia’s medical tourism. However, the contributions to
medical tourism in Malaysia are not sufficient enough. We identify the ways to create a competitive
advantage in Malaysia medical tourism through the factors and contributions of medical tourism which
are currently practiced by corresponding organisations and institutions (Malaysia government, medical
care provider, travel agency).
We also identify the factors and competitive advantages that are being adopted by other popular
medical tourism destinations such as Thailand and Singapore, so that it could be imitated or adopted by
Malaysia medical tourism. The products, services they provide and the strategy they adopt maybe the
significant factor to the success achievement.
Our research aims to identify the contributing factors to Malaysia’s medical tourism and the potential
competitive advantages that could improve this industry. Understanding and adopting these
contributions, competitive advantages and factors are necessary to enhance the medical tourism in
Malaysia. With this we are able to understand the factors that can attract more foreign patients to
Malaysia, which are unavailable in Malaysia yet. These factors can be fully or partly utilised by
Malaysia medical tourism in order to compete with our neighbour countries and gain more earnings
from medical tourism. This can assist the Malaysian government in promoting its medical tourism to
global, designing health care plan, medical tourism policy, and others. The tourism industry can gain
more foreign inflow, by attracting more medical tourists, the tourism industry can gain more foreign
earnings as the medical tourists will also spend time and travel to some popular destinations in
Malaysia. Other than private hospitals and health care providers, many related industries might get
benefit from them, such as the hospitality industry. Usually most of the patients travel with family and
friends. Therefore it multiplies the revenue several times.
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These factors and competitive advantages will able to improve the current status of medical tourism in
Malaysia and attract more medical tourists to Malaysia. Besides, it helps Malaysia to become a global
medical hub. Therefore, by attracting more international patients, the revenue and profit will be
increased and it benefits many other related industries.
LITERATURE REVIEW
2.1 Medical Tourism
Medical tourism or medical travel is the act that patients travel to other countries obtaining medical,
dental, and surgery care. Almost two decades ago, Goodrich & Goodrich (1987) defined health-care
tourism as “the attempt on the part of a tourist facility (for example a hotel) or destination to attract
tourists by deliberately promoting its health-care services and facilities, in addition to its regular tourist
amenities”. It is a new and niche industry that combines leisure and health care. The definition of
medical tourism and wellness tourism were equally interchangeable in Europe during the 1960’s and 1970’s,
it refer to a combination of leisure and health-care, the facilities referred to 20 years ago generally
included spas, resorts, hot springs, were added to this definitions. Connell (200 5) defined medical
tourism as a niche industry “where people often travel long distances to oversea countries to obtain
medical, dental and surgical care while simultaneously being holidaymakers, in a more conventional
sense”(p.1094). The emergence of medical tourism satisfies the needs for the growing number of
foreign patients, mainly in developed countries. This not only benefits foreign patients but also those
medical tourism destinations, principally in developing countries. Another definition of Medical
tourism is it occurs when international patients travel across boundaries for their healthcare and
medical needs Monica (2007).
2.2 The rise of medical tourism in Asia
Surprisingly, some Asian countries such as Thailand, Singapore, Malaysia, India, South Korea
attracting a combined 1.3 million medical tourists per year from around the world, and is increasing
annually. The main region of medical tourism is shifting to Asia in this decade. It is projected to
generate more than US$4 billion by 2012 Gupta (2007). Besides that, there are many other countries
seeking to enter this new industry such as Latin America, Eastern Europe, South Africa countries. Even
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Dubai, a well known destination of luxury vacation, is scheduled to open the Dubai Healthcare City by
2010 Shyam (2007). In fact, Thailand known as a destination for medical tourism as early as 1970s
because of its specialisation in sex change operations and later moved into cosmetic surgery Connell
(2005). Other than that, Malaysia involved in medical tourism after 1998 in the awake of the Asian
economic crisis and the need for economic diversification. India advertised itself as offering everything
from alternative Ayurvedic therapy to coronary bypasses and cosmetic surgery. Bumrungrad
International in Thailand and Apollo in India are among those well known medical tourism destinations.
