Medical Tourism Risks and Mitigation
Medical Tourism Risks and Mitigation Policies for Thailand’s Tourism Sector
December 3, 2015
Blaine Yonemitsu – Primary Article Contributor
Jake MacDonnell – Team Leader Thailand
Key words: Thailand, Tourism, Medical Tourism, Risks, Health-Care, Competitive Advantage
Thailand is emerging as a predominant and influential state in the medical tourism sector. Due to the rising costs and inefficiencies of health-care services in developed countries, many patients are opting to travel abroad to find more competitively-priced services. An increase in government spending has made Thailand a prime location to receive treatments such as cosmetic surgery, cardiology surgery, and organ transplants for a fraction of the price. The global industry itself has experienced tremendous growth, grossing $55 billion USD per annum as of October 2015. This figure is expected to grow another 10-15% annually. In 2015, Thailand is expected to gross an excess of $3 billion USD. The most prevalent risks to medical tourism pertain to the longevity of this sector in regards to investment activity.
With medical tourism accounting for 0.4% of Thailand’s GDP, the government has elected to commit a greater number of medical staff to hospitals catering to foreigners. This added emphasis makes Thailand a more appealing candidate as it demonstrates the government’s commitment to growing the sector, especially in light of the highly competitive nature of this industry. Thailand faces the difficulty of offering diverse packages in an attempt to differentiate itself from regional competitors like Malaysia and Singapore. Of the two, Singapore provides a higher risk as Thailand could slow in development, allowing for Singapore to surge forward. The longevity of Thailand’s presence revolves around another prevalent risk concerning the safety, cleanliness and overall reputation of hospitals.
Singapore provides the greatest threat to Thailand’s share of medical tourists. While it specializes in cardiac and neuro surgery, Singapore has generated a strong reputation within the region. Furthermore, Singapore also enjoys a very stable government, enabling it to actively participate in the creation of free trade agreements which increase the ability to gain more clientele. Thailand still maintains regional control with a reported 2.81 million patients in 2015, whereas Singapore has received about 600,000 patients so far in 2015. Nonetheless, Singapore is poised to take a more dominant role in southern Asia, presenting an even larger competitor to Thailand in multiple ways.
With the rise of cosmetic surgery, Thailand has begun to establish its name in this field. In order to remain competitive in the medical tourism industry, investment to ensure stability with the medical staff as well as an increase in the physical number of workers is a necessity. Furthermore, to avoid stagnation, workers from foreign countries should be encouraged to practice medicine within Thailand without having to take a Thai language examination. Having a deep and diverse pool of doctors grants an institution greater legitimacy, reducing risk by improving reputation. Acquiring more specialists will allow Thailand to maintain its lead over the emerging Singapore. This will enable horizontal expansion into a more diverse field of medicine, priming Thailand for growth. Loyal customers and word-of-mouth dissemination is a key factor towards the success of Thailand in this sector. Regarding investment, the most stable hospital in Thailand is the Bangkok Nursing Home Hospital (BNH) due to its entrenched quality service, diverse field, and good reputation.
Another ubiquitous risk regards the customer. Safety and liability are the main concerns when traveling to receive medical treatment. However, a benefit from the perspective of the hospital is the assumption of risk by foreign customers that travel to Thailand. If an operation is not successful, it can damage the reputation of the hospital - but this reputational damage is the largest risk. To mitigate this, investors could require insurance from a third party before proceeding with operations. For instance, Seven Corners will provide coverage for risks ranging from medical evacuation to trip cancellation.
The industry has the potential to become a highly profitable sector for investment. The overall risks associated domestically can be easily mitigated, with regional competitors, such as Singapore, presenting the largest concern to the longevity of Thailand’s dominance in this industry.
