Health Travel


Topic 1: Healthcare National Key Economic Areas (NKEA)

Introduction
The Malaysian Government has introduced the Economic Transformation Programme (ETP) for the benefits of all Malaysians. ETP is a focused, inclusive and sustainable initiative that will transform Malaysia into a high-income nation by the year 2020 (in other words, to achieve the much-anticipated Wawasan 2020 objective). The programme itself is purposefully designed to boost the rakyat's standard and quality of living, as well as to be on a par with the constantly-changing and developing global citizens of other countries. Although Malaysia has been making quite an impression globally, especially in terms of its economic growth, it's still not enough for the developing country to take a back seat.

As the world economy is constantly and rapidly changing, Malaysia will need a solid backup plan in order to sustain itself and keep up with the rat race. We are still at a major risk of being trapped in the middle-income level, and that the nation's fiscal position is debatably not sustainable. As such, the ETP is focusing on key growth engines or NKEA. Private sector-led growth is a one thing that NKEA relies on. Meanwhile, the ETP's innovative approach in delivering the Government's main objectives has shown that increasing improvements to the status quo won't be sufficient for the thriving country to transform itself into a high-income nation.

NKEAs are at the core of the ETP. An NKEA can simply be described as the sole enforcer of the nation's economic activity that also has the great potential in contributing a measurable amount of economic growth to the Malaysian economy, both directly and materially. Among the 12 major NKEAs are as follow:

• Greater Kuala Lumpur/ Klang Valley area
• Healthcare
• Agriculture
• Education
• Communications Content and Infrastructure
• Business Services
• Electronics and Electrical
• Tourism
• Palm Oil
• Wholesale and Retail
• Financial Services
• Oil, Gas, and Energy

While Greater Kuala Lumpur/ Klang Valley area is a geographical sector, 11 out of the 12 major NKEAs are industry sectors.

NKEA: Focus on the Healthcare Sector

The healthcare sector in Malaysia has always been viewed as one of the most critical sectors ever, and it's definitely the right time for the developing country to give better focus. As the healthcare industry can be quite a lucrative, not to mention robust economic machine and is considered as a sector that has the potential of creating significant social impact to the public in an indirect manner, higher value jobs can automatically be made, while the sector's entire infrastructure can be upgraded for the greater good and both specialist technology and skill-sets can be supported and put to use to improve the quality care for patients. Despite Malaysia's humble beginnings in the sector, the country's health sector opportunity appears to be somewhat enticing and appealing, especially to the foreign investors.

From the study conducted, the three key sub-sectors of the larger healthcare ecosystem (e.g. health travel, medical technology (med tech), and pharmaceuticals and biotechnology) have delivered stronger performances in relation to the bigger, more traditional economic sectors like electronics, agriculture, and automotive. To date, the growth of the healthcare industry in Malaysia has been organic in nature and is first of all driven by domestic consumption of healthcare services and products. To move ahead, Malaysia must position and reframe its healthcare sector as a money-making machine for the nation's economic growth and stability.

The healthcare NKEA is focusing on the bigger sub-sectors within the healthcare ecosystem to ensure the proper balance of breadth and depth of coverage, and among the larger sub-sectors include health services, private healthcare financing, med tech, and bio-pharmaceuticals. The expectation for the focus on the largest economic machines will be for it to have a significant impact on the healthcare infrastructure and that it will give better quality care for all the rakyats. For instance, the increase in doctors, nurses, and hospital beds as a result of the growth within the healthcare industry should improve the quality of patient outcomes via access to more specialist care centres, shorten the turnaround time on diagnostic lab results, as well as reduce wait times for patients.

In order for the country to achieve its target incremental GNI growth of RM35.3 billion between the year 2010 and 2020, several aggressive targets will be set for each sub-sectors, and the sub-sectors include:

Pharmaceutical industry
• The target is a 22 percent GNI growth rate that will deliver RM16.6 billion GNI by the year 2020. The target shall be driven by increased clinical research and enhanced generics and higher exports of generic pharmaceuticals in Malaysia.