2.3 Medical Tourism today
The reasons people travel oversea for medical care are high cost and long wait time (United State s,
United Kingdom) at native country, new technology and skill in destination countries alongside with
reduced transport costs and internet marketing Connell (2005). Besides, Connell states that the rise of
medical tourism emphasises the privatisation of health care, the growing dependence on technology,
uneven access to health resources, the accelerated globalisation of both health care and tourism.
Another research such as Kazemi (2008) conducted a research on determining the effective factors for
attracting medical tourists to Iran and examined the actual potential that foreign patients represent
based on costs, quality and recognising other aspect of marketing mix. Kazemi (2008) also investigated
the role of the government and related organisations. In order to provide a better understanding of the
current status of medical tourism and anticipated development, Mugomba and Caballero Danell (2006)
have developed a map document all information collected.
Figure 2.3.1: The Health Tourism Structure
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Mugomba and Caballero-Danell (2006) expressed that the market description is based on an analysis
made by the medical tourism reality, consisted of what services operators offer, how countries market
their destinations and package then with medical treatments, the social issues that have arisen and the
effects of the absence of a legal framework to keep up with the development of the medical tourism
niche market. This analysis also explains how infrastructure in medical tourism destinations are
changing in order to host tourists that are also patients by giving special attention to the safety and
technological requirements, among other things, in an effort to compete against medical institutions in
various regions for the medical tourist’s disposable income.
2.4 The trend of medical tourism concept in the world
The concept of medical tourism or health travel in the world was mooted in 1997, after Asian
economic crises. The concept of Health Tourism, Medical Tourism, Medical Travel and Medical
Outsourcing are the same. All of these concepts define as traveling abroad to receive health care and
treatment. In 1990 many factors in different countries such as Asian countries led to the growth of
medical tourism in the long term will continue. According Jabbari, the trend concept of medical tourism
from 1997 to 2007 has shown below:
1997 --- Health tourism
1997-2001 --- Transition
2001-2007 --- Medical tourism
2006-2007--- Medical outsourcing
The term “outsourcing” is defined as “a practice used by different companies to reduce costs by
transferring portions of work to outside suppliers rather than completing it internally”. So, medical
outsourcing which is also commonly known as medical tourism is the practice of seeking health care
abroad. As successful outcomes of medical tourism become more evident, demand is likely to increase
further. Western insurance companies might encourage overseas treatment to reduce their own costs. A
hospital in Kolkata which is in West India has signed an agreement with the British insurance company,
BUPA (Connell, 2005). Moreover, some larger Indian companies have been in negotiations with the
NHS about outsourcing the treatment of British patients to India Connell (2005).
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Earlier, people went abroad mostly for elective cosmetic procedures which were not covered by
insurances. Today, people outsource their orthopedic procedures as well as cardiac surgeries and organ
transplants. It’s not just individuals who are interested in this trend to save money. Medical outsourcing
has also received attention from health insurance companies who have started offering overseas treatment
plans to expand their customer base, and from employers who have included it as a benefit to their
employees Kazemi (2008).
With the time past, the objectives of medical travel in past (old model) have changed to a new medical
aspect of tourism (new market of today). The objectives for old model which was called medical travel can
be divided to three main factors: self-paying clients from the Middle East, Asia or Latin America
seeking care in the USA or Western Europe; specialists targeted on those where quality care and
advanced equipments are not available in home countries; patients’ requirement for emergency care
that not available in home countries.
The objectives of new model (new market) can be classified into many factors. It was called medical
tourism and has been expressed as waiting list lines for elective procedures in many developed
countries such as England, opportunities to offer first class services at third world cost and
combination of surgery with sightseeing tours. All these factors led the patient from developed counties to
developing countries.
