Singapore medical tourism business grows despite competition

Singapore’s medical tourism business is growing slower than nearby countries such as Korea, Taiwan and Malaysia, as competition is intensifying.

Singapore’s medical tourism business is growing slower than nearby countries such as Korea, Taiwan and Malaysia, as competition is intensifying.

According to research and consulting firm Frost & Sullivan, Singapore attracted 665,380 foreign patients in 2009 – a 3% increase on 2008 with 646,000, and 571,000 in 2007. Pawel Suwinski of Frost & Sullivan estimates that Singapore will get 725,264 foreign patients in 2010. In 2011 and 2012, he forecasts annual growth of 9 %. This is low compared to the 15 to 30 % growth that Malaysia, Thailand and South Korea are enjoying, but the higher priced Singapore gets more revenue per head. Dr Suwinski says, ‘We have to remember that there are different business models in operation, with Singapore focusing more on quality rather than volume as in Thailand and India. This is best seen when comparing the revenue per patient figures, with Singapore the undisputed leader.”

Foreign patients in Singapore generated US$1.4 billion in revenue in 2009 – US$2111 a head. This is higher than in Malaysia, South Korea, India or Thailand, where revenue per patient ranged from US$227 to US$2,016. But India is closing the gap, with projected revenue per patient of about US$2100 in 2010. 2010 will also be the year that India overtakes Singapore in volume terms, as it will have an estimated 731,400 foreign patients in 2010. Thailand has consistently been at the top, despite its political woes. The company estimates Thailand received more than 1.2 million foreign patients in 2009 and will get 1.5 million in 2010.

According to the company, the high revenue per foreign patient in India is largely a result of outsourcing. An arrangement between India’s Apollo Hospitals and US insurance firm Blue Shield allows Apollo – India’s largest hospital group – to treat Blue Shield’s corporate clients, who usually are high value. Dr Suwinski adds: ‘Hospitals in India are medically equipped to handle European and American patients during their stay after medical procedures. The cost and time of travel also become an incentive, with the US and EU relatively closer to India than South-east Asia.. He argues that if medical outsourcing is taken out of the equations Singapore is the regional leader in medical tourism, but should look at potential partnerships with Western healthcare benefits providers.

There are problems with the figures Dr Suwinksi uses. The latest available medical tourism statistics from the Singapore Tourism Board show that visitors who went to Singapore for medical treatment or related reasons grew 13 percent to 646,000 in 2008 compared to 2007. But 370,000 visitors actually went to Singapore for medical treatment. The other 230,000 are family members of the patients who accompanied them and had no treatment. According to The Tourism Authority of Thailand (TAT), Thailand currently gets 920,000 travelers visiting the kingdom annually as medical tourists. The often-quoted larger figure of 1.4 million is medical tourists and other non-nationals, including business and holiday travellers and expatriates.Indian tourism authorities recently estimated the figure for India to only be 500,000.This throws a different light on his comparisons to the other countries. And Dr Suwinski defines a foreign patient as a person who undergoes any medical procedure outside their home country. He includes people on business trips using medical services, (who are not medical travellers) but excludes expatriates. These different definitions of what a medical tourist is, makes it hard to directly compare figures for different Asian countries.

Singapore too should be wary of relying on US outsourced insurance business, as the actual numbers going to India are tiny and have no real impact on numbers. Information just emerging from the US shows the insurer he mentions as moving to domestic US medical tourism to cut costs and reduce travel times for customers (more on this story next week)

Dr.Suwinski warns that intra-regional movements are volatile and difficult to predict, as many countries – for example, Indonesia – will definitely try to reverse the tendency of their patients going abroad by providing better-quality care quality at home, “We can already see this trend, with modern healthcare facilities being established in Jakarta that boast the best equipment and personnel in the region. It is a warning to Singapore and Malaysia, as they are the biggest recipients of Indonesian patients annually. Between the two, Malaysia is in the more difficult position because it is focuses purely volume, which is highly price-sensitive, and any local competition can substantially decrease the traffic visiting another country.”