International trade in health services
Yodi Mahendradhata
International trades in services
Cross-border trade
Consumption abroad
Commercial presence
Natural presence
International trades in services
Cross-border trade
Consumption abroad
Commercial presence
Natural presence
Consumption abroad (Medical Tourism)
Indonesia is the biggest outbound global medical tourism country source
Number of Indonesian patients seeking treatment overseas
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2006 2012
Annual spending on overseas medical treatment (in thousand dollar)
0
2000
4000
6000
8000
10000
12000
14000
16000
2006 2012
“Overview of the development of Malaysia Healthcare towards Medical Tourism”, Dr Mary Wong Lai Lin, CEO of Malaysia Healthcare Tourism Council, 2012
Indonesia is a source of patients for its next-door neighbours
• Singapore– Indonesian market accounted for 56 per cent of total medical tourism
revenues in 2013– Revenue from Indonesian medical tourists in 2013 was S$463 million
(US$347.35 million), down 38 per cent from 2012
• Malaysia– 2011 data: >330,000 Indonesians sought treatment in Malaysia spending
over $150 million in direct medical costs. – 2013 data: > 400,000 Indonesians sought treatment in Malaysia -> may be
worth close to $1 billion in 2013 for Malaysia and this figure is growing around 30% a year
Source: http://www.edelman.id/medical-tourism-in-southeast-asia-indonesias-opportunity-cost/; http://www.asianewsnet.net/Singapore-losing-medical-tourists-to-neighbours-74854.html
Why do patients go abroad?
“Many people suggested that we come to Kuching because they said that the medical treatment here
was good. The guy over there had the experience of falling ill and being cured here. We weren’t sure about
coming to Kuching, but after we heard about it through word-of-mouth, we decided to come.”
(Wife of an Indonesian medical traveller in Malaysia,
a civil servant in his 50s)*
*Source: Ormond (2014)
“I think that 90 percent of patients here come fromIndonesia – especially from Pontianak. We understand why.
Doctors here are more open, honest, and explain to us whether illnesses can be cured or not. They will keep us
informed – giving us the percentage of likelihood for a cure, giving us all the information we need. They are clearer and
more open – friendlier, more familiar.”
(Indonesian medical traveller in Malaysia,
a small business owner in her 40s)*
*Source: Ormond (2014)
“People are forced to come here [to Malaysia]. It’s about our lives. We already spent money on local
health treatment [in Indonesia] without being cured. The situation makes it difficult for Indonesia to
develop its health services..”
(Indonesian medical traveller in Malaysia,
a small business owner in his 60s)*
*Source: Ormond (2014)
Familiarity Affordability
Perceived quality
Availability
Drivers for foreign medical care(Glinos et al 2006)
International patients visits*
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
2001 2002 2003 2004 2005 2006 2007 2008
Thailand
Singapore
Malaysia
*Kanchanachitra et al 2012
Annual Medical Tourism Revenue 2006-2008*
0
200
400
600
800
1000
1200
1400
1600
Malaysia Philippines Singapore Thailand
Mill
ion
USD
*Kanchanachitra et al 2012
Revenue per international patient*
0
500
1000
1500
2000
2500
Malaysia Thailand Singapore
Mill
ion
USD
*Kanchanachitra et al 2012
Popular Medical Tourism Services*Services Malaysia Philippines Singapore Thailand
Cosmetic surgery
Health screening
Orthopedics
Cardiology
Coronary artery bypass
Neurosurgery
Oncology
Hip replacement
Stem cell
Internal Medicine
Endocrinology
Health rejuvenation
*Kanchanachitra et al 2012
Areas of origin of the medical tourists attending five hospitals, Thailand, 2010*
Origins Number of med tourist (%)
Eastern Mediterranean 40,554 (38.7)
Southeast Asia 14,730 (14.1)
Europe 14,004 (13.4)
South Asia 12,703 (12.1)
North America 9,481 (9.0)
East Asia 4,166 (4.0)
Africa 3,957 (3.8)
Australasia 3,949 (3.8)
Unknown 1,252 (1.2)
Other area 34 (0.0)
TOTAL 104,830 (100.0)
*Ref: Noree et al (2016)
Medical Travel costs from major US cities (US$)
Chicago Los Angeles Miami
Bogota, Colombia 316 590 299
San Jose, Costa Rica 423 559 333