2.5 Medical tourism in Malaysia
Statistics indicated a strong and growing interest in Malaysia’s healthcare tourism industry. According
to Association of Private Hospitals Malaysia (APHM), the number of foreigners seeking healthcare
services in Malaysia has grown from 75,210 patients in year 2001 to 296,687 patients in year 2006
which generated a total of RM203.66 million (USD 59 million) in revenue. This trend is likely to grow
at a rate of 30 percent a year until 2010, projected by Association of Private Hospitals Malaysia
(APHM).
Tourism Malaysia, in collaboration with APHM and the Ministry of Health, has introduced tourist
brochures and other promotions on Health Tourism in Malaysia for distribution throughout the world.
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The brochure will promote Malaysia as a health tourist destination and will list the 35 private hospitals
and 20 travel agencies in the country, which are participating in health tourism.
Much of Malaysia’s attraction lies in the wide array of medical services and procedures including
dental, cosmetic and cardiac surgeries at significantly lower costs compared with the United States.
Also, foreign medical tourists and investors are attracted by Malaysia’s favourable exchange rate,
political and economic stability and high rate of literacy, since Thailand still suffered from the political
instability, some foreign medical tourist will choose Malaysia as their alternative for medical tourism
destination, Nuwire Investors (2008).
Competitive medical fees and modern medical facilities are two vital factors that make Malaysia a
popular destination among health tourists. Patients can undergo treatment and recuperate in any part of
the country for less than what it would cost them for a treatment in other countries. For example, a
normal cardiac bypass surgery (CABG) in Malaysia would cost only between US$6,000 and US$7,000
(Tourism Malaysia, 2007).
To ease entry formalities for patients, the Immigration Department of Malaysia has implemented the
Green Lane System at main entry points which expedites custom clearance for medical tourists.
Accompanying family members or friends of the patient can take advantage of their visit to Malaysia’s
various interesting tourist attractions. Cities like Kuala Lumpur and Penang offer a truly
comprehensive range of both health and tourism services, all within easy reach (Tourism Malaysia,
2007).
Besides the Ministry of Health, a committee was formed to assist the promotion of health tourism. It
comprised of the Ministry of Tourism, the Association of Private Hospitals of Malaysia and other
government agencies such as the Malaysian Association of Tours and Travel Agencies, Malaysian
Airlines and several private hospitals. This committee was called “The National Committee for the
Promotion of Heath Tourism in Malaysia”. Membership of the committee has also been extended to
several other agencies such as the Malaysian Industrial Development Authority, the Malaysian
Association of Tour and Travel Agencies, Malaysian Airlines System, the Primary Care Doctors’
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Organisation of Malaysia, and a few other tertiary hospitals.
5 subcommittees were formed to realise the references or objectives of The Committee, namely:
i. Health Tourism (Subcommittee for the identification of countries suitable for health tourism
promotion);
ii.
iii.
iv.
Inland Revenue Department (Subcommittee on Tax Incentives);
Association of Private Hospital Malaysia (Subcommittee on Fee Packaging);
Health Ministry’s Development Division (Subcommittee on Advertisement);
v. Health Ministry’s Pharmacy Division (Subcommittee on Accreditation).
The Committee had been cooperating with other agencies in carrying out promotional activities
concerning health tourism in the country. This included collaborations with the Malaysian External
Trade Development Corporation (MATRADE) through its trade missions; Tourism Malaysia through
its promotional activities; various state governments; private hospital groups and the Association of
Private Hospitals Malaysia.
Most of the promotional activities have been done in collaboration with MATRADE through its trade
missions; Tourism Malaysia through its travel marts; various state governments, notably Melaka, Pulau
Pinang and Selangor; and private hospital groups, notably Kumpulan Perubatan Johor and the
Association of Private Hospitals Malaysia (APHM).
