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GEORGE TOWN: When Julia’s mother Roslina, 77, suffered a stroke six years ago, she was first hospitalised in Medan. When her condition deteriorated, Julia’s family decided to fly her to Penang to seek further treatment at a private hospital on the island.

This time, when Roslina slipped and fell at home, fracturing her hip, the family decided to bring her to the same hospital again.

“We feel comfortable and confident bringing her here for treatment after her speedy recovery the last time,” Julia said at her mother’s hospital bedside.

Suhardi Eekandan, a 44-year-old businessman from Medan, is a regular patient at another private hospital on the island. On each trip, he brings along his 70-year-old father who is suffering from a liver ailment.

Both father and son undergo their outpatient medical examinations at the same hospital, staying between two and three days each trip.

“This is my third trip in five years and the medical services here are better than back home.

An aerial view of Penang Adventist Hospital.
Khoo Kongsi is one of Penang's many attractions.

“Though the costs are higher, we do not mind coming here as the flight is just 45 minutes and people here can understand us, there is no language barrier,” Suhardi said.

Suhardi, his father and Roslina are among thousands of foreigners, mostly Indonesians, who come to Penang each year to seek treatment at the various private hospitals on the island. Over the past few years, Penang has been the highest medical tourism receipt earner in the country.

Medical tourism is one of the six entry point projects (EPPs) identified for the healthcare National Key Economic Area (NKEA), with the government setting up the Malaysian Healthcare Travel Council (MHTC) to drive a co-ordinated marketing programme for healthcare travel.

Under the Economic Transformation Programme (ETP), the government plans to grow this sector to RM4.3 billion by 2020, and create 5,300 skilled, middle-income professional jobs.

Malaysia earned RM380 million from medical tourism last year from almost 400,000 foreign patients, with 70% of the patient base being Indonesians.

Of this figure, according to the Penang Health Association (PHA), the seven hospitals which are PHA members accounted for RM221 million from 230,000 foreign medical tourists who came to Penang in 2010.

The seven private hospitals are Gleneagles Medical Centre, Hospital Pantai Mutiara, Island Hospital, Loh Guan Lye, Lam Wah Ee, Mount Miriam and the Adventist Hospital.

According to national figures obtained from the Association of Private Hospitals Malaysia (APHM) collated from 32 private hospitals nationwide, the medical tourism industry receipts from foreigners in 2008 were RM299 million (with Penang contributing RM173 million), dropping to RM288 million in 2009 (of which RM164 million came from Penang).

Foreign medical tourists accounted for 20% to 40% of the earnings of the seven hospitals.

PHA chairman Datuk Dr Chan Kok Ewe said since 2005, the seven hospitals have been working together and pooling their resources to promote Penang as a medical tourism destination abroad.

Mohr: PAH has been attracting medical tourists since the 1930s.
Chan: The medical tourism industry has benefited supporting industries.
Law: Penang comes in third after Singapore and Thailand in medical tourism.

While one hospital specialises in cancer treatment and care, the other six hospitals collectively offer a wide range of medical services, complementing one another to compete with private medical hospitals in other parts of the country.

Chan said it made sense for the hospitals to work together on a common platform to attract the medical tourists via joint promotions overseas instead of going it alone. On these promotional trips, all the private hospitals come under the PHA banner.

“Patients would choose their own hospitals according to their needs and what we do is to convince them to come to Penang. As a group, we can offer them everything they need.

“We don’t interfere with each other’s businesses but we complement one another. If patients need a particular service which one hospital might not have, we refer them to the other hospital which has the service.”

Chan, who is also CEO of Island Hospital, said more than 75% of the medical tourists who come to Penang are from Indonesia while the rest are from Europe and the US. A small fraction are Malaysia My Second Home expatriates living in Penang.

Though there are no statistics recorded, the medical tourism industry has also spurred other services, including hotels, restaurants and taxi services as those who seek treatment often spend another 20% of what they spend for medical treatment on such services.

“The medical tourism industry has not only benefited private hospitals but also these supporting industries,” he added.

Chan said the PHA views the medical tourism industry as fulfilling a need rather than a want.

“These people come here as they do not get the services they need in their countries. We see it as our social contribution to serve them. In order to do that, we have to invest a lot of money in our equipment and related services to cater to their medical requirements.

“These patients do not mind paying for such services and treatment.

“The general perception is that private hospitals ‘suck blood’ from their patients to run their operations.

“The difference is the government uses tax payers’ money for their [hospital] facilities and equipment; we have to use what we earn from patients for the same purpose,” Chan said.

On average, an outpatient would spend about RM500 while inpatients spend between RM4,000 and RM5,000 during each trip. Outpatients outnumber those who are warded.

