Weaker ringgit will grow Malaysia’s medical travel sector

 

Recently, AmInvestment Bank, in a research note, said Malaysian private healthcare operators may be negatively impacted by the weakening ringgit versus the US dollar. This is because the cost of key inputs such as drugs, medical supplies and medical equipment is denominated in the US dollar.

However in the article in Free Malaysia Today, Sherene Azli said the cost of treatment in Malaysia is much more affordable compared with countries within the region in terms of charges. "Compared with the United States, patients save up to 85% in costs. Hence, the currency fluctuation also favours healthcare travellers greatly, as they receive more value for every ringgit spent in the country," she said.

Sherene said the health ministry regulates ceiling rates for healthcare treatment, thus ensuring services remain realistically affordable.

This is also against the backdrop of the Medical Fee Schedule 2013 set up by the ministry, coupled with other incentives introduced by the government, such as the sales and services tax (SST) exemption on medical bills, which has increased Malaysia’s attractiveness as a leading healthcare travel destination.

Leveraging on this, the article states that the healthcare travel industry in Malaysia is growing at an average rate of 16-17% per annum against a global average of 12-14%.

In 2017, Malaysia’s healthcare sector achieved about RM1.3 billion in revenue from more than one million healthcare traveller arrivals, with this growth contributing more than RM3 billion to the country’s gross domestic product. The total number of healthcare travellers also increased by 63.3% to 1.05 million compared with 921,000 in 2016. The article does not give a source for this data.

The main healthcare travellers to Malaysia for treatment were from Indonesia, India, China, Indo-China, Japan, Bangladesh, the United Kingdom, the Philippines, Singapore, Australia and the United States. MHTC has also identified several countries, namely Indonesia, India, China, Vietnam and Myanmar, as core markets based on the volume of healthcare travellers, as well as growth potential of each.

In Malaysia, Kuala Lumpur and Penang had traditionally been the "compulsory destination" for healthcare travellers, primarily due to the ease of accessibility, with international airports in both cities.

"We have also begun to witness a rise in healthcare hubs in Johor, Melaka and Sarawak, supported by both the government’s efforts to turn the industry into a key economic growth driver, as well as private healthcare providers’ business strategy of tapping into such opportunities," Sherene added.

The MHTC has been allocated RM20 million in Budget 2019 to realise the government’s mandate to boost growth in the industry by 25% in 2019.

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