GOING GLOBAL IN MEDICAL TOURISM. Assoc. Prof Dr Ghazali Musa (MBBS, PhD) Marketing Department Faculty of Business and Accountancy University Malaya

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1 GOING GLOBAL IN MEDICAL TOURISM Assoc. Prof Dr Ghazali Musa (MBBS, PhD) Marketing Department Faculty of Business and Accountancy University Malaya

2 CONTENT Introduction Definition of medical tourism Travel motivations of medical tourism Medical tourism in Malaysia Competitor Analysis: Singapore, Thailand and India Empirical study of medical tourism in Kuala Lumpur: motivation, satisfaction and consumption behaviour Issues and challenges How to go global?

3 INTRODUCTION Tourism is one of the 12 initiatives proposed under the National Key Economic Areas (NKEA) that could help the nation to achieve the status of a developed economy by Within tourism, the health sub-sector is singled out as the most promising and lucrative area for the development of the industry in the country. While tourist arrivals increased by 300% from 5.5 million in 1998 to 22.1 million in 2008, over the same period, medical tourist arrivals increased by 856% from 39,114 to 374,063 The Association of Private Hospitals of Malaysia (APHM) predicted revenue from medical tourism to grow at least 30% annually 2010: MYR 540 million to the nation s economy (Leonard, 2009).

4 INTRODUCTION Worldwide medical tourism market was about US$ 60 billion in 2006 and projected to climb to US$100 billion by 2012 (Evans, 2008) Key medical tourism destinations: Brunei, Cuba, Colombia, Costa Rica, Hong Kong, Hungary, India, Israel, Jordan, Lithuania, Malaysia, Mexico, Philippines, Singapore, Thailand, and United Arab Emirates The expansion of medical tourism is largely contributed to by the globalization of healthcare services, where boundaries among nations have been minimized, enabling patients to move across borders for medical treatment. Malaysia s competitors: the uniquely superior quality Singapore; the amazing Thailand and the emerging incredible India. Malaysia needs to offer unique competitive advantages in the current globalization in healthcare services; and identify its unique selling point.

5 DEFINITION Health: a balance state of body, mind and wellbeing Tourism: a travel to a destination and all the activities involved to host the tourist. Health Tourism: a travel to a destination and all the activities involved to host the tourist, who travels with the main purpose to attain a balance state of body, mind and wellbeing. Health Tourism includes spa, wellness and medical tourism Medical tourism: is a subset of health tourism, which aims at restoring health through medical intervention with the application of biomedical procedures to the patients.

6 DEFINITION Medical tourism is defined as all the activities related to travel and hosting a tourist who stays at least one night at the destination region, for the purpose of maintaining, improving or restoring health through medical intervention.

7 TRAVEL MOTIVATIONS

8 Key Motivators Sub-Motivators Cost (1) Lower cost in overseas (2) Higher cost in home country (3) Favorable exchange rates (4) Relatively affordable international air travel Time (1) Long waiting list in home country (2) Short waiting list Regulation (1) Treatments not approved by government (e.g. : In US : stem-cells therapy, cancer treatment) Medical Preferences and Availability (2) Easy accessibility to another country (3) Insurance-related Not covered by insurance in home country (e.g. : dental, vision, cosmetic surgery, fertility) or underinsured or no universal medical insurance available (e.g. : US) (1) Expats and migrants return home for medical treatment (2) Non-availability of certain procedures (e.g. : organ transplant) in home country Quality (1) Equal or better quality in another country (2) Medical expertise (3) Hospital hardware Tourism (1) New and exotic location in conjunction with holidays Information (1) Easy access to information regarding to medical

9 MALAYSIA Medical tourism after 1998, following the Asian Financial Crisis, as an economic diversification. Malaysia will receive about 689,000 medical tourists by 2012 (IMTJ, 2011b). The Ministry of Health reported that Malaysia has achieved US$ million from the medical tourism sector in The revenue is expected to further grow to about US$ million in 2011 (IMTJ, 2011a). Main markets: Indonesia (72.0% ), Singapore (10.0%), Japan (5.0%) and West Asia (2.0%) (UNESCAP, 2007). The majority of medical tourists travel to Penang (61%), while Malacca and Kuala Lumpur only receive 19 percent and 11% of health tourists respectively (Ormond, 2011). Penang is known as attracting primarily lower-middle income patients from the nearby Indonesian island of Sumatra (Ormond, 2011).