Chan said Penang was more popular among Indonesians from Medan due to reasons like connectivity — with seven or eight flights to Penang each day — and cheaper hospital charges compared with facilities in the Klang Valley and Singapore.

Eighty per cent of the Indonesians hail from Medan, while the rest are from Jakarta and Surabaya.

Since the thrice-weekly AirAsia flights to Penang from Surabaya started last October, Indonesia’s second largest city after Jakarta, the PHA has also seen a steady rise in the number of patients — from 50 a month last year to 200 now. This is expected to grow to 1,000 by the end of the year. Previously, most patients from Surabaya went to Singapore as there were direct flights to the republic.

“We have high medical standards in Penang and our services are comparable to Singapore but cheaper by 2.4 times, while we are cheaper by 20% to 30% compared with KL,” Chan added.

He said most Indonesians preferred Penang to Thailand due to cultural and religious similarities. They also find Penang’s medical environment conducive in terms of costs and standards.

Moving forward, Chan said PHA was keen to target the Southeast Asian markets namely Laos, Cambodia and Vietnam, where private hospitals are scarce.

Another potential market which PHA is keen to tap is the China market which also lacks private healthcare services.

Chan said Penang must move away from being overly dependent on the Indonesian clientele and he believes with the good product the state has to offer, it could go a long way.

Penang Adventist Hospital’s (PAH) CEO and president Datuk Teddric Jon Mohr said PAH has been attracting medical tourists since the 1930s.

“During those days, even the Thai monarchy came to us for treatment, as did high-level officials from other countries,” Mohr said in an interview.

He agreed with Chan on the need to explore new markets in medical tourism.

Mohr said if for some reason, the Indonesian medical tourists stopped coming altogether, it could cause at least one private hospital to close down and the consequences for other hospitals could be disastrous.

Last year, the not-for-profit hospital earned RM59 million in revenue from 67,000 foreign medical tourists.

Indonesians form 80% to 85% of its foreign medical tourists but PAH has treated patients from over 120 countries.

Mohr said the revenue derived from medical tourism is ploughed into state-of-the-art equipment, and also goes towards helping deserving Malaysian patients like children and the poor requiring heart surgery who cannot afford to pay the fees.

Last year, PAH provided free treatment for 50 babies with cardiology ailments. To date it has also performed 600 open heart surgeries for free.

Mohr said open heart surgery at PAH was much cheaper than Singapore, and this has also attracted Singaporeans to seek treatment at the hospital. Its wellness clinic which offers thorough medical checkups and health advice and a natural weight loss programme are also popular among Singaporeans.

In addition to medical services, PAH has received over 2,000 Americans who sought cosmetic surgery.

State tourism executive councillor Danny Law said Penang’s popularity as a medical tourism destination attracted news network CNBC to run a segment on it during its prime time in 2009.

Penang’s being billed as one of the eight most liveable cities in Asia last year and search engine Yahoo’s ranking it as one of the eight places to visit before one dies would also boost Penang’s medical tourism prospects, Law said.

Tourism arrivals in Penang increased 27% from 3.3 million in 2009 to 4.1 million last year.

Law, who works with PHA, said newer medical tourism and tourism markets being explored include Vietnam, Southern China, Africa and the Middle East.

“Penang comes in third after Singapore and Thailand in medical tourism and our potential is vast.

“We are also targeting tourists from UK and Australia to come here for dental treatment, which is five to six times cheaper than in those countries,” Law added.

The medical tourism industry in Penang has been growing 15% annually. Last year, it grew by 20% and the same growth is expected this year.

However, state-owned Penang Global Tourism managing director Ooi Geok Ling said more must be done in terms of connectivity to ensure that the medical tourists do not stop coming.

“We are depending on the direct flights to bring them in and if these stop, we may lose the business in a big way.

“Hence, we are trying to ensure that the flights are sustainable both ways, otherwise it would not be feasible for the airlines to continue the routes,” Ooi said.

She cited the example of AirAsia’s Penang-Chennai flights. Initially, these were daily, and later they dropped to thrice a week. Since early this year, they have been discontinued due to low passenger load.

According to Ooi, workshops are also being organised by the Northern Corridor Implementation Agency for stakeholders. The recent first workshop for medical tourism focused on other aspects of the industry, including looking at rehabilitative care for medical tourists instead of just offering inpatient and outpatient services.

Two roadshows have been planned with hospitals and travel agents for Acheh, Surabaya and Jakarta to target an even wider market.

To target the Indochina and even Bangladesh markets, Ooi believes having more direct flights would be helpful.

“We have direct flights to Hong Kong but we are not doing medical tourism there as we do not have a niche there. We have a niche in Medan and other parts of Indonesia and having direct flights is a boon to us,” she added.


This article appeared in The Edge Financial Daily, March 7, 2011.

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