MATRADE export promotion activities for the healthcare sector includes participation in international
trade fairs, specialised marketing missions as well as trade investment mission led by the Minister of
International Trade and Industry. MATRADE has also been working closely with other Ministries and
agencies to promote the export of healthcare sector, such as the Ministry of Health and Association of
Private Hospitals of Malaysia.
In Malaysia, all private medical centres are approved and licensed by the Ministry of Health. Most of
the private medical centres have achieved certification for internationally recognised quality standards,
for example, MS ISO 9002 or accreditation by the Malaysian Society for Quality of Health (MSQH).
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Accreditation or certification under ISO 9002 will be an invaluable testimony to the quality of our
healthcare services and will give us the competitive edge over our rivals.
2.6 Model
In our research conducted, the structure of the analysis is according to each of the five forces of
Porter’s model, “Porter’s 5 forces analysis”. Thee 5 components inside this model which includes 3
forces from ‘horizontal’ competition (rivals, new entrants, and substitute products) and 2 forces from
‘vertical’ competition (bargaining power of supplier and buyer). As one of our research objectives is to
determine the factors that allow Malaysia to gain more revenue from its medical tourism industry,
Porter’s 5 forces analysis was significant. This model is applicable to our research topic because we
need to analyse all the five components in order for Malaysia to gain more revenue from its medical
tourism industry. According to Harvard professor Michael Porter, the five industry forces determine an
industry’s overall attractiveness and potential for long-term profitability.
RESEARCH METHODOLOGY
Mixed method is one of the research techniques used in this research which will be examined and
explained further on in this chapter. According to Cohen and Manion (1986) define triangulation as an
“attempt to map out, or explain more fully, the richness and complexity of human behavior by studying
it from more than one standpoint”. By combining data sources, methods, investigators and theories,
triangulation opens the way for richer and potentially more valid interpretations for the view of medical
tourism. Readers can get a complete view of our case study, the idea can be described as the attempt on
the part of the contributing factors to medical tourism in Malaysia and its impact on profitability.
Primary data is accumulated by the researcher particularly to meet up the research objective of the
subsisting project. With the usage of primary data, we got to know the trend of medical tourism in
Malaysia.
A set of questionnaire was composed, in order to collect information from the hospital
administrators. These questions were used during our interviews with hospital administrators and key
management personnel in Pantai Medical Centre, Ampang Puteri Specialist Hospital and HSC Medical
Centre.
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Realising that obtaining information around Klang Valley alone is not enough, we decided to explore
further by sending our questionnaire by email to other hospitals in Peninsular Malaysia. We had
conducted an email survey with the Director of Corporate Development in Penang Adventist Hospital
(www.pah.com.my). He provided us very detail information regarding about our topic. The information
we obtained is well governed and accurate. After the analysing of the information, the idea of our
results of the topic is more visible and supportive.
Secondary data was collected and analysed to convene the requirements of various research objectives.
It is available effortlessly, rapidly and inexpensively. By surfing the internet we managed to obtain lots
of information and same goes to reading the secondary sources of information from brochures, articles,
journals regarding medical tourism worldwide. Another way to triangulate data is the notes which we
had taken during and immediately after each interview session. These include information we obtained
from interviews with the hospital administrators from Pantai Medical Centre, Ampang Puteri Specialist
Hospital and HSC Medical Centre. These notes were especially useful as they shed additional light on
the textual contents or indicate specific questions that did not directly appear in the interview
transcripts.
3.4 Sampling Method
Our target population is the private hospitals that provide medical services for foreign patients. Overall
there are thirty five private hospitals which provide this service which we obtained from the
Association of Private Hospital of Malaysia (APHM). Simple random sample was used to select fifteen
out of thirty five private hospitals. Simple random sample means all such subsets of the frame are
given an equal probability.
However, due to the large number of hospitals, we used judgmental sampling method to choose ten out
of the fifteen private hospitals. We focused on the hospitals that patients used to patronage in seeking
medical treatment. Finally, we have chosen convenience sampling method to obtain information. From
this method, we have selected three private hospitals that are willing to help us by giving us feedback
in doing this survey.