10 MALAYSIA: GOVERNMENT INITIATIVES Malaysia Healthcare Travel Council: package and standardize the prices for healthcare services and to market them internationally. Government efforts: extended the visa period for health patients; tax incentives to refurbish wards and rooms in private hospitals (Foong, 2009). The government is offering 100% tax exemption to private hospitals that are willing to construct new hospitals or expand, modernize, and refurbish their existing ones (IMTJ, 2011c). The health tourism web site ( produced by the Ministry of Health Malaysia (2010) provides comprehensive information about products, prices and places of healthcare services. The Malaysian government: attracting local and foreign investments.

11 MALAYSIA: PULL FACTORS Based on the quality and affordability (value for money) of healthcare and receptiveness to foreign investment, Malaysia ranked third in the world behind Panama and Brazil, and the first in Asia (Yanos, 2008). Tourism Malaysia (2007): Focus on high quality and low price offerings and short waiting list, well-trained and highly qualified medical personnel, world-class hospitals equipped with state-of-the-art medical equipment, and excellent English proficient staff The country has a harmonious, plural, multi-cultural and multi-racial society practicing a variety of religions (thus offer multi-ethnic and multi-lingual hospital staff from various religious denominations). Malaysia s strong Islamic credentials (Henderson, 2003), where hospitals are serving halal food and practicing Islamic protocols, is an attractive element in attracting the Middle Easterns (Connell, 2006).

12 MALAYSIA: TREATMENTS AND ALTERNATIVES Treatments: curative medical treatments, plastic surgery, cardiac procedures, fertility treatment, general screening and wellness, and orthopedics surgery. Malaysia also offers alternative medical treatments, such as traditional Chinese medicine that may include acupuncture and Indian ayurveda treatments (The Economic Times, 2011).

13 MALAYSIA: QUALITY Quality: most of the private medical centers have achieved certification for internationally recognized quality (e.g. ISO 9002) or the Malaysian Society for Quality of Health (MSQH) (APHM, 2008). Joint Commission International (JCI) is an important factor for medical tourism related agencies to recommend overseas healthcare centers to their customers Quality: 8 JCI accredited hospitals in the country (JCI, 2011), located mainly Kuala Lumpur (6) and one each in the island city of Penang and Kuching.

14 MALAYSIA-BRAIN DRAIN Brain drain: how to prevent and lure Malaysian doctors back to the country.

15 COMPETITORS ANALYSIS Thailand, Singapore and India

16 THAILAND: DEVELOPMENT Started in 1970s: Western countries demanded for cosmetic and other alternative treatments, such as, sex change (Connell, 2006), which were normally not approved by their government or were beyond the boundary of their national or private health insurance coverage (Cohen, 2008). Financial markets liberalizations in the 1990s strengthen the expansion of private hospitals. Financial Crisis: effort from both government and private sector to lure international patients to prop up the survival of private hospitals Markets: Japan, the United States, United Kingdom, and Middle East. Estimated revenue to reach US$4 billion by 2012

17 THAILAND: QUALITY AND INTERPRETERS 14 hospitals in Thailand that have obtained the Joint Commission International (JCI) accreditation Bangkok (10 out of 14 JCI accredited hospitals). Other medical tourism destinations: Chiang Mai, Koh Samui, and Phuket. Private and some public hospitals provide interpreters and well-trained and certified medical personnel from overseas. Phuket Hospital: interpreters in 15 languages, and Bumrungrad International Hospital in Bangkok is said to have seventy interpreters. The hospital has about 200 surgeons who have obtained certification from the United States.

18 THAILAND: PROMOTION. The Tourism Authority of Thailand (TAT) has launched Thailand Medical Tourism Blog Contest in October 2010 which attracted 219 participants from 24 countries, to create awareness, widen opportunities for worldwide medical tourists to access to online information on medical tourism in Thailand and enhance confidence among foreign medical tourists on Thailand s medical tourism s quality (IMTJ, 2010d). The Tourism Authority of Thailand (TAT) promotes medical tourism online through e-marketing campaign, such as the Healthy Beauty Holiday in Thailand campaign in December 2010 e.g.: dental treatments, cosmetic surgery, medical check-ups, etc.). Campaign You are in Good Hands which promotes the safety and credibility of Thailand in providing medical services, and stimulate higher arrival and longer stay among medical tourists (IMTJ, 2010d). Familiarization tour: the government invited some of the major global news agencies, including Fox News (US), Xinhua (China), VNA (Vietnam), Bernama (Malaysia), etc., to Chiang Mai (March 2011), Phuket (April 2011), Chanthaburi (May 2011), and border provinces in the South (June 2011) for a few days tour to familiarize the available medical and wellness treatments (OkMedicalTourism, 2011).

