Published February 2, 2009

Opportunities for M'sia health sector

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(KUALA LUMPUR) The present economic downturn presents a good opportunity for Malaysia's healthcare sector to steal market share from their more established regional rivals, OSK Research Sdn Bhd says.

The research house said that although the healthcare sector in the country is still relatively small and unknown, it is promising given the substantial opportunities going its way, according to a report in Malaysia's Business Times.

'Malaysia's stable political climate, comparable quality of medical services at private medical centres and price advantage over other regional players puts the country in a good competitive position to make a mark in the medical tourism sector,' OSK said in a research note.

It said that although the Association of Private Hospitals of Malaysia (APHM) anticipates receipts and the number of foreigners seeking treatment to go down this year to 25 per cent from 30 per cent previously, the research house believes the industry will remain robust and resilient.

This is because the majority of medical tourists coming to the country seek curative medical treatment instead of aesthetic purposes.

APHM had previously projected the Malaysian medical tourism sector to contribute around RM580 million (S$242.7 million) by treating more than 849,000 medical tourists by 2010.

With the 25 per cent growth projection this year, the number of medical tourists to the country is expected to be in the region of 625,000 patients compared with the estimated 501,000 patients in 2008.

OSK said that pricing will continue to give Malaysia the competitive advantage in the sector against main rivals namely Singapore and Thailand, especially in attracting medical tourists from Indonesia, Malaysia's Business Times reported.

'Given that Indonesia accounts for the biggest number of medical tourists to the two countries and, with the economic downturn in place, we expect they will choose Malaysia instead, due to cheaper costs,' it said.

OSK said that it is highly unlikely for Singapore to reduce its pricing due to higher labour and operating costs in that country.

'Even the Singapore government has admitted it and is forecasting negative growth for the sector this year, a far cry from the double-digit growth it recorded for the last 10 years,' it said.

OSK said that the country's price advantage over Singapore will play a more significant role in attracting medical tourists, particularly during the current downturn, as patients would be looking for the best value for their money.

Thailand has seen a significant drop in medical tourist arrivals due to the political turmoil in the country.