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The sampling method which was written above is based on qualitative method. As for the email survey,
quantitative method is adopted by sending the questionnaire to the other balances of private hospitals.
However, only one private hospital replied.
The main purpose of this questionnaire is to seek out those factors about medical tourism. Through this
questionnaire, we managed to understand more about medical tourism in Malaysia and even worldwide.
For example: What are the differences between Malaysia’s hospital and overseas hospitals in the
perspective of the medical equipments? All these questions have been compounded into appendix.
4.0 ANALYSIS AND FINDINGS
4.1 Asia as a Medical Tourism Destination of Choice
Figure 4.1.1: Distribution of international tourists in less developed countries
Many countries in Asia such as South Korea, Singapore, India, Thailand and Malaysia are actively
promoting medical tourism and attracted a combined 1.3 million medical tourists per year from around
the world and it is increasing annually.
Countries in Asia are so popular when it comes to medical tourism. This is because:
a) The costs of medical and healthcare in places such as United States and Great Britain are on a
rise. For example, a bone marrow transplant that costs $250,000 in the United States costs
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only $25,000 in India (Hutchinson, 2005). As for the Philippines, they offer competitive
prices as well as highly skilled and trained physicians who speak English Newman (2006).
b) The increasing ease and affordability of international travel via air and sea. Many Asian
Airlines offer frequent-flyer miles to ease the cost of returning for follow-up visit. The travel
industry saw this opportunity and put together packages that include airfare, hotel
accommodations and surgery expenses.
c) The quick and rapid advancement of medical technologies in Asia countries. For example,
Indian pharmaceuticals meet the stringent requirement of the United States.
d) More people are seeking places where they can receive affordable medical treatments, and
having a chance to visit breathtaking tourist spots in that country.
e) Countries in Asia also offer an abundant number of shopping, dining, entertainment attraction
and sightseeing.
f) Clinics in Asia, the doctors are supported by more registered nurses per patient than in any
Western facility.
g) Some of clinics in Asia also provide single-patient rooms that resemble guestrooms in Fourstar
hotels, with a nurse dedicated to each patient 24 hours a day.
h) The experiences and qualifications of medical profession are well recognised. According to
Hutchinson, B. (2005), Bangkok’s Bumruridgrad hospital has more than 2 00 surgeons who
are board-certified in the United States.
i) The successful rates of a surgery performed are highly safe. In a study conducted by
Hutchinson, B. (2005), Escorts Heart Institute and Research Center in Delhi and Faridabad,
India, performs approximately 15,000 heart operations every year, and the death rate among
patients during surgery is only 0.8 percent less than half that of most major hospitals in the
United States.
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4.2 Penang Adventist Hospital
Figure 4.2.1: Penang Adventist Hospital Revenue
(Source : Annual Report and Interview)
Based on the graph above, the revenue for Penang Adventist Hospital is increasing rapidly over the
years. There is a total increase of 13.05% and 6.38% in the hospital’s revenues between the year of
2005 and 2007 respectively while for the year of 2008, the revenue for Penang Adventist Hospital
increased up to 10.63%. Most of the revenue generated is from Indonesia, especially Northern
Sumatera and Jawa. Most of the visiting foreign patients come to Penang Adventist Hospital mainly for
open heart surgery, vascular surgery, cosmetic surgery, and orthopedics and spine treatments. This
hospital had invested about RM 70 millions to upgrade its medical equipment over the last five years in
order to attract more international patients. Up to date and advanced medical equipment is very
important as foreign patients nowadays are very demanding and always look for the best medical
equipment.
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Apart from that, doctors’ professional medical fees are regulated by Private Hospital and Service Act
1988, and this allows Penang Adventist Hospital to charge reasonably and stay competitive.
