Private Healthcare Sector in Malaysia and Outlook on Medical Tourism

Interview with Dr Chong Su Lin, Chief Executive Officer of Prince Court Medical Centre

Can you tell us a bit about medical tourism here in Malaysia? How important is this type of tourism for the country? What are some of the key advantages of Malaysia as the regional centre for medical tourism?

Medical tourism is a business sector that was first introduced in 1998. That was during the Asian financial crisis and so it was seen as a way to get foreign currency in. At that time the hospitals were really in Indonesia being the closest country where people could come. Over the years it has developed into a sector of its own. In 2010 under the economic transformation program, medical tourism became one of the key areas for growth, and that was when the government decided to come in and help the private sector to grow this sector even more.

Now the market has grown beyond Indonesia and includes Australia and New Zealand. For us here, we don’t see that many health tourists as such; rather we see white collar expatriates for example people from America, the UK, France and Australia. We also see some new customers from places which are a little bit unusual such as Libya, Somalia etc.

Does Malaysia offer any advantages over its neighbours when it comes to medical tourism?

Singapore started in health travel first and then Bangkok followed. Here we offer value for money particularly compared to Singapore. The other advantage is our Halal certification so we can offer Halal foods and medications which is really important. In terms of travel it also has its advantages.

In the private sector in Malaysia, there are many regulations that specify what the doctors can charge for consultations and procedures so we do cap costs and we have not had any scandals of overcharging etc.

Regarding the health sector in general, how does Malaysia compare to its neighbours in terms of the key ratio that is people to beds?

The health care sector in Malaysia is both public and private. In the public sector you have the Ministry of Health Hospitals and the Ministry of Education teaching in the university hospitals. Then there is also the private sector, where you can see that over the last few years investment in hospitals has gone beyond the public sector. In terms of the ratio of doctors and nurses per 1,000 population, we are still getting there. We haven’t met the ratios that you see in Australia or Singapore yet but we are actually doing very well and improving in this sense. If you look at the achievements in the public sector in terms of meeting the patient safety goals, the millennium development goals, maternal mortality rates etc. we have done very well indeed. Primary care in the public sector has really been very good in terms of international ratios. It is now that the private sector has become a growth sector of its own and so a lot of people are now coming in and investing or acquiring health care privately.

In terms of primary, secondary and tertiary care, what are some of the ratios of involvement of the public sector versus the private sector? Is the private sector mostly involved in tertiary care?

The private sector is involved both at the primary level i.e. at the general practice clinics and also at the tertiary level. The public sector deals with primary, secondary and tertiary care. However the investment up until now, in the private sector as far as I can see, has mainly been in tertiary care. Now there is a move towards a kind of fusion of diagnostic centres and labs, who are evolving into primary care. I think that is probably where the growth is going to be because the tertiary level is so expensive to set up.

Do you see significant investment opportunities in private health care in Malaysia? Is there still space to grow?

There is still space to grow. There are not that many listed companies but if you watch IHH you can see that their price earnings and multiples are really very strong. IHH offers a good combination of hospitals in Malaysia, Singapore and Turkey; I also think they may have another one in another country in Asia.

In terms of growth of the sector, do you know the figures?

Most of the hospitals that I see are experiencing double digit growth both in terms of patient volumes as in revenues. The margins are still a little bit tight. I think that what we are not sure about is the impact of GST (Goods and Services Tax) which comes in April next year. A hospital like ours is going to be considered exempt, so we are a mixed supply, there are some that are going to be completely standard, rated at 6% and some that can´t pass the GST straight through to the patients. It is going to be interesting to see how that evolves.

What is the major challenge for the health care sector in Malaysia?

I would say health care workers; we are training a lot of doctors and so there are new doctors graduating but there is a lot of competition for specialist doctors. Now particularly, as with the rest of the world, you evolve into sub-specialities, so you are no longer just a general orthopaedic surgeon but you are an orthopaedic surgeon who only works on hands or ankles for example. Everybody is looking for these specialists. The public hospitals, the university hospitals and the private hospitals are always chasing them and I think that is where the difficulty is. For instance, later this month Talent Co-op is going back to London and Manchester to see if we can persuade Malaysian specialist doctors to come home.

What challenges does Malaysia face in terms of structural challenges when it comes to insurance or free health care?

Malaysia has universal health care; it is between 95 to 98% subsidised. At the point of care when you go to a public hospital you pay a very nominal sum. Of course that does mean that there is some queuing and waiting lists in the public sector. In the private sector, we are primarily driven by medical insurance which is voluntary.  It is either an employee benefit or something that you take out as part of life insurance. It comes with its own downsides because the insurers can then compare hospitals and say Hospital A is charging X amount for an appendix and Hospital B is charging X+. This means there is always a bit of negotiation with the insurers. There is a worry that the insurers will start to have greater bargaining power so we have to wait and see how that works out.

How do you see the purchasing power of the consumers themselves? Can they put pressure on the insurance companies to receive what they want?

To some extent. One of the other drawbacks is that currently the medical insurance covers acute and surgical hospitalisation, so if you break an arm and come in then that is fine, but if you have diabetes and you need preventive care then the insurance won’t cover that sort of outpatient or rehab care. So it really is quite skewed. You do worry that people come into hospital just because they have an insurance card, where they could perhaps just take two paracetemol and rest at home. So far, it is still evolving.

