HEALTHCARE DESTINATIONS IN ASIA
The biggest earthquake in 40 years struck on the morning of December 26th 2004, off the coast of North Sumatra, creating the most severe human catastrophe in recent history. The areas most affected by the disaster coincide with a number of world-famous tourist destinations in South and Southeast Asia, in Thailand, Malaysia, Indonesia, India and the Maldives, to name a few. The disaster would no doubt bring about pronounced and long-range impacts on the countries’ tourism industry and the economy as a whole. In fact, a number of these countries have made great strides in developing their tourism industry, and are creating unique competitive advantages in the world tourism market.
In addition to spas, theme parks and palm beaches, healthcare tourism is emerging as a growing source of revenue in tourist destinations in Asia. Thailand, Singapore, Malaysia and India have identified healthcare tourism as one of the fastest growing segments in their respective tourist markets, and are launching aggressive marketing plans for the next few years. The target markets are customers from developed countries, most representatively from Europe, North America and Japan, with over-crowded and expensive medical services at home. As part of the healthcare package, customers receive the bonus of vacationing and sightseeing in a foreign country and an exotic culture. This Note provides a survey of how healthcare tourism is being developed in select Asian countries. Emphasis is placed on the marketing efforts employed by these countries in positioning their services, and developing this promising market segment. The respective roles of the public and private sectors are compared and contrasted, while issues and challenges are highlighted for other countries in their efforts of healthcare destination marketing.
Healthcare tourism dates back thousands of years when people travelled to places with thermal and mineral waters for bathing and health enhancement. Ancient mythologies believed in the powers of healing present in natural springs, leading to the popularity of public baths in the Roman era and, eventually, the evolution of spas in Europe in the 19th century. Healthcare tourism, as the name suggests, refers to travel for the purpose of enhancing health and general wellbeing. It was first categorised as a commercial tourism product in 1973, when it was associated with the presence of natural resources, especially mineral water and favourable climatic conditions.1 The definition was further refined to apply to a “deliberate attempt on the part of a tourist facility or destination to attract tourists by promoting healthcare services and facilities in addition to regular tourist facilities”.2
In terms of services rendered, healthcare tourism can be classified into three categories:3
In economic terms, healthcare tourism can be defined as a product derived from the trading of health services on the international market. With increased globalisation, international trade in health services is gaining increased attention, both, as a source of national income and health sector financing. The healthcare sector is among the highest growth sectors in the world economy today. Worldwide healthcare expenditures were an estimated US$3.3 trillion in 2001, and are expected to grow to US$4.4 trillion per year by 2005.4 Considering the per capita healthcare expenditures at various Gross Domestic Product (GDP) levels, the future growth potential of the healthcare services market will be enormous [see Exhibit 1]. In addition, increased privatisation of healthcare services is a global trend in the current climate of declining government budgets, rising costs and reduced national insurance coverage [see Exhibit 2 ]. These factors have led to the globalisation of healthcare services, as is evident from the emergence of new kinds of healthcare organisations and increased cross-border delivery of health services worldwide. Trading in health services can occur in one of four modes: i) cross-border delivery, ii) consumption abroad, iii) commercial presence and iv) movement of healthcare personnel.5 Each mode involves the provision of services through the movement of personnel, resources and customers between the place of supply and the place of consumption. Healthcare tourism is represented by the second mode of health services trading where consumers travel abroad for the consumption of healthcare services spanning from general health enhancement to diagnosis and treatment.
- Spas and alternative therapies: such as acupuncture, aromatherapy, beauty care, herbal healing, homeopathy, massage, meditation, yoga and other general well-being spa treatments
- Cosmetic surgery: including breast augmentation, facelifts, liposuction and other non-essential medical procedures
- Medical tourism: covering such medical services as health screening, heart surgeries, cancer treatment, joint replacements and other surgical operations typically requiring hospitalisation and professional medical care
Recognising the promising market opportunities worldwide, developing countries in Asia have joined the healthcare trade exploiting their advantages of “lower-cost skilled personnel, cultural factors, natural endowments and unique forms of medicine”.6 The primary consumer targets are patients from developed countries where medical treatments are costly and waiting lists are long. By providing their healthcare services to foreign customers, these countries are able to earn foreign exchange and remittances, increase the capacity of their public healthcare system, generate employment and upgrade their national health care infrastructure and standards. Thailand, Singapore and Malaysia are the pioneers in such development, followed by the aggressive contender, India.