Reasonable pricing is very important too as international patients nowadays always look for medical
treatments with cheapest price but high in quality. Besides that, doctors in this hospital are carefully
selected and interviewed by the vice president of Medical Administration before they carry out their
professions on behalf of the hospital. This is to ensure the professionalism and qualification of the
doctors in order to make sure the services provided to international patients are excellent and satisfied.
In addition, Penang Adventist Hospital was the first hospital in Malaysia to be accredited Joint
Commission International (JCI) in November, 2007. This accreditation is very important as it will
provide confidence and assurances to foreign patients. International patients are more willing to come
to Penang Adventist Hospital to seek more medical treatments as JCI is an international accreditation
which is high in reliability and standard. Last but not least, Penang Adventist Hospital also served
vegetarian food in order to attract various types of international patients. By having this, international
patients who are vegetarians will not be reluctant to come to Penang Adventist Hospital as they will
have no problems with their meals during their medical treatments in the hospital.
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4.3 Pantai Medical Center
Figure 4.3.1: Pantai Medical Center Revenue
Revenue
↑ 61 %
Revenue
↓12 %
↓ 22 %
2005 2006 2007 2008
Year
This graph clearly indicates that the revenue for Pantai over the years is unstable. There is a decrease of
12% in Pantai’s revenue from the year of 2005 to 2006 but for the year of 2006 to 2007, the revenue
for Pantai has increased up to 61%. Most significantly, Pantai’s revenue for the year of 2008 was
experiencing a huge drop of 22%. The main reason for that is because Pantai’s main focus is not on
international patients or in other words, Pantai’s main priority is not on medical tourism. Besides that,
according to Pantai’s administration, there are many other reasons that cause these pitfalls. However,
due to the insufficient responses and disclosures from Pantai, we are only able to identify that one of
the reasons is due to the changes in the management teams of Pantai over the years.
As a result, Pantai discovered that medical tourism is very important as it is one of key sources that
able to contribute large amount of revenue to the hospital. Therefore, Pantai started to focus more on
international patients, especially the Indonesians. Pantai has set up a permanent representative office in
central of Jakarta to increase the awareness of their presence in Indonesia. This helps Pantai to promote
its medical tourism in Indonesia as Indonesians are able to get information about Pantai in term of their
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medical qualities, medical fees, medical expertise, and etc. Besides that, Indonesians who are intended
to come to Malaysia for medical treatments will find it easier to travel to Malaysia as the office in
central of Jakarta will help them to arrange all the compulsory procedures for them. Most of the
visiting international patients come to Pantai mainly for cardiac surgery.
Besides that, Pantai also did various form of promotions in order to attract more international patients.
One of them is through agents in Vietnam and Pekan Baru. Agents will help Pantai to promote its
medical tourism in Vietnam and Pekan Baru. Agents will also help to arrange everything for
international patients who are willing to travel to Malaysia for medical treatments. Pantai did their
promotions by distributing brochures through Air Asia too. Passengers who travel around with Air Asia
are given the opportunity to view these brochures. Passengers are able to get first hand information
about Pantai’s medical tourism. Apart from that, Pantai collaborated with local hotels in Malaysia to
provide various packages for international patients or their intermediate family members to have a tour
around Malaysia. International patients are able to travel around Malaysia especially Penang and
Melaka once their medical treatments periods are over. Their intermediate family members are also
have the precious opportunity to enjoy the scenery and natural attractiveness of Malaysia especially
Sabah. Pantai also prepared separate wards for international patients in order to provide much comforts
and conveniences to them. Last but not least, Pantai do provide halal and non halal food to international
patients.
Figure 4.3.2: Number of International Patients visits Pantai Medical Center in 2008
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The pie chart above shows us the total number of international patients visiting Pantai Medical Center.
