Overview of Hospital Industry in Thailand:
The Southeast Asian country, Thailand, is a healthcare leader with the most advanced economic development and healthcare infrastructure. It is claimed that no other country in the Southeast Asia can compete with facilities, quality of medical service, technologies and expertise with regards to medical devices and pharmaceuticals in the healthcare industry in Thailand.
According to the World Health Organization, it has had “a long and successful history of health development.” Health and medical care here is overseen by the Ministry of Public Health (MOPH), including many other non-ministerial government agencies, with total national expenditures on the sector counting to 4.8 percent of GDP in 2014.
With more than 99 percent of the population receiving free health care, it is very strong on the domestic side. Not only this, but it is a highly competitive destination when medical tourism is concerned taking into account its high quality of medical services with affordable prices. The underlying support for the heavy investment is being made in the healthcare sector with hospital groups raising funds and expanding, mergers being undertaken and thus making the sector to progress overseas. Healthcare is growing and seen as a source of significant opportunity and growth.
Bangkok is not the only city now to have sole Thai healthcare market. Chiang Mai, Udon Thani, Hat Yai, Nakhon Ratchasima, Khon Kaen are the two-tier cities of Thailand increasingly expanding as a result of the growth of private and public sectors. With the urbanization of these cities, their population increasingly consists of economically strong people accustomed to better living standards who are now willing to pay in the healthcare sector.
The healthcare industry of any country comprises of the service providers (diagnostic, preventive, remedial, and therapeutic) such as doctors, nurses, hospitals including other private, public, and voluntary organizations of the medical field. Not to forget, the medical equipment, pharmaceutical manufacturers, and health insurance firms are also the indispensable parts of the medical industry. So, here you will get a clearer picture of all fields included in the healthcare industry of Thailand.
Public Sector Healthcare:
The hospitals in Thailand that come under public sector get funding from by the Department of Medical Services under the Ministry of Public Health. The Public Health Ministry deals with the administration of public health services and medical services in the government hospitals.
Public health facilities here offer good medical services that result in overcrowding at the public sector hospitals. Thailand is equipped with a universal health care system that aims to avail at least a basic level of healthcare to all Thai citizens. This system is divided into three programs.
- The Civil Servant Medical Benefit Scheme is mainly for the government workers providing with excellent healthcare benefits. Approximately 7 million of the government workers are benefitted under this scheme.
- The Social Security Scheme has the responsibility of providing healthcare benefits to the private sector workers covering about 10 million workers.
- Finally, the Universal Coverage Scheme offers basic healthcare services for free to the rest 50 million Thailand’s population.
Private Sector Healthcare:
In Thailand, nearly two-third of the hospitals is comprised of the public sector hospitals and only the one-third being in the private sector. In the late 1970’s the number of private hospitals were very few but since 1991 their number has been rising rapidly consistent with the rapid economic growth in the past decade along with the investment promotion packages of the government.
One of the leading factors contributing to the medical tourism in Thailand is the private sector of the healthcare that has excellent medical facilities, latest technology equipment, and language translators. These hospitals have specialized international wings to deal with the foreign patients as well.
The Thai government is encouraging private hospitals to invest more in research and development which helps the country to maintain its position as a leading medical tourism destination and may lead to developing into a medical center for the ASEAN region.
Prospects of Private Hospitals in Thailand
Non-Profit Health Organizations:
The Thai non-profit sector of healthcare comprises of associations and foundations that offer healthcare services to the disadvantaged people. These foundations and associations under Thailand law are established for the benefit of the public and not for profit sharing.
Some of the examples of such organizations under the non-profit sector are:
- Caritas International Thailand.
- Adventist Development and Relief Agency (ADRA)
- Camillian social center in Rayong.
- Jesuit Refugee Service Thailand.
- ANESVAD Foundation.
- Saint Camillus Foundation, runs Camillian Hospital.