Can you tell us a bit about the hospital itself? What makes you one of the best institutions in the country?

Well if you look at the hospital design, it is the first that has single rooms only, which is much better for patient privacy, confidentiality and infection control. If you look at the lobby it is beautiful, it doesn’t even look like a hospital! The other thing is that we are one of the first hospitals to have fully electronic records; we use the Cerner system which is American. We have very little in terms of hard copy records. Wherever you are in the world, if you need access to your records, we can dig them up for you.

The electronic medical records (EMR) is also linked with your radiology images so if you have a CTC scan here we can get the scans for you and download them for you.

These are some of the unusual things that made us one of the pioneers in this area. As you know, EMRs are really quite expensive and complex so to have one and to have the doctors used to using it is really great. With these electronic medical records, you never have to worry about not being about to read the doctor´s writing because they are typing it all. It particularly helps in pharmacy, if you imagine all the times you used to struggle to read what your prescription says. Also, the fact that you can just download data whenever and wherever you want is really good. Our doctors get access to the EMR throughout the hospital and also at home. So if you come in with a broken arm in the middle of the night and we did an x-ray, we will send the results through to the radiologist´s house so they can read it and not necessarily have to come into the hospital.

In terms of the machines that you are using, quality of service and staff etc. what makes you stand out from your competition?

We have some really fantastic doctors that are really specialised and very competent. On top of that, we also have one of the only purpose built burns units where the rooms have been built so that you can keep the temperature set at body temperature, because when you lose your skin you can suffer hypothermia. We have one or two pieces of equipment that nobody else has like the Da Vinci Robot which is for prostate surgery and hysterectomies. I think the beauty of it is that it is there and our doctors have learnt to use it; so we have progressed from open surgery to laparoscopic keyhole surgery to robot surgery which is pretty unique. We also have a very good radiotherapy centre with tomotherapy for particularly small tumours.

We also have a great physical rehab centre with a beautiful hydrotherapy pool which we use for back injuries, stroke patients etc. These are not easy things to maintain, a hydrotherapy pool has to have water quality controls etc. In a previous hospital that I worked in, they tried to set up a hydrotherapy pool and had a lot of problems. So it is not easy but this one works very well.
In the last couple of years we have been working with the government agencies to do “back to work”. So for occupational injuries we have a couple of machines to get people trained again, especially for hand injuries.

Overall, we have been designed for infection control and patient confidentiality, we have this great IT platform, and we also have some rather unique technology.

In the future what are your priorities in terms of which areas you would like to grow?

Unfortunately the areas that we grow are the areas of the common diseases. Diabetes is one that really poses critical issues in Asia and in Malaysia, especially diabetes linked to obesity. We have just brought in an endocrinologist to work on that. Diabetes and obesity are areas that we really want to focus on. If we can’t control it with diet etc. then we do carry out surgery. The other area we focus on is cancer. Unfortunately in Malaysia and parts of Asia, we see a lot of breast cancer in a younger demographic than you would see in the Caucasian population. Unfortunately fatality rates are pretty high.

We also still have the infectious diseases like dengue but at the same time we have seen a very steep increase in cardiovascular disease, again some of which is linked to obesity, lifestyle etc. These are the areas that we see demand for.

Have you been able to establish your presence in these areas?

In terms of cardiovascular, yes, we have very active cardiologists. Obviously we have the Heart Institute just down the road but we do see a lot of patients. In terms of diabetes, we are now trying to look at programs to improve compliance because people don’t often follow the lifestyle changes that we want them to. That is a big challenge. Cancer is the other area which is dealt either with surgery, radiotherapy or chemo. We are trying to make it less scary. Just this morning, we were thinking about maybe reaching out to consumers and patients to explain the whole process so that they aren’t so scared when they come in for chemo or for radiotherapy.

Are you a purely private hospital? Do you get any funding from the government?

No, we are purely private, but just recently when the machine was down in one of the public hospitals we were asked to provide radiotherapy services at a discounted rate and so we have done that. We don’t get any grants; we are fighting for some tax incentives. There are some tax incentives for health tourism but we are asking for incentives for building, upgrading etc. They are still being considered.

What would you like the hospital brand to be associated with? How would you like to be perceived by the people?

In the past, whenever you had a diagnosis and were told for example that you have lung cancer, the first thing people would do was go for a second opinion in another country, because they wouldn’t trust the Malaysian hospitals. For me, the idea is to say, “Look, we have the doctors, the technology and the capability, you don’t have to go somewhere else”.

When we looked at health travel as a sector, it was not just about having people come in but also to stop the revenues going out. Why should Malaysians have to go overseas for treatment if we have all of the capability here?

Is that still the case? Do Malaysians still go overseas for treatment?

Yes. I mean I recently got a call from someone who told me that their friend had a diagnosis here and that they want to see a doctor in Singapore, they were determined to go to Singapore; I couldn’t say to them that they should see someone here. There still is the perception that Singapore is better.

Can you tell us a bit about the history of the institute? How much was invested? How many rooms do you have?

At the moment we have 280 beds. We are licensed by the Ministry of Health and we have activated about 200 of those beds. We can pass on that data to you.

Again, there is always that perception that if you have been trained abroad you are better. The Malaysian patients will still tend to consider a UK qualification as the best, followed by Australian and American qualifications. I think that is because of our British past. You can see when they look at a list of doctors they will choose the doctor that was trained in the UK.