Most of the foreign patients who visit Pantai is the Indonesians (401 ,000), followed by the Asians
(44,000), Europeans (42,000), Australians and New Zealand (9.000), North Americans (7,000), and
others (6,000). Indonesians are the most likely foreign patients to come to Malaysia due to their
increased awareness of the presence Pantai Medical Center.(source Annual Report)
4.4 Ampang Puteri Hospital (KPJ)
Figure 4.4.1: Ampang Puteri Hospital Revenue
(Source Annual Report)
Based on the graph, Ampang Puteri Hospital which is under the KPJ group was experiencing a
significant increase of 42% in its revenue for the year 2007. The hospital did its promotion by having
agents in Australia. Therefore, most of the visiting international patients are from Australia, New
Zealand, and UK. Agents will act as intermediaries to stream the communication between the
international patients and the hospital. Besides that, Ampang Puteri Hospital is also having a separate
department where there are Korean communicators that enable the hospital to communicate with
Korean patients. Communication between Korean patients and the medical staff such as doctors, nurses,
and etc will be streamed with the presence of Korean communicators.
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Apart from that, Ampang Puteri Hospital also provides KPJ privileged cards. Patients who hold this
card are able to get cheaper room rates and other benefits such as discount for healthcare products and
medicines. Patients can apply for the card if they spend more than RM 15,000 in any of the hospitals
under KPJ group. Ampang Puteri Hospital has good post surgery service too. It will make surgery callup
to patients after 36 hours of surgery.
CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion
Figure 5.1.1: Revenue Generated from Medical Tourism in Malaysia
(Source: APHM)
The graph above shows that the revenue generated from international patient was increased from 2001
to 2007. This trend is expected to grow at a rate of 30 percent a year until 2010. After we have
discussed the unique factors which possessed by each hospital to attract international patients in
previous chapter. We are going to discuss the overall factors that Malaysia should concerntrate to
attract international patients.
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First of all, the pricing of Malaysia medical fee and favorable exchange rate are considered as
important factor to attract foreign patients. The medical charge and hospitalisation cost here are very
competitive compare to those in many developed countries. For example, heart bypass surgery will cost
patient around 13,000 USD in United State, meanwhile in Malaysia the same service would only cost
9,000 USD.
Table 5.1.1: Cost
Second factor, medical expertise. Medical specialists in Malaysia are highly qualified professionals
with extensive international qualification and they are supported by well trained paramedical staffs.
Malaysia would have to sell this point to attract medical tourism.
Third factor, advertising and marketing effort. The promotion of medical tourism in Malaysia is
supported by some government ministry and organisations. For example, The National Committee for
Promotion of Medical & Health Tourism, Association of Private Hospital of Malaysia (APHM) and
(MATRADE). MATRADE organises exhibition in oversea market and invite private hospital to set up
booth in the exhibition. It helps to promote and attract more international from foreign country.
Fourth factor, equipment. There are many state-of-art, well equipped and well staff private medical
center have extensive diagnosis and therapeutic resources. Most of the private hospitals in Malaysia are
keep on upgrade their equipment to meet the current medical need and trend. And we knew that most
of the hospital we interviewed equipped with the latest 64 sliced CT scanner.
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Fifth factor is time. There is no waiting time for international patient who seek surgery and operation
in Malaysia. Compare to United Kingdom, it could spend 8 months wait for a bypass surgery.
Sixth factor which is important is accreditation. Medical expertise in Malaysia ranks among the best
in the world and most private hospitals in the country have internationally recognised quality standard.
These include MS ISO 9002 or accreditation by the Malaysia Medical Society for Quality of Health
(MSQH).
Seventh factor, natural attractiveness. There are many easily accessible tourist destination visits can
be made to Malaysia beautiful beaches, tropical rain forest and horizon lines. For most patients will
like to take in bit of sightseeing tour or going on shopping spree.