19 SINGAPORE The top medical tourism destinations in Asia, Singapore Tourism Board (2010) itself claimed Singapore as the Asia s leading medical hub in Singapore is targeting to attract 1 million patients by 2012, with expected revenue between US$1.6 to 1.8 billion. Top markets: Indonesians, Malaysians, Chinese, Middle Eastern, and Japanese. The majority of its European and American patients are residents who live in Asia (Connell, 2006). Quality: 18 hospitals and medical centers in Singapore that obtained JCI accreditation (JCI, 2011). Quality: Compete on top notch quality instead of price; key competitive advantages are excellence in quality, trustworthiness, safety, and international accreditation. Offer high quality and complex medical treatments: neurosurgical procedures and liver and heart transplants; (separation of the Nepalese twins, heart and liver transplant, the first percutaneous aortic valve replacement, and the world s first operation for a rare ectopic pregnancy with a single incision exclusively through the belly button). The drawback: the most expensive, but Connell (2006) reported that Singapore has considered of setting its rates on par or slightly below Thailand

20 SINGAPORE The unique aspect: the industry is developed not only for the economic benefit but also to support the sustainability of expensive medical services in the country. The small population of Singapore will not be able to sustain the maintenance cost of high quality medical facilities that are also commonly shared by the locals. The government is involved in signing agreements with some Middle Eastern nations in order to offer medical services. Organize world-class symposiums, conferences, and courses in the medical field, attract not only medical tourists, but potential investors and international scholars in the field.

21 SINGAPORE Ministry of Health, SingaporeMedicine provides information including guides to available treatment facilities, treatment costs, and tourism activities to the international patients. Collaboration with reputable western hospitals such as John Hopkins University Hospital, Pennsylvania University Medical Center, Massachusetts General Hospital, and Kaiser Permanente in order to update its latest medical trends Parkway, Singapore s premier medical provider and the largest private medical group in Southeast Asia, runs some of the well-known hospitals in the region, such as Mount Elizabeth, Gleneagles, and East Shore hospitals. As medical tourism flourished in Asia, the group also ventured into Brunei, China, India, Indonesia, Malaysia, Sri Lanka, and United Arab Emirates (Chanda, 2002; IMTJ, 2010b), establishing its own hospitals or forming joint ventures with partners. Raffles Medical Group, ventures overseas through global strategic alliances and integrated networks with medical organizations from developed countries

22 INDIA Private health expenditure is 67%, compared on 33% government. Started in the mid-1990: following the economic liberalization, spurred the expansion of private hospitals that are equipped with higher technological and quality medical facilities (Vijaya, 2010). Forecast that India s medical tourism worth may reach US$2 billion by 2012 India also highlights the low cost of its medical services. However, during the first medical tourism trade show in Toronto, Canada in November 2009, India highlighted very little about low cost message in its promotional materials. The top three promotional messages: credentials or accreditations, list of services, and specializations. India s key competitive advantage: highly trained and qualified medical personnel. Excellent ability to converse in English among the staff, and its agility in adopting western technology and medical protocols.

23 INDIA 17 JCI accredited hospitals (JCI, 2011). The majority in New Delhi and Mumbai. Contemporary global medical tourism center: unani, ayurveda, and homeopathic treatments. Numerous traditional healthcare centers are mushrooming in many parts of India such as the ayurvedic school in Kottakkal, Kerala (Chanda, 2002). World- renowned for medical studies: 229 recognized medical colleges in 2010, producing almost 34,000 medical graduates yearly Welcome foreign direct investments. E.g. a German-owned company to set up a 200-bed hospital in Delhi with a staggering high foreign equity ownership of 90%. Several incentives: easier obtainment of long-term capital for new establishment or expansion of medical facilities, higher allowable depreciation rate for old equipment to encourage earlier replacement by new and more advanced equipment, and reduction of importation tax on life saving equipment (UNESCAP, 2007).

