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As many as 14 to 16 million people across the globe travel for medical reasons, be it for higher quality healthcare or affordability outside their countries of residence.1
Orbis Research valued global medical tourism at US$19.7bil (RM76.7bil) with an estimated compound annual growth rate (CAGR) of 18.8%,2 while Allied Market Research valued the market at a staggering US$61.2bil (RM238.3bil) with a CAGR of 15.0% from 2017 to 2023.3 It is however a volatile market, marked by disparate projections and trends due to the speculative nature of the industry.
In Penang, however, medical tourism is a booming sector – as it has been for the past two decades.
In the wake of the 1997 Asian financial crisis two private hospitals opened their doors in Penang: Island Hospital and Pantai Hospital Penang. Along with the other existing private hospitals, the two new hospitals increased the supply of hospital beds by 40% within two years, far exceeding the population growth rate in Penang at that time. This marked a major turning point in Penang’s medical tourism sector.
In 1998 the federal government recognised medical tourism as a growth sector for economic diversification, both in healthcare and in tourism. It later established the National Committee for the Promotion of Medical and Health Tourism,4 which was renamed Malaysia Healthcare Travel Council (MHTC) in 2009.
Meanwhile, in Penang, private hospitals began to make collective efforts to promote the island as a healthcare destination for the South-East Asia region, competing with medical tourism giants such as Bangkok and Singapore.
According to MHTC, medical tourism in Malaysia raked in RM1bil in revenue through approximately 860,000 medical travellers in 2016. Sherene Azli, chief executive officer of MHTC, made a healthy projection of 30% year-on-year growth for the industry, which hit approximately RM1.3bil in revenue in 2017.5
About 60% of health travellers to Malaysia head for Penang.6 Every year, the number of foreign patients in the state increases at an average of 6%. From 2008 to 2017, the revenue generated by medical tourism in Penang almost doubled. The state government reports that foreign patients who seek medical treatment in Penang contribute over half a billion ringgit in revenue in 20177 – a new record that is equivalent to the total average revenue of two private hospitals combined, thus justifying the expansion two decades ago.
Among the factors that drive medical tourism are healthcare providers and technology, promotion and advertising, policies and government, and intermediaries. It is known internationally that private hospitals in Penang offer top-notch technology and facilities in the medical field and heavily invest in modern equipment to remain globally competitive. Ivan Loh Ee Hoe, chief executive officer of Gleneagles Penang, confirmed that the best-computed tomography (CT) and magnetic resonance imaging (MRI) scanners in the world can be found at Gleneagles Penang.
In fact, these scanners are also available at most of the major private hospitals in Penang. On top of that, according to Loh, Gleneagles has built digital operating theatres that are designed with smart configurations and adjustable lighting for the attending surgeon. “More importantly, these operating theatres are linked to the auditorium where live surgeries can be streamed for education and training,” Loh adds. “In terms of hardware, we are there.”
Besides state-of-the-art technology, Penang also takes pride in its medical specialists. According to Loh, most local specialists were trained in renowned medical colleges abroad, and have experience and certifications comparable with, if not better than, international doctors.
Medical travellers will first seek out notable specialists in the medical treatment they need before considering the destination.
According to the Penang Centre of Medical Tourism (PMED), a specialised state government task force set up in 2015 to promote Penang’s health tourism, the most sought-after treatments in Penang are in the fields of cardiology, orthopaedics, oncology, neurology, in-vitro fertilisation, ophthalmology and dentistry.
“Most of the foreign patients we receive find out about specialists through word of mouth,” says Dr Ajay K Sharma, a consultant orthopaedic and spine surgeon at Penang Adventist Hospital. In the past year, Ajay received over 60 patients who heard about the new minimally invasive medical treatment he has been practising: Pulse Radio Frequency (PRF) STP is a treatment for nerve pain in the body caused by the irritation or malfunction of a nerve with higher treatment efficiency compared to conventional PRF treatment, and is used by Ajay to treat ailments such as slip discs, nerve compressions, joint problems of the spine, tennis elbow and many more, without surgery.
