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The Jakarta Post
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Rich Indonesians spend big on overseas medical expenses

  • Tifa Asrianti

    The Jakarta Post

Singapore | Mon, May 4 2009 | 02:58 pm

Every year, rich Indonesians spend far more than US$1 billion for their medical expenses overseas, which means a big potential loss for the domestic healthcare business, with Singapore, Australia, Malaysia and the US being the main destinations.

Indonesians in total shell out $12 billion per year for healthcare, with more and more higher-income people seeking the convenience of better healthcare services at top hospitals in neighboring countries, research and consulting firm Frost and Sullivan said in a major healthcare business forum in Singapore in April.

The figures confirm earlier statements by Fahmi Idris, chairman of the Indonesian Medical Association (IDI), suggesting at least 1 million Indonesians every year go abroad seeking health services, spending well over $1 billion.

According to Frost and Sullivan, in Singapore and Malaysia alone, Indonesians spend S$800 million ($593.56 million) and RM160 million ($44.32 million), per year respectively, in the past three years.

Pawel Swinski, senior consultant at Frost and Sullivan, said that while in terms of value Singapore gained far more than Malaysia, the later had of late gained ground in terms of growth in the number of Indonesian patients.

"Indonesian medical tourists going to Malaysia comprise around 70 percent of its total international patients, while those going to Singapore only reach around 65 percent," he said.

In 2008, Malaysian hospitals treated 288,000 Indonesian patients with RM182.16 million in revenue, an increase from the 221,538 patients and RM157.03 million earned in 2007. In 2006, Malaysian hospitals treated 170,414 Indonesian patients with RM135.37 million in revenue.

In 2006, Indonesian patients coming to Malaysia reached 65 to 70 percent, followed by Japan (5 to 6 percent), Europe (5 percent) and India (3 percent).

In 2007, Singapore hospitals treated 226,200 Indonesian patients and generated S$1.10 billion in revenue. The number of patients dropped from the 266,500 recorded in 2006, but the 2007 revenue was higher than the S$850 million recorded in 2006.

Swinski said Malaysia had managed to develop its healthcare industry over its main competitors in the region because of its price competitiveness relative to Singapore, and political and security stability relative to Thailand.

Major Malaysian private hospital providers have also set up referral systems and international customer departments specifically catering for admission and support of international patients, tied up with several renowned travel agencies and hotels to provide comprehensive tourism packages in conjunction with healthcare services, as well as representative or referral offices in Indonesia, its biggest source of medical tourists.

Simranjit Singh, associate director of healthcare for the Asia Pacific at Frost and Sullivan, said Indonesians sought medical treatment abroad because the domestic healthcare industry could not cater to the demands of the middle class searching for better service.

"Indonesia has huge potential because it has a huge population and spending power. But since Indonesia cannot meet the demand, they seek it abroad. You need to meet the expectations," he said on the sidelines of Hospital Build Asia seminar, held earlier this month.

He added several factors could boost the growth of the healthcare industry in a country. The first is connectivity, because hospitals should be located near main roads, airports and other transportation hubs.

"The second is accreditation, of doctors, nurses and hospital. You need to have quality doctors. You also need it for cross-arbitraging comparatively to the West, as the patients can be from the Middle East, America, East Asia," Singh said.


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