- Catholic Office for Emergency Relief and Refugees (COERR)
Healthcare Providers in Thailand:
There is no doubt that the hospitals and medical facilities in Thailand delight themselves on their high standards. Most of the hospitals here are the holders of international accreditation and certification. Thailand was the first country in Asia to achieve JCI accreditation in 2002, and as of April 2014, 35 hospitals were certified in Thailand.
Being the most desired medical tourism destination, Thailand, every year has about a million of International patients who will find that English-speaking general practitioners, dentists, and surgeons are available in private hospitals and specialist clinics most of the time. In addition, many hospitals here are provided with the translator services in almost all possible languages including Russian, Arabic, Dutch, and Japanese.
Many Thai doctors and surgeons practicing in the private sectors have won awards for their work and efforts and many specialist doctors are qualified internationally from western countries such as the US and the UK which means that more than 500 doctors practicing in both the public and private sectors of healthcare nowadays are American Board Certified.
Medical Device Industry Outlook:
The medical device market in Thailand was worth more than $850 million approximately in 2012 and is all set to aim an expansion of 7.5 percent annually over the next several decades. As for today, there are about 850 public sector hospitals and around 600 private sector hospitals. Thailand’s medical device market definitely possesses high economic growth with a yearly growth rate of 15 percent (according to Pacific Bridge Medical).
As far as the import of the medical devices is concerned, it imports two-thirds of the medical devices that are used in the country. Domestically, only the inexpensive devices, such as disposable test kits and syringes, surgical gloves etc are made and supplied.
The domestic medical device industry enjoys the support by the Thai government that benefits the manufacturers significantly. A plan, aiming to provide an industrial estate for the accommodation, exhibition, distribution, production and testing laboratories for the medical equipment industry has been put forward by the government in April 2013.
An industrial estate in Kanchanaburi province is already being developed by a private firm to accommodate small and medium-sized enterprises in this field. According to the Office of Industry Economies of Ministry of Industry (Thailand), the export of the medical equipment in Thailand, today, is worth approximately 92 billion baht per year, which is about 1 percent (or less) of the global market. Nevertheless, the government aims to grow this to 30 percent soon.
Pharmaceutical Industry in Thailand:
Thailand, with a healthcare market of $15.8 billion, in 2013 (about half the size of Taiwan’s) spends almost $240 per capita in healthcare and the majority is spent on pharmaceuticals. As discussed earlier, with the urbanization of the Thai cities and people becoming more affluent, demand for better healthcare is increasing simultaneously.
In 2013, Thailand’s pharmaceutical market had a value of more than $4.5 billion, almost the same as that of the Taiwan market.
The Thai drug market ranks second in Southeast Asia, first being Indonesia and aims to double by 2020 owing to rapid growth of the branded generic sector. Of the total government expenditure, 14 percent is spent on healthcare, in Thailand which is more than many European countries. On the basis of generic tenders or negotiation for branded drugs, hospitals here purchase about 75 percent of all drugs sold.
With the introduction of Universal Coverage Scheme, the number of Thai domestic drug companies has been growing quickly over the past decade. The government is now investing more in Research & Development, helping the local drug industry to move up the value chain.
Pharmaceutical exports are mainly to other Southeast Asian nations like Vietnam, Cambodia, and Myanmar and are valued at over $300 million. With the recent introduction of biotech parks and big tax incentives, the government is also encouraging the Biotechnology sector. As stated earlier, medical tourism is another priority for the Thai government.
Medical Tourism in Thailand:
Along with the Southeast Asian countries, Singapore and India, Thailand constitutes about 90 percent of Asia’s medical tourism market. There is no doubt that when tourism is concerned, Thailand has been one of the most popular destinations over years. Thailand is being known as a reputed and reliable medical tourism destination that serves high-quality medical treatment at a reasonable price. Such a reasonable price that some of the medical procedures will cost you as less as 1/10th of the cost in the US, UK or Australia for the same procedures. This accounts for the tremendous number of foreign tourists planning their holiday at Thailand not only for enjoyment but also for the medical treatment.