24 INDIA Apollo group plans to set up another 32 new hospitals in India by 2012, on top of their current 30 hospital fleets and venture overseas in establishing its chain of hospitals in Nigeria, Shanghai, and Vienna (Agarwal and Bhagrath, 2010). India attended the first medical tourism trade show in Toronto, Canada in November 2009, named the Medical Tourism Destination Brochures, flyers, and booklets were widely disseminated during the trade show, providing substantial and relevant information on medical tourism in India to the potential tourists and investors. The Indian government also extended the market development assistance (MDA) scheme for JCI and National Accreditation Board (NABH) certified medical facilities, where financial assistance is provided for printing promotional materials, attending trade exhibitions or study tours in relations to medical tourism (Ministry of Tourism India, 2011 Brain drain also an issue

25 EMPIRICAL STUDY IN KL Objectives of the study To identify the demographic profile of inbound health tourists in Kuala Lumpur. To explore travel motivation (pull factors) among inbound health tourists in Kuala Lumpur. To determine healthcare consumption and spending behaviour among inbound health tourists in Kuala Lumpur. The determine the satisfaction of medical tourists To examine the influences of demographic profile on travel motivation, satisfaction and spending behaviour among inbound health tourists in Kuala Lumpur.

26 METHODOLOGY The selection of the hospitals was by purposeful sampling. The hospitals involved were KPJ Ampang Puteri Specialist Hospital, Sime Darby Medical Centre Subang Jaya, Sunway Medical Centre, Pantai Medical Centre (Bangsar) and Pantai Hospital Klang. Data collection was from March 2008 to November questionnaires distributed but only 138 questionnaires were completed and returned giving the response rate of 34.5%. The numbers of questionnaire returned from private hospitals were 43 (Sunway Medical Centre), 21 (Pantai Hospital Klang), 25 (Pantai Medical Centre (Bangsar), 22 (Sime Darby Medical Centre Subang Jaya) and 27 (KPJ Ampang Puteri Specialist Hospital).

27 RESULTS: TOURISTS PROFILES Females (56.5%), males (42.8%). (41.3%) (21-40 years old) and 38.4 % (41-60 years). Degree (29.0%), high school (26.1%) and college (20.3%) qualifications. Health tourists from South East Asia (52.2%), European (18.1%), 10.1% (Australia and New Zealand). The top five health tourists by nationalities among respondents were Indonesia (47.8%), Australia (5.1%), New Zealand (5.1%), the Philippines (4.3%), India (4.3%) and Sudan (2.9%). Value for money (Mean=9.55), excellent medical services (Mean=9.50), supporting services (Mean=8.85), cultural similarity (Mean=7.82) and religion (Mean=6.20).

28 RESULTS: TOURISTS PROFILES The main sources of information: friends and relatives (60.2%), the Internet (14.5%) and travel agents (12.3%). Respondents largely travelled to Malaysia in the company of their family and relatives (47.1%), spouses (15.2%) and friends (13.0%). The actual number of travel companions varied from none to thirteen people in a group with an average of two others. The main healthcare services: medical treatment (41.3%), cosmetic procedures (20.3%) and medical check-ups (14.5%), and surgical procedures (7.2%). Examples of the medical treatments: hypertension, kidney illness, diabetes, rheumatology and heart diseases. Other activities: touring (21.0%), shopping (17.4%) and visits to friends and relatives (VFR) (8.0 %).

29 RESULTS: SPENDING BEHAVIOUR Spending Components Healthcare services International airfares Accommodation Min (MYR) Max (MYR) Sum (MYR) Mean (MYR) , 000 1, 127,840 12, , , 618 3, , , 050 3, Organized tours , , 200 2, Shopping Miscellaneous Food and beverages 60 35, , 420 2, , , 300 2, , , 885 1, Entertainment 50 10, , 870 1, Domestic transportation 15 10, , Total Expenditure , 500 2, 818, ,

30 RESULTS The predominance of female respondents: 20.3% of the respondents in this survey had cosmetic procedures and of these 89.3% were females. 79.7% were between 21 to 60 years old. Respondents aged 20 years and below and above 60 years were represented only by 9.4% each. Thus there is potential for further development of healthcare services for these market segments. Senior tourists needs: active, healthy and social destination (Pollock & William, 2000). Younger tourists as they are even more likely than other medical tourists to travel with companions (parents).

