Private hospitals are capitalising on strained Western health services and rising Asian incomes.

"Specially for you” reads an advertisement by a Singaporean hospital in one of Cambodia’s national English-language newspapers. It is illustrated with a present box and offers a complimentary first consultation with a specialist and a 10% discount on facilities fees. 

Such a commercial approach to healthcare is unusual in parts of the world (such as Europe) that enjoy a publicly funded healthcare system. However in Southeast Asia, where such infrastructure is often nonexistent or poorly developed at best, private hospitals driven by market forces dominate the industry.

Over the last decade, the region has witnessed a meteoric rise in private hospital chains catering to an increasingly affluent and aging middle class. Once predominantly located in Malaysia, Singapore and Thailand, the phenomenon of medical tourism has encouraged chains to expand to other countries such as Indonesia and Vietnam.

The number of foreign patients at Thai private hospitals almost tripled from 550,000 in 2001 to 1.5 million in 2009, according to the Kasikorn Research Centre and Thailand’s Department of Health Service Support. Malaysia enjoyed similar growth between 2001 and 2006.

Several factors have contributed to the astonishing expansion: improved infrastructure, logistics and cost efficiency; upgraded equipment and healthcare standards; and the return of doctors trained abroad.

While the quality of healthcare services on offer is improving, changing lifestyles in Southeast Asia have generated higher demand. The increasing presence of chronic diseases commonly found in the West, such as diabetes, cancer and cardiovascular diseases, coupled with improved access to information online and low-cost flights, have fuelled medical tourism within and to the region.

Whereas patients have typically come from middle-income Southeast Asian countries, Eastern Europe and the Middle East, there is increasing interest from lesser-developed countries such as Bangladesh, Cambodia and Myanmar.

“Our foray into the medical travel market started 14 years ago, but our first major boom occurred after 9/11,” says Kenneth Mays, senior director of marketing and business development at Bangkok’s Bumrungrad International. Of the 980,000 visits by patients from 190 countries this hospital receives annually, 400,000 were international medical tourists, a quarter of which are from the Gulf states. “It became more complicated for citizens from this region to get visas to the United States, so they looked for alternatives. Patients started calling us ‘the American hospital in Bangkok’.” Since then the stock exchange-listed hospital has continued to grow, generating $325m in revenue in 2010.

In recent years, the number of patients coming from Western countries has steadily increased as strained healthcare systems have led to rising in- and outpatient costs and long wait times for hospital admission. For the 25,000 American and 25,000 Europeans who visited Bumrungrad last year, medical treatment is cheaper in Southeast Asia than at home.

Deep pockets

This trend has been widely encouraged by some governments who see the development of a state-of-the-art healthcare industry as a way to raise their brand profile abroad, increase tourism revenues and build a competent medical labour force. Thailand has a five-year plan to generate $13.3 billion from foreign patients by 2014, while Malaysia has made healthcare one of its 12 main economic areas slated to double national income per head over the next ten years.

Medical tourism heavyweight Singapore has long been betting on this market.