Services sector
• The target is a GNI growth of 10 percent which will result in a GNI of RM27.8 billion by 2020. The growth is driven by an increased emphasis on export-focused services such as seniors living, specialist care centres, and health travel. Medical technology

• A moderate 8 percent growth is expected. The expectation for Malaysia will be for it to manufacture dental devices, orthopedic implants, and in-vitro diagnostic (IVD) test kits that leverage the nations manufacturing advantage and ongoing research efforts.

On the other hand, the Government has also introduced the Entry Point Projects (EPP). The projects represent a commitment to better healthcare for Malaysians, an upgraded services platform, and an aggressive export campaign. In order for Malaysia to succeed even further, the country should also work closely with a handful of other NKEAs, like education, financial services, tourism, and palm oil.

The 6 Entry Point Projects (EPP) to deliver RM35.3 billion
• EPP 1: Mandating private health insurance for foreign workers
• EPP 2: Creating a supportive ecosystem to grow clinical research
• EPP 3: Pursuing generics export opportunities
• EPP 4: Reinvigorating health travel through better customer experience, proactive alliances and niche marketing
• EPP 5: Creating a diagnostic services nexus to achieve scale in telemedicine for eventual international outsourcing
• EPP 6: Developing a health metropolis: A world-class campus for healthcare and bioscience

Reference : Economic Transformation Plan

Topic 2: Health Travel under EPP4 (NKEA)

Reinvigorating the Health Travel Industry in Malaysia under the Healthcare NKEA (EPP4)

Rationale
The healthcare travel industry in Malaysia is small (estimated at RM350 million in 2010) although the industry has shown quite a consistent growth of 38 percent per annum between 2003 and 2008 (in 2009, the market experienced a contraction). With the industry being prone to both increased competitive pressure from neighbouring countries (such as Singapore and Thailand, with each country having positioned itself as leaders in specific niches of the industry) and exogenous shocks such as a global economic crisis, Malaysia will need to up the ante in order to keep up with the pace.

Actions
The main goal of the healthcare National Key Economic Area (NKEA)'s Entry Point Project 4 (EPP4) is to create a differentiated position for Malaysia and to broaden the customer base beyond Indonesia (70 percent of 2009 receipts) and beyond lower margin outpatient treatments (more than 80 percent of health travel procedures). Hence, the first phase of the strategy will be to grow patient volume and expand beyond the Indonesian market, and the second phase will be to build capability in niche specialties to drive a shift towards more profitable in-patient care in later years.

For the proposed target markets of Indonesia, Vietnam and Bangladesh, the Malaysian government intends to provide good value-for-money healthcare services. Examples of healthcare services would range from regular health check-ups to more complex in-patient procedures in the fields of cosmetic surgery, cardiology and oncology. The government believes that a different approach towards the Middle East and Singapore markets in addition to providing high quality healthcare at a reasonable price, will attract more patients. For Japan, China and Western countries, a healthcare and tourism package will be designed to increase the attractiveness of Malaysia.

Enablers
The Ministry of Home Affairs and Immigration Department will consider ways to shorten the time required by private hospitals to bring in foreign doctors, nurses and other allied health labour to support the growth in hospital capacity. In addition, Ministry of Health (MOH) and Ministry of Higher Education (MOHE) will increase specialist doctor training capacity to raise domestic supply and establish centres of excellence, which will be a one-stop location for innovative care, research and specialised education to further enable the development of a greater pool of specialists in the nation.

To attract more health travellers, the Ministry of International Trade and Industry (MITI) will involve MOH in various trade missions, to seek agreement with foreign governments or foreign insurers to provide portability of medical insurance. In addition, MOH will encourage hospitals to pursue alliances with foreign hospitals and doctors to strengthen the referral network. Private hospitals will also actively engage Malaysian MNCs to encourage them to send their overseas employees to Malaysia for treatment.

Funding
In order to upgrade hospital infrastructure required to accommodate the rising number of health tourists, it is especially critical that RM335 million be sourced from the private sector hospitals.

Impact
With all these enablers in place, the government expects Malaysia's health tourists from the identified markets to reach 1.9 million in 2020, contributing RM9.6 billion in revenue. This translates into a GNI impact of RM4.3 billion and the creation of an estimated 5,300 jobs.

References:
Economic Transformation Plan - Chapter 16: Creating Wealth Through Excellence in Healthcare