31 RESULTS Value for money was the most important. The next important pull factors were excellent medical services and supporting services Motivation factors of cultural similarity and religion were of less importance. ASEAN tourists, cultural similarity appeared to be an important motivation element in choosing Kuala Lumpur as a tourist destination. Respondents of European descent were more likely to undergo cosmetic procedures in Malaysia. Further exploration in the latest cosmetic procedure products and services which are not yet available in some countries (e.g. stem cell therapy) could create greater pull factors for Malaysia. These medical procedures are normally not supported by health insurance Average total spending of health tourists was MYR 26,844 compared with MYR 2, (12 times more)by leisure tourists in 2008 (Tourism Malaysia, 2008). The average spending on healthcare services among health tourists in this study was MYR 12, 259. This was 18 and 3.5 times higher than what had been respectively recorded by the APHM (MYR 86) and Oon (2006) (MYR 3, 521).

32 RESULTS Health tourists travel on average with two other people medical tourism related tourists could have been as high as one million in Malaysia. The average length of stay among respondents was 15 days while the average spending as stated earlier was MYR 26, Might have contributed MYR 9 billion to the Malaysian economy in Combination of purposeful and convenience sampling higher spending tourists in Kuala Lumpur. Kuala Lumpur may also have attracted the middle-upper income health tourists as compared with lower-middle income health tourists in Penang (Ormond, 2011). All these impressive figures however clearly demonstrate that health tourism is indeed a high yield industry. Tourists of European descent spent a considerably higher amount while in Malaysia compared with shorter distance travellers from other Asian countries. Female respondents spent three times more than males in total expenditure. Females spent more in the expenditure components of healthcare services, international airfares, accommodation and domestic transportation.

33 RESULTS 60.2% of respondents gained information about healthcare in Malaysia from their friends and family members who either have visited or are living in the country. Word-of- mouth (especially from friends and family) is an effective risk-reducing strategy. Focus should then be given to providing healthcare services which exceed the expectation of health tourists, as this will generate positive word-of-mouth. Comparatively, only 14.5% of respondents relied on the Internet as information source.

34 CHALLENGES AND OPPORTUNITIES Biosecurity and nosocomial risks to both the patient s home country and the medical tourism destination. Higher rates of cross infections, spread of pandemics, transplant failures. The nature of obtaining organs for transplant procedures. Illegal organ trades have been reported in India where transplant treatment for foreign patients is widely demanded, especially kidney.

35 CHALLENGES AND OPPORTUNITIES The lack of governmental safeguards ensuring the quality of healthcare, the safety and effectiveness of certain procedures and the quality of physicians and other healthcare professionals Upon returning from health treatment overseas, health tourists often have difficulty in obtaining follow up from local physicians for their post treatments, as the physicians do not want to be held liable for any complication(s). There is also concern on legal issues with regards to the negligence of medical service providers in developing nations

36 CHALLENGES AND OPPORTUNITIES In America, Burkett (2007) proposed three solutions in order to make sure its citizens enjoy quality healthcare in other countries. These are regulation on insurance to cover health tourism, emphasis on international hospital accreditation and restriction to the approved health tourism destinations. The insurance companies have now offered new healthcare plans with the changing trend of healthcare. The healthcare financer may opt to offer premium coverage of treatments in other countries by foreign providers. Brain drain problem (e.g. Malaysia and India)

37 GOING GLOBAL: SAFETY Safety and security: Following the event of September 11, tourists, especially from European countries are wearier with the prospect of visiting Muslim countries, including Malaysia. European tourists compared with those nearby Indonesia stay longer and spend more (up to three times). Thus the role of government is to work on strengthening the country s stability, both in terms of politics as well as socio-economics, which often are interlinks. Malaysia should continuously maintain its status as a moderate Muslim country. Any movement of extremism, such as tourist attacks (e.g. Indonesia and Southern Thailand) must not be tolerated. Attract not only non-muslim tourists but also the majority of Muslims.

