Medical Tourism in Southeast Asia

Medical tourism is a quickly growing industry in Southeast Asia. The stigma of traveling for surgery is long gone, and now it can even be combined with a luxurious vacation. But have the potential downfalls of this growing global market been properly considered before nationally supported expansion efforts have been put into place?

"A US$3 billion business for Thailand, Malaysia and Singapore alone... Thailand specialises in sex changes, Singapore in joint replacements and liver transplants, Malaysia in cardiac surgery. But when public hospitals offer these services in separate private wings to rich foreign clients, resources may be wasted or at least misdirected.

"Regional economic collaborations such as the ASEAN Free Trade Area (AFTA) and the Asia-Pacific Economic Community (APEC) are fast-developing to increase the region’s competitive advantage as a production base geared towards the world market. This means that healthcare will also be a priority sector for region-wide integration. From a trade perspective, opening healthcare markets in medical tourism promises substantial economic gains.

"The private sectors in Singapore, Thailand and Malaysia have capitalised on their comparative advantage to promote medical tourism, combining health services for wealthy foreigners with travel packages to boost consumption of such health services. Patients from elsewhere, including the developed countries, are choosing to travel for medical treatment, which is perceived to be of high quality or value for money."

Implications:

"Medical tourism may well drive up the costs of health services for local consumers. Re-distributive financing mechanisms can offset these
increases and safeguard equity for poor patients. Policy options include taxing medical tourist revenues to be re-invested in the public health system and expanding financing instruments that do not tie access to ability to pay (such as social health insurance) to incentivise private providers to treat the local population. Private providers can be regulated to provide discounted services to locals in need of essential services."

As mentioned in the signal, medical tourism may end up widening the gap between rich and poor if measures such as those just mentioned are not put in place to ensure equitable distribution of health services.