New Delhi, India 1264 1390 1313
Amman, Jordan 1307 4503 1626
Seoul, Korea 1170 1301 1758
Monterrey, Mexico 737 642 521
Tel Aviv, Israel 1602 4229 5481
Bangkok, Thailand 3617 1369 3509
Kuala Lumpur, Malaysia 2603 1279 3804
Managua, Nicaragua 376 578 346
Average cost of medical procedures (US$)*
Procedure US UK Malaysia Singapore Thai
Heart-by-pass graft surgery
113,000 13,921 9,000 20,000 13,000
Heart valve replacement 150,000 - 9,000 13,000 11,000
Hip replacement 47,000 12,000 10,000 11,000 12,000
Knee replacement 48,000 10,162 8,000 13,000 10,000
*Kanchanachitra et al 2012
Single private hospital room per night
0
200
400
600
800
1000
1200
1400
Malaysia Thailand Singapore US
USD
Touristic healthcare services in demand
Lifestyle Invasive Diagnostic
Life enhancing Dental work General check up
Stress reducing Plastic surgery Bone density testing
Skin improving Eye surgery Heart stress test
Sleep psychology Cancer treatment Lipid analysis
Physical therapy Joint replacements
Holistic healing
Average cost of braces in the US (2012)
US$ 5,200
Dental tourism...
Favored destinations
Hungary
Mexico
Poland
Thailand
Turkey
Spain
Others
Procedures in demand
Implants
Veneers
Crowns
Teethwhitening
Bridges
Braces
Others
‘Innovative’ medical tourism
Toothache tourism
Women on wave/sperm
ship
Dialysis at sea
Fasting tourism
Pregnancy tourism
Detoxtourism
Health research
Suicide tourism
Medical tourism by patient profile
Rich patients Poor patients
From developedcountries
Elective invasive, Diagnostic, Lifestyle
Low-tech invasive, Diagnostic, Border medical care
From developing countries
Elective invasive, Diagnostic Lifestyle
Border medical care
Incidental medical tourists?
• Short term stayers
– Ordinary tourists
– Business traveler
• Long term stayers
– Foreign students
– Foreign workers
– Retirees
8% of traveler to developing country requires medical care (e.g. diarrhea, malaria)
Strategies and comparative advantages: Thailand
• National strategy as Asian Regional Med Hub, e.g. Center for trans-sexual surgery
• Large number of JCI accredited hospitals
• Highly skilled med professionals
• Strong private participation
• Competitive costs
Strategies and comparative advantages: Singapore
• Well-established medical tourism destination
• High technology equipment
• Highly skilled med professionals
• Large number of JCI accredited hospitals
• Strong goverment support
Strategies and comparative advantages: Malaysia
• Strong goverment support
• Competitive costs
• Strategic alliances with foreign partners
• Easy entry for foreign patients
• Destination for Muslim Patients
Targets in medical tourism
Country Target
Singapore • One million patients by 2012• S$ 3 billion revenue (0.95% of its
GDP)• S$ 400 million from related industries• 13,000 new jobs
Thailand • US$ 3,2 billion for 2014
Malaysia’s Economic Transformation Program (ETP)
• Earmarked health care as one of the country’s 12 National Key Economic Areas (NKEAs) deemed to have the potential to spur growth
• Medical tourism is intended to generate MYR 9.6 billion in revenue and MYR 4.3 billion in gross national income and to require 5,300 more medical professionals by 2020
• For-profit hospitals are expected to invest MYR 335 million in hospital infrastructure in order to be prepared for 1.9 million foreign patients annually by 2020.
Common policies and strategies (Johnston et al 2015)
• Creation of visas specifically for medical tourists
• Reduction or elimination of taxation on imported medical equipment and supplies
• Incentives and/or requirements for international hospital Accreditation
• International marketing efforts that advertise the high quality of medical care available
8 success factors for medical tourism
Competitive price
Tourist appeal
Market economicsDeveloped political
and legal institutions
Local R &DHuman capital
Confluence of western and traditional medicine
Developed physical infrastructure
Barriers to medical tourism
Standards. Accreditation and
credentialingInsurance
Legal recourse and protection of
patients
Entry requirements and
transportation
International regulation
International trades in services
Cross-border trade
Consumption abroad
Commercial presence
Natural presence