This treatment allows patients to make a short three-day trip to Penang to treat conditions of the spine; a simple procedure can be done within a day and in slightly more complicated cases, this takes at most two days.
“The procedure itself takes 15 minutes to complete, after which the patient is monitored for a few hours before he is released to go home to rest the very same day,” says Ajay. The treatment not only allows quicker pain alleviation, but also the opportunity for patients to avoid invasive surgery.
More than just the Equipment
It is not merely about the hardware when it comes to quality healthcare; processes implemented by healthcare providers are equally as important: “The healthcare industry is far behind in utilising big data and artificial intelligence (AI) compared to the banking industry. For example, capitalising on AI to provide alternative suggestions for antibiotics during treatment can tremendously improve the clinical outcome,” explains Loh.
On top of that, abiding by international health standards in medical practices such as simple hygiene practices and the washing of hands, can also affect patients’ safety. “Improving clinical outcome and patients’ safety is our utmost priority. These two factors would make us stand out above the rest,” says Loh. Currently, there are three Joint Commission International (JCI) and 11 Malaysian Society for Quality in Health (MSQH) accredited hospitals in Penang.
Penang is also an idyllic destination for healthcare tourists who wish to bring their families along on holiday while they receive medical treatment. “All of our healthcare providers here are multilingual, making it convenient for foreign patients,” says Tan Seang Aun, the newly elected executive director of PMED.
The state has 16 foreign consulates – many of which are familiar with assisting medical tourists. “Annually, Penang receives medical tourists from Indonesia, Japan, China, Myanmar, the Middle East and Europe,” Tan adds. As PMED expands its marketing and promotion beyond the Indonesian market, which makes up the bulk of foreign tourists in Penang, the task force is attracting other countries in South-East Asia, China and the Middle East, especially with the newly introduced direct flight from Qatar.8
Direct flights to Penang play a crucial role in expanding the medical tourism market. The state government and private hospitals work closely to lobby airlines for direct connectivity through subsidies and cross-marketing and promotion. PMED also works hand-in-hand with hospitals to promote Penang as a health destination through marketing campaigns, international exhibitions and roadshows. “We speak as one. We don’t just promote our individual hospitals, but Penang hospitals as a whole – that’s what makes Penang stand out from the other states; we often share resources for events and the CEOs from different hospitals know each other very well,” Loh adds.
“To strengthen Penang’s position as an international medical hub, there are three key areas to cover: medical hospitals, medical devices industry and medical institutions,” Tan says. As more hospitals and multinational medical manufacturing facilities break ground in Penang, such as Japan Lifeline and Boston Scientific,9, 10the state government needs to ensure that the supply of medical practitioners is equally sufficient to meet the sector’s rapid growth. Earlier this year, Penang Medical College announced plans to offer a Master of Business Administration course that specialises in medical tourism.11
A Peek into the Future
Hospitals in Penang are currently operating at 80-90% capacity, thus urging for a greater supply of hospital beds and medical practitioners. In May 2017 Island Hospital pledged RM2bil to expand its current 300-bed capacity to 1,000 beds, and to become one of Malaysia’s largest medical facilities.12 Columbia Asia sets eye on Batu Kawan with a RM185mil investment,13 while Sunway Group plans for a 350-bed tertiary medical centre costing RM500mil in Seberang Jaya.14
While medical tourism motivates urban infrastructure improvements, job opportunities and spillover economic benefits to local businesses, its effects on local healthcare accessibility should not be overlooked. Although quality and standards of healthcare have tremendously improved as due to the growing medical tourism industry, costs have inevitably risen.
Globalisation and advancements in technology are driving up the price of healthcare. Competitive pricing and the lower ringgit exchange rate has made healthcare affordable for foreign medical tourists from developed countries, but locals are in a quandary as their purchasing power stagnates. With the medical tourism industry growing at an astounding rate, it is crucial for the federal government to consider sustainable measures and policies to maintain the nation’s healthcare equity.