Hospitals in Thailand are equipped with latest technology equipment, language translators and are provided with international wings to deal with the foreign patients in their own language with ease. And not to forget, Thailand is known all over the world as ‘Land of Smiles’ owing to the hospitality of its people who treat their guests in as best way as they can.
Thailand has a number of internationally accredited hospitals which do not have any other opponent with respect to the treatments they provide, covering vast medical areas like cosmetic/plastic surgery and organ transplants to dental tourism at affordable rates.
Challenges in the healthcare market of Thailand:
Despite the fact that Thailand is one of the major SEA countries, providing high-quality medical services, a number of challenges remain.
- Even though the Universal health care was a success initially, it is now facing problem in terms of funding that has to be solved mostly by creating services like co-payment system. The limited benefits of the program are also being questioned. To a great degree, these trends are much like those seen in the rest of the world. Like many other developing countries Thailand is beginning to question the cost of prescription medicines. The greater costs are also the result of the interplay between the private hospital system, which gets higher rates because of demand from international patients, and the public hospital system, which is struggling for funds.
- Although Thai medical services tend to be less expensive when compared to Japan, Hong Kong, and other Western countries, complaints about the costs have been reported, with some customers refusing to pay their bills. Similar to the other developing countries like India, Thailand is beginning to question the cost of prescription medicines as well. The higher costs are the result of an imbalance between the private hospital sector, which tends to get higher rates because of demand from international patients, and the public hospital sector, which is facing the challenge for funds.
- Another major challenge in the Healthcare field of Thailand is aging. The people here are aging faster than the rest of the world, according to the Thailand Development Research Institute (TDRI). The ratio of senior citizens to the total population in 2005 was 11 percent which increased to 14 percent in 2014. On the other hand, the ratio was 11 percent, senior citizens, in 2005, the world over and 12 percent in 2014. It is estimated that the aged people in Thailand will account for 25 percent by 2025. An aging population has to be dealt with proper medical equipment, health services, nursery and home-care services, according to the TDRI. The government is looking for ways to handle this demographic issue.
To wind up, we can say that Thailand’s health sector is doing well in places, but has started to feel the pressures of the success. The huge success of health tourism has started to affect the domestic market, both in terms of cost and expectations, and necessary policy reforms have to be undertaken to solve the emerging issues.
Prospects and Investment Opportunities
The Ministry of Science and Technology’s National Metal and Materials Technology Center has developed a National Strategic Plan for Materials Technology for the year 2016. The aim of the plan is to enhance the quality of life among people of Thailand. It aims to do so by improving the healthcare through internal development of medical equipment which is in high-demand.
Another step taken by the government of Thailand is the Medical Device Prototype Development Project. The project seeks to improve the capacity manufacturers in Thailand. The research and development of the project are expected to help the local medical device suppliers in introducing new and more advanced devices and in reasonable ranges. Hence, there seem to be ample opportunities with respect to making investments in the domestic medical device sector in order to curb the import from foreign countries. This offers great encouragement to the invitation of new projects.
The Board of Investment also is offering incentives to investors of its own country as well as to foreign investors who want to manufacture medical equipment in Thailand. Some offerings are like getting an exemption from import duties on machinery, tax breaks, and land ownership rights to the investors from foreign countries.
Many international manufacturers have been influenced and attracted by the nation’s deliberate location that makes it a regional hub and strong domestic market. Few of the companies are 3M, Bausch & Lomb, Boston Scientific, GE Medical Systems, Medtronic, Philips, Roche Diagnostics, Siemens, etc.
As a result, tremendous opportunities for investment are available in the healthcare sector. The main markets are for artificial blood vessels, disposable kits for diagnostic tests, respiratory systems, rehabilitation equipment, orthopedic prosthetic devices, and neurosurgical devices and accessories.