5.2 Limitations
In our research, there are some barriers or limitations that restrain us from collecting important
information and complete our research. First of all, the limitation is that we are not authorised to go and
collect information from those medical tourists as they are those people who travel from far to
Malaysia for medical treatment. These medical tourists can provide us some useful feedback in our
research however these hospitals do not allowed us to do so. Usually these hospitals main concern is to
enable those medical tourists to rest during and after the medical treatment.
The second barrier for our research is that not many hospitals are free and willing to spare time for our
interview. Although there are 35 hospitals in the APHM and we chose 10 samples out of the 35
hospitals, part of these hospitals are not very willing to have interview session with us. We hardly find
hospitals which will accept our interview. We tried all types of method to contact with those hospital
administrators. In the end, we are only able to interview some hospitals.
Other than that, some of the hospitals interviewed are not willing to reveal the profit they gained from
medical tourists. They treat this figure as private and confidential information. This might be one of the
major limitations as the profit is a portion of our research topic. Without the profit figure, we are not
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able to analyse the profitability of medical tourism. Thus, we persuade the hospital administrators to
provide the figures in order for us to create graphs for analysis purpose. Besides that, we promise the
hospital administrators that we will not reveal the exact figure. Instead we present it in a graph form
which allows us to present the trend without listing out the profit. Other than that, hospital such as HSC
does not even provide us the figure for analysing.
5.3 Recommendations
First of all, the Malaysian government through Tourism Malaysia should put more effort and give more
support to the Malaysia Medical Tourism. We may able to build up a medical tourism ourselves but
collaboration with other parties will ease the process and bring more benefits. For example, Singapore
government has put effort on it and work together with international medical and travel industry. There
is an International Medical Travel Association formed in Singapore. They invite many international
healthcare service providers, insurer, travel agent, professional association and related parties to
become their members.
This association not only promotes medical tourism internationally, but it
really able to define and resolve the issues facing the global healthcare. Besides, it helps to form a
unified voices in medical travel and global healthcare.
Secondly, Malaysian hospitals should put more effort on the international accreditation. It refers to
Joint Commission International (JCI), which is a recognised world leader in health care quality and
patient safety. Medical Society of Quality Health (MSQH) is not enough because it
is only an
accreditation for Malaysia hospital, international accreditation is required. And MS ISO 9002 is only
for the standard of management quality, but not accreditation for medical service quality.
Joint
Commission International (JCI) has been working with healthcare organisations, global organisations
and ministries of health in over 80 countries since 1994. With accreditation of JCI, Malaysia hospitals
are able to attract more international patients who seek internationally recognised high healthcare
quality. Following table shows the number hospital accredited in several ASEAN countries:
Table 5.3.1: Number of Hospital Accredited in JCI
Country Number of hospital accredited in JCI
India 11
Malaysia 2
Singapore 15
Thailand 5
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The table shows Malaysia is the country that has least hospital accredited in Joint Commission
International. But there are 15 hospitals in Singapore and 11 hospitals in India accredited in Joint
Commission International (JCI).
This is an important factor as patients see wheter the hospital is
accredited to make their choice to come for treatment.
Thirdly, Malaysia should specialise in a particular medical field. For example, in the early of 1970s,
Thailand specialise in sex change operation, then turn into cosmetic surgery. Malaysia can also
specialise in a particular field in order to build up reputation and generate more revenue.
Fourth recommendation, Malaysia should utilise its natural attractiveness. Especially Melaka and
George Town was listed in World Heritage in 2008. And there are many hospital and healthcare
provider located in these two cities.
Fifth is to make Malaysia a one-stop service centre for medical tourism. It recommends each hospital
establish specific department to handle the matter of international patients, for example admission, visa,
travel agent, interpreter, accommodation, catering, sightseeing tour whatever will ease international
patients seek medical treatment in Malaysia.
Medical tourism is a profitable industry and its inflow could stimulate the countries economy. The
domino effect of medical tourism would enhance growth in medical services, hospitality, tourism of
Malaysia’s scenic destinations and not forgetting shopping. The impact would be certainly long term
profitability and growth in the industry.
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