38 ACCESSIBILITY Visa (ease of visa and length) Transportation link: external (inbound) and internal (domestic) Any effort to ease tourists movement (e.g. inhouse travel agencies) Information accessibility: websites (content, features, functionality etc.)

39 GOING GLOBAL: STRENGTHEN THE CORE PRODUCTS AND SUPPLEMENTARY PRODUCTS Satisfaction survey: evidenced that Malaysian core products and services (e.g. doctors, nurses, medical equipment an facilities) are highly rated. Could be improved are supplementary service elements: depth of advice, friendliness and level of empathy. Others: domestic transportation, parking, signage etc.

40 GOING GLOBAL: QUALITY=JCI Branding strategy through accreditation. The most internationally accepted accreditation is the Joint Commission International (JCI). A not-for-profit American organization that provides standards and qualifications for medical facilities ( The determining factor used by the medical tourism related agencies to recommend to potential medical tourists to purchase medical services overseas. Malaysia (8), Singapore (18), India (17) and Thailand (14)

41 GOING GLOBAL: ISLAMIC MEDICAL TOURISM Being a moderate Islamic appeals both to Muslim and non-muslim. With greater awareness of halal tourism, Malaysia could well positioned itself as medical providers for Muslim patients, by introducing the concept of halal medical tourism which stressing on the use of halal medical products and services.

42 GOING GLOBAL: THAI PERSPECTIVES Thailand: famous for its friendly culture and as well as being an exotic Eastern holiday destination among westerners. This augurs well for medical tourism (especially cosmetic surgery) which requires a period of recuperation which could be carried out in luxury resorts in Thailand. Thailand: the culture is more relaxed and more permissive which has been the main cultural attraction. Thus many of European and American prefer to visit Thailand compared to Malaysia. As for front liners, more training is required, and perhaps training of front lining could be benchmarked by the attitude of service providers in Thailand.

43 GOING GLOBAL: INDIA PERSPECTIVES India: the cheapest destination which offers excellent medical facilities and services, together with the increasing popularity of contemporary medical treatment. The popularity of also complementary medicine which gains increasing acceptance among public worldwide. India is famous for medical therapies such unanis, Ayurveda etc. Cultural link with India: Malaysia could promote itself under tagline of Malaysia Truly Asia which proudly acknowledged the large majority of three races live in harmony in the country: Indian, Malay and Chinese. India also produces medical doctors from its many internationally accredited medical schools.

44 GOING GLOBAL: SINGAPORE PERSPECTIVES Quality, Quality, Quality Singapore is the premier medical tourist destination of all and also with the reputation of performing groundbreaking medical treatment and procedures Like Parkway, Singapore, Malaysia could extend medical tourism services to other countries in the region: Brunei, China, India, Indonesia, Malaysia, Sri Lanka, and United Arab Emirates (Chanda, 2002; IMTJ, 2010b), establishing its own hospitals or forming joint ventures with partners. Like Raffles Medical Group, Singapore, Malaysia should make efforts to venture overseas through global strategic alliances and integrated networks with medical organizations from developed countries.

45 GOING GLOBAL: MALAYSIA Increase products and services offered. The product must be high yield, ground breaking medical treatment and procedures. Among high yield medical treatment that is discovered by this study is cosmetic surgery. Further exploration needs to be carried out in developing new treatments which are not yet available in certain countries such as stem cell therapy. Perhaps effort should be carried to develop the expertise which requires patient to stay longer for chronic illnesses such as medical and orthopedic rehabilitation and cancer treatment and disability rehabilitation. Longer stay translates to bigger spending among health tourists. Perhaps more products and services could be designed to cater for pediatric patients as well as elderly patients. Pediatric patients are more likely to come with their parents. While elderly people are often having chronic illnesses, have more time and money to spend for their medical treatment. Malaysia should avoid getting involved in controversial practices, which may tarnish the image of the country, such as the provision of assisted suicide and illegal organ trades. The cultural sensitivity such as sex change operation may also have to be considered

46 GOING GLOBAL: TACKLING BRAIN DRAIN Establishing the country as an attractive place to live can reduce the international brain drain, particularly among the professional medical personnel (Ramirez de Arellano, 2007). The provision of advanced and high technology work environments may be viewed as an attractive element to local talents to remain working in the country. Medical schools: produce doctors offer attractive scholarship and jobs. Competitive salary

47 THANK YOU